                               In the

 United States Court of Appeals
                For the Seventh Circuit

No. 10-1712

M INN-C HEM , INC., et al.,
                                                  Plaintiffs-Appellees,
                                   v.

A GRIUM INC., et al.,
                                              Defendants-Appellants.


              Appeal from the United States District Court
         for the Northern District of Illinois, Eastern Division.
        No. 08 C 6910, MDL No. 1996—Ruben Castillo, Judge.



      A RGUED F EBRUARY 8, 2012—D ECIDED JUNE 27, 2012




  Before E ASTERBROOK, Chief Judge, and P OSNER, M ANION,
K ANNE, W OOD , S YKES, T INDER, and H AMILTON, Circuit
Judges.
  W OOD , Circuit Judge. Potash, a naturally occurring
mineral used in agricultural fertilizers and other
products, is produced and sold in a global market. In



  Circuit Judges Flaum, Rovner, and Williams took no part
in the consideration or decision of this case.
2                                               No. 10-1712

this case, the plaintiffs, U.S. companies that are direct
and indirect purchasers of potash, accuse several global
producers of price-fixing in violation of the U.S. anti-
trust laws. See 15 U.S.C. §§ 1 et seq. The district court
denied the defendants’ motion to dismiss the com-
plaint, but it certified its ruling for interlocutory appeal
under 28 U.S.C. § 1292(b). We agreed with that court’s
assessment of the importance of the issues presented
and accepted the appeal. A panel of the court concluded
that the complaint failed to meet the requirements
of the Foreign Trade Antitrust Improvements Act of
1982 (FTAIA), 15 U.S.C. § 6a, and it thus voted to reverse.
Minn-Chem, Inc. v. Agrium Inc., 657 F.3d 650 (7th Cir.
2011). We then decided to rehear the case en banc. We
hold first that the FTAIA’s criteria relate to the merits of
a claim, and not to the subject-matter jurisdiction of
the court. We therefore overrule our earlier en banc deci-
sion in United Phosphorus, Ltd. v. Angus Chem. Co., 322
F.3d 942 (7th Cir. 2003). We then address the applicable
standards for antitrust cases involving import com-
merce and the restrictions imposed by the FTAIA. We
conclude that the district court correctly ruled that
the complaint does state a claim under the federal
antitrust laws.


                             I
  The district court’s opinion details the critical facts
alleged in the Complaint, see In re Potash Antitrust
Litig., 667 F. Supp. 2d 907, 915-19 (N.D. Ill. 2009), but
for convenience we briefly summarize them here. The
No. 10-1712                                                  3

term “potash” refers to mineral and chemical salts
that are rich in potassium. It is mined from naturally
occurring ore deposits and its primary use is in
agricultural fertilizers, but it is also used in the produc-
tion of such varied products as glass, ceramics, soaps,
and animal feed supplements. Importantly for our later
antitrust analysis, potash is a homogeneous commodity:
One manufacturer’s supply is interchangeable with an-
other’s. As a result, buyers choose among suppliers
based largely on price. Markets for this type of product
are especially vulnerable to price-fixing.
  We focus our analysis on the Direct Purchaser
Amended Consolidated Class Action Complaint (re-
ferred to here simply as the Complaint), because the
complaint filed by the indirect potash purchasers
focuses primarily on state law remedies (since indirect
purchasers are not entitled to sue for damages under the
federal antitrust laws, see Illinois Brick Co. v. Illinois, 431
U.S. 720, 729 (1977)).1 The Complaint alleges that the
world’s potash reserves are confined to a handful of
areas, with over half of global capacity located in just
two regions—Canada and the former Soviet Union (in
particular, Russia and Belarus). Commercially, the
industry has been dominated by a small group of compa-
nies that market, sell, and distribute potash. The key
actors are:



1
  The indirect purchasers had sought injunctive relief under
the federal antitrust laws, but the district court dismissed
those claims, 667 F. Supp. 2d at 941, and they are not now
before us.
4                                                No. 10-1712

    •   Potash Corporation of Saskatchewan (Canada)
        Inc. and its U.S. subsidiary Potash Sales (USA), Inc.
        (collectively PCS), the world’s largest producer
        of potash;
    •   Mosaic Company and Mosaic Crop Nutrition
        (Mosaic) a Delaware company headquartered in
        Minnesota, number three globally;
    •   Agrium Inc. and Agrium U.S. Inc. (Agrium), a
        Canadian corporation and its wholly owned
        U.S. subsidiary;
    •   Uralkali, a Russian joint venture headquartered
        in Moscow; fifth largest in the world and holder
        of a one-half interest in JSC Belarusian Potash
        Company (Belarusian Potash), which acts as the
        exclusive distributor of potash for Uralkali;
    •   Belaruskali, a Belarusian company and the
        owner of the other one-half interest in Belarusian
        Potash, which, as it is for Uralkali, is Belaruskali’s
        exclusive distributor;
    •   Silvinit, a Russian company that sells potash
        throughout the world, including the United States;
        and
    •   IPC, another Russian company, which is Silvinit’s
        exclusive distributor.
The Complaint alleges that as of 2008, these seven entities
produced approximately 71% of the world’s potash.
  In 2008, the United States consumed 6.2 million tons
of potash. Of that total, 5.3 million tons were imports,
and PCS, Mosaic, Agrium, and Belarusian Potash (acting
No. 10-1712                                                   5

for both Uralkali and Belaruskali, its equal and joint
owners) were responsible for the lion’s share of those
sales. Data for other years covered by the Complaint
are comparable.
   The total world market for potash, in which the
United States is an important consumer (second only
to China, Complaint ¶51), is allegedly under the thumb
of a global cartel consisting primarily of the companies
listed above. This cartel restrained global output of
potash in order to inflate prices. The cartel members
used a rolling strategy: They would first negotiate prices
in Brazil, India, and China (Complaint ¶111), and then
use those prices as benchmarks for sales to U.S. custom-
ers. (Complaint ¶¶117-121). For example, in May 2004,
the cartel arranged for prices to increase by $20 per ton
for some foreign customers; shortly thereafter, prices in
the United States went up by precisely the same amount.
  The cartel initiated a sustained and successful effort
to drive prices up beginning in mid-2003; by 2008 potash
prices had increased at least 600%. The plaintiffs assert
that this increase cannot be explained by a significant
uptick in demand, changes in the cost of production,
or other changes in input costs. In fact, U.S. consumption
of fertilizer, of which potash is a consistent part, re-
mained relatively steady throughout the period covered
by this case; demand declined somewhat in 2008 but
then returned to normal levels in 2009.2 One might think


2
    Data from the International Fertilizer Industry Association
                                                  (continued...)
6                                                   No. 10-1712

that the decrease in demand in 2008 was because of
the increase in price, but the slippage in demand did
not build up over the entire Class Period and appears
to have been only temporary, and is thus not correlated
to potash price movements. Furthermore, the specific
allegation in the Complaint that a $100 per ton increase
in the price of potash adds only $0.03 to the production
cost of a bushel of corn suggests that demand for
potash is inelastic. Complaint ¶54. Prices for potash rose
and stayed high, increasing even while fertilizer prices
declined. Based on World Bank statistics, average
fertilizer price indices rose from 1.0 to 2.2, and then
fell back to 1.0 in 2008, while potash price indices
started in 2008 at 1.0 and rose to 3.5 by the end of the
year. Earnings by cartel members reinforce this picture
of financial gain even in the face of waning demand:
PCS posted first-quarter income figures in 2008 that
tripled its previous-year figure, while Mosaic’s earnings
for that quarter were up more than tenfold over the
year before.
  The Complaint goes into detail about ways in which
the defendants managed their collective output. (A cartel
will always try to restrict output to the level where mar-
ginal cost equals marginal revenue, but in the real world,
this normally requires constant adjustment.) For ex-


2
  (...continued)
give the following figures for 2003 through 2009: 21,203.1 (2003);
20,090.7 (2004); 19,273.3 (2005); 20,770.9 (2006); 19,455.1
(2007); 16,045.7 (2008); and 18,908.2 (2009). See http://www.
fertilizer.org/ifa/ifadata/search (last visited June 25, 2012).
These data appear to refer to thousands of metric tons.
No. 10-1712                                             7

ample, when global demand for potash declined in 2005,
rather than decreasing its price, PCS announced that it
was shutting down three of its mines in November
and December 2005 for “inventory control pur-
poses.” Complaint ¶88. This action had the effect of re-
moving 1.34 million tons of potash from the world mar-
ket. At the same time, rather than jumping into the
gap this drastic cutback created, Mosaic announced
that it too was implementing temporary cutbacks that
would remove an additional 200,000 tons from the mar-
ket. These (allegedly) coordinated and deep reduc-
tions continued into 2006. In the first three months of
that year, PCS reduced output from 2.4 million tons
to 1.3 million tons, removing yet another 1.1 million
tons from the market, or the equivalent of 32 weeks
of mining. Uralkali reduced its output by 200,000 tons,
and Belaruskali cut its exports back by 50%, or 250,000
tons. In the second quarter of that year, Silvinit fol-
lowed suit with mine stoppages that removed about
100,000 tons from the market. Collectively, these three
companies removed over half a million tons of potash
from the market in early 2006. See Complaint ¶¶88-93.
Their compatriots applauded the “discipline” of the
former Soviet Union producers, “noting that many
years earlier when demand for potash declined those
same producers had sought to maintain volume over
price and flooded the market with excess supply.” Com-
plaint ¶93.
  China was a particular target of the cartel’s efforts,
given its importance as a consumer. The shortages
created by Uralkali’s and PCS’s supply restrictions in
the first half of 2006 induced China to accept an increase
8                                              No. 10-1712

in the price of potash. Shortly thereafter, a similar price
increase was implemented throughout the world. Com-
plaint ¶95. Comparable actions took place in 2007, as
the Complaint rehearses in detail. The plaintiffs assert
that a number of the defendants had excess capacity
throughout the period between 2003 and mid-2009
(which represents the Class Period defined in ¶1 of
the Complaint). PCS, for instance, had a utilization rate
of only 54% to 69%, and Uralkali bragged in Decem-
ber 2007 that it had the “ability to add significant
capacity on the cheapest basis vs. global peers.” Com-
plaint ¶¶133-134. This pattern of restrained output made
it possible for the cartel to maintain its inflated prices,
but the excess capacity inevitably gave its members an
easy opportunity to cheat, and so the group had to co-
ordinate to ensure that its price control efforts were
not undermined.
  The Complaint also points to several ways in which
the cartel members had the opportunity to cooperate,
to conspire on future actions, and to monitor one
another’s actions for possible cheating. First, the major
suppliers participated in joint ventures that facilitated
coordination. PCS, Agrium, and Mosaic were joint ven-
turers and equal shareholders in Canpotex Ltd., a Cana-
dian company that sold, marketed, and distributed
potash throughout the world excluding the United
States. Through that vehicle, those three companies
had access to one another’s sensitive production and
pricing information. Canpotex in turn entered into co-
operative marketing agreements with the Russian and
Belarusian entities. As part of those deals, Canpotex
No. 10-1712                                           9

agreed to market Uralkali potash outside North America
and Europe. For their part, the former Soviet pro-
ducers coordinated their sales and marketing through
Belarusian Potash. That joint venture, formed between
Uralkali and Belaruskali in 2005, supplied 34% of the
market for potash by the following year. Complaint ¶26.
Silvinit has sought to join the venture, and one of its
owners (with a 20% share) owns 60% of the stock of
Uralkali.
  Beyond the access created by these structural rela-
tions among the entities, there were other more
immediate opportunities to collude. The defendants
routinely held meetings during the Class Period and
engaged in an exchange program through which senior
executives from each visited the others’ plants. These
meetings gave the defendants an opportunity to
exchange sensitive information. Critically, one such
meeting of the key players at PCS, Canpotex, Mosaic,
Uralkali, Belaruskali, and Silvinit—mostly at the presi-
dential level—took place in October 2005. As we
described above, in the very next month, November 2005,
PCS and Mosaic announced significant production cut-
backs; the others followed suit with additional supply
reductions through the beginning of 2006.
  In addition, all of the defendants are members of the
International Fertilizer Industry Association and the
Fertilizer Institute, and they regularly attended
those trade organizations’ conferences. During one such
meeting in Turkey, in May 2007, the defendants an-
nounced an additional price increase.
10                                            No. 10-1712

  The Complaint contains, in its 165 paragraphs, many
more details, which we discuss as needed below. What
we have said here, however, is enough to set the stage
for the two legal issues before us: how the FTAIA
should be interpreted, and whether the district court
correctly allowed this case to go forward.


                            II
  Whether this case can be entertained by a court in the
United States turns on the global reach of the antitrust
laws, and to a significant degree on the Foreign Trade
Antitrust Improvements Act of 1982, 15 U.S.C. § 6a.
Before delving into the FTAIA’s requirements, however,
we take this opportunity to revisit the question whether
that law affects the subject-matter jurisdiction of the
district court or if, on the other hand, it relates to the
scope of coverage of the antitrust laws. Nine years ago,
in United Phosphorus v. Angus Chemical, the en banc
court concluded that the former interpretation was
correct. 322 F.3d 942, 952 (7th Cir. 2003). In so doing,
we relied on the legislative history of the statute, the
vocabulary used by a number of commentators, and a
number of court decisions that used the word “jurisdic-
tion” in describing the requirement that challenged
conduct must affect interstate or import commerce in
specified ways.
  Since that decision, the Supreme Court has em-
phasized the need to draw a careful line between true
jurisdictional limitations and other types of rules. Thus,
in Morrison v. National Australia Bank Ltd., 130 S. Ct.
No. 10-1712                                                  11

2869 (2010), which dealt with the securities laws, the
Court squarely rejected the notion that the extrater-
ritorial reach of § 10(b) of the Securities Exchange Act,
15 U.S.C. § 78j(b), raises a question of subject-matter
jurisdiction. Id. at 2877. “[T]o ask what conduct § 10(b)
reaches is to ask what conduct § 10(b) prohibits, which
is a merits question. Subject-matter jurisdiction, by con-
trast, refers to a tribunal’s power to hear a case.” Id. (citing
Union Pacific R. Co. v. Locomotive Eng’rs & Trainmen Gen.
Comm. of Adjustment, 130 S. Ct. 584, 596 (2009); Arbaugh
v. Y&H Corp., 546 U.S. 500, 514 (2006); United States v.
Cotton, 535 U.S. 625, 630 (2002)). The Court might have
added to that list Reed Elsevier, Inc. v. Muchnick, 130 S. Ct.
1237, 1243 (2010), Kontrick v. Ryan, 540 U.S. 443, 455 (2004),
and Steel Co. v. Citizens for a Better Environment, 523 U.S.
83, 89 (1998). Even more recently, the Court restated
this proposition in Henderson v. Shinseki, 131 S. Ct. 1197,
1202-03 (2011). Notably, what may have been thought
a nascent idea at the time United Phosphorus was
decided (as one can tell by the dates of decision in our
list) has now become a firmly established principle of
statutory construction.
  The panel in the present case had no quarrel with the
proposition that this recent string of decisions under-
mined the holding in United Phosphorus. 657 F.3d at 653.
It commented that “[t]hese intervening developments
suggest that United Phosphorus may be ripe for recon-
sideration,” but it was hesitant to take that step on its
own. The panel also observed that the same issue had
recently come before the Third Circuit, which held that
the FTAIA does not impose a jurisdictional limit but
12                                            No. 10-1712

instead establishes an element of a Sherman Act claim.
Id. at 659 n.3 (citing Animal Sci. Prods., Inc. v. China
Minmetals Corp., 654 F.3d 462 (3d Cir. 2011)). Indeed, the
Animal Science opinion expressly approved the position
of the United Phosphorus dissenters. 654 F.3d at 469 n.8.
We agree with the panel that this issue is indeed ripe
for reconsideration and ought to be settled now.
   The Supreme Court’s decision in Morrison, we believe,
provides all the guidance we need to conclude that, like
§ 10(b) of the Exchange Act, the FTAIA sets forth an
element of an antitrust claim, not a jurisdictional limit
on the power of the federal courts. As the Court put
it, limitations on the extraterritorial reach of a statute
describe what conduct the law purports to regulate
and what lies outside its reach. The Supreme Court
itself used much the same language with respect to the
antitrust laws in its decision in F. Hoffman-La Roche
Ltd. v. Empagran S.A., 542 U.S. 155 (2004), which dealt
specifically with the FTAIA. The Court spoke, for
example, of the FTAIA’s “removing from the Sherman
Act’s reach” certain types of conduct, id. at 161, and
whether it was reasonable under the facts presented
there “to apply this law to conduct that is significantly
foreign,” id. at 166. Even if one thought the language
in Empagran to be less than dispositive, we can now see
no way to distinguish this case from Morrison.
  We add briefly that the interpretation we adopt today—
that the FTAIA spells out an element of a claim—is the
one that is both more consistent with the language of
the statute and sounder from a procedural standpoint.
No. 10-1712                                                13

When Congress decides to strip the courts of subject-
matter jurisdiction in a particular area, it speaks clearly.
The FTAIA, however, never comes close to using the
word “jurisdiction” or any commonly accepted synonym.
Instead, it speaks of the “conduct” to which the
Sherman Act (or the Federal Trade Commission Act)
applies. This is the language of elements, not jurisdiction.
  From a procedural standpoint, this means that a
party who wishes to contest the propriety of an antitrust
claim implicating foreign activities must, at the out-
set, use Federal Rule of Civil Procedure 12(b)(6), not
Rule 12(b)(1). This is not a picky point that is of interest
only to procedure buffs. Rather, this distinction affects
how disputed facts are handled, and it determines
when a party may raise the point. While “it is the burden
of the party who seeks the exercise of jurisdiction in
his favor clearly to allege facts demonstrating that he is
a proper party to invoke judicial resolution,” FW/PBS,
Inc. v. City of Dallas, 493 U.S. 215, 231 (1990) (citations
and quotation marks omitted), we “accept as true all of
the allegations contained in a complaint,” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v.
Twombly, 550 U.S. 544 (2007)) subject, of course, to the
limitations articulated in those cases. Likewise, subject-
matter jurisdiction must be secure at all times, re-
gardless of whether the parties raise the issue, and no
matter how much has been invested in a case. See, e.g.,
Cotton, 535 U.S. at 630 (citing Louisville & Nashville R. Co.
v. Mottley, 211 U.S. 149 (1908)). By contrast, a motion to
dismiss for failure to state a claim may only be brought
as late as trial. F ED. R. C IV. P. 12(h)(2). Although this
14                                              No. 10-1712

is a significant difference, we note that foreign connec-
tions of the kind at issue here are unlikely to be difficult
to detect, and so we are confident that parties who want
to argue that a particular claim fails the requirements
of the FTAIA will be able to do so within these gen-
erous time limits.


                            III
  Having established that the FTAIA relates to the
merits of a claim, rather than the subject-matter jurisdic-
tion of the court, we can now turn to the principal
issues in this appeal. We consider first how the statute
should be interpreted and then, on that understanding
of the law, we decide whether the district court correctly
found that the Complaint stated a claim that could
go forward.


                             A
   Although the FTAIA has been parsed in a number of
judicial opinions, including notably Empagran, we think
it important to begin with the language of the statute,
in order to place our discussion of these decisions in
context. We note that the 1982 legislation that we are
examining actually amended both the Sherman Act, see
15 U.S.C. § 6a, and the Federal Trade Commission Act,
see 15 U.S.C. § 45(a)(3), using identical language. That
fact is important insofar as it underscores the generality
of the issue we face: The statute applies not only to
private actions, such as this one, but also to actions
No. 10-1712                                                15

brought by the two federal agencies entrusted with the
enforcement of the antitrust laws. Since it is the Sherman
Act that applies to our case, however, from this point
forward we cite only its provision. It reads as follows:
 § 6a. Conduct involving trade or commerce with
 foreign nations
   Sections 1 to 7 of this title [i.e., the Sherman Act] shall
   not apply to conduct involving trade or commerce
   (other than import trade or import commerce) with
   foreign nations unless—
   (1) such conduct has a direct, substantial, and reason-
   ably foreseeable effect—
       (A) on trade or commerce which is not trade
       or commerce with foreign nations, or on import
       trade or import commerce with foreign nations; or
       (B) on export trade or export commerce with
       foreign nations, of a person engaged in such
       trade or commerce in the United States; and
   (2) such effect gives rise to a claim under the provi-
   sions of sections 1 to 7 of this title, other than this
   section.
   If sections 1 to 7 of this title apply to such conduct
   only because of the operation of paragraph (1)(B),
   then sections 1 to 7 of this title shall apply to such
   conduct only for injury to export business in the
   United States.
The opening phrase (sometimes referred to as a chapeau
in international circles) reflects Congress’s effort to
16                                              No. 10-1712

indicate that the Sherman Act does not apply to every
arrangement that literally can be said to involve trade
or commerce with foreign nations. As the Supreme
Court stressed in Empagran, the public recognition of this
limitation was inspired largely by international comity.
But, by inserting the parenthetical “other than import
trade or import commerce” in the chapeau, Congress
recognized that there was no need for this self-restraint
with respect to imports, even though they represent part
of the foreign commerce of the United States. Although
some, including the Third Circuit in Animal Science, have
referred to this as the “import exception,” that is not an
accurate description. Import trade and commerce are
excluded at the outset from the coverage of the FTAIA
in the same way that domestic interstate commerce
is excluded. This means only that conduct in both
domestic and import trade is subject to the Sherman
Act’s general requirements for effects on commerce, not
to the special requirements spelled out in the FTAIA.
Where the FTAIA does apply, it “remov[es] from the
Sherman Act’s reach . . . commercial activities taking
place abroad, unless those activities adversely affect . . .
imports to the United States” Empagran, 542 U.S. at 161.
The Court’s decision in Hartford Fire Ins. Co. v. California,
509 U.S. 764 (1993), suggests a pragmatic reason for
this distinction: The applicability of U.S. law to transac-
tions in which a good or service is being sent directly
into the United States, with no intermediate stops, is
both fully predictable to foreign entities and necessary
for the protection of U.S. consumers. Foreigners who
want to earn money from the sale of goods or services
No. 10-1712                                             17

in American markets should expect to have to comply
with U.S. law.
  Next, we come to the statute’s treatment of non-import,
non-domestic commerce. Empagran explained that the
FTAIA handles that problem by “lay[ing] down a gen-
eral rule placing all (nonimport) activity involving
foreign commerce outside the Sherman Act’s reach . . .
[and then] bring[ing] such conduct back within” the Act
provided that it meets the two criteria provided. Id. at
162 (emphasis in original). The first criterion dictates
the kinds of effects that truly foreign commerce must
have in the U.S. market. Conduct “involving trade or
commerce . . . with foreign nations” must have “a direct,
substantial, and reasonably foreseeable effect” on either
[A] U.S. domestic commerce (phrased awkwardly as
“trade or commerce which is not trade or commerce with
foreign nations”) or U.S. import commerce, or [B] the
export trade or commerce of a U.S. exporter. See § 6a(1).
The export trade provision plays no part in our case, and
so we do not address it further here. The second
criterion, which was the focus of Empagran, is that the
direct, substantial and foreseeable effect shown under
subpart (1) must give rise to a substantive claim under
the Sherman Act. The reason this was important in
Empagran is that the plaintiffs there were foreign pur-
chasers of allegedly price-fixed products that were sold
in foreign markets. The Court held that their claims
fell outside the scope of the Sherman Act. In our case,
by contrast, the plaintiffs are all U.S. purchasers, and so
the particular problem addressed in Empagran does not
arise here.
18                                             No. 10-1712

  Thus, before we can address the merits of the com-
plaint, we must address two distinct questions of
statutory interpretation. The first is how to define pure
import commerce—that is, the kind of commerce that
is not subject to the special rules created by the FTAIA.
Second, we must explore the FTAIA’s standards
further and explain what it takes to show that foreign
conduct has a direct, substantial, and reasonably fore-
seeable effect on U.S. domestic or import commerce.


                            1
  There can be no question that the import commerce
exclusion puts some of the conduct alleged in the Com-
plaint outside the special rules created in the FTAIA
for Sherman Act claims. The plaintiffs are U.S. entities
that have purchased potash directly from members of
the alleged cartel. The defendant members of the cartel
are all located outside the United States. Those trans-
actions that are directly between the plaintiff pur-
chasers and the defendant cartel members are the
import commerce of the United States in this sector.
  The FTAIA does not require any special showing in
order to bring these transactions back into the Sherman
Act, as Empagran put it, because they were never
removed from the statute. That does not mean, however,
that plaintiffs are home free. Rather, we must still apply
the rules governing import commerce for purposes
of the antitrust laws. For several decades, the leading
authority on this subject was Judge Learned Hand’s
opinion for the Second Circuit in United States v. Aluminum
No. 10-1712                                             19

Co. of America, 148 F.2d 416, 444 (2d Cir. 1945) (Alcoa).
There the court (sitting as a court of last resort because
the Supreme Court lacked a quorum) held that the
Sherman Act covers imports when actual and intended
effects on U.S. commerce have been shown. In Hartford
Fire, the Supreme Court confirmed this rule, stating
that “the Sherman Act covers foreign conduct pro-
ducing a substantial intended effect in the United
States.” 509 U.S. at 797. The Third Circuit has suggested
that this standard is met where “the defendants’
conduct target[s] import goods or services.” Animal
Science, 654 F.3d at 470.
  As noted, the Complaint before us alleges import trans-
actions. Thus, the only outstanding question is whether
this import trade has been substantially and inten-
tionally affected by an anticompetitive arrangement (i.e.,
something that would violate the U.S. antitrust laws).
There is nothing particularly “international” about
that question. Effects on commerce are a part of every
Sherman Act case. See, e.g., Hartford Fire, supra (import
commerce); Summit Health, Ltd. v. Pinhas, 500 U.S. 322
(1991) (interstate commerce). We address the adequacy
of the Complaint under the Sherman Act in more
detail below.


                            2
  As we already have observed, trade involving only
foreign sellers and domestic buyers (i.e., import trade) is
not subject to the FTAIA’s extra layer of protection
20                                             No. 10-1712

against Sherman Act claims implicating foreign activi-
ties. Some of the activities alleged in the Complaint,
however, may be best understood as sufficiently outside
the arena of simple import transactions as to require
application of the FTAIA. For example, Canpotex is the
unified marketing and sales agent for Agrium, Mosaic
and PCS in all markets except Canada and the United
States, yet its actions are an important part of the
alleged scheme to set inflated benchmark prices. Pre-
sumably, in order to avoid Illinois Brick’s prohibition on
“pass on” antitrust damages, 431 U.S. at 728, the plain-
tiffs are seeking to hold firms like Canpotex jointly
and severally liable for any damages the direct sellers
might be ordered to pay, perhaps under a conspiracy
theory. If this were an action by the Department of Justice
or the Federal Trade Commission, we would not need
to worry about Illinois Brick, but regardless of whether
the case is brought by the government or in private liti-
gation, it is essential to meet the criteria spelled out
by the FTAIA. We thus take a closer look at what
kind of conduct “involve[s] trade or commerce . . .
with foreign nations” and what showing is necessary to
demonstrate “direct, substantial and reasonably foresee-
able” effects on domestic [i.e., “not trade or commerce
with foreign nations”] or import commerce.
  The first question—whether the conduct alleged in
this case “involves” foreign commerce—is readily an-
swered. The Complaint alleges an international cartel in
a commodity, and it asserts that the cartel succeeded
in raising prices for direct U.S. purchasers of the
product, potash. This alleged arrangement plainly
No. 10-1712                                             21

involves foreign commerce, and so we move immedi-
ately to the second inquiry—the task of parsing the stat-
ute’s central requirements. As Empagran put it, after
excluding foreign activities from the scope of the
Sherman Act, the FTAIA brings back into the statute’s
reach conduct that has a “direct, substantial, and rea-
sonably foreseeable effect” on domestic or import com-
merce.
   The potash cartel described in the Complaint is one
for which the requirements of substantiality and fore-
seeability are easily met. There is little dispute that the
Complaint has alleged substantial effects: The Com-
plaint alleges that 5.3 million tons of potash were
imported into the United States in 2008 alone, and the
Complaint elsewhere asserts that the vast majority of
these imports came from the defendants. From 2003 to
2008, the price of potash increased by over 600%. We
do not need to belabor the point. These allegations
easily satisfy the requirement to show substantial effects
in the U.S. market. Wherever the floor may be, it is so
far below these numbers that we do not worry about
it here.
  Foreseeability is equally straightforward. It is objec-
tively foreseeable that an international cartel with a grip
on 71% of the world’s supply of a homogeneous com-
modity will charge supracompetitive prices, and in
the absence of any evidence showing that arbitrage is
impossible (and there is none here), those prices (net of
shipping costs) will be uniform throughout the world.
Higher prices cannot be divorced from reductions in
22                                               No. 10-1712

supply, and so the effects alleged here are a rationally
expected outcome of the conduct stated in the Complaint.
  The question that has caused more discussion
among various courts and commentators is what it
takes to show “direct” effects. One school of thought,
launched by the Ninth Circuit’s split decision in United
States v. LSL Biotechs., 379 F.3d 672 (9th Cir. 2004), has
borrowed the definition of the word “direct” that the
Supreme Court adopted for a different statute, the
Foreign Sovereign Immunities Act (FSIA), 28 U.S.C.
§ 1605(a)(2); see Republic of Argentina v. Weltover, Inc., 504
U.S. 607 (1992). The word appears in the exception
for foreign sovereign immunity that applies for com-
mercial activity that takes place outside the territory of
the United States when “that act causes a direct effect
in the United States.” In that setting, the Court held
that an effect is “direct” if it “follows as an immediate
consequence of the defendant’s . . . activity.” Id. at 618.
The other school of thought has been articulated by
the Department of Justice’s Antitrust Division, which
takes the position that, for FTAIA purposes, the term
“direct” means only “a reasonably proximate causal
nexus.” Makan Delrahim, Drawing the Boundaries of the
Sherman Act: Recent Developments in the Application of
the Antitrust Laws to Foreign Conduct, 61 N.Y.U. A NN. S URV .
A M . L. 415, 430 (2005) (remarks of the Deputy Assistant
Attorney General); Brief for Appellant United States of
America 38 in United States v. LSL Biotechs., supra, available
at http://www.justice.gov/atr/cases/f200200/200243.pdf
(directness is a synonym for proximate cause).
No. 10-1712                                               23

  In our view, the Ninth Circuit jumped too quickly to
the assumption that the FSIA and the FTAIA use the
word “direct” in the same way. Critically, the Supreme
Court in Weltover reached its definition of “direct” for
FSIA purposes only after refusing to import from the
legislative history of that statute the notion that an
effect is “direct” only if it is both “substantial” and
“foreseeable.” 504 U.S. at 617. “[W]e reject,” it said, “the
suggestion that § 1605(a)(2) contains any unexpressed
requirement of ‘substantiality’ or ‘foreseeability.’ ” Id. at
618. Only then did the Court endorse the appellate
court’s definition that an effect is “direct” if it follows
“as an immediate consequence” of the defendant’s activ-
ity. Id.
  No one needs to read the words “substantial” and
“foreseeable” into the FTAIA. Congress put them there,
and in so doing, it signaled that the word “direct” used
along with them had to be interpreted as part of an inte-
grated phrase. Superimposing the idea of “immediate
consequence” on top of the full phrase results in a
stricter test than the complete text of the statute can
bear. To demand a foreseeable, substantial, and “im-
mediate” consequence on import or domestic commerce
comes close to ignoring the fact that straightforward
import commerce has already been excluded from
the FTAIA’s coverage.
  We are persuaded that the Department of Justice’s
approach is more consistent with the language of the
statute. The word “direct” addresses the classic concern
about remoteness—a concern, incidently, that has been
at the forefront of international antitrust law at least
24                                                  No. 10-1712

since Judge Hand wrote in Alcoa that “[w]e should not
impute to Congress an intent to punish all whom its
courts can catch, for conduct which has no conse-
quences within the United States.” 148 F.2d at 443; see also
LSL Biotechs., 379 F.3d at 683-91 (Aldisert, J., dissenting)
(tracing the history of the FTAIA’s effects test through
Alcoa). Just as tort law cuts off recovery for those
whose injuries are too remote from the cause of an
injury, so does the FTAIA exclude from the Sherman Act
foreign activities that are too remote from the ultimate
effects on U.S. domestic or import commerce.
   This understanding of the FTAIA should allay any
concern that a foreign company that does any import
business at all in the United States would violate the
Sherman Act whenever it entered into a joint-selling
arrangement overseas regardless of its impact on the
American market. A number of safeguards exist to
protect against that risk. If the hypothetical foreign com-
pany is engaged in direct import sales, it must naturally
comply with U.S. law just as all of its domestic com-
petitors do. If its foreign sales do not meet the threshold
for “effects” on import or domestic commerce estab-
lished by cases such as Hartford Fire and Summit Health,
then, for those transactions, it has nothing to worry
about. If the hypothetical foreign company is engaged
in the kind of conduct outside the United States that
the FTAIA addresses, then its actions can be reached
only if there are direct, substantial, and reasonably fore-
seeable effects. This is a standard with teeth, as the many
cases that have been dismissed for failing to meet those
criteria attest. E.g., Turicentro, S.A. v. Am. Airlines, Inc., 303
No. 10-1712                                              25

F.3d 293 (3d Cir. 2002); Carpet Grp. Int’l v. Oriental Rug
Imps. Ass’n, 227 F.3d 62 (3d Cir. 2000); McGlinchy v. Shell
Chem. Co., 845 F.2d 802 (9th Cir. 1988); Filetech S.A. v.
France Telecom S.A., 212 F. Supp. 2d 183 (S.D.N.Y. 2001).
  Empagran is consistent with the interpretation we
adopt here. While it holds that the U.S. antitrust laws
are not to be used for injury to foreign customers, it
goes on to reaffirm the well-established principle that
the U.S. antitrust laws reach foreign conduct that
harms U.S. commerce:
    [O]ur courts have long held that application of our
    antitrust laws to foreign anticompetitive conduct is
    nonetheless reasonable, and hence consistent with
    principles of prescriptive comity, insofar as they
    reflect a legislative effort to redress domestic
    antitrust injury that foreign anticompetitive conduct
    has caused.
Empagran, 542 U.S. at 165. Finally, we note that § 6a(2)
will protect many a foreign defendant. No matter what
the quality of the foreign conduct, the statute will not
cover it unless the plaintiff manages to state a claim
under the Sherman Act. In this connection, we point out
that a great many joint-selling arrangements are legal,
efficiency-enhancing structures. See, e.g., Texaco Inc. v.
Dagher, 547 U.S. 1 (2006); Broadcast Music, Inc. v. Columbia
Broadcasting Sys., Inc., 441 U.S. 1 (1979).


                             B
  Having described the requirements for both simple
import commerce and the FTAIA, our final task is
26                                              No. 10-1712

to measure the Complaint against these standards. In
particular, we must decide whether the plaintiffs have
plausibly alleged that the defendants’ conduct took
place either in import commerce and are thus subject
to the more general rules of Hartford Fire for effects
on commerce, or if they have in whole or in part
described conduct subject to the FTAIA, and if so,
whether the allegations describe direct, substantial, and
foreseeable effects on domestic or import commerce.


                             1
  In our view, much of the Complaint alleges straight-
forward import transactions. Under Hartford Fire the
plaintiffs thus must allege that the conduct of the foreign
cartel members was (1) meant to produce and (2) did
in fact produce some substantial effect in the United
States. See also Animal Science, 654 F.3d at 470 (“[T]he
import trade or commerce [exclusion] requires that the
defendants’ conduct target import goods or services.”). The
Complaint contains ample material supporting both
of those points.
  The plaintiffs describe a tight-knit global cartel, similar
to OPEC in its heyday, that restrained global output
of potash so that prices throughout this homogeneous
world market would remain artificially high. Just like the
raisin producers in California in the famous state-action
antitrust case, Parker v. Brown, 317 U.S. 341 (1943), who
controlled 90% of the world market in raisins, the
alleged cartel members here control a comparable share
of the world market in potash. The purpose of this
No. 10-1712                                            27

cartel was to inflate the profits of its members. Its
alleged effect was substantial. The United States,
according to the Complaint, is one of the two largest
consumers of potash in the world, and approximately
85% of U.S. potash comes from overseas. From 2003
to 2008, the price of potash increased six-fold. The in-
ference from these allegations is not just plausible but
compelling that the cartel meant to, and did in fact,
keep prices artificially high in the United States.


                            2
   We turn next to an analysis of the conduct that falls
outside the import exclusion to determine whether it
may nevertheless be subject to the Sherman Act under
the FTAIA. For example, the Complaint alleges that
Canpotex, a Canadian entity that does not sell directly
into the United States, restricted supply during a pe-
riod of especially difficult price negotiations with
China. This supply restriction compelled Chinese
buyers to accept a price increase. Complaint ¶94. We
assume for present purposes that none of this literally
involved import trade. Our discussion, however, is
rooted in the facts of this Complaint. In that connection,
it is important to recall that the FTAIA itself demands
that the facts of each case must be evaluated for com-
pliance with its demands. We thus address only the
situation before us, in which several members of the
cartel sold directly into the United States and others
allegedly worked with them in connection with those
efforts. The question before us is thus whether the al-
28                                            No. 10-1712

legations in the plaintiffs’ Complaint describe conduct
that had a direct, substantial, and reasonably fore-
seeable effect on domestic or import commerce by, for
example, setting a benchmark price intended to govern
later U.S. sales.
  As we noted above, the effects of the supply restric-
tion on U.S. potash prices were foreseeable. So too were
the effects of forcing foreign purchasers to accept
higher prices in a commoditized and cartelized market:
Either someone in the cartel would cheat, or a new
entrant would begin to arbitrage its purchases, or, as the
plaintiffs allege, the cartel would succeed in pushing
prices up across all of its markets, including the United
States. And, as we have explained, there is every reason
to infer that any such effects in the U.S. potash market
were substantial.
  We turn to the question whether these effects are
“direct,” as we have defined the term. The plaintiffs
allege that the defendants would first negotiate prices
in Brazil, India, and China, and then they would use
those prices for sales to U.S. customers. The alleged
supply reductions led to price hikes in these foreign
markets, and those increases showed up almost imme-
diately in the prices of U.S. imports. The defendants do
not suggest that the potash market is insulated from
these effects by regulatory structures or other arrange-
ments, and even if they did, that would be no reason
to dismiss the Complaint outright. To the contrary,
the plaintiffs have alleged that the cartel established
benchmark prices in markets where it was relatively free
No. 10-1712                                                 29

to operate, and it then applied those prices to its U.S.
sales. (Benchmark prices set in one market for general
use are common: think, for instance of the London In-
terbank Offered Rate (LIBOR), in the credit market; the
Brent Crude price, formally used for North Sea oil but
in general use in oil markets; or even the Medicare
Fee Schedule, which though technically only for
Medicare reimbursements, has widespread effects on
the healthcare market.) It is no stretch to say that the
foreign supply restrictions, and the concomitant price
increases forced upon the Chinese purchasers, were a
direct—that is, proximate—cause of the subsequent
price increases in the United States.
  The allegations in the Complaint state a claim, as re-
quired by Federal Rule of Civil Procedure 8, and thus are
enough to withstand a motion to dismiss under Rule
12(b)(6), as interpreted by the Supreme Court in Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and
Ashcroft v. Iqbal, 556 U.S. 662 (2009). The Complaint is
not defeated by the defendants’ contention that the
alleged cartel was not efficacious. See In re High Fructose
Corn Syrup Antitrust Litig., 295 F.3d 651, 656 (7th Cir. 2002).
We are also satisfied that the allegations suffice, at
this stage, to support a plausible story of concerted
action. See In re Text Messaging Antitrust Litig., 630 F.3d
622 (7th Cir. 2010). We stress, however, that our evalua-
tion throughout has proceeded exclusively on the face
of the Complaint. Nothing we have said should be under-
stood as a prediction of the facts that may turn up
in discovery, nor are we opining about the likely fate
of any possible defenses. In particular, the defendants
30                                              No. 10-1712

mentioned in their opposition to the petition for
rehearing en banc that some of their actions were under-
taken with the approval of foreign governments (e.g.,
Canada’s). We express no opinion on either the contours
or the likely success of any such argument. Similarly,
we do not have before us any question about the
court’s personal jurisdiction over the various defendants.
Cf. J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780
(2011). We are not faced with the question of whether
the actions of the non-selling defendants, such as
Canpotex, fall outside the substantive scope of Sherman
Act § 1 (as opposed to the law’s territorial reach), nor
have the defendants argued that Congress as a matter
of U.S. law has no constitutional power to enact laws
with some extraterritorial effect. These or other theories
may all be important to explore as the case goes
forward, but they do not provide a reason to throw out
the case on the grounds that the plaintiffs failed to
show either that the challenged transactions occurred
in import commerce or that they had a direct, sub-
stantial, and reasonably foreseeable effect on either the
domestic or import commerce of the United States.


                            IV
  Foreign cartels, especially those over natural resources
that are scarce in the United States and that are traded
in a unified international market, have often been the
target of either governmental or private litigation. The
host country for the cartel will often have no incentive
No. 10-1712                                            31

to prosecute it. Canada and Russia, here (just like Cali-
fornia in Parker), would logically be pleased to reap
economic rents from other countries; their losses from
higher prices for the potash used in their own fertilizers
are more than made up by the gains from the cartel
price their exporters collect. Export cartels are often
exempt from a country’s antitrust laws: the United States
does just that, through its Webb-Pomerene Associa-
tions, see 15 U.S.C. §§ 61 et seq., and Export Trading
Companies, see 15 U.S.C. §§ 4001 et seq. This case is ac-
tually the mirror image of the situation described in
Empagran, where the foreign country whose consumers
are hurt would have been the better enforcer. It is the
U.S. authorities or private plaintiffs who have the
incentive—and the right—to complain about over-
charges paid as a result of the potash cartel, and whose
interests will be sacrificed if the law is interpreted not
to permit this kind of case.
   The world market for potash is highly concentrated,
and customers located in the United States account for
a high percentage of sales. This is not a House-that-Jack-
Built situation in which action in a foreign country
filters through many layers and finally causes a few
ripples in the United States. To the contrary: foreign
sellers allegedly created a cartel, took steps outside the
United States to drive the price up of a product that
is wanted in the United States, and then (after suc-
ceeding in doing so) sold that product to U.S. customers.
The payment of overcharges by those customers was
objectively foreseeable, and the amount of commerce
32                                          No. 10-1712

is plainly substantial. We A FFIRM the order of the
district court denying the motion to dismiss for failure
to state a claim.




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