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OPTIMUM, S.A. v. LEGENT CORP.

March 5, 1996

OPTIMUM, S.A., Plaintiff,
v.
LEGENT CORPORATION; COMPUTER ASSOCIATES INTERNATIONAL, INC.; and COMPUTER ASSOCIATES DE ARGENTINA, S.A., Defendants.



The opinion of the court was delivered by: BLOCH

 BLOCH, District J.

 Presently before this Court is defendants' motion to dismiss for lack of subject matter jurisdiction. *fn1" For the reasons set forth in this opinion, the motion will be granted.

 I. Background

 The facts set forth in plaintiff's complaint are as follows.

 Since 1992, plaintiff was the exclusive marketing representative and distributor of computer software products sold by defendant Legent Corporation (Legent) in Argentina. In July of 1995, defendant Computer Associates International, Inc. (CA International) acquired a controlling interest in Legent's stock and, in September of 1995, Legent assigned its rights under the marketing contract with plaintiff to defendant Computer Associates de Argentina, S.A. (CA Argentina). CA Argentina is a wholly-owned subsidiary of CA International and allegedly is plaintiff's largest competitor. In October of 1995, CA Argentina terminated the marketing contract with plaintiff, allegedly without legal grounds, and allegedly for the purpose of enabling CA Argentina to monopolize the Argentine computer software market.

 As a result of defendants' actions, plaintiff filed the instant action alleging that defendants have violated §§ 1 and 2 of the Sherman Act, 15 U.S.C. § 1, et seq., by engaging in an unlawful combination and conspiracy to unreasonably restrain trade and monopolize commerce in the Argentine computer software market. Plaintiff has also filed claims for breach of contract, for estoppel, for intentional interference with contractual relations, and, pursuant to Article 1071 of the Argentine Civil Code, for "abuse of rights."

 II. Discussion

 Defendants have moved to dismiss plaintiff's complaint pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. Specifically, the defendants allege that subject matter jurisdiction over the Sherman Act claims is lacking because the plaintiff has failed to demonstrate that the defendants' alleged anti-trust conduct has a direct, substantial and reasonably foreseeable effect on United States commerce. Defendants further allege that subject matter jurisdiction over the remaining claims is lacking due to the absence of complete diversity of citizenship.

 When subject matter jurisdiction is challenged under Fed. R. Civ. P. 12(b)(1), the plaintiff bears the burden of persuasion. Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir.), cert. denied, 501 U.S. 1222, 115 L. Ed. 2d 1007, 111 S. Ct. 2839 (1991). This burden is not demanding, however, because a court may dismiss for lack of subject matter jurisdiction only when the right claimed is "'so insubstantial, foreclosed by prior decisions of the [Supreme Court], or otherwise completely devoid of merit as not to involve a federal controversy.'" Kulick v. Pocono Downs Racing Association, 816 F.2d 895, 898-99 (3d Cir. 1987) (citations omitted). Further, when a Rule 12(b)(1) motion attacks a complaint on its face, i.e., when a defendant asserts that the undisputed facts are insufficient to demonstrate the existence of jurisdiction, a court must consider the uncontroverted allegations set forth in the complaint as true and accurate and resolve all ambiguity in favor of the plaintiff. Mortensen v. First Federal Savings and Loan Association, 549 F.2d 884, 891 (3d Cir. 1977).

 A. Sherman Act claims

 Defendants move to dismiss plaintiff's Sherman Act claims for lack of subject matter jurisdiction on the grounds that plaintiff has failed to demonstrate that defendants' alleged anti-trust conduct has a direct, substantial and reasonably foreseeable effect upon United States commerce. However, the plaintiff contends that it has sufficiently pled the requisite effect on United States commerce.

 Section 1 of the Sherman Act prohibits conspiracy "in restraint of trade or commerce among the several States, or with foreign nations." 15 U.S.C. § 1. Section 2 of the Sherman Act prohibits monopolization and attempted monopolization "of the trade or commerce among the several States, or with foreign nations." 15 U.S.C. § 2. Although the Sherman Act applies to trade and commerce with foreign nations, it applies to foreign anti-trust conduct only to the extent that said conduct produces "some substantial effect in the United States." Hartford Fire Insurance Co. v. California, 509 U.S. 764, 113 S. Ct. 2891, 2909, 125 L. Ed. 2d 612 (1993). Specifically, pursuant to § 6(a) of the Sherman Act, anti-trust conduct involving United States export commerce with foreign nations is actionable only if said conduct has a "direct, substantial, and reasonably foreseeable effect" on one of the following: (1) on United States domestic commerce; (2) on United States import commerce; or (3) on export commerce only to the extent that such conduct injures export business in the United States. 15 U.S.C. § 6(a).

 The § 6(a) limitation applies even where the anti-trust conduct originates in the United States or involves American-owned entities operating abroad. Eurim-Pharm GmbH v. Pfizer, Inc., 593 F. Supp. 1102, 1106 (S.D.N.Y. 1984). In addition, "a foreign company cannot demonstrate the domestic injury requirement by 'piggy-backing' onto the injury of a United States ...


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