Foreign Sovereign Compulsion: A Widening Split on Chinese Exports

A team of attorneys from Davis Polk & Wardwell LLP presented the ABA’s January Antitrust Update for In-House Counsel. The following article summarizes one of the recent developments discussed during the program.

Three recent price fixing cases have analyzed the question of whether and to what extent price and output restrictions imposed by the Chinese government can serve as a defense to antitrust claims under U.S. law. In the first case (involving the export of vitamin C from China to the United States), a New York district court rejected the defense on summary judgment and forced a trial, which the defendants lost. In the second case (bauxite), a Pennsylvania district court upheld the defense and granted summary judgment in the defendants’ favor. And in the third case (magnesite), a district court in New Jersey has indicated that it will likely give deference to the Chinese government’s position on its control of Chinese export prices, but it has not yet ruled on the question.