The Foreign Trade Antitrust Improvements Act’s Domestic Injury Exception: A Nullity for Private Foreign Plaintiffs Seeking Access to American Courts


Since the Foreign Trade Antitrust Improvements Act (“FTAIA”) amended the Sherman Act in 1982, the FTAIA has been a source of confusion and debate about Americanantitrust law’s applicability to anticompetitive conduct implicating foreign nations. The FTAIA states that the Sherman Act does not apply to conduct with foreign nations, but then provides multiple exceptions to this initial exclusionary rule. The federal courts have had particular trouble applying the FTAIA’s “domestic injury exception,” which requires claimants to satisfy a double causation standard in order to access American courts. Under the exception, to make a claim generally excluded from the Sherman Act’s reach because it involves trade or commerce with foreign nations: (1) the defendant’s conduct must have a direct, substantial and reasonably foreseeable effect on United States commerce; and (2) that effect on United States commerce must “give rise” to a claim under the Sherman Act. Lower federal courts have reached a consensus proximate cause relationship between the first and second prongs of this test. This Note argues, however, that this proximate cause standard prevents all foreign private plaintiffs from accessing American courts. In light of global antitrust enforcement developments and international comity concerns, there are strong policy justifications *217 to support this unattainable standard. Nevertheless, a question remains whether it is better to occupy judicial resources with claims that should always fail under the prevailing standard or to expose the Sherman Act to Congressional amendment and political pressures to refine a standard that might be extremely difficult to define precisely.