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Christopher Williams

645 E. Holly St. # 204 Boise, ID 83712


Email: Will8385@vandals.uidaho.edu
Tel: (509) 540-0028
WRITING SAMPLE
To whom it may concern,
Attached is a 15 page excerpt of the facts and analysis section I contributed to for the
National Moot Court Competition in fall 2014. No one outside of our three person team made
any contributions to the paper. The fact section from pages 12 was substantially written by
another participant and is included solely to provide context for the reader. The argument
section is entirely my product and begins at page 3.
Thank you for reading,
Christopher Williams

ISSUES PRESENTED
1.

[First argument omitted]

2.

Did the Twelfth Circuit properly hold that foreign


anticompetitive conduct directly affects the United
States, and is thus governed by the FTAIA, if the foreign
conduct bears a reasonably foreseeable casual nexus
with its alleged domestic effects?
STATEMENT OF FACTS

In 1982 Starke Pharmaceuticals Ltd. (Starke Pharma) was


incorporated and had its principle place of business in the state of North
Westeros. Starke Pharma focused nearly all of its attention towards
combatting the AIDS/HIV virus.
Until 1989, treatments for the AIDS/HIV virus consisted of a
combination of pills, known as cocktails that were individually formulated for
each patient. In 1989, Starke Pharma created a single-pill made-to-order
cocktail known as Rx Sansa (Sansa). In 1990 Starke Pharma was issued a
twenty-year patent on Sansa.
To prepare for production, Starke Pharma conducted research to
determine the maximum price the market would bear for Sansa. Starke
Pharma deviated from the traditional pricing approach and risked another
strategy to maximize profits. Although market research indicated that the
customers would be willing to pay up to 10% more for a brand name drug,
Starke Pharma deviated from that research and relied on an increased sales
volume to collect profits.
Due to this deviation, as soon as the Sansa patent expired, two generic
companies, Rx Aryalite and Rx Rickontin, entered the market and offered the
drug at 80% of Sansas market price. After the second year Sansa was only

within 115% of the generics manufacturers price. By the end of 2010


generic medication constituted nearly 50% of all HIV/AIDS cocktails sold in
the United States.
Although Starke Pharma was incorporated and had its principle place of
business in North Westeros, United States, it outsourced the manufacturing
of its drug to companies in Japan, Canada, South Korea, and Germany.
Afterwards everything was processed and packaged in Sweden and then
shipped.
Despite Starke Pharmas multi-international manufacturing operation
which is subject to supply-chain instability and international market
instability, Starke Pharma received information that the employees of both
Bolton Chemists and Walder medical had attended a trade conference in St.
Lucia in 2008. They reason that because both companies prices had steadily
risen, that the employees illegally agreed to match each others Viserol
prices and filed suit in the District of North Westeros in January 2010. The
trial was set for May 2012.
[Facts pertaining to first issue omitted]
SUMMARY OF ARGUMENT
[Summary of first issue argument omitted]
Additionally, the district court correctly adopted the immediate
consequence test as applied by the Ninth Circuit. This test is not only
narrower and less vulnerable to overreaching, but has a more predictable
application and does not overstep into foreign enforcement actions.
STANDARDS OF REVIEW
We review de novo constitutional claims and questions of law. RosasQuiroz v. Holder, 12-70195, 2014 WL 4947087 (9th Cir. Oct. 3, 2014).

ARGUMENT

[First argument omitted


The Twelfth Circuit improperly held that foreign
anticompetitive conduct is governed by the FTAIA if the foreign
conduct bears a reasonably foreseeable casual nexus with
its alleged domestic effects.
The Sherman Act makes it a felony to enter into a [c]ontract,
combination in the form of trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several states, or with foreign nations . . . .
15 U.S.C.A. 1 (West). Although the Act explicitly applies to acts in foreign
nations, it does not apply to all foreign conduct nor does it specifically state a
test for when application to foreign conduct is appropriate; the Second
Circuit Court of Appeals wrote an influential opinion regarding the Sherman
Acts application to foreign law in 1945, proffering the effects test, which
was subsequently adopted by many courts. United States v. Aluminum Co. of
America, 148 F.2d 416 (2d Cir. 1945). Congress passed the Foreign Trade
Antitrust Improvements Act of 1982 (FTAIA) to clarify the precise test to
determine the Sherman Acts application to foreign law. 15 U.S.C.A. 6a
(West). The FTAIA states that [The Sherman Act] shall not apply to conduct
involving trade or commerce . . . with foreign nations unless (1) such conduct
has a direct, substantial, and reasonably foreseeable effect, (a) on trade or
commerce . . . or (b) on export trade or commerce . . . . Id. (emphasis
added).
The Circuit Courts adopted two parallel tests to interpret the direct
requirement of direct, substantial, and reasonably foreseeable effect. In
2004, the Ninth Circuit adopted the immediate consequence test. United

States v. LSL Biotechnologies, 379 F.3d 672, 68083 (9th Cir. 2004). More
recently, in 2012, the Seventh Circuit adopted the reasonably proximate
causal nexus test. Minn Chem, Inc. v. Agrium, Inc., 683 F.3d 845, 857 (7th
Cir. 2012). Before the FTAIA and these two opinions, the test utilized by most
courts was the Second Circuits effects test that the Sherman Act was
meant to reach foreign conduct only if it was intended to and did affect
United States commerce. LSL Biotechnologies, 379 F.3d at 677.
The Ninth Circuit adopted the immediate consequence test in
response to the patchwork of FTAIA interpretations of lower courts, many of
which could not even agree on whether the FTAIA set a new jurisdictional
standard or merely codified the [effects test] Id. at 678. To create this test,
the court used a dictionary from the time of the FTAIAs passage, which
stated that direct meant proceeding from one point to another in space or
time without deviation or interruption. Id. at 680. They then analogized a
Supreme Court interpretation of direct in the context of the Foreign Service
Immunities Act, where the Court stated that an effect is direct if it follows
as an immediate consequence of the defendants activity. Id. (quoting
Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 618 (1992). When
determining whether an action is direct for purposes of the FTAIA, the
effect must follow as an immediate consequence of the defendants activity.
Id.
The Seventh Circuit adopted the reasonably proximate causal nexus
test and rejected the Ninth Circuits immediate consequence test in Minn
Chem, Inc. 683 F.3d 845, 856 (7th Cir. 2012); Lotes Co. v. Hon Hai Precision
Industry, Co., 753 F.3d 395, 410 (2d Cir. 2014). This test reads substantial

and reasonably foreseeable into the definition to determine that direct


means the action and subsequent effect must have a reasonably
foreseeable causal nexus. Id. at 857. While saying nothing to the dictionary
definition cited, the court states that the Ninth Circuit was too quick to adopt
the Supreme Courts interpretation of direct, because it was used in a
different context. Id. at 857.
Ultimately, the immediate consequence test is a stricter,
conservative application of the direct, substantial, and foreseeable
language that will cover less activity than the reasonably foreseeable causal
nexus test. The immediate consequence test is more appropriate and
should be adopted by this Court because 1) the statutory text of the FTAIA
favors the immediate consequence test, 2) the Seventh Circuits test is
difficult to apply and will lead to over-application of the law, inconsistent with
the legislative intent, and 3) On difficult questions, deference should be
given to the interests in a foreign nations sovereignty.
A. The Statutory Text of the FTAIA favors the
immediate consequence test.
The reasonably foreseeable causal nexus test stretches the limits of
a reasonable reading of the text and requires the equivalent of mental
gymnastics to reach; in contrast, the immediate consequence test merely
requires the application of dictionary and Supreme Court definitions, and the
presumption that Congress means what it says. First, the dictionary definition
of direct supports an immediate consequence test. The Supreme Court
also defined direct in the past under a similar anti-trust provision. Second,
the three elements of the test are separate and distinct, and reading the

elements to modify each other is both counterintuitive and against


Congresss stated intent in its House Report.
Interpreting a statute begins, first and foremost, with the language of
the statute itself. Absent a clearly expressed legislative intention to the
contrary, that language must ordinarily be regarded as conclusive.
Consumer Prod. Safety Commn v. GTE Sylvania, Inc., 447 U.S. 102, 108
(1980). A primary rule of statutory construction is that the courts must
presume that a legislature says in a statute what it means and means in a
statute what it says there. Connecticut Natl Bank v. Germain, 503 U.S. 249,
25354 (1992). Additionally, in making this determination, the court must
interpret the relevant words . . . with reference to the statutory context,
structure, history, and purpose. Abramski v. United States, 134 S. Ct. 2259,
2267 (2014). When the words are unambiguous, judicial inquiry is
complete. Natl Bank, 503 U.S. at 254 (citing Rubin v. United States, 449
U.S. 424, 430 (1981)). Ultimately, relevant definitions and the statutory
context of the document are the best indicators regarding the intent of a
statute.
The 1981 version of Websters dictionary defines direct as
proceeding from one point to another in time or space without deviation or
interruption. LSL Biotechnologies, 379 F.3d at 680 (quoting WEBSTERS THIRD
NEW INTL DICTIONARY 640 (1981)). A parallel, second definition in the same
dictionary cited by the Ninth Circuit states that direct is characterized by or
giving evidence of a close especially logical, causal or consequential
relationship. Lotes, 753 F.3d at 410 (quoting WEBSTERS THIRD NEW INTL
DICTIONARY 640 (1981)). The Second Circuit favored the parallel definition and

seemed to believe this second definition supported the reasonably


proximate causal nexus test. It is highly relevant though that the parallel
definition does not state that direct is a reasonably close logical, causal or
consequential relationship, but instead states that direct is an especially
[close] logical, causal, or consequential relationship. Taking the plain
definition of directwhich includes language such as without deviation or
interruption, and especially closeand using another element, reasonably
foreseeable, to impose a reasonableness requirement into the definition
ignores the plain language imposed by both dictionary definitions.
Additionally, the Supreme Court defined a direct effect to mean it
follows as an immediate consequence of the defendants . . . activity.
Republic of Argentina v. Weltover, 504 U.S. 607, 618 (1992). The Seventh
Circuit finds it highly relevant that, in Weltover, the Supreme Court refused
to read the requirements of substantial or reasonably foreseeable into
the definition of direct, arguing that the FTAIA includes such language, so the
language should be read into the definition of direct. Minn-Chem, Inc., 683
F.3d at 85657. However, this conclusion directly contradicts the plain
meaning of the language and the intention of Congress.
Reading a requirement of substantial and reasonably foreseeable into
the directness requirement is illogical because they are three separate and
distinguishable elements of the extraterritorial application of the Sherman
Act. Direct, substantial, and reasonably foreseeable each address a
distinguishable character of the effect that must occur. Direct refers to
how the action affects the United States, whether they are ancillary, indirect,
or direct; substantial refers to the significance or the intensity of the

actions effect; and reasonably foreseeable refers to how foreseeable the


actions effect on the United States must be. Under the Seventh Circuits
interpretation, in order to reach the Ninth Circuits conclusion (that direct
means what the dictionary and the Supreme Court has defined it to mean),
Congress would have to place a disclaimer at the bottom of the statute
stating the three elements listed above are separate elements and do not
define each other. Under this interpretation, Congress would not be safe
creating a list of elements that, together, constitute a crime without the risk
that lower courts will read the elements to define each other.
The House report makes it apparent that Congress added the language
reasonably foreseeable late in the bills history for a specific purpose,
which does not include an intention to amend the meaning of the language
direct. As stated earlier, when interpreting a statute, the court should
consider history, and purpose. Abramski, 134 S. Ct. at 2267. H.R. 2326 was
the original bill that, after some amendments, would become the FTAIA. H.R.
2326: Foreign Trade Antitrust
Improvements Act of 1984, GOVTRACK, https://www.govtrack.us/congress/bills/
97/hr2326 (last visited Oct. 10, 2014). The original bill, H.R. 2326, only
applied to foreign conduct that effects the United States if such conduct
substantially affects commerce within the United States. Id. (emphasis
added). After that bill failed, witnesses and commentators expressed their
concern that a foreign entity would fall under this standard due to an
unpredictable, remote or indirect impact on U.S. Commerce, determined
after the fact. H.R. REP. NO. 97-686, at 8 (1982). So, the addition of

reasonably foreseeable was added as an afterthought, with no explicit


indication by Congress that it is designed for anything other than to quell the
fears of foreign entities hoping to do business in the United States. The
purpose of adding reasonably foreseeable was to make it apparent that an
effect must be predictable by a foreign entity, not to amend the direct
requirement.
Finally, the House Reports language makes clear that direct,
substantial, and reasonably foreseeable are three separate, distinct
requirements. The House Report states [a] defendant confronted with
evidence that his past conduct has had direct and substantial effects within
our country could not argue that continued effects of this type flowing from
similar future conduct were not reasonably foreseeable. H.R. REP. NO. 97686, at 9 (1982). The distinction between a direct effect and a reasonably
foreseeable effect would be superfluous if the direct effect merely needed
to be a reasonably foreseeable causal nexus between the action and the
effect. If that was the case, Congress could have made this clear by requiring
a reasonably foreseeable direct effect.
The Seventh Circuit ignored plain dictionary and analogous Supreme
Court definitions, and instead read distinctive definitions together to
promulgate a standard contrary to Congress original definition.
B. The Seventh Circuits test is difficult to apply and
will lead to over-application of the law, inconsistent with
legislative intent.
The immediate consequence definition of direct is more in-tune with
Congress intent than the reasonably foreseeable causal nexus test
because the former test provides more clarity and predictability for business,

whereas the latter test imposes less predictable standards on foreign entities
and discourages foreign participation in U.S. commerce.
A primary goal by Congress when passing the FTAIA was to provide
clarity for the application of the Sherman Act to foreign conduct because
predictability fosters foreign investment in U.S. commerce; the immediate
consequence test furthers Congresss intent and the reasonably
foreseeable nexus test does not. The House Report associated with this bill
states that the ultimate purpose of this legislation is to create certainty in
assessing the applicability of American antitrust law to international business
transactions and proposed transactions . . . . H.R. REP. NO. 97-686, at 9
(1982) (emphasis added). By clarifying the standard for American antitrust
law application to foreign conduct, Congress intended to allow American
firms greater freedom when dealing with foreign companies in order to
encourage a competitive domestic marketplace. Id. at 7. It is not
coincidence that the FTAIA was passed in the early 1980s during the Reagan
administration, well known for being pro-business and opposed to
commercial regulation. Bryan J. Soukup, From Coolidge to Christie:
Historical Antecedents of Current Government Officials Dealing with Public
Sector Labor Unions, LABOR L. J., Dec. 2013, WL 6685867.
In direct opposition to the purpose of the FTAIA, to provide clarity,
stands the reasonably foreseeable causal nexus test. The reasonably
foreseeable causal nexus test is a less stringent approach to the FTAIA
that 1) requires a case-by-case fact-intensive analysis, and 2) covers far
more activity than the immediate consequence test. Lotes, Co. v. Hon Hai
Precision Indus. Co., 753 F.3d 395, 410 (2d Cir. 2014); Record p. 36.

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Whether an action in a foreign country has a reasonably foreseeable


causal nexus with a particular result in the United States requires an
intensive fact-by-fact analysis in the court, inconsistent with the purpose of
the FTAIA. A purpose of the FTAIA was to clarify the effects test, which
applied the Sherman test if the foreign activity intended and did affect
United States commerce. ALCOA, 148 F.2d 416, 443 (2d Cir. 1945); see H.R.
REP. NO. 97-686. For instance, the House Report states that in a situation
where the unpredictability of anti-trust considerations enter the equation
early in a business transaction, the potential transaction may die on the
drawing board, and thus act as a deterrent to economic activity. H.R. REP.
NO. 97-686, at 6. By sweeping aside the potential detriments to business
transactions by stating that [t]he more flexible nature of this test is not a
demerit, the Twelfth Circuit entirely ignores the primary purpose for the
legislation: to provide clarity and predictability for business. Instead, the
Twelfth Circuit would place a fairly loose standard into the hands of U.S.
regulators and courts to determine the applicability in a case-by-case
basis. Id. If a statute is designed to promote clarity and predictability, the
flexible nature of a test that applies that statute is a detriment. Instead,
the test should be interpreted along with the purpose of the statute.
As stated earlier, the House Report makes clear that the intent was to
narrow the application of the Sherman Act to foreign activities to strengthen
business, the argument being that less regulation and more predictability
provide incentives for foreign investors to invest in the U.S. economy.
Promulgating the unpredictable, malleable reasonably foreseeable causal

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nexus test works directly against the purpose of this legislation, while the
rigid, predictable immediate consequence test supports it.
C. On difficult questions, deference should be given to
the interests in a foreign nations sovereignty.
Even if, after considering the plain language of the statute along with
Congress clearly stated intent, the Court still considers the statute to be
ambiguous, the statute should be interpreted to be less restrictive on foreign
nations under the principles of prescriptive comity. Prescriptive comity is the
rule of statutory construction that [the Supreme] Court construes
ambiguous statutes to avoid unreasonable interference with the sovereign
authority of other nations. F. Hoffman-La Roche, Ltd. v. Empagran S.A., 542
U.S. 155, 164 (2004). This is a rule of statutory construction derived from
customary international law, which the Court assumes Congress ordinarily
seeks to follow. Id. Americas antitrust laws, when applied to foreign
conduct, can interfere with a foreign nations ability independently to
regulate its own commercial affairs. Id.
Ultimately, the court presumes that Congress means to minimize their
interference with a foreign nations sovereignty. If a statute is ambiguous
with two interpretations, one that interferes more with foreign sovereignty
and one that interferes less, the court should construe the statute to
interfere less absent some sort of express congressional statement of intent.
In this case, foreign nations have an interest in criminalizing antitrust
activities that occur in their own country. Interpreting the FTAIA to cover
significantly more activity than a reasonable interpretation of its plain
language suggests would violate the principle of prescriptive comity.

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In this case, the district court properly denied Plaintiffs Motion for
Judgment as a Matter of Law. There remains a reasonable question as to
whether Bolton Chemists and Walder Medicals alleged conduct in fixing the
price for their product, Viseriol, has an immediate consequence on the
United States. Viseriol is manufactured by two facilities, one in South Korea
and the other in Germany. Bolton Chemists and Walder Medical then send
their product to a facility in Sweden, Tyrell Manufacturing. At this point, both
Bolton Chemists and Walder Medical are no longer involved in the
manufacturing or production process of Sansa. Tyrell Manufacturing then
manufactures Sansa, which only consists of 40%50% Viseriol. The jury
properly determined that the miniscule effect in the United States was not an
immediate consequence of the alleged conduct, especially when Bolton
Chemists and Walder Medical end their involvement in the manufacturing
process after their product reaches a manufacturing facility in Sweden.
The term direct should be interpreted to require the effect in the
United States to arise as an immediate consequence of the foreign action.
First, the definition immediate consequence is supported by multiple
dictionary definitions from the period that the FTAIA was passed, and the
Supreme Court specifically interpreted direct to mean an immediate
consequence under a similar antitrust statute. Second, the reasonably
foreseeable causal nexus test requires a fact-intensive, case-by-case
analysis, which is inconsistent with the explicit legislative intent to increase
the predictability regarding what conduct fits within the statute. Finally, even
if the Court believes the statute is ambiguous, the statutory principle of

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prescriptive comity suggests that the immediate consequence test should


be used because it intrudes less into foreign sovereignty than the sloppy
reasonably foreseeable causal nexus test.
CONCLUSION
[First issue conclusion omitted]
Additionally, adopting the reasonably foreseeable casual nexus test
would have a disruptive effect on foreign markets, overstep its bounds by
expanding the range of conduct reachable by the Sherman Act, and be
inconsistent in application. The statutory text of the FTAIA favors the more
appropriate immediate consequence test because it will not lead to an
over application of the law that is inconsistent with the legislative intent.
Further, if a statute is ambiguous in its meaning, courts should construe the
statute to minimize their interference with a foreign nations sovereignty.
We respectfully request this court reverse the Twelfth Circuits
conclusion on both issues and affirm the district courts decision to deny the
Plaintiffs Motion for Judgment as a Matter of Law and Motion for a New Trial.

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