International Trade Commission Drops US Steel's Antitrust Claims Against Chinese Steelmakers
United States Steel cannot bring antitrust claims against 40 Chinese steel manufacturers over alleged price-fixing, the U.S. International Trade Commission has ruled in a decision that refines exactly what type of injuries private companies must have suffered to make antitrust claims.
March 22, 2018 at 04:35 PM
4 minute read
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United States Steel cannot bring antitrust claims against 40 Chinese steel manufacturers over alleged price-fixing, the U.S. International Trade Commission has ruled in a decision that refines exactly what type of injuries private companies must have suffered to make antitrust claims.
As part of its ruling in Certain Carbon and Alloy Steel Products, the commission determined that, in order to bring antitrust claims against other companies, private companies need to show that competition in the market as a whole had suffered, rather than just their business. The ruling, which affirmed a decision by the administrative law judge, adopted federal case law interpreting standing requirements for bringing claims under the Sherman Act.
Claims that the Chinese companies had priced its products below market rates in a way that harmed U.S. Steel's finances fell short of that standard, which requires a showing of “predatory pricing,” the commission said.
“It would be 'inimical to the antitrust laws' to award an exclusion order and/or cease-and-desist order for trade practices where the complainant's losses resulted from behavior that constituted continued competition rather than a reduction in competition,” the commission said. ”U.S. Steel's approach would have the commission create a new version of antitrust law for disputes between private parties that conflicts with established federal precedent and runs the risk of undermining the antitrust laws' fundamental purpose.”
The ruling, which was issued March 19, came nearly three weeks after President Donald Trump imposed a 25 percent tariff on steel products, a decision widely seen as targeting Chinese steel imports.
Commissioner Meredith Broadbent dissented from the ruling, saying she did not agree that private companies needed to show that an “antitrust” injury occurred.
The ruling dismisses a case that faced long odds since it was filed in 2016. U.S. Steel, which is headquartered in Pittsburgh, had sued its Chinese competitors under Section 337 of the Tariff Act of 1930, which is a statute that is more commonly used in patent disputes. If U.S. Steel had been successful, it would have resulted in a ban of all Chinese carbon and alloy steel imports to the United States.
The commission had previously dismissed trade secret misappropriation and false designation of origin claims. On the antitrust claims, U.S. Steel contended that Chinese pricing was unfair, and that the threshold to satisfy standing in federal court is “virtually impossible.” According to the commission, counsel for U.S. Steel said “the reality is that we couldn't” meet the standard even if given the ability to amend its complaint.
The commission, however, said its ruling not only adopted the federal standards, but also aligned with its handling of international property cases brought under Section 337.
Debbie Shon of Quinn Emanuel Urquhart & Sullivan represented U.S. Steel. She declined to comment without talking with her client first.
Covington & Burling attorneys Sturgis Sobin, James O'Connell and Derek Ludwin represented Baosteel America.
O'Connell said he was pleased with the decision, and Ludwin said that, even though Section 337 is not often used to bring antitrust claims before the ITC, U.S. Steel's complaint “reflected a renewed interest” in raising those claims. The attorneys agreed that the opinion provides significant guidance for future litigants.
“When an antitrust claim is brought by a private complainant, that private complainant should have to meet the same requirements they would if they brought that antitrust claim in federal court,” O'Connell said. “Antitrust is antitrust.”
Mark Davis of Greenberg Traurig represented Hebei Iron and Steel. James Altman of Foster, Murphy, Altman & Nickel represented Magang (Group) Holding. Michael Allan of Steptoe & Johnson represented Shougang Corp. Tom Schaumberg of Adduci, Mastriani & Schaumberg represented Anshan Iron and Steel Group. Adam Swain of Alston & Bird represented Jiangsu Shagang Group. Schaumberg declined to comment. All other attorneys did not return a call seeking comment.
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