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WT/DS162/R/Add.1 Page 98

Act, they are more likely to file suit against importers than against domestic competitors for the same alleged conduct.  As a consequence, importers face a higher risk of legal and business harassment under the 1916 Act than domestic producers face under the Robinson-Patman Act.328


Japan notes that these transaction and business costs take the form of legal expenses, disrupted business, uncertainty in the marketplace and a chilling effect on imports.  In addition, using the threat of protracted lawsuits to seek to force defendants to accept out-of-court settlement is commonplace in the United States.  The defendants in the Geneva Steel case have incurred the expense and uncertainty of being involved in litigation for nearly three years.  The defendants in the Wheeling-Pittsburgh litigation have suffered even more dramatic consequences.  Of the nine defendants in the case, six have reached out-of-court settlements.329  Although these settlements remain confidential, most of them include certain restrictions on the importation of foreign steel and agreements to purchase undisclosed amounts of steel from the plaintiff.330  According to statements from the plaintiff in that case, one defendant even agreed to pay it an undisclosed amount of money to settle the litigation.331


Japan argues that the settlements themselves distort trade.  Importers have been forced to purchase steel from an US producer.332  They have been forced to agree to curb their purchases of imported steel all to the benefit of an US steel producer.333  Touting the successes of the 1916 Act actions brought by Geneva Steel and Wheeling-Pittsburgh, one even agreed to simply pay the plaintiff to end the legal harassment.334


In the view of Japan, what is perhaps even more troubling is that these recent cases and resulting settlements raise the potential for similar lawsuits and class action suits.  Touting the success of Geneva Steel and Wheeling-Pittsburgh, at least one American law firm has solicited plaintiffs to bring a class action lawsuit under the 1916 Act against steel importers.335


The United States disagrees with Japan's argument that domestic firms can "more easily impose significant litigation costs and business burdens on foreign producers [through lawsuits under the 1916 Act] than on domestic competitors [through lawsuits under the RobinsonPatman Act]".  Japan offers no support for this bald statement and none exists.  The cases described establish that this theory is not valid; clearly, the far greater number of RobinsonPatman Act cases imposes far more significant litigation costs and business burdens on domestic firms than the two 1916 Act cases could ever impose on foreign firms.


The United States recalls in this regard that the 1916 Act has rarely been invoked by private parties, and has never been invoked by the US government.  More importantly,  the 1916 Act establishes a standard for relief which has never been met in the case of importers and imported goods.  The RobinsonPatman Act, by contrast, has been successfully invoked in thousands of federal court and administrative cases, including a substantial number pursued administratively by the Federal Trade Commission.

328 Japan notes that litigation under Robinson-Patman has come to a virtual standstill since the US Supreme Court handed down its ruling in Brooke Group.  By comparison, the 1916 Act has seen a recent revival in activity, imposing trade-inhibiting transaction and business costs on the defendants named in recent cases.

329 Japan notes that only three defendants, all Japanese, remain active in the litigation, opting thus far to continue to bear the costs and uncertainty associated with the litigation rather than the costs of settling.

330 Japan refers to Wheeling-Pittsburgh Steel Corporation press releases.

331 Ibid.

332 Ibid.

333 Ibid.

334 Ibid.

335 Japan refers to advertising material of a San Francisco law-firm.

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