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.
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.
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. § 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 ...