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MIDLAND EXPORT v. ELKEM HOLDING

November 18, 1996

MIDLAND EXPORT, LTD., Plaintiff,
v.
ELKEM HOLDING, INC., FERRO INVEST II, INC., and ELKEM METALS COMPANY, L.P., Defendants.



The opinion of the court was delivered by: JOYNER

MEMORANDUM

 JOYNER, J.

 NOVEMBER 18, 1996

 Plaintiff Midland Export, Ltd. ("Midland") instituted this action under the Clayton Antitrust Act of 1914, 15 U.S.C. § 12 et seq. (1990 & Supp. 1996), seeking treble damages and injunctive relief for two alleged violations of the Sherman Antitrust Act of 1890, 15 U.S.C. § 1 et seq. (1990 & Supp. 1996). Midland also asserts several pendent state law claims. Before the Court is Defendants' Motion to Dismiss Plaintiff's Complaint in its entirety for failure to state a claim and for lack of subject matter jurisdiction. Because Midland lacks the standing necessary to assert its federal antitrust claims, the motion is granted.

 BACKGROUND

 Plaintiff Midland and Defendant Elkem Holding, Inc. ("Elkem Holding") are both Pennsylvania corporations. Defendant Elkem Metals Company, L.P. ("Elkem Metals") is a New York limited partnership with one general partner, Defendant Ferro Invest II, Inc. ("Ferro Invest"), and two limited partners, neither of which is a party to this action.

 We take the following facts alleged by Midland to be true for purposes of the instant motion. Midland imports and exports ferroalloys including silicon metal and ferrosilicon and sells these products to purchasers in the United States. Among the products sold by Midland is silicon metal imported from China. Defendants are domestic producers, importer/exporters, marketers and distributors of ferroalloys including silicon metal and ferrosilicon, and direct competitors of Midland.

 Sometime prior to 1991, Defendants and six additional petitioners instituted with the International Trade Administration of the U.S. Department of Commerce ("ITA") and the International Trade Commission ("ITC") a proceeding under the Tariff Act of 1930, 19 U.S.C. § 1671 et seq. (1990), commonly known as an "Anti-Dumping Proceeding." Defendants and their co-petitioners charged that the sale of silicon metal imported from China at less than fair market value was causing a "material injury" to the domestic silicon metal industry. After investigating the claims, the ITC agreed and imposed duties and tariffs on silicon metal imported from China in excess of one hundred (100) percent. The imposition of these duties caused Midland to suffer significant monetary losses, lost future profits, and impaired business relationships with third party purchasers and consumers.

 Midland alleges in this action, however, that the duties imposed and the economic harm to Midland that ensued were the result of a conspiracy undertaken by Defendants. According to Midland, Defendants and certain other companies, which together account for essentially the entire domestic market for ferroalloy products, *fn1" engaged in a price fixing scheme from 1989 to 1992 that artificially inflated the price of silicon metal. Defendants' scheme resulted in reduced demand for their products and increased market share for the Chinese imports sold by Midland and others. Defendants then instituted the Anti-Dumping Proceeding, claiming that the reduced demand for domestic silicon metal was the result of dumping of imports from China and using market data that had been distorted by their price fixing conspiracy. On the basis of the information manipulated by Defendants' anticompetitive practices, the ITC made its "material injury" determination and imposed the tariffs that caused, and continues to cause, Midland "irreparable and immeasurable injury and damage to [its] business and property." Compl. at P 15. Had Defendants' price fixing been disclosed, according to Midland, "the ITC would likely have determined that there was no material injury caused in any way by imports" and would never have imposed the duties that have caused Midland such grievous harm. Pl.'s Mem. in Opp. to Mot. to Dismiss at 13.

 In short, Midland alleges that Defendants "deliberately engaged in price fixing with the purpose of causing antidumping duties to be imposed on Plaintiff." Defs.' Reply at 4. These duties enabled Defendants to eliminate competition from Midland in the silicon metal market and consolidate their monopoly in the industry. Based on this alleged conspiracy, Midland asserts two violations of the Sherman Antitrust Act of 1890 and several causes of action under Pennsylvania, New York and West Virginia law. Defendants now move this Court to dismiss Midland's complaint pursuant to Fed. R. Civ. P. 12 for failure to state a claim and for want of subject matter jurisdiction.

 DISCUSSION

 1. Standard for Motion to Dismiss

 In considering this Rule 12(b)(6) motion, we primarily consider the allegations contained in the complaint, although we may also take into account matters of public record, orders, items appearing in the record of the case and exhibits attached to the complaint. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993), cert. denied, 510 U.S. 1042, 126 L. Ed. 2d 655, 114 S. Ct. 687 (1994). We must accept as true all of the allegations in the pleadings and must give Midland the benefit of every favorable inference that can be drawn from those allegations. Schrob v. Catterson, 948 F.2d 1402, 1405 (3d Cir. 1991); Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). We may properly dismiss the ...


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