Argument analysis: Justices seem ready to reject binding-deference rule for foreign law

By Amy Howe

When a case comes to the Supreme Court, the justices are usually interpreting US laws – either the US Constitution or a federal statute. But in today’s global economy, resolving cases brought under US law in US courts can also require an understanding of foreign laws. And that’s not always easy, especially when the foreign laws and legal systems at issue are different from our own. In these situations, should US courts take a foreign government’s word about how a foreign law works? The justices considered that question today, in a case that could have implications not only for the enforcement of US antitrust laws, but also for US relations with China. After an hour of oral argument, the court seemed likely to hold that the rule adopted by the lower court, which would generally require deference to a foreign government’s interpretation of foreign law, is too rigid – even if the justices weren’t sure precisely what the contours of the new rule should be.

The case before the Supreme Court yesterday was filed in 2005 by Animal Science Products, a Texas-based company that uses Vitamin C in the livestock supplements that it makes. The company alleged that Hebei Welcome and other Chinese manufacturers had fixed the prices of the Vitamin C that they exported to the United States, in violation of U.S. antitrust laws. Hebei Welcome has argued in US courts that it struck deals on prices and quantities with other Chinese manufacturers because Chinese law required it to do so, and the Chinese ministry that regulates trade has told the US courts the same thing. A jury awarded Animal Science nearly $150 million in damages, but a federal appeals court threw out that verdict and ruled for Hebei Welcome, holding that the court was required to defer to the Chinese government’s interpretation of Chinese law. Animal Science took its case to the Supreme Court, which agreed to weigh in earlier this year.

Continue Reading…