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Animal Science Products v. Hebei Welcome

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Supreme Court of the United States
Animal Science Products v. Hebei Welcome
Term: 2017
Important Dates
Argument: April 24, 2018
Decided: June 14, 2018
Outcome
Second Circuit vacated
Vote
9 - 0
Majority
Chief Justice John G. Roberts • Anthony Kennedy • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch


Animal Science Products v. Hebei Welcome is a case argued during the October 2017 term of the U.S. Supreme Court. Argument in the case was held on April 24, 2018. The case came on a writ of certiorari to the United States Court of Appeals for the 2nd Circuit.

HIGHLIGHTS
  • The case: Two U.S. companies filed a lawsuit in U.S. district court against several Chinese companies, claiming that those companies had violated U.S. antitrust law by collectively fixing prices and supplies of Vitamin C exports from China. A division of the Chinese government filed a brief in the district court, stating that the companies were required to set prices under Chinese law. The district court allowed the case to proceed to trial. After a jury found in favor of the U.S. companies, the Chinese companies appealed to the Second Circuit. The Second Circuit ruled that the district court was required to defer to the Chinese government's interpretation of Chinese law. Concluding that Chinese and American law were in conflict, the Second Circuit dismissed the U.S. companies' lawsuit.[1]
  • The issue: Are U.S. courts required to defer to a foreign government's interpretation of its own law?[2]
  • The outcome: In a unanimous decision, the Supreme Court vacated the Second Circuit, holding that courts are not required to defer to a foreign government's interpretation of its own law. The court remanded the case for further consideration in light of its opinion.[3]


    • You can review the lower court's opinion here.[1]

    Background

    Legal question

    This was a case about the level of deference U.S. courts must give to foreign governments' interpretations of their own laws.

    Case background

    Animal Science Products, Inc. and The Ranis Company, Inc. (referred to together as Animal Science Products) are U.S. companies that buy Vitamin C from Chinese companies. Animal Science Products sued two Chinese companies in U.S. court, claiming that the Chinese companies violated U.S. antitrust laws by colluding with the China Chamber of Commerce of Medicines and Health Products of China (the Chamber) to fix prices and limit supplies of Vitamin C exported from China. The Chinese companies admitted that they had set prices, but they moved to dismiss the suit, arguing that their actions were required by Chinese law. The Ministry of Commerce of the People's Republic of China, a division of the Chinese government, then filed a brief with the district court stating that Chinese law required the companies to set prices in conjunction with the Chamber. "In short, the Ministry represented to the district court that all of the vitamin C that was legally exported during the relevant time was required to be sold at industry‐wide coordinated prices."[1]

    The district court ruled that it was not bound to accept the Ministry's interpretation of Chinese law, concluding that the record was "simply too ambiguous to foreclose further inquiry into the voluntariness of [the Chinese companies'] actions." It denied the Chinese companies' motion to dismiss and allowed the case to proceed to trial. A jury found in favor of Animal Science Products, and the Chinese companies appealed.[1]

    Panel opinion

    On appeal, the United States Court of Appeals for the 2nd Circuit reversed the district court's denial of the Chinese companies' motion to dismiss. The court ruled, "When, as in this instance, we receive from a foreign government an official statement explicating its own laws and regulations, we are bound to extend that explication the deference long accorded such proffers received from foreign governments."[1] The court wrote that international comity required the district court to defer to the Chinese government's statement as to Chinese law.

    International comity, the court explained, "is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws." Quoting another case, the court wrote, "Whatever its precise contours, international comity is clearly concerned with maintaining amicable working relationships between nations, a shorthand for good neighbourliness, common courtesy and mutual respect between those who labour in adjoining judicial vineyards.” The court continued:

    “ Consistent with our holding in Karaha Bodas and the Supreme Court’s pronouncements in Pink, we reaffirm the principle that when a foreign government, acting through counsel or otherwise, directly participates in U.S. court proceedings by providing a sworn evidentiary proffer regarding the construction and effect of its laws and regulations, which is reasonable under the circumstances presented, a U.S. court is bound to defer to those statements . . . Not extending deference in these circumstances disregards and unravels the tradition of according respect to a foreign government’s explication of its own laws, the same respect and treatment that we would expect our government to receive in comparable matters before a foreign court.[1][4][5] ”


    The court concluded that the Chinese companies were "required by Chinese law to set prices and reduce quantities of vitamin C sold abroad and doing so posed a true conflict between China’s regulatory scheme and U.S. antitrust laws such that this conflict in Defendants’ legal obligations, balanced with other factors, mandates dismissal of Plaintiffs’ suit on international comity grounds."[1]

    Animal Science Products appealed to the United States Supreme Court.

    Petitioner's challenge

    The petitioners challenged the holding of the United States Court of Appeals for the 2nd Circuit. They argued that the Second Circuit erred in concluding that courts must defer to a foreign government's interpretation of its own law.[1]

    Certiorari granted

    On April 3, 2017, the petitioner initiated proceedings in the Supreme Court of the United States in filing a petition for a writ of certiorari to the United States Court of Appeals for the 2nd Circuit. The U.S. Supreme Court granted the petitioner's request for certiorari on January 12, 2018. Argument in the case was held on April 24, 2018.[2]

    Question presented

    Question presented:

    "Whether a court may exercise independent review of an appearing foreign sovereign's interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is 'bound to defer' to a foreign government's legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit)."[2]

    Audio

    • Audio of oral argument:[6]



    Transcript

    • Transcript of oral argument:[7]

    Outcome

    Decision

    In a unanimous decision, the Supreme Court vacated the Second Circuit, holding that courts are not required to defer to a foreign government's interpretation of its own law.[3]

    Opinion of the court

    Justice Ruth Bader Ginsburg authored the opinion for a unanimous court. Ginsburg ruled, "A federal court should accord respectful consideration to a foreign government’s submission, but is not bound to accord conclusive effect to the foreign government’s statements."[3]

    Ginsburg wrote that a court's interpretation of a foreign law was governed by Federal Rule of Civil Procedure 44.1. Under that rule, Ginsburg quoted, a court "may consider any relevant material or source . . . whether or not submitted by a party" and "engage in its own research and consider any relevant material thus found." Therefore, she continued, courts should accord respect to a foreign government's statements, but they are not bound to follow those statements. Instead, courts should consider a broad range of information and determine based on the particular circumstances of the case how much weight to give a foreign government's statements.

    “ In the spirit of international comity, a federal court should carefully consider a foreign state’s views about the meaning of its own laws. But the appropriate weight in each case will depend upon the circumstances; a federal court is neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials. When a foreign government makes conflicting statements, or, as here, offers an account in the context of litigation, there may be cause for caution in evaluating the foreign government’s submission . . . Given the world’s many and diverse legal systems, and the range of circumstances in which a foreign government’s views may be presented, no single formula or rule will fit all cases in which a foreign government describes its own law. Relevant considerations include the statement’s clarity, thoroughness, and support; its context and purpose; the transparency of the foreign legal system; the role and authority of the entity or official offering the statement; and the statement’s consistency with the foreign government’s past positions.[3][8][5] ”


    Having describe the framework for lower courts to apply, the court did not take a position on the interpretation of foreign law in this case, choosing instead to remand the case to lower courts for reconsideration in light of its opinion.[3]

    Text of the opinion

    See also

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 United States Court of Appeals for the 2nd Circuit, "Animal Science Products v. Hebei Welcome Opinion," December 20, 2016
    2. ↑ 2.0 2.1 2.2 Supreme Court of the United States, "Animal Science Products v. Hebei Welcome Question Presented," January 12, 2018
    3. ↑ 3.0 3.1 3.2 3.3 3.4 United States Supreme Court, "Animal Science Products v. Hebei Welcome Opinion," June 14, 2018
    4. ↑ Internal quotations, citations, and parentheticals omitted.
    5. ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ Supreme Court of the United States, 'Animal Science Products v. Hebei Welcome, argued April 24, 2018
    7. ↑ Supreme Court of the United States, Animal Science Products v. Hebei Welcome, argued April 24, 2018
    8. ↑ Internal citations and quotations omitted.
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