Conduct Within the Scope Cannot Be Beyond the Reach

Since the Federal Trade Antitrust Improvements Act's (the FTAIA) passage, the federal courts have discussed, at length, whether the FTAIA speaks to the court's power to hear the case (subject matter jurisdiction) or to the substantive elements of a Sherman Act claim.¹ The FTAIA was enacted to “clarify the legal standard determining when American antitrust law governs foreign conduct.” Lotes Co. v. Hon Hai Precision Industry Co., 753 F.3d 395, 404 (2d Cir. 2014). The FTAIA does this by “placing all nonimport activity involving foreign commerce outside the Sherman Act's reach. It then brings back such conduct within the Sherman Act's reach provided the conduct both” has a “'direct, substantial and reasonably foreseeable effect' on American domestic, import or (certain) export commerce” and “gives rise to a Sherman Act claim.” F. Hoffman-La Roche Ltd. V. Empagran S.A., 542 U.S. 155, 162 (2004) (emphasis removed).

Among the issues still percolating is the interplay between the FTAIA and personal jurisdiction over a foreign defendant.² Although the FTAIA does not and was not intended to address personal jurisdiction specifically, when one examines the Sherman Act and the FTAIA, as well as the burden of proof the FTAIA places on plaintiffs, a convincing argument can be made that personal jurisdiction is established if the two “Acts” elements are met.

With the exception of import commerce,³ the FTAIA extends Sherman Act protection to domestic commerce that is injured by antitrust violations perpetrated by foreign entities. By carving out an exception for domestic commerce impacted by foreign antitrust activity, the Act recognizes an American citizen's right to a private cause of action in U.S. courts, for harms caused by a foreign defendant. In demonstrating that a defendant's conduct was “direct, substantial and reasonably foreseeable,” the plaintiff arguably satisfies the “Calder effects test”—the causal link necessary to show a connection between the defendant's acts and the plaintiff's injury. United States ex rel. Piacentile v. Novartis AG, 2010 U.S. Dist. LEXIS 146050 at *14 (E.D.N.Y. 2011). In order to establish specific personal jurisdiction over a foreign defendant, the plaintiff must show that “defendants expressly aimed their allegedly tortious conduct at the United States.” In re Terrorist Attack on September 11, 2001, 714 F.3d 659, 665 (2d Cir. 2013). This language is consistent with the “direct, substantial and reasonably foreseeable” language of the FTAIA.