Tuesday, June 10, 2014
Falling in line on the FTAIA
The Second Circuit last week became the latest circuit (joining the Third and Seventh) to overrule circuit precedent and hold that the Foreign Trade Antitrust Improvements Act (FTAIA), which limits the extraterritorial reach of the Sherman Act, is a nonjurisdictional merits limitation. This court focused more on Arbaugh and the absence of "jurisdictional language," rather than Morrison's absolute "extraterritoriality-is-always-merits" approach. But, citing the Seventh Circuit, the court recognizes the merits nature of the FTAIA. The court makes one nice move with the FTAIA's legislative history and its repeated references to jurisdiction. References to the "subject matter jurisdiction of United States antitrust law" are not unambiguously about the adjudicative authority of the federal courts, but instead are better understood as inartfully referring to the prescriptive scope of federal law, which goes to the merits of any claim under that law.
The Second Circuit also recognized that Congress was as confused as the courts about jurisdictionality and as likely as the courts to use terms loosely and inaccurately, at least prior to Arbaugh in 2006. This suggests that even if Congress did include "jurisdictional language" in a pre-2006 statute, courts still must look carefully at whether it really meant adjudicative jurisdiction or whether it meant jurisdiction in some other sense (notably in referring to its own legislative authority). Morrison's absolute approach helps in this reading of statutory text and history.