The case of the day is Mountain Crest SRL, LLC v. Anheuser-Busch InBev SA/NV (7th Cir. 2019). Mountain Crest sued Anheuser-Busch and Molson Coors, claiming the two companies had conspired to keep Mountain Crest out of the business of exporting beer to Ontario by boycotting the LCBO, Ontario’s government-run liquor store, to force it to enter into agreement under which an entity controlled by Anheuser-Busch and Molson Coors was the only entity allowed to sell beer to the LCBO in packages of more than six bottles. The district court dismissed the case under the act of state doctrine, and Mountain Crest appealed.
The court held that a provincial government counted as a foreign state for purposes of the act of state doctrine, both because the FSIA defines a foreign state to include its political subdivisions and because in this case the LCBO’s liquor monopoly in the province was a result of Canadian federal law. It held further that a decision on the claims would require, in effect, a decision on the lawfulness of the LCBO’s rules about the sale of six-packs, which is what the act of state dotrine means to avoid.
That said, the court held that not all of the claims were intimately tied up with the Ontario rule. In addition to saying that the rule itself was illegal and should be enjoined, Mountain Crest claimed that its two competitors had wrongfully conspired to try to get Ontario to adopt the rule. That claim of conspiracy was not itself barred by the act of state doctrine, because the court could rule in Mountain Crest’s favor without invalidating the Ontario regulatory scheme.