On January 28, 2016, the United States Court of Appeals for the Second Circuit heard arguments on whether the doctrines of act of state, foreign sovereign compulsion, and international comity required the reversal of a jury’s verdict against two Chinese companies that were found liable for violating Section 1 of the Sherman Act. The plaintiffs in In re: Vitamin C Antitrust Litigation (06-MD-1738) had alleged that defendants Hebei Welcome Pharmaceutical Co. Ltd. and North China Pharmaceutical Group Corporation formed an illegal cartel to fix prices and limit supply for exports of vitamin C sold in the United States. A jury from the Eastern District of New York agreed and awarded $153 million in treble damages.
On appeal, the defendants argued before appellate judges Jose A. Cabranes, Richard C. Wesley, and Peter W. Hall that Chinese law required the price-fixing and barred the plaintiffs’ claims as a matter of law. The defendants’ argument was supported by an amicus brief from the People’s Republic of China, in which the government of China argued that the defendants’ price-fixing was compelled by Chinese law, and as such was completely immune from U.S. antitrust liability.