Standing for Extraterritoriality: Defining the Empagran Exception
Max Huffman, Sep 08, 2006
Efforts by private plaintiffs to enforce the U.S. antitrust laws extraterritorially have become an enormous industry. A reflection of the challenges facing federal courts in this global age, F. Hoffman-LaRoche Ltd. v. Empagran S.A. (Empagran) held the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) precluded the assertion by U.S. courts of jurisdiction over claims by foreign plaintiffs alleging harm felt in wholly foreign commerce. Empagran left an exception that undermines its general rule. Plaintiffs able sufficiently to show â€œthe anticompetitive conduct's domestic effects were linked to their foreign harmâ€ are excepted from the preclusion. This is the â€œEmpagran exception.â€ The article is the first to propose a workable and consistent approach for applying the Empagran exception. The classical prudential antitrust standing analysis is readily imported into the extraterritoriality framework. Modified for extraterritorial application, the standing analysis includes consideration of comity and â€œinverse deterrenceâ€ - a twist on the under-deterrence rationale. The standing analysis permits courts flexibility to adjust for those and other factors perhaps not yet recognized. As the question how to define the Empagran exception works its way through the courts, the approach outlined here promises superior and consistent decisions.