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


Alvin K. Klevorick


Yale University - Law School

Alan O. Sykes


New York University School of Law

July 1, 2007

Cowles Foundation Discussion Paper No. 1617
Yale Law & Economics Research Paper No. 340
Stanford Law and Economics Olin Working Paper No. 338
Rock Center for Corporate Governance Working Paper No. 42

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 in ANTITRUST STORIES from Foundation Press, edited by Daniel Crane and Eleanor Fox and in Competition Law & Economics 309 (2007).

Number of Pages in PDF File: 59

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Date posted: February 15, 2007 ; Last revised: September 29, 2009

Suggested Citation

Klevorick, Alvin K. and Sykes, Alan O., United States Courts and the Optimal Deterrence of International Cartels: A Welfarist Perspective on Empagran (July 1, 2007). Cowles Foundation Discussion Paper No. 1617; Yale Law & Economics Research Paper No. 340; Stanford Law and Economics Olin Working Paper No. 338; Rock Center for Corporate Governance Working Paper No. 42. Available at SSRN: http://ssrn.com/abstract=963394 or http://dx.doi.org/10.2139/ssrn.963394

Contact Information

Alvin K. Klevorick (Contact Author)
Yale University - Law School ( email )
P.O. Box 208215
New Haven, CT 06520-8215
United States
Alan O'Neil Sykes
New York University School of Law ( email )
40 Washington Square South
New York, NY 10012-1099
United States
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