580 F.2d 1311 (7th Cir. 1978), cert. denied, 439 U.S. 955 (1978)
Westinghouse Electric Corp. v.
Do the act of state doctrine and the foreign sovereign compulsion defense bar U.S. antitrust claims against domestic and foreign uranium producers for alleged price-fixing and supply restraints where foreign governments later adopted export controls and pricing policies affecting uranium, or may the antitrust claims proceed under the Sherman Act based on the intended and actual effects in U.S. commerce?
1) Act of State: U.S. courts generally will not examine the validity of a foreign sovereign's official act performed within its own territory. The doctrine does not bar adjudication of private antitrust claims unless resolution requires declaring invalid or condemning as unlawful the foreign sovereign's public act itself. Mere overlap with or relevance of foreign governmental policies is insufficient. 2) Foreign Sovereign Compulsion: A defendant may avoid antitrust liability where it demonstrates that a foreign government compelled the challenged conduct, leaving no discretion to comply with U.S. law. The defense requires proof of genuine, specific compulsion; mere encouragement, approval, or the existence of a regulatory climate is inadequate. 3) Extraterritorial Antitrust Reach: The Sherman Act applies to foreign conduct intended to, and that does, have substantial effects on U.S. commerce (the Alcoa "effects" principle), subject to considerations of international comity. Such defenses are fact-bound and ordinarily cannot be resolved on the pleadings without a developed record.
The Seventh Circuit reversed the dismissal and held that neither the act of state doctrine nor the foreign sovereign compulsion defense categorically barred Westinghouse's antitrust claims, particularly as to domestic defendants like Kerr-McGee. The court permitted the claims to proceed and remanded for further factual development, noting that any compulsion-based defenses must be proven and narrowly applied.
This decision is a leading authority on the limits of act of state and foreign sovereign compulsion in transnational antitrust cases. It teaches that private cartels cannot evade Sherman Act scrutiny merely because their conduct coincides with—or is later touched by—foreign government policies. It underscores the Alcoa effects principle, confirms that these defenses are narrow and fact-dependent, and signals that domestic defendants cannot rely on foreign sovereign actions to escape U.S. antitrust liability. For law students, the case is foundational for understanding how U.S. courts balance antitrust enforcement, international comity, and foreign relations in cross-border markets.