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FERROMIN INTERN. TRADE v. UCAR INTERN.

June 13, 2001

FERROMIN INTERNATIONAL TRADE CORPORATION, ET AL.
V.
UCAR INTERNATIONAL, INC., ET AL. BHP NEW ZEALAND, LTD., ET AL. V. UCAR INTERNATIONAL, INC., ET AL.



The opinion of the court was delivered by: Weiner, District Judge.

MEMORANDUM OPINION AND ORDER

The plaintiffs in these cases are all foreign companies who are seeking a remedy under the United States antitrust laws for injuries they claim to have suffered as a result of price fixing and market allocation in the worldwide market for graphite electrodes from July 1, 1992 to December 31, 1997. Most of the plaintiffs claim they were injured by having to pay inflated prices abroad for graphite electrodes. Plaintiffs have brought these actions under Sections 4 and 16 of the Clayton Act, 15 U.S.C. § 15, 26, to recover treble damages for injuries caused by defendants' alleged violations of Section 1 of the Sherman Act, 15 U.S.C. § 1.

In Ferromin International Trade Corp, et at. v. UCAR International Inc., et al., Civil Action No. 99-693, ("Ferromin") the plaintiffs are 26 foreign corporations which have their principal place of business in Thailand. Turkey, Australia, China, Austria or Sweden. The other plaintiff is a domestic company which purchased graphite electrodes on behalf of two of the Turkish plaintiffs.

In BHP New Zealand, LTD.,et al. v. UCAR International, Inc., et al., Civil Action No. 99-4772, ("BHP"), the plaintiffs are a New Zealand company and three Australian companies. Defendants in both actions are various American, Japanese and German entities engaged in the worldwide market for the manufacture and sale of graphite electrodes.

In Ferromin, the defendants have filed motions to dismiss the Second Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction. In BHP, the defendants have filed an identical motion. Following oral argument, the court, in an Order dated February 13, 2001, stated that although "it does not appear from the bare allegations in the complaints that plaintiffs can meet [the standards under the Foreign Trade Improvements Act]", we would, "out of an abundance of caution", give plaintiffs sixty days to conduct discovery in support of jurisdiction. Plaintiffs elected not to conduct any discovery during the 60-day period. For the reasons which follow, the motions to dismiss will be granted in part and denied in part.

In deciding a motion to dismiss under Rule 12(b)(1), this court is not confined to the bare allegations of the complaints, but may consider "affidavits, depositions and testimony to resolve factual issue bearing on jurisdiction." Gotha v. United States, 115 F.3d 176, 179 (3d Cir. 1997).

In the case sub judice, plaintiffs have submitted certain tables in which they detail their individual purchases of graphite electrodes. Indeed, by Stipulation dated June 30, 1999, the plaintiffs expressly agreed to provide the information contained in the tables prior to defendants' Rule 12 motions for the purpose of assisting the Court in resolving issues related to jurisdiction. Therefore, we will consider these tables in ruling on the defendants' motions to dismiss for lack of subject matter jurisdiction.

In Ferromin, plaintiffs allege that they purchased approximately $229 million worth of graphite electrodes from the defendants during the alleged conspiracy period. See, Tables 1 and 2 attached to Plaintiffs' Responses to Defendants' First Set of Interrogatories (Plaintiffs' Tables). The plaintiffs concede, however, that nearly $205 million worth of these alleged purchases had no connection whatsoever to the United States — the electrodes were all manufactured outside of the United States, shipped to plaintiffs' locations outside the United States, invoiced outside the United States and used in steel mills outside the United States. Plaintiffs' Table 2. Indeed, 14 of the 27 plaintiffs concede that none of their purchases had any connection to the United States.*fn1 Id. Two of the plaintiffs, China Metallurgical Import and Export Magang Co. and Jiangsu Shagang Group Co., Ltd., do not even claim to have purchased any graphite electrodes from defendants or anyone else, during the alleged conspiracy period. Id. The remaining 11 plaintiffs purchased some electrodes that were manufactured and/or invoiced in the United States, but shipped to the plaintiffs' locations outside the United States and used in steel mills outside the United States.*fn2 (Plaintiffs' Table 1, nn. 1 & 2).

In BHP, the plaintiffs claim to have purchased approximately $21.3 million worth of graphite electrodes from sellers located in India, Australia, Japan, Germany and France. See attachment to Plaintiff's Supplemental Response to Defendants' First Set of Interrogatories Id. Plaintiff's concede that approximately $20.8 million of their graphite electrode purchases had no connection whatsoever to the United States — the electrodes were all manufactured, shipped, invoiced and used outside the United States. Id. Plaintiffs characterize approximately $500,000 of their purchases as "U.S. purchases," but do not, as the plaintiffs do in Ferromin, differentiate as to which of these purchases involved electrodes that were manufactured in the United States and those that were invoiced in the United States.

The gravamen of both complaints is that the defendants "entered into and participated in an illegal contract, combination and conspiracy to suppress and eliminate competition in the worldwide market for graphite electrodes by artificially raising, fixing, maintaining or stabilizing prices, allocating the volume of graphite electrodes sold by each, and limiting the transfer of technology related to the manufacturing of graphite electrodes . . ." Second Amended Complaint at 69, 72; BHP Complaint at 47, 50.

Section 1 of the Sherman Act states:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.

15 U.S.C. § 1.

The Foreign Trade Antitrust Improvement Act ("FTAIA"), enacted by Congress in 1982 to clarify the application of United States antitrust laws to foreign conduct, limits the application of such laws when non-import foreign commerce is involved.*fn3 Specifically, section 6a of the FTAIA, 15 U.S.C. ยง 6a, provides, in pertinent part, that the Sherman Act "shall not apply to conduct involving trade or commerce . . . with foreign nations unless such conduct has a direct, substantial, and reasonably foreseeable effect . . . on ...


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