is a minimal requirement. One court has stated that "it is probably not necessary for the effect on foreign commerce to be both substantial and direct as long as it is not de minimus." Dominicus Americana Bohio v. Gulf & Western Industries, Inc., 473 F.Supp. 680, 687 (S.D.N.Y.1979).
Applying the first step of the Mannington Mills jurisdictional test to the present case, we conclude that even employing the most lenient standard of substantiality of effects, this court lacks subject matter jurisdiction over plaintiff's antitrust cause of action. Plaintiff's complaint fails to allege any effects on United States commerce. The only effects alleged are effects on the regional resources and environmental systems of Western Australia. See, e. g., PP 103 (effect on the Northern Jarrah Forest), & 113 (effect on the regional hydrologic system of the Darling Region). These allegations regarding the defendants' activities are not sufficient to confer jurisdiction on this court.
2. 28 U.S.C. § 1331
The second asserted basis for jurisdiction is "federal question" jurisdiction under 28 U.S.C. § 1331. Federal courts are courts of limited jurisdiction. Because there is no presumption in favor of federal court jurisdiction, the basis for that jurisdiction must be shown affirmatively. Kirkland Masonry, Inc. v. Commissioner of Internal Revenue, 614 F.2d 532, 533 (5th Cir. 1980). "If jurisdiction is based on the existence of a federal question, the jurisdictional allegation should state that the action arises under a particular statute or provision of the Constitution and the body of the complaint must state facts showing that the case does in fact arise under federal law." Id. at 533. "A mere "suggestion' of a federal question is not sufficient." Koll v. Wayzata State Bank, 397 F.2d 124, 127 (8th Cir. 1968). The Complaint in this case does not explain what the supposed "federal question" is. No federal statute is alleged, no federal common law right is pleaded, and the complaint is totally devoid of any allegations of fact tending to show the existence of a federal question. Accordingly, this court does not have subject matter jurisdiction under 28 U.S.C. § 1331.
3. "Equitable Jurisdiction"
Finally, the complaint purports to invoke the "equitable jurisdiction" of this court as an independent jurisdictional basis. This basis is without merit. "Federal courts have no independent "equity jurisdiction'; they may grant equitable relief, but not unless there is an independent statutory basis for federal jurisdiction, which is conferred only by specific congressional enactment." In re "Agent Orange" Product Liability Litigation, 506 F.Supp. 737, 740 (S.D.N.Y.1979). See 7 Moore's Federal Practice, § 65.03(2.) (2d ed. 1980).
4. 28 U.S.C. § 1332(a)
28 U.S.C. § 1332(a) permits federal courts to entertain suits between citizens of a state and citizens or subjects of a foreign state. Although the Council did not specifically plead diversity jurisdiction in its Complaint, it did allege facts that support such jurisdiction, to-wit, that plaintiff is an organization formed under the laws of the State of Western Australia and that both defendants are citizens of the United States.
There being no other basis for subject matter jurisdiction, for the reasons discussed above, we address the issue of whether this court has diversity jurisdiction.
In support of its motion to dismiss, defendant Reynolds maintains that the real dispute in this case is between plaintiff and four participants in a joint venture agreement for the construction and operation of the Worsley Project, none of whom is presently before this court. Because it appears from the face of the Complaint that this court has diversity jurisdiction, we must determine whether the joint venturers in the Worsley Project are indispensable parties.
Under Fed.R.Civ.P. 19(a), we must first determine whether the joint venturers are persons who should be joined if feasible. Rule 19(a)(2)(i) provides that a person should be joined if "he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may as a practical matter impair or impede his ability to protect that interest."
The Complaint asserts that in February, 1980, Reynolds and three other companies "agreed to participate in a joint venture for the purpose of constructing and operating (the Worsley Project)." In support of its motion to dismiss, Reynolds submitted the affidavit of Deryck H. F. Stone, a Solicitor of the Supreme Court of England employed in the Law Department of Reynolds Metals Company.
Mr. Stone's affidavit is based upon various documents, statutes, and matters of public record, many of which have been submitted as exhibits by Reynolds. The affidavit establishes that although a joint venture agreement was made in February, 1980 for the construction and operation of the Worsley Project, Reynolds is not a participant. Rather, the joint venture consists of the following four participants: (1) Reynolds Australia Alumina, Ltd. ("Reynolds Australia"), a Delaware corporation owned by a trust of which Reynolds and a wholly owned subsidiary of Reynolds are the grantors and beneficiaries, (2) Shell Company of Australia, Limited, a company incorporated in the State of Victoria, Australia, (3) Dampier Mining Company Limited, a company incorporated in the State of Western Australia, and (4) Kobe Alumina Associates (Australia) Pty. Limited, also incorporated in the State of Western Australia. Under the terms of the joint venture agreement, the property and assets of the joint venture, consisting primarily of the facilities involved in the Worsley Project and the rights to develop them, are owned by the four joint venturers as tenants in common; Reynolds Australia owns a forty percent interest in the joint venture and the three Australian companies have, in the aggregate, a sixty percent interest. Reynolds does not have an ownership interest in the property and assets of the joint venture nor does it have any right to manage or direct the joint venturers' activities. Furthermore, the three Australian joint venturers are not affiliated with Reynolds. Although Reynolds Australia is referred to as a Reynolds affiliate, by the terms of the joint venture agreement, Reynolds Australia cannot control the Worsley Project.
The Council seeks relief directed solely toward the continuation of a project owned and operated by joint venturers. Under Rule 19(a), the presence of the three Australian joint venturers is required.
As noted above, the interest of each in the Worsley Project is that of a tenant in common. Whether tenants in common are indispensable depends on the nature of the relief sought and the possible effects on their interests. Where a judgment will directly affect the interests of the co-tenants because the contract involved is an entire and indivisible one, the courts have required all of the tenants to be joined. There, "the right of any one tenant is not distinct and the relief sought is interwoven with the rights of the other tenants." 3A Moore's Federal Practice P 19.09(2), at 19-201 (2d ed. 1979). The Third Circuit applied this principle in Brodsky v. Perth Amboy National Bank, 259 F.2d 705, 707 (3d Cir. 1958). In that case, a lessee sought to nullify a lease held by four tenants in common in an action in which only one of the tenants was joined. The Third Circuit held that it was "so crystal clear" that the interest of each tenant would be affected by a judgment that all of them had to be joined. The same is true of the joint venturers' interests here. Because plaintiff is demanding relief for damages allegedly caused or about to be caused solely by the Worsley Project, the joint venturers have an interest in the subject of this action and without their joinder, their ability to protect that interest may be impaired. We conclude that the joint venturers' rights cannot be adjudicated in their absence, and consequently they should be joined in this action. However, because three of the joint venturers are Australian corporations, their joinder would destroy complete diversity of citizenship, thereby divesting this court of subject matter jurisdiction. See Ed & Fred, Inc. v. Puritan Marine Insurance Underwriters Corp., 506 F.2d 757, 758 (5th Cir. 1975).
Because joinder of the joint venturers would divest this court of diversity jurisdiction, we must proceed to decide under Rule 19(b) "whether in equity and good conscience the action should proceed among the parties before (us), or should be dismissed, the absent person being thus regarded as indispensable." Rule 19(b) requires a court to consider four factors in connection with this decision: (1) to what extent a judgment rendered in the person's absence might be prejudicial to him or to those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or by other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; and (4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
The first factor to be considered deals with the need to protect absent persons from litigation adversely affecting their interests and the need to protect those who are parties from the threat of multiple actions. Because plaintiff seeks to enjoin the operation of the Worsley Project, any decision rendered would adversely affect the joint venturers' interests and thus would constitute prejudice to the absent parties.
The second factor listed in Rule 19(b) requires the court to seek an alternative to dismissing the action if to do so will minimize the prejudicial effect. Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S. Ct. 733, 19 L. Ed. 2d 936 (1968). In this case, however, we cannot perceive of any alternative relief that will minimize the prejudicial effect to the joint venturers. The plaintiff brought this action to enjoin the operation of the Worsley Project unless and until the defendants establish by scientific evidence that the Project will not damage the Darling Range ecological system. Any available relief, therefore, will directly affect the three Australian companies. Thus, there is no satisfactory way to minimize the prejudice to the joint venturers.
As noted in the 1966 Advisory Committee Note to Rule 19, 39 F.R.D. 89, 93, the third Rule 19(b) factor meshes with other factors, particularly with the "shaping of relief" mentioned under the second factor. As we noted in connection with the second factor, there is no way we can shape relief to leave the Australian joint venturers unaffected. We reach the same result under the third factor; plaintiff seeks to enjoin the operation of the entire Worsley Project. Thus, only if all of the joint venturers in that project were present would we be able to grant the relief prayed for by the plaintiff.
The final factor listed in Rule 19(b) is "whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder." All of the joint venturers are subject to suit in Australia, and the matters at issue are local to the Australian state. We will not hear the Council, an Australian organization, complain of being sent back to the courts of its home country.
Based on the foregoing analysis, we find that the three Australian companies participating in the Worsley Project joint venture are parties who should be joined if feasible, under Rule 19(a). Because joining those companies would destroy diversity of citizenship between all the parties, we looked to Rule 19(b) to determine whether the litigation should proceed in their absence. After analyzing the four factors set forth in Rule 19(b), we conclude that the case should not proceed in the absence of joint venturers. Therefore, although the complaint appears on its face to plead diversity jurisdiction, we would dismiss this action for failure to join an indispensable party.
Even if we were to find that this court has subject matter jurisdiction over this action, we would dismiss plaintiff's Complaint with prejudice pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. The analytical framework differs depending upon the grounds for finding jurisdiction.
1. 28 U.S.C. § 133 1/ 28 U.S.C. § 1337
As noted earlier, plaintiff's Complaint asserts violations of the antitrust laws, the Lanham Act, and various provisions of the Federal Trade Commission Act. Because plaintiff has abandoned the latter two statutes as a basis for its cause of action, we turn now to an examination of whether plaintiff's complaint states a cause of action upon which relief can be granted for violations of Section 1 of the Sherman Act.
In making that determination, we bear in mind that a complaint should not be dismissed for failure to state a claim unless it is abundantly clear that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-102, 2 L. Ed. 2d 80 (1957).
In Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72 (3d Cir. 1977), cert. denied, 436 U.S. 913, 98 S. Ct. 2253, 56 L. Ed. 2d 413, reh. denied, 438 U.S. 908, 98 S. Ct. 3128, 57 L. Ed. 2d 1150 (1978), the Court of Appeals for the Third Circuit set forth the elements of a cause of action for violation of Section 1 of the Sherman Act. The court held that in order to sustain such a claim a plaintiff must prove:
(1) that the defendants contracted, combined, or conspired among each other; (2) that the combination or conspiracy produced adverse, anti-competitive effects within relevant product and geographic markets; (3) that the objects of the conduct pursuant to that contract of conspiracy were illegal; and (4) that the plaintiff was injured as a proximate result of that conspiracy.
Id. at 81.
Notwithstanding the Conservation Council's apparent intention to rely upon Section 1 as a basis for the relief it seeks in this action, it has failed to allege any of the elements that must be proved to establish a violation of that section, and has failed to plead any facts in support of such a claim.
First, there is no allegation in the complaint that the defendants "contacted, combined or conspired" with each other. Aside from the Council's stated desire to restrain the defendants "individually and collectively, jointly and severally," the Complaint alleges no connection between Alcoa's activities in the Darling Range and the Worsley Project, in which a Reynolds affiliate has a forty percent interest. Second, the complaint is devoid of any allegations of anticompetitive effects, and does not even attempt to define a relevant product market or geographic market in which any such effects might be felt. As noted earlier, the only "effects" alleged are "effects" upon the environment and natural resources of Western Australia. Third, naturally coupled with the failure to allege any contract or conspiracy, is a failure to allege that the objects of, or conduct pursuant to, a contract or conspiracy were illegal. Finally, there is no allegation that the Council has been injured, or threatened with injury, as a result, proximate or otherwise, of any contract, combination or conspiracy in restraint of trade.
The complaint asserts neither injury to competition nor injury to the ability of the plaintiff or anyone else to compete in any particular product or geographic market. The only complaint we can glean from the pleading filed is plaintiff's dissatisfaction with the alleged deleterious effects of defendants' affiliates' activities on the environment of Western Australia. Thus, the Complaint does not state a claim for relief under Section 1 of the Sherman Act.
We are mindful of the Supreme Court's admonition, upon which plaintiff places great reliance, that "summary procedures should be used sparingly in complex antitrust litigation" because "the proof is largely in the hands of the alleged conspirators...." Poller v. CBS, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962). However, as the Seventh Circuit observed in Havoco of America, Ltd. v. Shell Oil Co., 626 F.2d 549, 553 (7th Cir. 1980),
It does not necessarily follow ... that the above principles (enunciated in Poller ) require the trial of cases where the cause of action alleged is substantially deficient. A contrary view would be tantamount to excepting antitrust litigation from the provisions of Rules 12(b)(6) and 56 of the Federal Rules of Civil Procedure. We rather think that the import of Poller and its progeny is simply that where some claim under the antitrust laws has been stated, the factual, subjective questions of intent and purpose are properly resolved only after discovery and trial. Here, however, the question presented relates, as it should on a Rule 12(b)(6) motion, to the purely legal issue of whether, viewing all of (plaintiff's) allegations ... as true, (plaintiff) has successfully pleaded a contract, combination or conspiracy in restraint of trade, within the meaning of the Sherman Act.
Addressing that purely legal issue, we find that plaintiff's Complaint fails to state a claim based upon violations of the antitrust statutes. We are unwilling to construe pleadings so liberally as to infer a "contract, combination, or conspiracy in restraint of trade" where the Complaint contains no more than the bare statement that "the statutes relevant to this proceeding (include) Title 15 United Staates (sic) Code (Section) 1."
Plaintiff's failure to state a claim based upon violations of the antitrust laws is attributable to its attempt to stretch those laws far beyond their intended purpose. The type of alleged harm that the Council seeks to redress in this action simply is not the kind of harm at which the antitrust laws are aimed.
In Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S. Ct. 690, 697, 50 L. Ed. 2d 701 (1977), the Supreme Court held that a plaintiff attempting to recover damages under the Clayton Act "must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful."
The Council is not the first plaintiff to attempt to litigate environmental issues by invocation of antitrust claims. In In re Multidistrict Vehicle Air Pollution, 538 F.2d 231 (9th Cir. 1976), plaintiffs alleged that the defendants, automobile manufacturers and an automobile trade association, had conspired in restraint of trade to prevent development of antipollution technology. Affirming the district court's dismissal of the suit, the Court of Appeals for the Ninth Circuit reiterated that affirmative injunctive relief has been granted under the antitrust laws to remedy consequences of anticompetitive conduct "only where the threatened harm to be prevented is harm to the system which the antitrust laws were designed to protect, the competitive market system." Id. at 236. The court noted that:
(Section) 16 of the Clayton Act takes meaning from the purpose of the antitrust laws. It is not a broad license to the court to issue decrees designed to eliminate air pollution.