United States: The Future Of Antitrust Claims At The ITC

In March, the U.S. International Trade Commission issued its long-awaited opinion in Certain Carbon and Alloy Steel Products, nearly a full year after the ITC held a rare full-day oral hearing before the full commission. The ITC dismissed the antitrust-based Section 337 complaint brought by complainant U.S. Steel, holding that U.S. Steel failed to plead the requisite "antitrust injury" to maintain its action before the ITC. While one commissioner (Commissioner Meredith M. Broadbent) dissented from the ITC's decision, the commission's dismissal of U.S. Steel's complaint caused some to question whether there remained a viable path for antitrust-based claims at the ITC. But the ITC's initiation of an antitrust-based Section 337 investigation just days later in Certain Programmable Logic Controllers shows that the door for antitrust claims at the ITC has not closed. Those interested in bringing future antitrust-related claims at the commission should use the guidance provided in these cases.

The ITC's Decision in Certain Carbon and Alloy Steel Products

In dismissing U.S. Steel's complaint in Certain Carbon and Alloy Steel Products, the ITC held that when a complainant alleges a Sherman Act-based claim (here, price-fixing) as an "unfair method of competition and unfair act" prohibited by Section 337(a)(1)(A) of the Tariff Act (19 U.S.C. § 1337(a)(1)(A)), the complainant must also allege that it has suffered an antitrust injury1 — the same threshold the U.S. Supreme Court has determined is required for private plaintiffs who file complaints grounded in the Sherman Act in federal district court.2 U.S. Steel had alleged that dozens of the largest Chinese steel producers and their distributors, along with the Chinese government, engaged in an illegal conspiracy to fix prices in violation of the Sherman Act and Section 337. In 2016, the presiding administrative law judge dismissed U.S. Steel's complaint, finding that while allegations of antitrust injury were required, U.S. Steel had not pleaded in its complaint that it suffered antitrust injury as a result of the complained-of conduct.

In affirming the ALJ's ruling, the full commission — addressing a matter of first impression for the ITC — explained that if U.S. Steel wanted to predicate its action on the Sherman Act, then as a matter of law, it needed to adhere to the same standards as district court plaintiffs. That is to say, U.S. Steel needed to establish its antitrust standing by pleading an "antitrust injury" — an injury that stems from a competition-reducing aspect of the respondents' behavior.3 As the ITC explained, antitrust injury reaches beyond acts that simply disadvantage the litigant.4 In fact, even acts that per se violate antitrust laws are not enough.5 Unless the conduct in question is competition-reducing and thus contradicts the central purpose of antitrust laws — to protect pro-competitive and efficient markets — the ITC, like district courts, will not finding standing to raise an antitrust claim. This is in line with the policy justification underlying the antitrust injury requirement, lest the ITC becomes a venue for antitrust litigation over actions are not competition-reducing.

And because U.S. Steel specifically claimed a price-fixing violation, the ITC held that, under Supreme Court precedent, U.S. Steel needed to allege that the respondents engaged in "predatory pricing," which is a competition-reducing practice composed of two parts: (1) the respondents set prices below an appropriate measure of its rival's costs; and (2) the respondents had a dangerous probability of recouping their investment.6 Because U.S. Steel had not done so — and in fact, acknowledged that it could not do so — the ITC dismissed the complaint.

In her dissent, Commissioner Broadbent argued that there was no reason to import standing requirements applicable to private Sherman Act plaintiffs into the ITC's statutory scheme — asserting that Congress, by including a prohibition on "unfair methods of competition" that "restrain or monopolize trade and commerce in the United States" within Section 337, intended "to capture within its scope any nefarious practices that distort domestic competition, whether or not such unfair practices are familiar to domestic courts."7 This, the dissent argued, gives the ITC freedom to depart from federal court precedent and to grant complainants standing simply based on whether the alleged acts are potentially unfair.8 As such, the dissent would have found U.S. Steel's pleadings sufficient to grant it standing, and would not have dismissed the complaint.

The ITC's decision caused some to speculate that antitrust-based Section 337 claims — which were already extremely rare, in light of the ITC's inability to award damages — would henceforth be untenable and unwelcome at the ITC. But it took just a few days later, the ITC initiated another antitrust investigation.

The ITC's Institution of an Investigation in Certain Programmable Logic Controllers

In January 2018, before the commission issued its decision in Certain Carbon and Alloy Steel Products, Radwell International Inc. filed a Section 337 complaint with the ITC, requesting that the ITC institute an investigation into certain alleged unfair methods of competition and unfair acts by Rockwell Automation Inc. In its complaint, Radwell alleged several different antitrust-based claims against Rockwell, claiming that the following conduct would "destroy or substantially injure a domestic industry in the United States" and/or "restrain or monopolize trade and commerce in the United States":

  1. a conspiracy to fix resale prices in violation of Section 1 of the Sherman Act;
  2. a conspiracy to boycott resellers in violation of Section 1 of the Sherman Act; and
  3. monopolization in violation of Section 2 of the Sherman Act.9

Shortly thereafter, Rockwell filed a letter with the commission, requesting that the ITC decline to institute the complaint. Rockwell contended that Radwell's complaint failed to properly plead a cognizable violation of Section 337, in part because it did not sufficiently plead that Radwell had suffered an antitrust injury stemming from Rockwell's conduct. In the alternative, Rockwell asked the commission to postpone its decision on institution until after any ruling in Certain Carbon and Alloy Steel Products and/or to address the issue of antitrust standing in an expedited manner, as part of the ITC's Early Disposition Pilot Program.10

The ITC did in fact postpone its institution decision until March 23 — which, as it turns out, was shortly after it issued its ruling in Certain Carbon and Alloy Steel Products. And on March 26, 2018, just a week after issuing its Certain Carbon and Alloy Steel Products opinion, the ITC issued a notice of institution of investigation into the antitrust-based Section 337 claims brought by Radwell. That same day, the ITC also denied Rockwell's request to utilize the Early Disposition Pilot Program to address the issue of antitrust standing, finding that "the issues raised may be too complex to be decided within 100 days of institution."11

What Distinguishes Certain Carbon and Alloy Steel Products and Certain Programmable Logic Controllers?

Though the ITC's decision to institute a new antitrust-related investigation so soon after dismissing U.S. Steel's complaint may seem surprising at first glance, a closer read of the Certain Carbon and Alloy Steel Products decision and the Certain Programmable Logic Controllers complaint illuminates a consistent principle: the complainant must properly allege "antitrust injury."

In Certain Programmable Logic Controllers, Radwell adhered to the ITC's new rule — while Radwell broadly alleged various Sherman Act violations beyond what was alleged in Certain Carbon and Alloy Steel Products, it also importantly appears to have specifically alleged that it in fact suffered antitrust injury stemming from those violations. Radwell alleged that Rockwell and each of its authorized distributors have engaged in a "hub-and-spoke conspiracy" which constitutes both a group boycott and an impermissible price-fixing scheme, all of which are in violation of the Sherman Act. Radwell further alleged that Rockwell's conduct will not just "restrain or monopolize trade and commerce in the United States," but will also "destroy or substantially injure an industry in the United States" (commonly known in the ITC as the "injury to a domestic industry" requirement). Radwell claimed that "Rockwell and its Authorized Distributors' conduct constitute a conspiracy in restraint of trade in violation of Section 1 of the Sherman Act, [and] a conspiracy to monopolize and monopolization in violation of Section 2 of the Sherman Act."

As examples for the Section 1 violation, Radwell claimed that Rockwell and the authorized distributors have agreed that they will: "(a) not carry PLC product lines from manufacturers that directly compete with Rockwell PLCs; (b) not compete with one another on the resale prices of Rockwell PLCs offered for sale to their customers; (c) fix the resale prices of all Rockwell PLCs offered for sale to their customers; (d) refuse to sell Rockwell PLCs to PLC resellers, like Radwell; (e) assist Rockwell in preventing other downstream customers of imported Allen-Bradley PLCs from reselling Allen-Bradley PLCs to U.S. resellers, like Radwell, and, (f) take active and affirmative steps to participate in, enforce and conceal the conspiracy."12

And as examples of the Section 2 violation, Radwell claimed that Rockwell "possesses sufficient monopoly and market power to control prices in, and to exclude competitors from, the U.S. PLC market. As evidence, Radwell claims that Rockwell sells PLCs in the United States at a premium price compared to the PLCs sold by other manufacturers in the United States and compared to PLCs sold by Rockwell in other parts of the world where it lacks monopoly and market power."13

Radwell also alleged that due to these alleged violations of the Sherman Act, Radwell has suffered antitrust injury — specifically, that Radwell has been foreclosed from purchasing and reselling importing PLCs and/or has been force to purchase these products at supra-competitive prices.14

Thus, whereas U.S. Steel framed its Section 337 complaint as one made under a pure trade statute with no antitrust injury requirement, Radwell pleaded a broader set of antitrust theories and set out to plead antitrust injury. The ITC's institution of an investigation based on Radwell's complaint — and its rejection of the use of the Early Disposition Pilot Program to address the question of antitrust injury at the outset of the case — implies that this broad approach, paired with an express pleading of antitrust injury, may be a better one for antitrust complainants at the ITC.

What Do These Cases Mean for the Future of Antitrust Claims at the ITC?

The ITC decisions in these cases may provide guidance and fodder for future litigants at the commission. For example, to better ensure that the ITC will institute (and not dismiss) a Section 337 investigation based on antitrust claims, a complainant may be wise to adopt Radwell's strategy, and specifically claim it has suffered antitrust injury while also broadly pleading a variety of antitrust violations. This stands in contrast to U.S. Steel's claims, where, in the context of alleged Sherman Act violations, U.S. Steel did not (and apparently could not) plead antitrust injury suffered from "predatory pricing."

While the commission did not state that antitrust injury is required in every case, a prudent antitrust complainant at the ITC would include such allegations. Moreover, even where a complainant may not be able to plead or prove any antitrust injury, there may be a path forward. Notably, because Section 337 itself prohibits unfair methods or unfair acts which may "restrain or monopolize trade and commerce in the United States," a future complainant may seek to avoid the necessity to show antitrust injury by grounding its claims in Section 337 alone. Because the statute includes no separate antitrust injury requirement, it may be that such a strategy could avoid the dismissal that occurred in Certain Carbon and Alloy Steel Products.

Of course, given the length of time it took to decide Certain Carbon and Alloy Steel Products and the fact that there was a dissent, it is possible that a change in the composition of the commission would have led to a different result.15 A new commissioner, Jason E. Kearns, was recently sworn in, and several others have been nominated to fill vacant positions or expiring terms; new commissioners may take different views on the role antitrust claims and antitrust injury are supposed to play, if any, at the ITC. After all, the dissent made a passionate argument that Section 337(a)(1)(A) is intended to be used broadly as a sword and shield to attack and defend against the sort of geopolitical forces that warp markets, harm private companies, and threaten free-market economies. And there is also the possibility that the law will change through the courts: U.S. Steel might seek to appeal the ITC's dismissal of its complaint to the U.S. Court of Appeals for the Federal Circuit, who could weigh in on whether the ITC's requirement of antitrust standing was appropriate.

And finally, it's worth noting that Radwell has simply gotten past the institution stage of its proceeding — it is possible that its claim fails on the merits, or that the respondents identify a different factual or legal flaw. While the ITC rejected Rockwell's request to use the Early Disposition Program, this only allows one to conclude — as the ITC noted — that Radwell's complaint is too complex to be decided within 100 days of institution. At the end of the day, Radwell might find itself in the same situation as U.S. Steel. This much is certain, however: for those interested in the intersection of antitrust and trade issues, Certain Programmable Logic Controllers will be a case to watch.

The upshot is that while antitrust-related Section 337 claims have rarely been asserted at the ITC, they are certainly within the purview of Section 337's broad prohibition against "unfair methods of competition and unfair acts." Future complainants interested in bringing such claims should take care to heed the commission's guidance in pleading and proving their cases, and learn from the lessons taught in Certain Carbon and Alloy Steel Products and Certain Programmable Logic Controllers. Future respondents, likewise, should study these cases to seek to craft effective defenses and seek dismissal of defective antitrust claims at the ITC.


1. Certain Carbon and Alloy Steel Products, Inv. No. 337–TA-1002, Commission Opinion (Mar. 19, 2018).

2. Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 339 (1990) ("ARCO").

3. Certain Carbon and Alloy Steel Products at 17 (citing ARCO at 344).

4. Id.

5. Id.

6. Id. at 18 (citing Brooke Grp., Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993)).

7. Id. at 37.

8. Id. at 39.

9. Complaint, Certain Programmable Logic Controllers (PLCS), Components Thereof, and Products Containing Same, Inv. No. 337-TA-1105 (Jan. 19, 2018).

10. Under this program, the ITC endeavors to identify issues that are likely to be dispositive of an entire investigation, and directs the assigned ALJ to expedite factfinding, hold an abbreviated hearing, and issue an early initial determination on the dispositive issue, all within 100 days of institution. See "Pilot Program Will Test Early Disposition of Certain Section 337 Investigations," https://www.usitc.gov/press_room/featured_news/pilot_program_will_test_early_disposition_certain.htm.

11. Order Denying Request for Entry into Early Disposition Pilot Program, Inv. No. 337-TA-1105 (Mar. 26, 2018).

12. Complaint at 2.

13. Complaint at 3.

14. Complaint at 6-7.

15. In fact, former Commissioner Scott Kieff, who was an active Commissioner at the time of oral argument but retired in June 2017, has published as an article the "opinion" that he would have authored had he still been a Commissioner at the time of the decision. In his article, he espouses views similar to the dissent, and would have found that antitrust standing was not required to maintain an antitrust-based Section 337 claim. Kieff, F. Scott, Private Antitrust at the U.S. International Trade Commission (March 19, 2018). Journal of Competition Law & Economics (Oxford University Press), Forthcoming; GWU Law School Public Law Research Paper No. 2018-16; GWU Legal Studies Research Paper No. 2018-16. Available at SSRN: https://ssrn.com/abstract=3144513

This article by counsel Matthew Rizzolo, associate Raishay Lin and law clerk Martin Njoroge was published by Law360 on May 15, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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