BHP New Zealand Ltd. v. Ucar International, Inc. ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
8-9-2004
BHP New Zealand Ltd v. UCAR Intl Inc
Precedential or Non-Precedential: Non-Precedential
Docket No. 01-3329
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 01-3329
BHP NEW ZEALAND LTD.;
NEW BHP STEEL PTY LTD.;
BHP STEEL (JLA) PTY LTD.;
BROKEN HILL PROPRIETARY COMPANY, LTD.,
Appellants
v.
UCAR INTERNATIONAL, INC.;
UCAR CARBON COMPANY, INC.;
SGL CARBON A.G.;
TOKAI CARBON CO., LTD.;
TOKAI CARBON U.S.A. INC.;
THE CARBIDE/GRAPHITE GROUP, INC.;
NIPPON CARBON CO., LTD.;
SEC CORPORATION
(D.C. Civil No. 99-cv-04772)
(Amended in accordance with Clerk’s Order dated 2/21/02)
No. 01-3340
IN RE: GRAPHITE ELECTRODES ANTITRUST LITIGATION
(MDL No. 1244)
FERROMIN INTERNATIONAL TRADE CORPORATION;
EKINCILER DIS TICARET A.S.; EKINCILER DEMIR
CELIK SANAYI A.S.; ASIL CELIK SANAYI VE
TICARET, A.S.; DILER DEMIR CELIK ENDUSTRISI VE
TICARET A.S.; YAZICI DEMIR CELIK SANAYI VE
TICARET A.S.; COLAKOGLU METALURJI A.S.; SIAM
YAMATO STEEL COMPANY, LIMITED; SIAM
CONSTRUCTION STEEL COMPANY, LIMITED; SIAM
IRON AND STEEL COMPANY, LIMITED; SMORGON
STEEL GROUP, LTD.; SHANGHAI PUDONG IRON &
STEEL (GROUP) CO., LTD.; SHANGHAI NO. 5 STEEL
(GROUP) CO., LTD.; FU SHUN STEEL PLANT IMPORT
& EXPORT COMPANY; INTERNATIONAL ECONOMIC
& TRADING CO. (WUGANG GROUP); CHINA
METALLURGICAL IM PORT & EXPORT MAGANG CO.;
LAI WU IRON & STEEL COMPANY; DAYE STEEL
GROUP IMPORT & EXPORT CO.; ZHANGJIAGANG
NOVEL STEEL CO. LTD.; JIANGSU SHAGANG GROUP
CO., LTD.; ZHANGJIAGANG SHEEN FAITH STEEL CO.,
LTD.; GUANGZHOU IRON & STEEL CO., LTD.;
GUANGZHOU IRON & STEEL HOLDING LTD. CORP.;
IZMIR DEMIR CELIK SANAYI A.S.; ICDAS CELIK
ENERJI TERSANE VE ULASIM SANAYI A.S.
v.
UCAR INTERNATIONAL, INC.; UCAR CARBON COM PANY, INC.;
SGL CARBON A.G.; TOKAI CARBON CO., LTD.; TOKAI CARBON
U.S.A., INC.; THE CARBIDE/GRAPHITE GROUP, INC.; NIPPON
CARBON CO., LTD.; SEC CORPORATION
(D.C. Civil No. 99-cv-00693)
Ferromin International Trade Corporation, Ekinciler Dis
Ticaret AS, Ekinciler Demir Celik Sanayi AS, Asil Celik
Sanayi VE Ticaret, AS, Diler Demir Celik Endustrisi BE
Ticaret AS, Yazici Demir Celik Sanayi VE Ticaret AS,
Colakoglu Metalurji AS, Siam Yamato Steel Company,
Limited, Siam Construction Steel Company, Limited, Siam
Iron and Steel Company, Limited, Smorgon Steel Group, Ltd,
Shanghai Pudong Iron & Steel (Group) Co., Ltd., Shanghai
No. 5 Steel (Group) Co., Ltd., FU Shun Steel Plant Import &
Export Company, International Economic & Trading Co.
(Wugang Group), China Metallurgical Import & Export
Magang Co., Lai Wu Iron & Steel Company, Daye Steel
Group Import & Export Co., Zhangjiagang Novel Steel Co.
2
Ltd, Zhangjiagang Sheen Faith Steel Co., Ltd., Guangzhou
Iron & Steel Co., Ltd., Guangzhou Iron & Steel Holding Ltd.
Corp., Izmir Demir Celik Sanayi AS, and Icdas Celik Enerji
Tersane VE Ulasim Sanayi AS,
Appellants
(Amended in accordance with Clerk's Order dated 2/21/02)
No. 01-3991
IN RE: GRAPHITE ELECTRODES ANTITRUST LITIGATION
(MDL No. 1244)
FERROMIN INTERNATIONAL TRADE CORPORATION;
EKINCILER DIS TICARET A.S.; EKINCILER DEMIR
CELIK SANAYI A.S.; ASIL CELIK SANAYI VE
TICARET, A.S.; DILER DEMIR CELIK ENDUSTRISI VE
TICARET A.S.; YAZICI DEMIR CELIK SANAYI VE
TICARET A.S.; COLAKOGLU METALURJI A.S.; SIAM
YAMATO STEEL COMPANY, LIMITED; SIAM
CONSTRUCTION STEEL COMPANY, LIMITED; SIAM
IRON AND STEEL COMPANY, LIMITED; SMORGON
STEEL GROUP, LTD.; SHANGHAI PUDONG IRON &
STEEL (GROUP) CO., LTD.; SHANGHAI NO. 5 STEEL
(GROUP) CO., LTD.; FU SHUN STEEL PLANT IMPORT
& EXPORT COMPANY; INTERNATIONAL ECONOMIC
& TRADING CO. (WUGANG GROUP); CHINA
METALLURGICAL IM PORT & EXPORT MAGANG CO.;
LAI WU IRON & STEEL COMPANY; DAYE STEEL
GROUP IMPORT & EXPORT CO.; ZHANGJIAGANG
NOVEL STEEL CO. LTD.; JIANGSU SHAGANG GROUP
CO., LTD.; ZHANGJIAGANG SHEEN FAITH STEEL CO.,
LTD.; GUANGZHOU IRON & STEEL CO., LTD.;
GUANGZHOU IRON & STEEL HOLDING LTD. CORP.;
IZMIR DEMIR CELIK SANAYI A.S.; ICDAS CELIK
ENERJI TERSANE VE ULASIM SANAYI A.S.
3
v.
UCAR INTERNATIONAL, INC.; UCAR CARBON COM PANY, INC.;
SGL CARBON A.G.; TOKAI CARBON CO., LTD.; TOKAI CARBON
U.S.A., INC.; THE CARBIDE/GRAPHITE GROUP, INC.; NIPPON
CARBON CO., LTD.; SEC CORPORATION
(D.C. Civil No. 99-cv-00693)
Ucar International, Inc., Ucar Carbon Co., Inc., The
Carbide/Graphite Group, Inc., Nippon Carbon Co., Ltd., SEC
Corporation, SGL Carbon AG, Tokai Carbon Co., Ltd. and
Tokai Carbon U.S.A., Inc.,
Appellants
(Amended in accordance with Clerk's Order dated 2/21/02)
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Nos. 99-cv-04772 and 99-cv-00693)
District Judge: Hon. Charles R. Weiner
Argued March 11, 2003
Before: SLOVITER, NYGAARD, and ALARCÓN *, Circuit Judges
(Filed August 9, 2004)
*
Honorable Arthur L. Alarcón, United States Circuit Judge for the Ninth Circuit, sitting
by designation.
4
James vanR. Springer (Argued)
Kenneth L. Adams
R. Bruce Holcomb
James R. Martin
Dickstein Shapiro Morin & Oshinsky LLP
Washington, D.C. 20037-1526
Attorneys for all Appellants
Kevin R. Sullivan (Argued)
Grace M. Rodriguez
Peter M. Todaro
Jeffrey T. Tao
King & Spalding
Washington, D.C. 20006-4706
Francis Patrick Newell
Montgomery, McCracken, Walker & Rhoads, LLP
Philadelphia, PA 19109-1029
Attorneys for Appellees/Cross-Appellants,
UCAR International Inc. and UCAR Carbon Co., Inc.
Stuart J. Baskin
Jerome S. Fortinsky
Paul S. Hessler
Shearman & Sterling
New York, New York 10022
Daniel Segal
Hangley Aronchick Segal & Pudlin
Philadelphia, PA 19103
Attorneys for Appellee/Cross-Appellant,
SGL Carbon AG
5
Craig D. Bachman
Kenneth R. Davis II
Thomas W. Sondag
Lane Powell Spears Lubersky LLP
Portland, OR 97204-3158
Matthew A. White
Wolf Block Schorr & Solis-Cohen
Philadelphia, PA 19103
Attorneys for Appellees/Cross-Appellants,
Tokai Carbon Co., Ltd. and Tokai Carbon U.S.A., Inc.
Kenneth I. Schacter
Timothy A. Valliere
Bingham McCutchen LLP
New York, New York 10022
Attorneys for Appellee/Cross-Appellant,
Nippon Carbon Co., Ltd.
A. Paul Victor
Scott Martin
Christopher V. Roberts
Weil, Gotshal & Manges, LLP
New York, New York 10153-0119
Jerome R. Richter
William H. Roberts
Blank Rome
Philadelphia, PA 19103
Attorneys for Appellee/Cross-Appellant,
SEC Corporation
Stephen D. Brown
Joseph A. Tate
George G. Gordon
6
Carolyn H. Feeney
Dechert
Philadelphia, PA 19103
Attorneys for Appellee/Cross-Appellant,
Carbide Graphite Group
OPINION OF THE COURT
SLOVITER, Circuit Judge.
The appeals before us stem from two antitrust actions filed by two groups of
plaintiffs, which include foreign corporations engaged in the production of steel and a
U.S. corporation that acted on behalf of two such foreign steel producers. One action, led
by BHP New Zealand, was filed by a New Zealand company and three Australian
companies (collectively referred to as “BHP”).1 The other action, led by Ferromin
International Trade Corp., was filed by 26 foreign corporations with their principal places
of business in the United States, Thailand, Turkey, Australia, China, Austria, and
Sweden, and one U.S.-based affiliate that acted on behalf of two of the Turkish plaintiffs
in this group (collectively referred to as “Ferromin”).2 The actions were filed against a
1
The BHP-led plaintiffs include: BHP New Zealand Steel Ltd.; NSW BHP Steel Pty
Ltd.; BHP Steel (JLA) Pty Ltd.; and Broken Hill Proprietary Company, Ltd. App. at 3.
2
Plaintiffs in the Ferromin-led action were Ferromin International Trade
Corporation; Ekinciler dis Ticaret A.S.; Ekinciler Demir Celik Sanayi A.S.; Asil Celik
Sanayi VE Ticaret, AS; Diler Demir Celik Endustrisi VE Ticaret AS; Yazici Demir Celik
Sanayi VE Ticaret AS; Colakoglu Metalurji A.S.; Siam Yamato Steel Company, Ltd.;
Siam Construction Steel Company, Ltd.; Siam Iron and Steel Company, Ltd.; Smorgon
Steel Group, Ltd.; Shanghai Pudong Iron & Steel (Group) Company, Ltd.; Shanghai No.
7
group of American, Japanese, and German companies that manufacture and sell graphite
electrodes in the domestic and foreign graphite electrode markets (collectively referred to
as “UCAR”).3 The two actions were consolidated in the District Court.
To produce steel, plaintiffs use a high-temperature technique that requires the
burning of large quantities of graphite electrodes. Plaintiffs allege that defendants
conspired to artificially inflate graphite electrode prices by establishing a global cartel
that fixed prices and allocated business among graphite electrode producers throughout
5 Steel (Group) Company, Ltd.; FU Shun Steel Plant Import & Export Company;
International Economic & Trading Company (Wugang Group); China Metallurgical
Import & Export Magang Company; Lai Wu Iron & Steel Company; Daye Steel Group
Import & Export Company; Zhangjiagang Novel Steel Company, Ltd.; Zhangjiagang
Sheen Faith Steel Company, Ltd.; Guangzhou Iron & Steel Company, Ltd.; Guangzhou
Iron & Steel Holding Ltd. Corporation; Izmir Demir Celik Sanayi A.S.; Bohler Edelstahls
GM BH; Uddeholm Tooling AB; and Icdas Celik Enerji Tersane VE Ulasim Sanayi A.S.
App. at 1 (Ferromin, et al., Notice of Appeal).
Jiangsu Shagang Group Company, Ltd., was a plaintiff in the Ferromin action.
Although we do not have any record of Jiangsu Shagang abandoning its claims against
UCAR, it is not listed among the Appellants in the Notice of Appeal. App. at 1.
Bohler Edelstahl GMBH and Uddeholm Tooling AB, subsequent to the filing of
the Notice of Appeal, have abandoned their claims against UCAR and were dismissed
from the case on February 21, 2002.
3
The Ferromin and BHP actions name the same defendants: UCAR International,
Inc.; UCAR Global Enterprises, Inc.; UCAR Carbon Company, Inc.; SGL Carbon A.G.;
Tokai Carbon Company, Ltd.; Tokai Carbon U.S.A., Inc.; The Carbide/Graphite Group,
Inc.; Nippon Carbon Company, Ltd.; and SEC Corp.
Subsequent to the filing of the Notices of Appeal, on February 21, 2002, UCAR
Global Enterprises, Inc. was removed as an appellee/cross-appellant from appeal 01-
3329, 01-3340, and 01-3991.
8
the worldwide market. App. at 58-59, 107-08.
Defendants filed motions to dismiss pursuant to Federal Rule Civil Procedure
12(b)(1), arguing that the plaintiffs’ claims were beyond the subject matter of the
Sherman Act. The District Court, by order of June 13, 2001, granted in part and denied in
part the defendants’ motions to dismiss the complaints. See Ferromin Int’l Trade Corp. v.
UCAR Int’l, Inc., 153 F. Supp. 2d 700 (E.D. Pa. 2001). UCAR cross-appeals the same
order. The District Court held that it had no subject matter jurisdiction over antitrust suits
for overcharges on electrodes purchased outside the United States. It also ruled that
claims based on items purchased abroad but invoiced in the United States were within the
jurisdiction of the federal courts. Both sets of parties appeal, following certification by
the District Court of certain of its rulings under 28 U.S.C § 1292(b) and its certification of
the other rulings with the statements required under Federal Rule Civil Procedure 54(b).
The principal question before us on appeal is whether the Sherman Act’s coverage
with respect to activities involving foreign commerce, as defined by the general
exclusionary rule and the specific exceptions contained in the Foreign Trade Antitrust
Improvement Act (“FTAIA”), 15 U.S.C. § 6a, extends to the specific antitrust claims
asserted by plaintiffs. While this case was pending our decision, the Supreme Court
issued its opinion in F. Hoffman-LaRoche Ltd. v. Empagran S.A., 124 S. Ct. 2359 (2004),
in which it held that where the alleged anticompetitive conduct causes an adverse foreign
effect that is independent of the domestic effects of the conduct, “the FTAIA [domestic-
9
injury] exception does not apply (and thus the Sherman Act does not apply) . . . .” Id. at
2366. The Court reasoned that “two sets of considerations, the one derived from comity
and the other reflecting history, convince us that Congress would not have intended the
FTAIA’s exception to bring independently caused foreign injury within the Sherman
Act’s reach.” Id. at 2371. The Court, however, stated no position regarding situations in
which the foreign injury was not independent of the alleged anticompetitive conduct’s
domestic effects because the Court of Appeals had not addressed that issue. Id. at 2372.
We requested that the parties provide us with letter memoranda addressing the
effect of the Supreme Court’s opinion in Empagran on the appeal before us. Both parties
agree that, to the extent that plaintiff steel producers claim foreign injuries that are
independent of the domestic effects of the alleged anticompetitive conduct, Empagran
controls our ruling on such claims. Letter from plaintiff-appellants’ counsel to the court
of June 30, 2004, at 1-2; Letter from defendant-appellees’ counsel to the court of July 1,
2004, at 1. Plaintiffs, however, assert that the basic questions on appeal, in light of
Empagran, are:
Have plaintiffs made a preliminary showing, sufficient to proceed with this
litigation, that the prices they paid for graphite electrodes were linked to,
and not “independent” from, the raising of prices in the United States by
defendants’ alleged global price-fixing cartel?
If not, should plaintiffs have an opportunity to make such a showing on
remand?
Letter from plaintiffs-appellant’s counsel, at 1. Defendants, on the other hand, maintain
10
that the District Court erred in allowing the claims of certain plaintiffs based on foreign
purchases of graphite electrodes that were invoiced in the United States to proceed.
Letter from defendants-appellees’ counsel, at 4.
Because the District Court, and the parties, did not have the benefit of Empagran,
we will remand the case to the District Court for its reconsideration. The District Court,
should it deem it necessary or helpful, may give the parties the opportunity to present
evidence as to whether the alleged anticompetitive conduct’s domestic effects were linked
to the alleged foreign harm. The District Court may consider and take evidence, if
necessary, on any other related issue. For the reasons set forth above, we will vacate the
decision of the District Court and remand for further proceedings consistent with this
opinion.
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