Ninth Circuit Rules U.S. Antitrust Law Applies to Ex-U.S. Sales When Contract Negotiated in the U.S.

In this article, authors Kevin B. Goldstein, Benjamin Rudofsky, Molly Gibson, Naoki Furuta & Yusuke Kobayashi (Winston & Strawn) explain the Ninth Circuit’s January 2026 decision allowing Seagate and its foreign subsidiaries to pursue U.S. antitrust claims against NHK Spring under the Foreign Trade Antitrust Improvements Act (FTAIA). The court found a sufficient nexus to U.S. commerce even though the relevant components were purchased abroad, emphasizing that pricing negotiations conducted in California under a master agreement binding foreign affiliates were central to satisfying the FTAIA’s domestic effects exception.

The authors outline the FTAIA framework, which generally excludes foreign conduct from the reach of the Sherman Act unless either the “import exclusion” or the “domestic effects exception” applies. The Ninth Circuit held that the import exclusion did not apply because the allegedly price-fixed suspension assemblies were not themselves directly imported into the United States; only finished hard drives incorporating them were. This confirms that indirect or upstream components do not qualify as “import commerce” under the statute.

However, the court allowed the case to proceed under the domestic effects exception, which requires a direct, substantial, and reasonably foreseeable effect on U.S. commerce that gives rise to the plaintiff’s claim. Relying in part on NHK Spring’s prior criminal admissions, the court found the direct effects prong satisfied and concluded that the U.S.-based negotiations—binding on Seagate’s foreign subsidiaries—meant the alleged overcharges were not the result of independent foreign decision-making. The location and structure of the global pricing agreement proved decisive.

The authors note potential tension with the Seventh Circuit’s Motorola decision but stress that corporate formalities and negotiation venues can materially affect FTAIA analysis. For multinational companies, the ruling highlights the risks of negotiating global agreements in the United States, the possibility of treble damages exposure, and the collateral consequences of criminal pleas in subsequent civil litigation…

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