Companhia Brasileira Carbureto De CalcioCBCC v. Applied Industrial Materials Corp.

Citations: 859 F. Supp. 2d 1; 2012 WL 1574650; 34 I.T.R.D. (BNA) 1551; 2012 U.S. Dist. LEXIS 63469Docket: Civil Action No. 2001-0646

Court: District Court, District of Columbia; May 7, 2012; Federal District Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The United States District Court for the District of Columbia dismissed consolidated cases involving Companhia Brasileira Carbureto de Calcio (CBCC) against multiple defendants, citing a lack of personal jurisdiction. This decision was partially affirmed and partially reversed by the D.C. Circuit, which vacated the dismissal order. CC Metals Alloys, Inc. and Elkem Metals, Inc. moved for dismissal based on the Circuit's opinion, but this motion was denied.

The cases stem from import duties imposed on Brazilian ferrosilicon producers due to allegations of "dumping" by U.S. producers, leading to the imposition of tariffs in 1993 and 1994, which forced Brazilian firms out of the U.S. market. Concurrently, the Department of Justice investigated price-fixing in the domestic silicon industry, resulting in convictions of some defendants. Following the lifting of tariffs by the International Trade Commission (ITC) in 1999, the plaintiffs alleged that the defendants conspired to file fraudulent antidumping petitions, violating the Sherman Antitrust Act and the Racketeer Influenced and Corrupt Organizations Act (RICO).

Initially, defendants included several U.S. ferrosilicon producers, foreign parent companies, and a trade association. Some defendants became insolvent and were dismissed from the case. The court's dismissal in March 2010 was based on three key findings: insufficient factual allegations regarding a conspiracy involving the trade association to establish personal jurisdiction; lack of jurisdiction over foreign corporations due to insufficient contacts; and the withdrawal of certain claims by the plaintiffs.

Foreign parents of subsidiaries were not petitioners before the International Trade Commission (ITC) and the claims that their subsidiaries induced unions to petition and paid legal fees were inadequate to establish jurisdiction. The court noted that personal jurisdiction over a nonresident defendant’s coconspirator requires that both the overt act and injury occurred in the District. The court affirmed the dismissal of foreign corporations Trostberg and Elkem A/S, stating that the plaintiffs could not demonstrate sufficient contacts with the District to confer personal jurisdiction over subsidiaries SKW and Elkem Metals based solely on allegations of inducing unions or paying legal fees. 

The court emphasized that mere stock ownership does not suffice for establishing personal jurisdiction through a subsidiary unless the subsidiary acts as the parent's agent or alter ego. The D.C. Circuit did not indicate that the dismissal of the foreign parent corporations should be reversed. The court reiterated that petitioning the government should not lead to civil actions based on unfounded fraud allegations, and that personal jurisdiction is not shielded in cases where fraudulent petitions are involved. Elkem and CC Metals, not being petitioners before the ITC, moved to dismiss for lack of personal jurisdiction. Under Federal Rule of Civil Procedure 12(b)(1), a court must review the complaint liberally when assessing such motions to dismiss for lack of subject-matter jurisdiction.

The court in Barr v. Clinton emphasized that it is not obligated to accept unsubstantiated factual inferences or legal conclusions from plaintiffs when evaluating jurisdiction. To determine jurisdiction, courts may consider materials beyond the pleadings. Subject matter jurisdiction is a requirement that cannot be granted by the parties, and the burden of proving its existence lies with the party claiming it.

Elkem and CC Metals contested the court's personal jurisdiction over them, arguing they had no contacts with the forum because they were not petitioners before the ITC, and thus the fraudulent ITC petition could not establish jurisdiction. The court upheld that allegations of "inducement" of unions to file the ITC petition and payment of their attorney fees did not constitute sufficient contact with the District of Columbia.

Plaintiffs claimed personal jurisdiction based on the defendants’ allegedly false responses to ITC questionnaires, but this argument was rejected. The court clarified that simply responding to an ITC questionnaire does not indicate purposeful availment of the forum's laws. However, personal jurisdiction could be established under a coconspiracy theory, as the complaint alleged that Elkem and CC Metals conspired with ITC petitioners to violate antitrust and RICO laws. This included actions such as agreeing to the conspiracy, coordinating with petitioners, providing false information, and inducing unions to participate in the ITC petition, all of which involved overt acts within the District of Columbia.

Personal jurisdiction is established over Elkem and CC Metals due to the overt acts of alleged coconspirators in the forum, despite Elkem and CC Metals not taking actions themselves within that jurisdiction. The Complaint sufficiently details the conspiracy's existence, their involvement, and the coconspirators' overt acts, allowing the Court to assert jurisdiction. While Elkem and CC Metals argue that the Circuit upheld a prior rejection of conspiracy jurisdiction related to TFA, the Complaint presents additional allegations of conspiracy involving the ITC petitioners, which supports the theory of conspiracy jurisdiction. Consequently, the motion to dismiss for lack of personal jurisdiction filed by CC Metals and joined by Elkem will be denied. The Court emphasizes that it does not determine the sufficiency of evidence for the alleged conspiracy regarding potential future motions for summary judgment or trial outcomes. An accompanying Order will be issued.