On February 24, the Supreme Court of the United Kingdom dismissed the appeal of Ian Norris, former CEO of The Morgan Crucible Company plc, paving the way for the first-ever extradition to the United States of a defendant in an antitrust case. The Antitrust Division of the U.S. Department of Justice (DOJ) is seeking Mr. Norris's extradition in connection with its prosecution of a price-fixing agreement relating to certain carbon products. With more and more countries (including several in the last year alone) criminalizing antitrust violations, the DOJ is likely to be increasingly aggressive in seeking extradition of suspected cartel participants who reside outside the United States.
In November 2002, UK engineering firm Morgan Crucible and its U.S. subsidiary, Morganite Inc., pleaded guilty to fixing the prices of certain carbon products, including carbon brushes and current collectors used in electrical motors, in violation of the Sherman Act, 15 U.S.C § 1. Under the terms of the plea agreement, Morgan Crucible and Morganite agreed to pay a fine of $11 million for their participation in the carbon products cartel and for obstruction of justice. Four executives, including Ian Norris, were "carved out" of the plea agreement and remained subject to individual prosecution.
In 2003, Norris was indicted in the United States for Sherman Act violations related to the carbon products price-fixing agreements and for obstruction of justice. Since that time, the DOJ has sought to have Norris extradited on both the Sherman Act violation and on obstruction of justice charges. In March 2008, the Appellate Committee of the House of Lords, then the highest judicial body in the United Kingdom, ruled that Norris could not be extradited on the Sherman Act charge. The basis for the ruling of the House of Lords was that price-fixing was not a criminal offense in the UK at the time of the offense, and thus the "dual criminality" requirement of the UK's extradition treaty with the United States was not met.1 The House of Lords rejected prosecutors' attempts to satisfy the dual criminality requirement by arguing that price-fixing constitutes the common law offense of conspiracy to defraud, but upheld the extradition order for the three ancillary obstruction charges and remanded to the lower courts to determine whether Norris is entitled to a Human Rights exception to extradition. The most recent decision of the UK Supreme Court upholds the decisions of the lower courts, finding that Norris should be extradited to face the obstruction of justice charges in a U.S. court. Norris has until March 10, 2010 to appeal the decision to the European Court of Human Rights.
The six-year legal battle to extradite Norris is the latest in the DOJ's campaign to increase the number of investigations and prosecutions of international cartels and foreign nationals who participate in them. Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement, has warned, "not only is the Division able to ensure that national boundaries do not interfere with our ability to investigate cartel activity, but also our ability to obtain jurisdiction over defendants residing abroad has been enhanced. In order to track down and prosecute foreign nationals who participate in cartels affecting the United States, the Division will utilize INTERPOL Red Notices, border watches, and extradition."2
The DOJ is likely to be increasingly aggressive in the future in seeking extradition of foreign nationals indicted for price-fixing offenses. The DOJ's ability to seek extradition in the past was hampered by the "dual criminality" requirement of most extradition treaties, as exemplified in its attempts to extradite Ian Norris. Until relatively recently, the United States and Canada were the only countries to make pricefixing a crime. Thus, foreign nationals indicted in the United States for price-fixing violations were often able to escape prosecution simply by avoiding travel to the United States.
In the last several years, however, several countries (including the United Kingdom) have criminalized price-fixing, enabling the DOJ to seek extradition in a wider variety of price-fixing cases. This development makes it increasingly important for non-U.S. executives to be aware of and comply with U.S. antitrust laws.
Footnotes
1. Section 188 of the Enterprise Act of 2002 made price-fixing a criminal offense in the U.K. That law could not satisfy the dual criminality requirement, however, because it was not in effect during the time when the alleged conduct took place. While untested, the extradition of cartel participants who engaged in conduct after Section 188 took effect in 2003 presumably would be more straightforward.
2. Scott D. Hammond, Dep. Assistant Att'y Gen., Antitrust Division, U.S. Dep't of Justice, Recent Developments, Trends, and Milestones in the Antitrust Division's Criminal Enforcement Program, Speech at the 56th Annual Spring Meeting of the ABA Section of Antitrust Law (March 26, 2008), available at http://www.justice.gov/atr/public/speeches/232716.htm (www.justice.gov/atr/public/speeches/232716.htm).
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