Who Interprets Foreign Law in U.S. Federal Courts?

Who Interprets Foreign Law in U.S. Federal Courts?

Legal Sidebari

Who Interprets Foreign Law in U.S. Federal
Courts?
Updated July 9, 2018
Federal courts are frequently called upon to evaluate foreign law in a variety of contexts—from routine
breach of contract and tort claims to complex cases implicating the judicial branch’s role in international
affairs. In Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., the Supreme Court
announced the standard of deference for U.S. federal courts to apply when considering a foreign
government’s interpretation of its own law. Prior to the Court’s ruling, federal courts took a range of
approaches on the degree of deference given to a foreign government’s official explanation of its
domestic law. Some courts viewed a foreign nation’s interpretation as effectively binding (at least as long
as it was reasonable), but others were willing to deviate from the nation’s position if it was inconsistent
with prior statements or not supported by affidavits and expert testimony. In Animal Science Products,
Inc., the Supreme Court unanimously held that federal courts must give “respectful consideration” to a
foreign government’s interpretation, but they are not “bound to defer” to that position.
Why Do U.S. Courts Interpret Foreign Law?
In recent decades, analysis of foreign law has become important in cases when litigants claim to be
subject to conflicting obligations under U.S. and foreign law. For example, U.S. courts have ordered
companies to turn over documents held overseas when foreign bank secrecy laws prohibited their
disclosure. And a business operating in the United States and abroad may be subject to conflicting legal
requirements when, for example, American antitrust law prohibits anticompetitive sales practices at the
same time foreign law mandates the business engage in those practices.
When considering cases involving irreconcilable legal duties between U.S. and foreign law, federal courts
have, at times, excused violations of U.S. law or moderated the penalty imposed for the violations. But it
may not always be clear what foreign law requires or whether there is an actual conflict between U.S. and
foreign legal obligations. Although foreign governments have submitted official written explanations of
their national law in some cases, prior to Animal Science Products, federal courts of appeals took differing
approaches to their analysis of foreign governments’ submissions. Whereas some courts scrutinized the
foreign government’s views for consistency with prior statements and external evidence, others adopted
the nation’s analysis with little to no independent analysis. Most recently, the United States Court of
Appeals for the Second Circuit (Second Circuit) concluded that it was bound to defer to a foreign
government’s reasonable interpretation of its own law, and it declined to analyze statements or evidence
Congressional Research Service
https://crsreports.congress.gov
LSB10166
CRS INSIGHT
Prepared for Members and
Committees of Congress

Congressional Research Service
2
that contradicted the foreign government’s views. In Animal Science Products, the Supreme Court
rejected the Second Circuit’s approach, holding that “a federal court is neither bound to adopt the foreign
government’s characterization nor required to ignore other relevant materials.”
Background on Animal Science Products
Animal Science Products arose out of allegations that several Chinese manufacturers and exporters of
vitamin C agreed to fix the price and quantity of exports to the United States in violation of Section 1 of
the Sherman Act (a provision discussed in more detail in this Sidebar). The Chinese companies moved to
dismiss the case on the ground that they should be shielded from liability because Chinese law required
them to follow a nationally determined price and quantity setting regime for vitamin C exports. Initially,
the district court denied the motion to dismiss, the case went to trial, and the jury found the defendants
liable for violating the Sherman Act. On appeal, the Second Circuit reversed, holding that principles of
comity—or respect for foreign sovereignty—required dismissal if Chinese law mandated compliance with
the price and quantity controls.
The Second Circuit’s analysis hinged on whether the defendants could comply with both U.S. antitrust
law and Chinese law. In an amicus brief filed with the trial court, the Ministry of Commerce of the
People’s Republic of China (Ministry) analyzed the relevant Chinese law and concluded that the alleged
anticompetitive behavior was, in fact, mandated by the Chinese government. The plaintiffs disputed the
Ministry’s interpretation, noting that it was not based on a written law or regulation, and that, in a 2002
document filed with the World Trade Organization (WTO), China stated that it “gave up export
administration . . . of Vitamin C[.]” Faced with competing explanations of Chinese law, the Second
Circuit declined to evaluate evidence or statements outside the Ministry’s submission, and the court
inspected only the Ministry’s submission and the sources cited therein. Based on this material, the court
concluded that it must defer to the Ministry’s views because they were facially reasonable. Having
accepted the Ministry’s interpretation, the Second Circuit held that American and Chinese law imposed
conflicting legal requirements, and based on this consideration and other factors, principles of comity
warranted the dismissal of plaintiffs’ claims.
The Supreme Court’s Opinion
In a unanimous opinion written by Justice Ginsburg, the Supreme Court held that the Second Circuit erred
in applying such a “highly deferential” standard to the Ministry’s submission. Instead, the Court held that
the Second Circuit should have afforded the submission “respectful consideration”—a standard applied in
a variety of other contexts, but that had not been a part of the Supreme Court’s jurisprudence involving
interpretation of foreign domestic law. Under this less deferential standard, federal courts should
“carefully consider a foreign state’s views about the meaning of its own laws,” the Court explained. But
U.S. courts are not bound by the foreign government’s interpretation if circumstances make that
interpretation unreliable. “Given the world’s many and diverse legal systems, and the range of
circumstances in which a foreign government’s views may be presented,” the High Court reasoned, U.S.
courts can consider a variety of factors before deciding to accept a foreign government’s analysis.
The Supreme Court noted that its view was consistent with Federal Rule of Civil Procedure 44.1, which
states that, when determining foreign law, federal courts “may consider any relevant material or source,
including testimony, whether or not submitted by a party or admissible under the Federal Rules of
Evidence.” The Court also distinguished United States v. Pink, a 1943 decision, in which the Court treated
an official declaration from the Soviet Union regarding the legal effect of a Soviet nationalization decree
as “conclusive.” Not only did Pink “arise in unusual circumstances[,]”the Animal Science Products Court
explained, the ruling pre-dates Rule 44.1, and therefore was not applicable to the case.
The Supreme Court did not resolve the underlying question of whether Chinese law conflicts with U.S.
antitrust law or the impact of such a conflict on the defendants’ liability. However, the Court found that
the Second Circuit had not considered all relevant materials—including China’s potentially inconsistent

Congressional Research Service
3
statements before the WTO—in its decision to dismiss the case. Therefore, the Supreme Court remanded
the case to the Second Circuit to reevaluate its holding in a manner consistent with the Court’s opinion.
Implications for Congress
The Animal Science Products decision may have implications in a variety of contexts, including upon the
United States’ efforts to address anticompetitive trade practices abroad. In recent years, some executive
branch officials and Members of Congress have expressed interest in combating what have been
described as “predatory” economic practices of foreign countries, including China. (For additional
background and analysis of U.S.-China trade issues, see this CRS Report.) As noted above, if foreign law
mandates that private companies engage in economic practices that violate U.S. law, existing legal
doctrines in the United States—such as the doctrines of comity, foreign sovereign compulsion, and act of
state (described here)—may allow federal courts to excuse or moderate the sanction for violation of U.S.
law. While Animal Science Products does not impact these underlying legal doctrines, it may result in
federal courts using a more critical eye when evaluating a foreign government’s claim that its national law
conflicts with legal obligations in the United States.

Author Information

Stephen P. Mulligan

Legislative Attorney

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

LSB10166 · VERSION 3 · UPDATED