The Supreme Court today ruled that a US court does not need to take at face value a foreign government’s word about how that country’s laws operate. Instead, the justices explained, although courts should “carefully consider” what a foreign government says about its own laws, they are not bound by those views; they can also take into account other materials that might shed light on what the foreign law at issue means. In our global economy, in which resolving cases brought under US law in US courts can also require an understanding of foreign laws, the decision is an important one.
The case was a victory for Animal Science, a Texas-based company that uses Vitamin C in the livestock supplements it manufactures. In 2005, the company sued Hebei Welcome, a Chinese company, in US courts, alleging that Hebei Welcome and other Chinese manufacturers had fixed the prices of the Vitamin C that they sold to the United States – a violation, the company said, of US antitrust laws.
A federal appeals court ruled that Animal Science’s claims should be thrown out. It explained that US courts should defer to evidence provided by the Chinese government indicating that Chinese law required Hebei Welcome and the other companies to agree on their prices and quantities. Such deference, the US Court of Appeals for the 2nd Circuit emphasized, is appropriate whenever a foreign government, as here, “directly participates” in a case in US courts by offering sworn evidence about “the construction and effect of its laws and regulations” and that evidence is “reasonable under the circumstances presented.”