Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-07115/USCOURTS-caDC-01-07115-1/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 

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Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

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before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Decided November 2, 2004

No. 01-7115

EMPAGRAN S.A., ET AL.,

APPELLANTS

v.

F. HOFFMAN–LAROCHE, LTD., ET AL.,

APPELLEES

On Remand from the United States Supreme Court

–————

Before: EDWARDS, HENDERSON, and ROGERS, Circuit Judges.

Opinion for the court filed Per Curiam.

Per Curiam: In F. Hoffman-LaRoche, Ltd. v. Empagran

S.A., U.S. , 124 S. Ct. 2359 (2004) (‘‘Empagran III’’),

the Supreme Court vacated this court’s judgment in Empagran S.A. v. F. Hoffman-LaRoche, Ltd., 315 F.3d 338 (D.C.

Cir. 2003) (‘‘Empagran II’’), regarding the reach of the

domestic-injury exception to the Foreign Trade Antitrust

Improvements Act of 1982 (‘‘FTAIA’’), 15 U.S.C. § 6a. We

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 1 of 15
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now face an issue that was left unresolved in Empagran II

and in the Supreme Court’s review of that decision.

Section 1 of the Sherman Act makes unlawful ‘‘[e]very

contract, combination TTT or conspiracy, in restraint of trade

or commerce among the several States, or with foreign

nationsTTTT’’ 15 U.S.C. § 1. Section 4 of the Clayton Act

confers a cause of action on ‘‘any person who shall be injured

in his business or property by reason of anything forbidden in

the antitrust laws,’’ and provides for treble damages. Id.

§ 15(a). Section 16 of the Clayton Act entitles ‘‘[a]ny person,

firm, corporation, or association TTT to sue for and have

injunctive relief TTT against threatened loss or damage by a

violation of the antitrust lawsTTTT’’ Id. § 26. In 1982,

Congress enacted the FTAIA, which amended the Sherman

Act to make the Sherman Act inapplicable to non-import

foreign commerce unless the ‘‘conduct has a direct, substantial, and reasonably foreseeable effect’’ on domestic commerce, and ‘‘such effect gives rise to a claim under’’ the

Sherman Act. Id. § 6a. In vacating the judgment of this

court in Empagran II, the Supreme Court held that the

FTAIA does not reach claims arising out of foreign injury

that is entirely independent of the domestic effects of the

allegedly anticompetitive conduct. The Court noted, however, that appellants had raised an ‘‘alternative’’ claim: the

alleged anticompetitive conduct’s domestic effects were linked

to the asserted foreign harm, and without an adverse domestic effect (i.e., higher prices in the United States), the sellers

could not have maintained their international price-fixing

arrangement and appellants would not have suffered their

foreign injury. The Court expressly declined to decide

whether this ‘‘but for’’ condition is sufficient to bring the

contested price-fixing conduct within the scope of the

FTAIA’s exception. The case was remanded to this court for

further proceedings on this issue.

Following remand from the Supreme Court, an order was

issued by this court instructing the parties to submit briefs on

three questions: (i) whether the alternative claim — which

appellants argued to the Supreme Court — was properly

pleaded; (ii) whether it was preserved before this court; and

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 2 of 15
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(iii) if this alternative claim was properly pleaded and preserved, whether it should be resolved in the first instance by

the District Court. Empagran S.A. v. F. Hoffman-LaRoche,

Ltd., No. 01-7115, Order (D.C. Cir. June 21, 2004) (‘‘Briefing

Order’’). Having reviewed the parties’ briefs, the record of

proceedings in this case, the District Court’s decision in

Empagran S.A. v. F. Hoffman-LaRoche, Ltd., 2001 WL

761360 (D.D.C. 2001) (‘‘Empagran I’’), and the decisions in

Empagran II and Empagran III, it is clear that appellants

raised their so-called ‘‘alternative’’ claim before the District

Court and before this court. It is also clear that appellees

have never suggested at any point in this protracted litigation, at least, not before now, that appellants’ alternative

claim was either insufficiently pleaded or waived. Accordingly, we hold that the alternative claim was both pleaded and

preserved.

The parties are in accord that this court, not the District

Court, should rule in the first instance on the sufficiency of

the alleged nexus between the purported foreign injuries and

the domestic effects. We agree. This recommended course

will preserve judicial resources and remain faithful to the

integrity of the appellate process, because the issue can be

resolved as a pure question of law. We will therefore order

full merits briefing and schedule oral argument on whether

the nature of the alleged link between foreign injury and

domestic effects is legally sufficient to trigger application of

the FTAIA’s domestic-injury exception, and decide the question in the first instance.

Finally, appellants filed a motion in this court for a limited

remand that would permit the District Court to conduct

proceedings on issues relating to a $10 million settlement that

plaintiffs reached with a subset of the defendants. See Pls.-

Appellants’ Mot. for Limited Remand (Aug. 19, 2004), at 1.

The settlement was reached in December 2003, after this

court filed its decision in Empagran II and before the Supreme Court granted certiorari. See id. at 3. Appellants

submit that the settlement should be approved by the District

Court prior to and irrespective of whether the court is

ultimately found to have subject matter jurisdiction. See id.

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at 4-6. We disagree. It would defy the basic tenets of

federal jurisdiction for this court to remand the case to the

District Court to oversee settlement proceedings before it has

been determined whether the District Court has subject

matter jurisdiction.

An order will be issued in due course establishing a briefing

schedule and setting the case for oral argument.

I. BACKGROUND

Appellants initially filed a class action lawsuit on behalf of

foreign and domestic purchasers of vitamins alleging that

appellees, foreign and domestic vitamin manufacturers and

distributors, had engaged in anticompetitive activity that

injured customers in the United States and abroad. Appellees moved to dismiss the suit as to foreign purchasers who

bought vitamins from appellees outside the United States.

The District Court granted appellees’ motion to dismiss. See

Empagran I, 2001 WL 761360. This court reversed. See

Empagran II, 315 F.3d 338. The Supreme Court granted

certiorari on the question whether foreign purchasers could

bring a suit in U.S. courts when anticompetitive conduct with

foreign effects, which are entirely independent of any domestic effects, gave rise to their claim. See Empagran III, 124 S.

Ct. 2359. The Supreme Court vacated this court’s judgment

and remanded the case to this court for further proceedings.

See id. at 2372-73.

The Supreme Court held that the domestic-injury exception

to the FTAIA does not reach claims arising out of a foreign

injury that is entirely independent of the domestic effects of

the challenged conduct. See id. at 2372 (‘‘We have assumed

that the anticompetitive conduct here independently caused

foreign injury; that is, the conduct’s domestic effects did not

help to bring about that foreign injury.’’). The Court acknowledged that respondents-appellants also had raised an

‘‘alternative’’ claim:

Respondents argue, in the alternative, that the foreign injury was not independent. Rather, they say,

the anticompetitive conduct’s domestic effects were

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linked to that foreign harm. Respondents contend

that, because vitamins are fungible and readily

transportable, without an adverse domestic effect

(i.e., higher prices in the United States), the sellers

could not have maintained their international pricefixing arrangement and respondents would not have

suffered their foreign injury. They add that this

‘‘but for’’ condition is sufficient to bring the pricefixing conduct within the scope of the FTAIA’s

exception.

Id. at 2372. The Supreme Court left open the question

whether this alternative claim was properly pleaded and

preserved below. See id.

This court subsequently ordered the parties to brief the

questions presented above. See Briefing Order of June 21,

2004.

II. ANALYSIS

A. Whether the Alternative Claim was Properly Pleaded

Appellants submit that their complaint complied with the

notice pleading requirement of the Federal Rules. Specifically, appellants argue that their complaint provided fair notice

of their legal theory that the domestic effects of the allegedly

anticompetitive conduct were necessary to induce the foreign

injury because the complaint alleged (i) a ‘‘global market’’ for

bulk vitamins; (ii) a small number of vitamins producers and

significant barriers to entry; (iii) horizontal agreements in

which North American and European manufacturers and

distributors (defendants) agreed to leave each other’s markets; and (iv) elimination of arbitrage as a key part of the

conspiracy. See Appellants’ Br. 2-3.

Rule 8(a) of the Federal Rules of Civil Procedure requires

that a complaint include a ‘‘short and plain statement’’ of the

grounds for jurisdiction and of the claims alleged. See FED.

R. CIV. P. 8(a). Appellants note that Rule 8(a) provides the

only pleading requirement for their complaint, see Appellants’

Br. 3 (citing, e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506,

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513 (2002) (‘‘Rule 8(a)’s simplified pleading standard applies

to all civil actions, with limited exceptions.’’)), and stress that

‘‘conclusory’’ allegations meet the requirement of this rule.

See id. at 3-4 (citing, e.g., Warren v. District of Columbia, 353

F.3d 36, 39 (D.C. Cir. 2004)).

Appellants also argue that legal theories need not be

pleaded. See Appellants’ Br. 4. They rely on Hanson v.

Hoffmann, 628 F.2d 42, 53 (D.C. Cir. 1980), which stressed

that ‘‘[t]he liberal concepts of notice pleading embodied in the

Federal Rules do not require the pleading of legal theories.’’

In Hanson, this court read an implicit First Amendment

claim into the plaintiff’s complaint, which alleged sex discrimination but included the ‘‘basic factual allegation’’ for a First

Amendment claim. See id. Hanson noted that ‘‘[u]nless a

defendant is prejudiced on the merits by a change in legal

theory, a plaintiff is not bound by the legal theory on which

he or she originally relied.’’ See id. at 53 n.11 (citing 5

CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE

AND PROCEDURE § 1219 (1969)).

Appellees counter that appellants’ complaint failed to plead

a nexus between their purported foreign injury and the

domestic effects of the allegedly anticompetitive activity. See

Appellees’ Br. 4. Appellees argue that what appellants’

complaint had actually alleged was foreign injury from a

worldwide conspiracy, which also harmed U.S. commerce.

See id. For this reason, appellees argue, the complaint failed

to provide adequate notice of appellants’ alternative claim.

See id.

Appellees do not respond to any of the complaint’s specific

allegations that appellants discuss in their brief, but rather

dismiss appellants’ argument as ‘‘post hoc wordplay.’’ Id.

Appellees also do not point to any part of appellants’ complaint to support their characterization of what was actually

pleaded. Instead, they purport to rely on the District Court’s

decision, which stated that ‘‘[p]laintiffs have not alleged that

the precise injuries for which they seek redress here have the

requisite domestic effects necessary to provide subject matter

jurisdiction over this case. Plaintiffs argue that the jurisdicUSCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 6 of 15
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tional nexus is provided solely by the global nature of the

defendants’ conduct.’’ Empagran I, 2001 WL 761360, at *3,

quoted at Appellees’ Br. 4. Appellees also point to their

motion to dismiss, which stated that plaintiffs failed to allege

that the foreign injuries ‘‘arose’’ from domestic effects, and

plaintiffs’ response in opposition to the motion to dismiss,

which claimed that the ‘‘proper focus’’ for the jurisdictional

question is not whether plaintiffs’ transactions had effects on

domestic commerce, but whether defendants’ conduct had

such effects. See Appellees’ Br. 4-5 (discussing Defs.’ Mot. to

Dismiss (Mar. 6, 2001), reprinted at Appellees’ App. at 18-21;

Pls.’ Opp’n to Mot. to Dismiss (Apr. 6, 2001), reprinted at

Appellees’ App. at 27).

None of these statements on which appellees rely is inconsistent with appellants’ position, however. First, appellants

specifically argued before this court that the District Court

erred in finding that they had not established jurisdiction,

even under the District Court’s more narrow conception of

the requisite allegations. The District Court’s description of

appellants’ position, moreover, is consistent with appellants’

alternative claim: plaintiffs did not suggest that their foreign

injuries had effects on domestic commerce, but rather that

the allegedly anticompetitive activity, which created appellants’ foreign injuries, could not have succeeded (and therefore injured them) without supracompetitive prices in the

United States, i.e., without domestic effects. According to

appellants’ alternative claim, the ‘‘global nature of the defendants’ conduct’’ accounts for the interconnectedness of the

domestic effects and the foreign effects, which gave rise to

appellants’ injury.

Appellees’ motion to dismiss seems to misconstrue the

alternative claim, which states, not that anticompetitive effects on U.S. commerce were the independent cause of appellants’ foreign injury, but rather that these effects comprised a

necessary link in creating the foreign injury. Thus, appellants’ alternative claim is consistent with the argument in

their opposition to the motion to dismiss that the focus should

not be on whether plaintiffs’ transactions affected domestic

commerce. The appropriate question under appellants’ alterUSCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 7 of 15
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native claim would be whether appellees’ anticompetitive conduct had effects in the United States that were necessary to

achieve appellants’ injury abroad.

Appellants contend, moreover, that because appellees never

before asserted that appellants failed to satisfy Federal Rules

of Civil Procedure Rule 8, in spite of the fact that appellants

argued their alternative claim before the District Court, this

court, and the Supreme Court, appellees have waived this

argument. See Appellants’ Br. 4-7. Appellants point to

Lennon v. U.S. Theatre Corp., 920 F.2d 996, 1000 (D.C. Cir.

1990), which noted that a party’s failure to challenge the

absence of a necessary pleading under Federal Rules of Civil

Procedure Rule 8 ‘‘in all likelihood waive[s] any waiver defense that [the party’s] omission might otherwise have created.’’ More importantly, appellants submit that because they

raised the alternative claim at every stage in the litigation,

appellees’ silence on this point demonstrates that appellees

understood the complaint to allege the alternative claim. See

Appellants’ Br. 4, 6-7.

Appellants rely on Arent v. Shalala, 70 F.3d 610, 618 (D.C.

Cir. 1995), which held that ‘‘lack of specificity is not fatal [to a

complaint] so long as the defendant is given ‘fair notice’ of the

plaintiff’s claim.’’ In Arent, appellants challenged final regulations on nutritional labeling promulgated by the Food and

Drug Administration. This court found that although appellants’ amended complaint was ambiguous and the record was

unclear as to which of two possible claims appellants intended

to include, the amended complaint was sufficient because the

Food and Drug Administration ‘‘had fair notice of the interpretation of appellants’ amended complaint for which appellants TTT argue[d] on appeal.’’ Id. at 619, quoted at Appellants’ Br. 7. Appellants submit that this is an easier case

than Arent, because even if this court concludes that the

complaint is ambiguous, the record is clear: appellants intended the complaint to allege their alternative claim, and

argued the alternative claim before the District Court, this

court, and the Supreme Court. At the status conference

before the District Court, for example, appellants argued at

length that a global market for bulk vitamins existed and that

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 8 of 15
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control of the U.S. market was necessary for the conspiracy

to succeed. See Tr. of Status Conference (May 23, 2001),

reprinted at Appellants’ App. at 67-71. Thus, appellants

submit that appellees received ample notice of the alternative

claim, but nevertheless failed to contest whether it was

properly pleaded. Appellees’ brief is silent on appellants’

reliance on Arent; appellees assert only that they did not

waive any arguments at the status conference because they

were pressed for time. See Appellees’ Br. 5 n.4.

Appellants are correct that appellees’ failure to challenge

the complaint under Rule 8, even after the alternative claim

was repeatedly argued by appellants, establishes that the

complaint sufficiently placed appellees on notice regarding

the alternative claim and therefore complied with the Federal

Rules. Appellees failed to challenge the alternative claim

under Rule 8, not only during the status conference, but also

at any subsequent point before the District Court or before

this court. Appellees’ silence on this point suggests that the

complaint adequately placed them on notice regarding the

alternative claim.

B. Whether the Alternative Claim was Preserved

Appellants argue that they have preserved their alternative

claim by advancing it in briefs or oral arguments at every

stage in this litigation. See Appellants’ Br. 4. Appellees

counter that appellants waived their alternative claim because

they failed to ‘‘raise it clearly in the district court.’’ Appellees’ Br. 5. But appellees do not explain what exactly was

unclear about the way that appellants raised it. In contrast,

appellants discussed their argument before the District Court

at length. At the status conference, appellants’ counsel explained how the global market for bulk vitamins functioned,

including that control of the U.S. market was necessary

because otherwise arbitrage would destroy supracompetitive

pricing. Appellants’ counsel stressed that

[i]f you affected the prices in the United States, you

affected the prices around the world, regardless of

where you wereTTTT That is [ ] where the interconnection in this market comes in. It’s not just forUSCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 9 of 15
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eign commerce. It’s not just United States commerce. It is commerce literally that was held in

balance as world commerce by the defendants, and

adjustments were made, set and fixed with regard to

the world market conditions.

Tr. of Status Conference (May 23, 2001), reprinted at Appellants’ App. at 71, quoted at Appellants’ Br. 5. Appellants

argue that this discussion before the District Court preserved

the issue for appeal. See Appellants’ Br. 5 n.1.

Appellants point to Fraternal Order of Police v. United

States, 173 F.3d 898, 902 (D.C. Cir. 1999), which held that

presenting a claim in oral argument before the district court

‘‘was enough to satisfy the general requirement that an issue

on appeal be raised in the trial court.’’ Fraternal Order of

Police also stressed that ‘‘the District Court for the District

of Columbia regularly considers arguments raised for the

first time at oral argument in deciding dispositive motions.’’

Id. Appellees counter that Fraternal Order of Police is not

on point because appellants did not rely on the alternative

claim but rather argued before the District Court that they

did not need to establish a nexus between the domestic

effects and the foreign injury. See Appellees’ Br. 5-6. Appellees’ attempt to distinguish Fraternal Order of Police is

unavailing: appellees seem to misconstrue the meaning of an

‘‘alternative’’ claim, which is alternative because appellants

rely on a different, primary theory.

Appellants also point to their discussion of the alternative

claim in their briefs before this court in Empagran II, and

underscore that the court itself recognized that appellants

had raised the alternative claim. See Appellants’ Br. 6.

Indeed, this court stated in Empagran II:

In the alternative, appellants claim that their complaint states a viable cause of action even under the

District Court’s restrictive view of FTAIA. Appellants contend that appellees caused injury to purchasers outside of the United States as a result of

the anticompetitive effects of price changes and supply shifts in United States commerce. Not only was

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 10 of 15
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United States commerce directly affected by the

worldwide conspiracy, appellants say, but the cartel

raised prices around the world in order to keep

prices in equilibrium with United States prices in

order to avoid a system of arbitrage. Thus, according to appellants, the ‘‘fixed’’ United States prices

acted as a benchmark for the world’s vitamin prices

in other markets. On this view of the alleged facts,

appellants claim that the foreign plaintiffs were injured as a direct result of the increases in United

States prices even though they bought vitamins

abroad.

315 F.3d at 341. Appellants establish that they also preserved the alternative claim before the Supreme Court, by

addressing it in their briefs and at oral argument. See

Appellants’ Br. 6.

Appellants argue, moreover, that because appellees never

suggested to the District Court or to this court that the

alternative claim was waived, they have waived their chance

to make such an argument. See id. at 6. Appellants are

correct; the alternative claim was preserved, because appellants have demonstrated that they consistently raised the

claim and appellees do not purport to have argued to this

court or the court below that the claim was waived. See, e.g.,

United States v. Layeni, 90 F.3d 514, 522 (D.C. Cir. 1996)

(‘‘The government, however, has waived the waiver argument

by not raising it.’’).

C. Whether this Court Should Remand the Case to the

District Court

The parties (as well as the amici curiae) are in agreement

that this court should not remand the case to the District

Court before it determines whether the nature of the link

alleged by appellants is legally sufficient to trigger application

of the FTAIA’s domestic-injury exception. Appellants, appellees, and their amici curiae all argue that this is a question of

law best resolved by this court in the first instance.

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 11 of 15
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Appellants argue against remand absent further guidance

from this court because they read the Supreme Court’s

decision as contemplating this court’s resolution of the legal

sufficiency of the complaint. See Appellants’ Br. 10-11. They

argue that this is a question of law and that their proposed

course best preserves judicial resources. They also submit

that remanding to the District Court without further instruction would leave the trial court ‘‘somewhat at sea.’’ Id. at 11.

Appellees agree that the sufficiency of any alleged jurisdictional link between domestic effects and foreign injury is a

question that ‘‘can be answered as a matter of lawTTTT’’

Appellees’ Br. 6. Appellees point to Sniado v. Bank Austria

AG, 378 F.3d 210 (2d Cir. 2004) (per curiam), in which the

Second Circuit vacated, in light of Empagran III, a prior

ruling on remand from the Supreme Court. The court of

appeals also decided the question whether the plaintiff’s

complaint could have alleged the ‘‘alternative’’ theory noted in

Empagran II, despite the fact that the plaintiff had not

previously raised the argument to the district court or to the

court of appeals, because the Second Circuit concluded that

the plaintiff’s ‘‘alternative theory TTT is purely legal and

requires no further development of the record.’’ See id. at

213.

The United States and the Federal Trade Commission

(‘‘FTC’’), amici curiae in support of appellees, also argue

against a remand to the District Court in this case because

‘‘the issue is purely legalTTTT’’ U.S. & FTC Amicus Curiae

Br. 1. Amici curiae contend that this court’s resolution of the

question not only would preserve judicial resources but also

would prevent harm to the United States in deterring antitrust violations by removing a disincentive to seek amnesty.

See id. at 1-2.

No party or amici has presented any argument for remanding this case to the District Court. The parties are correct

that the Supreme Court seems to have suggested that it

would be appropriate for this court to decide the question:

‘‘Respondents remain free to ask the Court of Appeals to

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consider the [alternative] claim. The Court of Appeals may

determine whether respondents properly preserved the argument, and, if so, it may consider it and decide the related

claim.’’ Empagran III, 124 S. Ct. at 2372. The parties are

also correct that the question whether appellants’ alternative

claim provides a sufficient nexus can be decided as a pure

question of law. It should be noted, however, that one circuit

has remanded a similar case, in light of Empagran III,

instructing the district court, ‘‘should it deem it necessary or

helpful, [to] give the parties the opportunity to present evidence as to whether the alleged anticompetitive conduct’s

domestic effects were linked to the alleged foreign harm.’’

BHP New Zealand Ltd. v. UCAR Int’l, Inc., 106 Fed. Appx.

138, 2004 WL 1771436, at *2 (3d Cir. 2004), noted at Appellees’ Br. 6 n.5.

On balance, we agree with the parties that reaching the

legal question at this point would not stymie the development

of an appropriate record: If the legal argument for the

jurisdictional nexus is sufficient to survive a motion to dismiss, the parties will each have an opportunity to develop

their case before the trial court. If the legal argument is

without merit, then judicial economy supports a ruling by this

court in the first instance. Appellees’ arguments on the

merits are not properly before the court at this juncture, so

we will not consider them. These arguments, and the arguments in support of appellants’ alternative claim, will be

subject to full briefing and oral argument before the court

reaches judgment on the alternative claim.

D. Motion for Limited Remand

There is one last matter pending before the court that

warrants our attention at this juncture. On August 19, 2004,

appellants filed a motion in this court for a limited remand

that would permit the District Court to conduct proceedings

on issues relating to a $10 million settlement that plaintiffs

reached with a subset of the defendants. See Pls.-Appellants’

Mot. for Limited Remand (Aug. 19, 2004), at 1. The settlement was reached in December 2003, after the court of

appeals filed its decision and before the Supreme Court

USCA Case #01-7115 Document #857474 Filed: 11/02/2004 Page 13 of 15
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granted certiorari. See id. at 3. Appellants submit that the

settlement should be approved by the District Court prior to

and irrespective of whether the court is ultimately found to

have subject matter jurisdiction. See id. at 4-6. Appellants

contend that permitting this limited remand advances the

parties’ and potential class members’ right to finality. See id.

at 4-5.

On September 3, 2004, appellees filed an opposition to

appellants’ motion. See Defs.-Appellees’ Resp. in Opp’n of

Mot. for Limited Remand. Appellees argued that it would be

inappropriate for the District Court to oversee a settlement

before the question whether the District Court has subject

matter jurisdiction over this case is resolved. See id. at 3-7.

Appellees submit that the limited remand is a poor use of

scarce judicial resources. See id. at 4-5. Appellees also

stress that the limited remand is counter to their interests,

because it would force them to expend time and resources in

settlement-related proceedings on a claim that may have no

jurisdictional basis in U.S. courts. See id. at 5.

Appellees are correct that it would be improper for this

court to remand the case to the District Court to oversee

settlement proceedings prior to any determination whether

the District Court actually has subject matter jurisdiction.

Appellants’ proposal to permit a limited remand for settlement proceedings before it is determined whether the District

Court has subject matter jurisdiction is in tension with the

basic tenets of federal jurisdiction. See Tuck v. Pan Am.

Health Org., 668 F.2d 547, 549 (D.C. Cir. 1981) (‘‘Jurisdiction

is, of necessity, the first issue for an Article III court. The

federal courts are courts of limited jurisdiction, and they lack

the power to presume the existence of jurisdiction in order to

dispose of a case on any other grounds.’’).

III. CONCLUSION

In due course, the court will issue an order instructing the

parties to submit full merits briefs on the question whether

the nature of the alleged link between foreign injury and

domestic effects is legally sufficient to trigger application of

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the FTAIA’s domestic-injury exception. The order will also

set a date for oral arguments in this case.

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