Rotec Industries, Inc., an Illinois Corporation v. Mitsubishi Corporation, a Corporation Organized Under the Laws of Japan Tucker Associates, Inc., an Oregon Corporation Garry Tucker, an Individual

Citations: 348 F.3d 1116; 2003 Cal. Daily Op. Serv. 9732; 2003 U.S. App. LEXIS 22964Docket: 02-35268

Court: Court of Appeals for the Ninth Circuit; November 9, 2003; Federal Appellate Court

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Rotec Industries, Inc. appeals a district court's summary judgment favoring Mitsubishi Corporation and other defendants regarding claims of a Robinson-Patman Act violation and intentional interference with economic advantage under Oregon state law. Rotec contends the district court improperly found a lack of subject matter jurisdiction for the Robinson-Patman claim and ruled insufficient evidence existed for the causation element of the intentional interference claim. The Ninth Circuit has jurisdiction under 28 U.S.C. 1291 and affirmed the district court's ruling.

The background involves the construction of the Three Gorges Dam on the Yangtze River, which began in 1993 and is expected to be the largest hydroelectric dam upon completion in 2009. Rotec, a manufacturer of concrete placement equipment, sought contracts for Phase II of the dam project. In December 1995, Mitsubishi and other companies agreed to collaborate to bid against Rotec. Seven bids were submitted on January 15, 1996, with both Rotec and the defendants recommended for contracts by the Bid Evaluation Committee.

Rotec secured a contract for three pieces of equipment worth over $30 million, but CRNC, the buyer, opted to purchase two additional pieces from Mitsubishi instead of exercising its option with Rotec. Mitsubishi subsequently agreed to pay a 0.5 percent commission to CRNC related to this additional purchase.

During negotiations involving Mitsubishi, a Bid Evaluation Committee member was recommended for a quality control position. Rotec initially sued the defendants for patent infringement in the Central District of Illinois, but the case was dismissed. Following this, Rotec filed another lawsuit in the same district, presenting multiple claims, and sought to amend its pleadings approximately five months after the typical amendment deadline, which the district court denied. However, the court allowed Rotec to pursue claims based on certain documents in a different district without opining on the appropriateness of those claims.

Subsequently, Rotec filed a lawsuit in the District of Oregon, alleging violations of the Robinson-Patman Act, RICO, and Oregon state law concerning intentional interference with economic relations. The district court granted summary judgment in favor of Mitsubishi for all claims. The defendants contended that Rotec’s claims were barred by the doctrine of claim preclusion, arguing they could have been included in the Illinois federal action. However, this argument was deemed waived since it was not raised in the district court and the defendants did not object to the concurrent proceedings.

The court noted that claim preclusion, as an affirmative defense, could not be introduced for the first time on appeal unless extraordinary circumstances justified it, which were not present in this case. Additionally, the district court had determined that the conduct in question did not satisfy the jurisdictional requirements of Section 2(c) of the Robinson-Patman Act, rejecting reliance on a prior case that was deemed outdated due to subsequent Supreme Court rulings.

Rangen established that even a minimal impact on interstate or foreign commerce can meet the jurisdictional criteria of section 2(c) of the Robinson-Patman Act, asserting that payments made intrastate can harm interstate commerce in fish food. Conversely, the Supreme Court in Gulf Oil interpreted section 2(a) more restrictively, emphasizing that the provisions pertain only to entities directly involved in interstate commerce. Gulf Oil underscored that showing an effect on commerce is insufficient for satisfying jurisdictional requirements. Although Rotec claims the district court should have followed Rangen's analysis due to the difference in sections, the court argues that the jurisdictional aspects of both sections 2(a) and 2(c) are fundamentally similar. Rangen's reliance on the Moore decision, which interpreted section 2(a), is noted, but Gulf Oil provided a narrower interpretation of Moore, suggesting it does not support Rangen's broader outlook. Furthermore, recent Supreme Court decisions, particularly Circuit City Stores, Inc. v. Adams, challenge the validity of Rangen by clarifying that "engaged in commerce" refers to a limited legislative intent under the Commerce Clause, contrasting with Rangen’s broader interpretation.

Rotec's claim that the court has 'reaffirmed' the jurisdictional analysis from Rangen is rejected. In the case May Department Store v. Graphic Process Co., the court allowed a party to amend its pleadings regarding the interstate commerce requirements of section 2(c) of the Robinson-Patman Act, indicating that the interstate nature of the companies could satisfy jurisdictional needs. However, the court did not clarify how Rangen's analysis relates to Gulf Oil. Rotec fails to provide a convincing argument against applying Gulf Oil's jurisdictional standards to section 2(c). Consequently, Rangen’s jurisdictional analysis is overruled, and it is established that section 2(c) applies only to entities and activities directly involved in interstate or international commerce. The $17.8 million contract with Three Gorges Corp., which included a requirement for tools from the U.S., does not meet this jurisdictional criterion, as the payments in question occurred entirely outside the U.S., between Mitsubishi and CRNC, with funds transferred to a Hong Kong bank. Thus, the dismissal of the section 2(c) claim for lack of subject matter jurisdiction is affirmed.

For the claim of intentional interference with economic relations in Oregon, Rotec must prove six elements, including the existence of a business relationship and causation of damages by improper interference. The district court assumed all but the causation element were met and dismissed the case due to a lack of demonstrated causation. The court agreed to assume the improper means included a commission payment to CRNC and an improper job offer to a committee member. However, it concluded that too many inferences were needed to connect this conduct to Rotec's failure to secure contracts. Rotec's assertion that Mitsubishi influenced the Evaluation Committee lacks supporting evidence, particularly regarding the alleged influence of the two committee members supposedly bribed, as the Committee recommended both Rotec and Mitsubishi.

Three Gorges Corp. initiated negotiations with the relevant parties, and despite Rotec's claims that Mitsubishi influenced two members of the Evaluation Committee, no direct link was established between the Committee's actions and CRNC's decision to enter into a contract with the defendants. Rotec failed to provide evidence that connected CRNC's decision not to award the contract to them with the alleged improper award of a quality control job and a kickback to CRNC by the defendants. Consequently, the district court's summary judgment on this claim was upheld. Additionally, the court correctly dismissed the Robinson-Patman claim due to lack of jurisdiction, finding no sufficient evidence that defendants' unlawful payment influenced their contract award from Chinese government parties. The decision was affirmed, noting the nuances of the Robinson-Patman Act and the court's authority concerning prior rulings.