United States Courts and the Optimal Deterrence of International Cartels: A Welfarist Perspective on Empagran

Alvin K. Klevorick (alvin.klevorick@yale.edu) and Alan O. Sykes
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Alvin K. Klevorick: Yale University, https://economics.yale.edu/people/faculty/alvin-klevorick
Alan O. Sykes: Stanford University

No 1617, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: E. Hoffmann-La Roche Ltd. v. Empagran S.A. concerned a private antitrust suit for damages against a global vitamins cartel. The central issue in the litigation was whether foreign plaintiffs injured by the cartel’s conduct abroad could bring suit in U.S. court, an issue that was ultimately resolved in the negative. We take a welfarist perspective on this issue and inquire whether optimal deterrence requires U.S. courts to take subject matter jurisdiction under U.S. law for claims such as those in Empagran. Our analysis considers, in particular, the arguments of various economist amici in favor of jurisdiction and arguments of the U.S. and foreign government amici against jurisdiction. We explain why the issue is difficult to resolve, and identify several economic concerns, which the amici did not address, that may counsel against jurisdiction. We also analyze the legal standard enunciated by the Supreme Court and applied on remand by the DC Circuit, and we argue that its focus on "independent" harms and "proximate" causation is problematic and does not provide an adequate economic foundation for resolving the underlying legal issues. A revised version of this paper is forthcoming in ANTITRUST STORIES from Foundation Press, edited by Daniel Crane and Eleanor Fox.

Keywords: Antitrust; Cartels; Competition policy; International trade (search for similar items in EconPapers)
JEL-codes: F13 K21 L41 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2007-07
New Economics Papers: this item is included in nep-com, nep-int, nep-law and nep-reg
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Citations: View citations in EconPapers (2)

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