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. e du/thir dc ir c uit_1999/51Filed March 1, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 98-6004

CHEMINOR DRUGS, LTD.; REDDY-CHEMINOR, INC.,

Appellants

v.

ETHYL CORPORATION;

JOHN DOES 1 THROUGH 10

On Appeal from the United States District Court for the District of New Jersey (D.C. No. 94-cv-04371) District Judge: Honorable Joseph A. Greenaway, Jr.

Argued Friday, October 30, 1998

BEFORE: SLOVITER, GARTH, and MAGILL,* Circuit Judges

(Opinion filed March 1, 1999)

Andrew J. Miller (Argued)

Budd Larner Gross Rosenbaum Greenberg & Sade, P.C. 150 John F. Kennedy Parkway Short Hills, New Jersey 07078

Attorneys for Appellants

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*Hon. Frank J. Magill, Senior United States Circuit Judge for the Eighth Circuit, sitting by designation.Douglas S. Eakeley (Argued)

Timothy G. Hansen, Esq.

Lowenstein Sandler PC 65 Livingston Avenue Roseland, New Jersey 07068

Attorneys for Appellee

OPINION OF THE COURT

GARTH, Circuit Judge:

This appeal requires us to analyze whether alleged misrepresentations by the defendant Ethyl Corp. ("E thyl")1 vitiates application of the immunity afforded by th e NoerrPennington doctrine and thus defeats Ethyl's "objec tive basis" for petitioning the government for protectio n of its bulk ibuprofen industry from imports of bulk ibupro fen by plaintiffs Cheminor Drugs, Ltd. and Reddy-Cheminor, Inc. (collectively, "Cheminor").

Cheminor's ibuprofen exports to the United States w ere found to be heavily subsidized by the Government of India ("India"), and Cheminor was found to sell its impor ted ibuprofen in the United States at substantially les s than fair value. The District Court granted summary judg ment in favor of Ethyl, holding that Ethyl's petition was n ot a "sham" and was thus protected activity pursuant to the

First Amendment of the United States Constitution. We

affirm.

I.

Cheminor and Ethyl are both manufacturers of bulk ibuprofen for sale to tableters; Cheminor is an Ind ian

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1. The Amended Complaint lists the defendants as "E thyl Corporation

and John Does 1-10." It describes the "Doe" defenda nts as "individuals and corporate entities including Ethyl's employees, agents, and unrelated corporate entities which conspired with E thyl in the misconduct alleged in the complaint." For ease in r eference, we will refer throughout this opinion to all defendants as "Ethyl ."

2company, and Ethyl is a United States company. On J uly

31, 1991, Ethyl complained to the United States International Trade Commission ("ITC") and the Depa rtment of Commerce ("DOC") about Cheminor's dumping of ibuprofen and its sale at less than fair value, and Ethyl alleged that India was subsidizing the manufacture of the ibuprofen. After receiving information from Ethyl t hrough its petition and a detailed questionnaire, the ITC and DOC made preliminary determinations that Cheminor would be taxed on its imports because it was receiving subsi dies from India, it was dumping ibuprofen at less than f air value in the United States, and the domestic industry suf fered material injury as a result. Before final determina tions could be made, however, Cheminor withdrew from the U.S. market -- its sole distributor, Flavine Internation al, Inc., canceled its orders for ibuprofen because the cost to be charged by Cheminor was prohibitive. Ethyl then wit hdrew its complaint from the ITC and DOC on March 4, 1992

, stating that it would refile if necessary.

Cheminor then brought federal and state antitrust c laims and various state common law claims against Ethyl b y a complaint filed in the District Court for the Distr ict of New Jersey. Cheminor moved for summary judgment, claimi ng that Ethyl's administrative complaints to the ITC a bout Cheminor's below-market pricing and the resultant i njuries to Ethyl were baseless, made in bad faith, containe d false statements, and were brought only for anti-competit ive reasons. In response, Ethyl asserted that its admin istrative complaints had a legal basis, were made in good fai th, and were truthful. As such, Ethyl argued that the Noerr Pennington doctrine, which protects the right of ci tizens and corporations to petition the government for grievan ces and

is based on the First Amendment of the United State s Constitution, prohibits Cheminor's antitrust and un fair

trade claims.

The District Court granted Ethyl's motion for summa ry judgment, holding that Ethyl was protected from Cheminor's federal and state antitrust claims by No errPennington immunity. Specifically, the District Cou rt held that no genuine issues of fact existed on the quest ion of whether Ethyl had an objective basis to file a peti tion with

3the ITC and the DOC. In addition, the District Cour t, in its

discretion, declined to exercise supplemental juris diction, 28 U.S.C. S 1367(c), over Cheminor's tort claims br ought

under state law. The District Court did not conside r whether it had diversity jurisdiction under 28 U.S. C.

S 1332.

Summary judgment was entered on behalf of defendant Ethyl on February 5, 1998, disposing of all claims against all parties.2 Plaintiff Cheminorfiled its notice of appeal on March 3, 1998. The District Court had subject matte r jurisdiction pursuant to 28 U.S.C. SS 1331 and 1332 . We exercise jurisdiction pursuant to 28 U.S.C. S 1291.

Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admiss ions on file, together with the affidavits, if any, show th at there is no genuine issue as to any material fact and that t he moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). We give the grant of summary judgment plenary review.

II.

If a United States business or industry believes th at it is being injured by foreign-made subsidized products t hat are imported into the United States and sold at less th an fair value, the business or industry may seek relief fro m the ITC by filing an antidumping ("AD") and countervailing duty ("CVD") petition ("AD/CVD petition")3 with the ITC and the DOC4 to obtain relief in the way of extra duties to offset alleged subsidies.

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2. The District Court's order of February 5, 1998 g ranted Ethyl's motion for summary judgment pursuant to Federal Rule of Ci vil Procedure 56(c) "for an Order of dismissal of the Complaint." App. 3088. Because the grant of summary judgment and the dismissal of the complaint are inconsistent, we will disregard reference to the"di smissal" of Cheminor's complaint and treat the record as a summary judgmen t record.

3. The CounterVailing Duty investigation inquires w hether the foreign company received subsidies from its government. The AntiDumping investigation deals with the question of whether th e foreign company actually brought the subsidized goods into the Unit ed States and sold

them for less than fair value.

4. The ITC and the DOC divide up the investigation. The ITC determines whether the domestic industry has suffered material injury; the DOC

4An AD/CVD petition receives consideration at two le vels.

First, preliminary determinations of subsidies and antidumping are made by DOC and a preliminary determination of "material injury" or "threat of ma terial injury" to the domestic industry is made by the ITC . The DOC and the ITC base their preliminary determinatio ns upon the complaining firm's petition and questionna ire, the respondent firm's questionnaire, if available, and argument from all interested parties' counsel. Second, once the preliminary determinations have been made in petiti oner's (here, Ethyl's) favor, the DOC imposes duties upon the imported product. The DOC and ITC make final determinations after they have conducted their own investigations (collecting information apart from t he complainant's petition and questionnaire) and after they have heard further arguments from the parties invol ved.5

On September 16, 1991, based upon the "best information available,"6 the ITC made a preliminary determination that there was material injury to the domestic market7 caused by Cheminor's receipt of su bsidies from the Indian government and dumping of bulk ibup rofen

into the United States market at less than fair val ue. App. 2077-2147 (ITC report). On December 13, 1991, the D OC made a preliminary determination of countervailing duty (CVD). DOC determined that India had subsidized

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determines whether the foreign company has received foreign government subsidies and whether the foreign compan y has been dumping product at less than fair value.

5. In a preliminary determination, the ITC must det ermine whether there is a reasonable indication of material injury or th e threat thereof to the domestic industry "by reason of" the imports under investigation. In its final determination, the ITC must determine that th ere is a material injury or threat thereof to the domestic industry b y reason of the imports under investigation.

6. The best information available comprised Ethyl's petition and questionnaire and arguments from the parties' couns el -- Cheminor

refused to submit verified information to the ITC.

7. Ethyl's ibuprofen constituted the entire domesti c market because it was the only domestic manufacturer of ibuprofen at the time the petition

was filed.

5Cheminor in the amount of 43.71%, and thus DOC

imposed a 43.71% ad valorem duty on Cheminor's ibuprofen. App. 1471.8 On January 13, 1992, Chemino r informed the ITC and DOC that it would be withdrawi ng from the United States market.

On February 27, 1992, DOC made a preliminary determination on the antidumping (AD) petition. DOC found that imports of ibuprofen from India were bei ng sold

in the United States at less than fair value and th at there was an estimated dumping margin of 115.94%. App. 14 72.9 Ethyl withdrew its AD/CVD petition on March 4, 1992

, stating that it no longer believed it could succeed in a final determination based on its then new profit figures and

Cheminor's decision to exit the United States marke t.

III.

A party who petitions the government for redress generally is immune from antitrust liability. Easte rn R.R. Presidents Conference v. Noerr Motor Freight, 365 U .S. 127 (1961); United Mine Workers of Am. v. Pennington, 3 81 U.S. 657 (1965) ("Noerr-Pennington doctrine"). This immu nity extends to persons who petition all types of govern ment entities -- legislatures, administrative agencies, and courts. California Motor Transport Co. v. Trucking Unlimite d, 404 U.S. 508, 510 (1972) ("The right of access to the c ourts is indeed but one aspect of the right of petition."). "[W]here restraint upon trade or monopolization is the resul t of valid

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8. The Government of India subsidized the productio n of bulk ibuprofen for export by establishing: (1) below interest rate loans for exporters, (2) post-shipment financing loans to enable exporters t o extend credit to foreign buyers, (3) tax deductions for foreign sale s, (4) a rebate of indirect taxes on exported merchandise, and (5) dut y-free importation of raw materials used in exported products (Advance li censes). App. 2172-

82.

9. The basic formula for determining a dumping marg in is defined as "the amount by which the normal value exceeds the e xport price or constructed export price of the subject merchandise ." 19 U.S.C. S 1677(35). The actual determination of the dumping margin requires substantial economic analyses. See, e.g., Raj Bhala , Rethinking Antidumping Law, 29 Geo. Wash. J. Int'l L. & Econ. 1, 30-50 (1995).

6governmental action, as opposed to private action, no

violation of the [Sherman] Act can be made out." No err, 365 U.S. at 136 (citations omitted).

Noerr-Pennington immunity does not apply, however, to petitions or lawsuits that are a "mere sham to cove r what is actually nothing more than an attempt to interfe re directly with the business relationships of a compe titor." Noerr, 365 U.S. at 144. Often, a petition to the go vernment causes an anti-competitive effect, but "evidence of anticompetitive intent or purpose alone cannot tran sform otherwise legitimate activity into a sham." Profess ional Real Estate Investors v. Columbia Pictures Indus., Inc., 508 U.S. 49, 57-58 (1993) ("PRE").

In PRE, the Supreme Court held that litigation is a sham if the lawsuit is "objectively baseless." But"[t]he existence of probable cause to institute legal proceedings pr ecludes a finding that an antitrust defendant has engaged in sham litigation." Id. at 62. The Court then stated, "Pro bable cause to institute civil proceedings requires no more tha n a reasonable belief that there is a chance that a cla im may be held valid upon adjudication. . . . the existence o f probable cause is an absolute defense." Id. at 62-63 (intern al quotation marks, brackets, and citations omitted). The Court concluded its discussion by stating "a proper probable-cause determination irrefutably demonstrat es that an antitrust plaintiff [here, Cheminor] has not pro ved the objective prong of the sham exception and that the defendant [here, Ethyl] is accordingly entitled to Noerr immunity." Id. at 63.

It was in this context that the Court announced a t wostep test:

First, the lawsuit must be objectively basel ess in the sense that no reasonable litigant could real istically expect success on the merits. If an objectiv e litigant could conclude that the suit is reasonably c alculated to elicit a favorable outcome, the suit is immu nized under Noerr, and an antitrust claim premised on th e sham exception must fail. Only if challenged liti gation is objectively meritless may a court examine th e litigant's subjective motivation. Under this second par t of our

7definition of sham, the court should focus o n whether

the baseless lawsuit conceals an attempt to interfere directly with the business relationships of a competitor, through the use of governmental process-- as opposed to the outcome of that process -- as an anti competitive weapon. This two-tiered process requires the plaintiff to disprove the challenged lawsuit's legal viab ility before

the court will entertain evidence of the sui t's economic viability.

508 U.S. at 60-61 (1993) (citations omitted) (empha sis in original). Accordingly, applying the Court's Noerr- Pennington immunity test to Ethyl's petition, we must determin e whether Ethyl had probable cause to file its petiti on, and in making that determination, we must be satisfied tha t the petition filed was not objectively baseless in the sense that Ethyl could not reasonably expect success on the me rits.10

The Supreme Court has not addressed how alleged misrepresentations affect Noerr-Pennington immunity or the sham exception to Noerr-Pennington immunity. In PRE , the Court explicitly declined to decide whether the sha m exception to immunity would include situations wher e the litigant had perpetrated "fraud" or had made "other misrepresentations." Id. at 61 n.6.11 Cheminor argu es either that Noerr-Pennington immunity does not apply at al l to petitions containing misrepresentations or that Eth yl's

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10. We recognize that the second step of the Suprem e Court's test comes into play only if the petition is objectively basel ess and therefore

without probable cause. Because, as discussed infra, we are satisfied that Ethyl's petition was not "objectively baseless," and that E thyl had probable cause to file its petition, we have no need to disc uss Ethyl's subjective intent, which is the subject of the second part of the Supreme Court's

definition of sham.

11. In footnote six of PRE, the Court cited Fed. R. Civ. P. 60(b)(3),

which allows a federal court to "relieve a party . . . fr om a final judgment"

for "fraud . . . misrepresentation, or other misconduct of an adverse party." The Court also cited Walker Process Equip., Inc. v. Food Machinery & Chem. Corp., 382 U.S. 172, 176-77 (1965); id. at 17 9-80 (Harlan, J., concurring), in which the Court held that a purport ed patent-holder could not avoid antitrust liability for his suit ag ainst an alleged infringer if the purported patent-holder's patent was based u pon material misrepresentations.

8alleged misrepresentations led to the conclusion th at the

Ethyl's AD/CVD petition to the ITC and DOC was objectively baseless.

We decline to carve out a new exception to the broa d immunity that Noerr-Pennington provides. Rather, we will determine whether Ethyl's petition was objectively baseless under the Supreme Court's test in PRE, without rega rd to those facts that Cheminor alleges Ethyl misrepresen ted. If the alleged misrepresented facts do not infect the core of Ethyl's claim and the government's resulting action s, then the petition had an objective basis and will receiv e NoerrPennington immunity under the first step of PRE. Wh ile we do not condone misrepresentations in a judicial set ting, neither will we deprive litigants of immunity deriv ed from the First Amendment's right to petition the governm ent if the alleged misrepresentations do not affect the co re of the litigant's (here, Ethyl's) case. We note that other remedies such as provided by under Federal Rules of Civil Pr ocedure 11 and 60(b)(3), exist for alleged misrepresentatio ns that do not taint the core of the litigant's case. See supr a note 11.

In Music Center S.N.C. De Luciano Pisoni & C. v. Pr estini Musical Instruments Corp., 874 F. Supp. 543, 549 (E .D.N.Y. 1995), the court was faced with circumstances simil ar to the circumstances we face here. Because we agree wi th the matters noted for consideration by the Music Center court, we will evaluate the information upon which the ins tant petition was based as the court in Music Center eva luated

the circumstances there:

[A] determination [of objective basis] requi res consideration, inter alia, of the outcome of the proceedings, including the findings made by the relevant administrative tribunals, the natur e of the particular allegations of the petition or ac tions before the administrative agency claimed to be frau dulent or improper, and whether these claimed misrepresentations or improper actions would have been significant to the ultimate outcome or continuation of the proceeding.

Music Center, 874 F. Supp. at 549 (holding that def endants were entitled to Noerr-Pennington immunity for fili ng

9AD/CVD petition despite allegations of misrepresent ations

in the petitions because the defendants had an obje ctive basis for filing the petitions). If the government' s action was not dependent upon the misrepresented information, the misrepresented information was not material and did not go to the core of Ethyl's petition. In sum, a material misrepresentation that affects the very core of a l itigant's (here, Ethyl's) case will preclude Noerr-Pennington immunity, but not every misrepresentation is materi al to the question of whether a petition such as Ethyl's had an objective basis.12

IV.

We will assume, for the purposes of determining whe ther Ethyl had an objective basis to file its AD/CVD pet ition, that the statements that Ethyl made in its petition and questionnaire and are alleged by Cheminor to be fal se were, in fact, false. We note, however, that if this case were to proceed to trial, Cheminor might not be able to pro ve that they were false, as Ethyl has articulated reasonabl e explanations for the truth of their statements, or at least, that the representations made as to its financial c ondition were reasonable estimates of the profits Ethyl woul d sustain based upon predictions of various research and development costs and capital expenditures.

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12. Our approach in requiring that misrepresentatio ns must be material to bar Noerr-Pennington immunity is consistent with the two other circuit courts of appeals that have considered this issue. The Ninth Circuit held that Noerr-Pennington immunity does not extend to p arties who make knowing material misrepresentations in the course o f a litigative proceeding. See Kottle v. Northwest Kidney Ctrs., 1 46 F.3d 1056 (9th Cir. 1998) (citing Clipper Exxpress v. Rocky Mountain Mo tor Tariff, 690 F.2d 1240, 1260 (9th Cir. 1980)). The District of Columb ia Circuit disallowed a Noerr-Pennington defense in an action for common law torts because the defendants had made material misrepresentations to state securities regulators. Whelan v. Abell, 48 F.3d 1247 (D.C. Cir . 1995). Moreover, misrepresentations made to procure a patent must ri se to the level of fraud in order to cause a patent infringement actio n to fail -- unethical behavior alone is insufficient. Nobelpharma AB v. I mplant Innovations, Inc., 141 F.3d 1059, 1070-71 (Fed. Cir. 1998) (disc ussing Walker Process Equip., Inc. v. Food Machinery & Chem. Corp., 382 U .S. 172 (1965)).

10To have an objective basis to file a AD/CVD petitio n with

the ITC and DOC, Ethyl must have had a reasonable b elief that Cheminor was dumping ibuprofen that was subsid ized by India in the United States at less than fair val ue, and that the dumping caused material injury or threat o f material injury to the domestic market.13 We are s atisfied that Ethyl had such an objective basis because (1) India was subsidizing at a rate of 43.71% Cheminor's prod uction of ibuprofen; (2) Cheminor was dumping the subsidiz ed ibuprofen in the United States at a 115.42% margin; and (3) Ethyl was suffering material injury or was thre atened with material injury as a result of the dumping.

Cheminor takes issue with only one of these three conclusions -- that Ethyl was suffering material in jury or that it was threatened with material injury. 19 U.S .C. S 1677(7). Under the statute, the ITC must make thr ee determinations before it can find "material injury: "

(I) the volume of the imports of the subject merchandise, (II) the effect of the imports of that merchandise on prices in the United States f or domestic like products, and (III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of pr oduction operations within the United States.

19 U.S.C. S 1677(7)(B)(i)(I)-(III) (emphasis added) . In addition, the ITC "may" consider other "relevant" e conomic factors. 19 U.S.C. S 1677(7)(B)(ii). The statute go es on to expand upon and define each of the three required determinations of 19 U.S.C. S 1677(7)(B)(i)(I)-(III ). Of concern here is the third (III) required determinat ion for material injury, i.e., the impact of the imports on the domestic producers (underlined above).

This third determination is further defined by refe rence to factors in 19 U.S.C. S 1677(7)(C)(iii)(I)-(V):

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13. See Gerald Metals, Inc. v. United States, 132 F .3d 716, 719-20 (Fed. Cir. 1997); American Spring Wire Corp. v. United St ates, 590 F. Supp. 1273, 1276 (C.I.T. 1984); SMC Corp. v. United State s, 544 F. Supp. 194, 199-200 (C.I.T. 1982).

11(iii) Impact on affected domestic industry

In examining the impact required to be consi dered under subparagraph (B)(i)(III), the Commissi on shall

evaluate all relevant economic factors which have a bearing on the state of the industry in the United States, including, but not limited to --

(I) actual and potential decline in output, sales, market share, profits, productivity, return on investments, and utilization of capacity,

(II) factors affecting domestic prices,

(III) actual and potential negative effects on cash flow, inventories, employment, wages, growth , ability to raise capital, and investment,

(IV) actual and potential negative effects o n the existing development and production efforts in the domestic industry, including efforts to deve lop a

derivative or more advanced version of the d omestic like product, and

(V) in a proceeding under Part II of this su btitle, the magnitude of the margin of dumping.

The Commission shall evaluate all relevant e conomic

factors described in this clause within the context of the business cycle and conditions of competi tion that are distinctive to the affected industry.

19 U.S.C. S 1677(7)(C)(iii)(I)-(V). The ITC has dis cretion to give these factors found in S 1677(7)(C)(iii)(I)-(V ) of the trade statute varying degrees of weight in making its determination of material injury. SMC Corp. v. Unit ed States, 544 F. Supp. 194, 199-200 (C.I.T. 1982). A court reviews the ITC's (and DOC's) discretionary determi nations by "evaluating whether they are `unsupported by substantial evidence on the record, or otherwise no t in accordance with law.' " Gerald Metals, Inc. v. Unit ed States, 132 F.3d 716, 719 (Fed. Cir. 1997) (quoting 19 U.S. C. S 1516a(b)(1)(B)(i) (1994)). No one single fact abo ut the domestic industry, the market, or the imported prod uct is dispositive to the issue of material injury: the re cord as a whole requires evaluation. Music Center, 874 F. Sup p. at

549.

12Cheminor alleges that Ethyl gave the ITC inaccurate

information regarding its profitability during the first half of 1991,14 which caused the ITC to determine erroneous ly that Ethyl had suffered material injury. Cheminor cites three alleged misrepresentations made by Ethyl that maske d Ethyl's true profitability: (1) research and develo pment costs and capital expenditures were allocated to th efirst half of 1991 but were not expected to be charged on Ethyl's books until the second half of 1991; (2) research a nd development costs for S+ ibuprofen should not have been included at all because S+ ibuprofen was not at iss ue in the AD/CVD petition; and (3) Ethyl falsified its lost s ales resulting from Cheminor's imported product.15 All o f these "false" statements, Cheminor alleges, resulted in t he ITC's erroneous conclusion that Ethyl's profits were down while Cheminor's market share was up in the first half of 1991, which in turn caused the ITC to make a finding of m aterial injury to Ethyl.

The statements in Ethyl's petition and questionnair e relating to Ethyl's profitability in the first half of 1991 bear on only a small proportion of the numerous factors the ITC must consider when making a determination of materi al injury. In the instant case, the ITC found that the domestic market had sustained material injury. The ITC issue d a report explaining its decision to preliminarily gra nt Ethyl's AC/CVD petition. The ITC's finding set forth in the "Views of the Commission" that the domestic industry incur red injury, relied only in part on Ethyl's representati ons of its

financial condition:

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14. Ethyl provided profitability data for the perio d 1988 through the

first six months of 1991. Among other charges, Cheminor a lleges that the data for the first six months of 1991 was misrepres ented. However, of the charges made by Cheminor, each was refuted by E thyl in its brief to the Court, and in any event, each of Cheminor's cha rges were deemed to be not material by the ITC. See Appellee's Br. at 1 5-16; infra pp. 13-14 (discussing the views of the ITC).

15. Cheminor also alleges that Ethyl made misrepres entations regarding

Cheminor's market share that made Cheminor's market share look larger than it really was. However, Cheminor was in a bett er position to inform the ITC and the DOC about its own market share, but , as we have noted previously, see supra note 6, Cheminor chose not to furnish the ITC or

DOC with its market share information.

13The financial trends provide reasonable ind ication of

present material injury. For example, as ill ustrated by the public exhibit introduced by Ethyl at th e conference, the industry's [Ethyl's] profita bility (as measured by the profit-to-sales ratio) decli ned substantially from the beginning to the end of the investigatory period, despite an increase in 1989 from

the 1988 level.

Confidential information concerning other f actors, such as [Cheminor's] apparent domestic consu mption and market share, further provide a reasonab le indication of present injury. Accordingly, o n the basis of the information gathered in these prelimi nary investigations, we find a reasonable indicat ion of material injury to the domestic industry pro ducing bulk ibuprofen.

App. 2097 (footnote omitted). As demonstrated by th is finding, the ITC relied upon a number of reasons fo r its determination that the domestic industry had been a ffected and thus that Ethyl had suffered material injury. T he record reflects that the ITC was aware that Ethyl's research costs were high during the first six months of 1991 . App. 2048 (Redacted Post Conference brief of Cheminor be fore the ITC).16 Moreover, the ITC found that the market share and domestic consumption of Cheminor's ibuprofen

contributed to its determination that there was mat erial injury to the domestic industry.

The Acting Chairman of the ITC, Anne Brunsdale, did not join the reasoning in the "Views of the Commission" on the issue of material injury to the domestic industry. Brunsdale thus filed "Additional Views," in essence, a concur ring opinion to the "Views of the Commission." Brunsdale also found that there was material injury to the domesti c industry, but she did not rely upon Ethyl's asserti ons of decreased profits that Cheminor has alleged to be f alse.

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16. Ethyl noted in its brief that despite attempts to obtain an unredacted version of the Post Conference brief, Cheminor did not produce it. Nevertheless, it appears from the redacted version that Cheminor argued to the ITC that it should consider that Ethyl's res earch costs were higher than normal during the first six months of 1991.

14Instead, she gave three reasons for her material in jury

determination: (1) the Indian imports are a suitabl e substitute for domestic ibuprofen; (2) "the alleged dumping and subsidy margins in these investigations are qui te high;" and (3) the share of the U.S. market held by Indian ibuprofen "was not small enough, when combined with other factors, to ensure that there is no material injury [to the domestic market] by reason of the `unfair' impo rts." App. 2105-08. Brunsdale had knowledge of Ethyl's fi nancial condition, but she did not find it to be determinat ive in light of the other factors indicating that the dome stic industry was affected by Cheminor imports of ibupro fen.17

Thus, all ITC Commissioners, albeit in separatefind ings, determined that Ethyl had suffered material injury by Cheminor's imports based on factors other than Ethy l's profitability.18

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17. We note here that the dissent, in referring to the view of Acting Chairman Anne Brunsdale, does not refute the fact t hat Brunsdale did not rely on Ethyl's assertions of decreased profits . Commissioner Brunsdale's separate opinion itself provides eviden ce of Ethyl's probable cause to file its ITC petition. Indeed, the dissent nowhere even acknowledges that the standard of probable cause as announced by the Supreme Court in PRE, 508 U.S. at 62-63, is the cru cial test in the determination of the applicability of Noerr-Penning ton immunity, as we have pointed out. See supra pp. 7-8. Rather, the at tempt by the dissent to structure a wholly separate exception to Noerr-P ennington for fraud or misrepresentation, which is nowhere found in the ju risprudence, cannot take the place of PRE's required probable cause sta ndard. Thus, the question to be answered in this case under the cont rolling standard is whether by reason of Ethyl's success in having the USTR remove Indian ibuprofen from the General System of Preferences li st, Cheminor's receipt of subsidies from India, Cheminor's dumping of ibuprofen in the United States at less than fair value, and the harm and threat of harm to Ethyl by reason of Cheminor's dumping, Ethyl had probable cause to file an AD/CVD petition.

18. The dissent has not recognized that misrepresen tations, if indeed they occurred, must be material to be acknowledged in the NoerrPennington context, as we have established. See sup ra pp. 9-10. Even if misrepresentations had been made such that Ethyl's allegations regarding its January through June 1991 profitabili ty were unsupported, they were not deemed material in the opinions of th e Commissioners.

15Our review of the ITC and Brunsdale's analyses, in

conjunction with the uncontested DOC preliminary

determinations of 43.71% subsidization and 115.42% dumping margin, leads us to the conclusion that not only did Ethyl have probable cause to file its petition, but that substantial record evidence supported the ITC's pre liminary determination of material injury. Thus, Ethyl's AD/ CVD petition was not objectively baseless and the alleg ed misrepresentations, even if made, did not taint the "core" of Ethyl's AD/CVD petition. Accordingly, the sham exce ption to the Noerr-Pennington doctrine has no application to Ethyl's petition, and Ethyl is entitled to First Am endment immunity from antitrust liability for its petition to the ITC

and DOC.

Moreover, the record reveals that in 1988, Ethyl ha d made a request to United States Trade Representativ e ("USTR") that the USTR remove Indian ibuprofen from the General System of Preferences ("GSP") list-- a list that contains products that are not charged duties upon arrival

in the United States. USTR declined to do so in 198 8 because Cheminor's impact on the U.S. market was sl ight in 1988. App. 1316. Ethyl renewed its request in 19 90 asking then that the USTR remove Indian ibuprofen f rom the GSP. At that time, USTR granted Ethyl's request because of Indian ibuprofen's "potential impact on U.S. producers." App. 1445. This latter action by USTR m ight well be inferred to have given Ethyl probable cause to seek further remedies available by petition from the Uni ted States Government to support Ethyl's continued conc ern about Indian ibuprofen.19

In determining Ethyl's "objective basis for filing its petition," we also cannot ignore the fact that Ethy l posited a "threat" of material injury in addition to its pr esent material injury. The ITC, as we have discussed, con sidered only Ethyl's present material injury, which we have held provided Ethyl with a sufficient objective basis fo r its AD/CVD petition, satisfying the Supreme Court's tes t. We recognize, however, that had the ITC made a contrar y

___________________________________________________ ______________

19. Again, the dissent fails to recognize that the USTR's actions gave Ethyl probable cause to file its AD/CVD petition.

16finding as to actual material injury, it would have been

obliged to address Ethyl's claimed "threat" to its ibuprofen sales. If that endeavor had been necessary, the ITC determination of "threat" would not have required a ny consideration by the ITC of the domestic industry's (i.e., Ethyl's) present profitability, 19 U.S.C. S 1677(7) (F)(i)(I)-(F)

-- the one issue to which Cheminor has called atten tion. Hence, even if the ITC had not found present materi al injury based upon Ethyl's claims, the threat of mat erial injury stemming from Indian subsidization and dumpi ng at

less than fair value in the future would have more than sufficed to justify Ethyl's petition. Significantly , Cheminor failed to adequately rebut Ethyl's threatened injur y.

V.

Because we hold that Cheminor has not satisfied the first step of PRE's sham exception to the Noerr-Penningto n doctrine, we have no need to address the question o f whether Ethyl had a subjective intent to abuse gove rnment process.20

VI.

While the district court did not err in granting No errPennington immunity to Ethyl, it did err in dismiss ing Cheminor's state law claims on the ground that the court lacked subject matter jurisdiction. Both Ethyl and Cheminor agree that the District Court had subject matter jurisdiction over Cheminor's state law claims under 28 U.S.C. S 1332 because the parties are diverse 21 an d the amount in controversy exceeded $75,000. However, Et hyl

___________________________________________________ ______________

20. Cheminor requested discovery from Ethyl regardi ng issues of Ethyl's intent. Discovery motions were pending at the time the district court granted Ethyl's motion for summary judgment. In lig ht of our affirmance of the District Court's opinion on the ground that Ethyl had an objective basis to file its petition, discovery issues as to Ethyl's subjective

intent

are neither relevant nor material.

21. The complaint states that Cheminor Drugs is an Indian company; that Reddy-Cheminor is a New Jersey corporation; an d that Ethyl is a Virginia corporation.

17urges us to affirm dismissal of Cheminor's state la w claims

on another ground, namely, that Ethyl is entitled t o NoerrPennington immunity for the state claims that Chemi nor has asserted, in the same fashion as Noerr-Penningt on applies to the federal antitrust claims.

Specifically, Cheminor has alleged tort claims unde r New Jersey common law for malicious prosecution, tortio us interference with contract, tortious interference w ith prospective economic advantage, and unfair competit ion. Although New Jersey has not yet decided whether the Noerr-Pennington doctrine "extends beyond antitrust law to tort liability," Snyder v. American Ass'n of Blood Banks, 144 N.J. 269, 296 (1996), we have been presented with n o persuasive reason why these state tort claims, base d on the same petitioning activity as the federal claims, wo uld not be barred by the Noerr-Pennington doctrine.

Indeed, at least two New Jersey District Courts hav e held that entry of summary judgment for a defendant on f ederal antitrust claims requires that summary judgment be

entered for the defendant on state antitrust claims . InterCity Tire & Auto Ctr., Inc. v. Uniroyal, Inc., 701 F. Supp. 1120, 1124-25 (D.N.J. 1988), aff'd, 888 F.2d 1380 ( 3d Cir. 1989); Regency Oldsmobile, Inc. v. General Motors C orp., 723 F. Supp. 250, 270 (D.N.J. 1989). We are persuad ed that the same First Amendment principles on which N oerrPennington immunity is based apply to the New Jerse y tort claims. See Brownsville Golden Age Nursing Home, In c. v. Wells, 839 F.2d 155, 1159-60 (3d Cir. 1988) (Slovit er, J.) (holding that Noerr-Pennington immunity precludes t ort liability for reporting nursing home violations to government authorities under Pennsylvania law); 22 see also

___________________________________________________ ______________

22. Although the dissent argues that Brownsville di d not "extend the Noerr-Pennington doctrine to state or common law cl aims," Dissent at 31, the court in Brownsville did in fact rely on severa l Noerr doctrine cases to support its holding rejecting a cause of action for malicious

interference with business relations. In Brownsvill e, the court stated:

Two lines of cases support the Sierra Club decision and that which we uphold here: the defamation cases . . . a nd the Noerr-Pennington cases teaching that the collusive use by com petitors of legislative, administrative, or judicial process does not , without more, give

rise

18Whelan v. Abell, 48 F.3d 1247, 1254 (D.C. Cir. 1995 ) ("[I]t

is hard to see any reason why, as an abstract matte r, the common law torts of malicious prosecution and abuse of process might not in some of their applications be found to violate the First Amendment") (District of Columbia law); Kottle v. Northwest Kidney Ctrs., 146 F.3d 1056, 10 59 (9th Cir. 1998) (Washington state antitrust law covered by NoerrPennington). We thus will affirm summary judgment f or Ethyl on those claims as well as on the federal cla ims.23

___________________________________________________ ______________

to an anti-trust violation, see Eastern R.R. Conference v. Noerr

Motor Freight, 365 U.S. 127 (1961); California Mot or Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972).

Brownsville, 839 F.2d at 160 (underlining added). T he court went on to

cite to several relevant Noerr cases:

In numerous cases, the courts have rejected claims seeking damages for injuries allegedly caused by the defendants' actions directed to influencing government action. S ee, e.g., State of

Missouri v. National Organization of Women, 620 F.2d 1301, 1317 (8th Cir.), cert. denied, 449 U.S. 842 (1980) (boycott c ampaign of NOW against states not ratifying the ERA was neither tor tious nor prohibited by the Sherman Act because `the right to petiti on is of such importance that it is not an improper interference even where exercised by way of a boycott'); Protect our Mountain Environ ment, Inc. v. District

Court, 677 P.2d 1361, 1369 (Colo. 1984) (Noerr-Penn ington analysis applicable to suit for abuse of process and civil conspiracy);

Rudoff v. Huntington Symphony Orchestra, Inc., 91 M isc.2d 264 (N.Y. Sup. 1977) (`public policy dictates that the tort of interference not be

extended to those situations where a citizen petitions an agency of his government'); Bledsoe v. Watson, 106 Cal . Rptr. 197 (Ct. App. 1973) (`the benefit to the public interest i n allowing free challenges to public expenditures that may circumvent t he electoral process outweighs any detriment that may result to p rivate contracting parties from such challenges'). Brownsville has neither distinguished these cases nor cited any authority to suppo rt its underlying

action.

. . .

Id.

23. After the district court improperly dismissed t he state claims in this action, Cheminor refiled its common law state claim s in New Jersey statecourt. Ethyl removed that case to federal court. Th e District Court

administratively dismissed this second-filed case p ending the outcome of this appeal. Because we are affirming the District Court's judgment in the instant case and are holding that Noerr-Penning ton applies to the state law claims, those claims would be subject to a res judicata defense. Fed. R. Civ. P. 8(b).

19VII.

We will affirm the District Court's judgment of Feb ruary 5, 1998, which granted Ethyl's motion for summary judgment.

20SLOVITER, Circuit Judge, dissenting.

I dissent from the decision of the majority for two reasons. First, I believe the majority errs as a ma tter of law in its reading of the sham exception to the Noerr-P ennington doctrine, and thereby diminishes by judicial interp retation the scope of the Sherman Act, a seminal congression al enactment. Second, I believe the facts of record ar e sufficient to withstand summary judgment.

I will not repeat in detail the historical facts ou tlined by the majority. For our purposes, it is sufficient to recognize that appellant Cheminor, an Indian manufacturing company, began exporting bulk ibuprofen for sale in the United States in 1988, which would have created competition for appellee Ethyl, who was at that tim e the only U.S. manufacturer of bulk ibuprofen.

Ethyl began taking steps to impede Cheminor's entry into the U.S. market. In addition to filing a petition w ith the U.S. Trade Representative (USTR), seeking to remove Indian ibuprofen from the list of eligible articles, which was ultimately successful effective July 1, 1991, it al so filed an anti-dumping (AD) and countervailing duty (CVD) pet ition

with the United States International Trade Commissi on (USITC) and the United States Department of Commerc e (USDOC) accusing Cheminor of receiving generous subsidies from the Indian government and selling bu lk ibuprofen on the U.S. market at below market prices . The USITC, which has only 45 days to make a preliminary determination whether, based on the best informatio n available at the time, there is a reasonable indica tion of material injury to a domestic industry, or threat t hereof, by reason of the imports under investigation, see 19 U .S.C. S 1671b(a), made a preliminary determination on Sep tember 16, 1991, that there was sufficient evidence of mat erial injury to the domestic market to justify taking cor rective action against Cheminor. On December 13, 1991, the USDOC preliminarily determined that the Indian government had been subsidizing Cheminor in the amo unt of 43.71%. As a result of these two determinations, the USITC and/or USDOC required Cheminor's exclusive distributor, Flavine International ("Flavine"), to pay 43.71% duties on any Cheminor ibuprofen imported.

21In response to this significant additional cost, Fl avine

canceled all orders for bulk ibuprofen. This effect ively forced Cheminor out of the U.S. ibuprofen market.

Cheminor notified the USITC that it would be withdr awing from the market. Only after Cheminor withdrew did E thyl voluntarily withdraw its USITC petition.

Cheminor then filed this lawsuit against Ethyl. The District Court granted Ethyl's motion for summary judgment on the antitrust claims on the ground that Ethyl

was immune from suit under the First Amendment and the Noerr-Pennington doctrine. It dismissed Cheminor's state law claims under 28 U.S.C. S 1367 (c), refusing to exercise supplemental jurisdiction as a matter of discretion

.

I

LEGAL ISSUE: TREATMENT OF FRAUD UNDER

NOERR-PENNINGTON

Under the majority's decision, even a party who has

committed blatant and intentional fraud and misrepresentation in a judicial or administrative p roceeding is entitled to the protection that the Noerr-Pennin gton

doctrine affords from suit under the antitrust laws . I do not believe that Noerr-Pennington goes as far as to cov er abuse of process; I do not believe that it should.

The rationale given by the Supreme Court for its ho lding

in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961), that"no vi olation of the [Sherman] Act can be predicated upon mere attem pts to influence the passage or enforcement of laws," was the dissimilarity between an agreement to lobby for leg islation and an agreement to price-fix or boycott, id. at 13 7, the concern about impairing the ability of persons to m ake known their wishes to their legislators, id., the unwillingness to apply the Sherman Act to political activity, id., and the First Amendment protection of the righ t to petition, id. at 137-38. This holding was extended to attempts to influence the executive branch, specifi cally the Secretary of Labor, in United Mine Workers of Ameri ca v. Pennington, 381 U.S. 657 (1965). Yet another extens ion was

22added in California Motor Transport Co. v. Trucking

Unlimited, 404 U.S. 508, 510-11 (1972), when the Co urt ruled that citizens' attempts to influence administ rative agencies or courts similarly may not engender antit rust liability. The majority relies upon this doctrine i n holding

that Cheminor cannot base its antitrust claims on E thyl's attempts to influence the USITC and USDOC.

However, the Noerr-Pennington exception to the anti trust

laws is not unlimited. The Court in Noerr made that clear when it stated, "There may be situations in which a publicity campaign, ostensibly directed toward infl uencing governmental action, is a mere sham to cover what i s actually nothing more than an attempt to interfere directly with the business relationship of a competitor and the application of the Sherman Act would be justified," thereby describing what has come to be known as the "sham" exception. 365 U.S. at 144.

Thereafter, in holding that because of the sham exc eption the antitrust laws applied to the conduct of highwa y carriers who allegedly engaged in concerted action to institute state and federal proceedings to resist a nd defeat applications by competitive highway carriers to acq uire, transfer or register those rights, the Supreme Cour t held that "[m]isrepresentations, condoned in the politic al arena, are not immunized when used in the adjudicatory pro cess." California Motor Transport, 404 U.S. at 513. If the activity were proven, the antitrust laws would apply.

Thus, I believe, and there are cases so holding, th at the "sham" exception to Noerr-Pennington immunity from the antitrust laws includes at least two separate and independent grounds for holding that a particular l itigant is not immune from antitrust liability: (1) that the l itigation was objectively baseless, and (2) that the litigati on was based on knowing and material misrepresentations. T he District Court never considered whether Ethyl's AD/ CVD petition might be a sham based on the second ground . The majority holds this was not error, and in doing so relies on the Supreme Court's most recent decision on this su bject.

In Professional Real Estate Investors, Inc. v. Colu mbia Pictures Industries, Inc., 508 U.S. 49 (1993) (PRE) , the

23Court, in "defin[ing] the `sham' exception to the d octrine of

antitrust immunity first identified in [Noerr] as t hat doctrine applies in the litigation context," held that "liti gation cannot be deprived of immunity as a sham unless the litiga tion is objectively baseless." Id. at 51. The majority read s that as holding that "objective baselessness" is the only e xception to Noerr-Pennington. However, nothing in PRE repudi ated the holding in California Motor Transport. Rather, the PRE Court expressly reserved the question whether and t o what extent the test it announced would apply in the eve nt that the litigation involved misrepresentations or other highly

disfavored conduct. It stated:

In surveying the "forms of illegal and repre hensible practice which may corrupt the administrativ e or judicial processes and which may result in a ntitrust violations," we have noted that "unethical c onduct in the setting of the adjudicatory process ofte n results in sanctions" and that "[m]isrepresentations, c ondoned in the political arena, are not immunized when used in the adjudicatory process." California Motor Transport, 404 U.S., at 512-513. We need not decide her e whether and, if so, to what extent Noerr permits the imposition of antitrust liability for a litigant's frau d or other misrepresentations.

PRE, 508 U.S. at 61 n.6 (citations omitted).

The majority's decision to disregard the facts that Cheminor alleges Ethyl misrepresented is contrary t o the position of the two other courts of appeals that ha ve considered this issue. Both of these courts read PR E to preserve a fraud exception to antitrust immunity, a lthough they vary in their interpretation of that exception . See Whelan v. Abell, 48 F.3d 1247, 1254-55 (D.C. Cir. 1 995); Kottle v. Northwest Kidney Centers, 146 F.3d 1056, 1060 (9th Cir. 1998), petition for cert. filed 67 U.S.L. W. 3364 (U.S. Nov. 17, 1998) (No. 98-810).

For example, the Court of Appeals for the District of Columbia has held that litigation that is based on misrepresentations does not enjoy immunity either u nder Noerr-Pennington or under the First Amendment. In Whelan, the district court had dismissed the antitr ust

24complaint on the grounds that the defendants were

immune from liability under Noerr-Pennington becaus e the litigation they pursued was not objectively baseles s. See 48 F.3d at 1253. In reversing that decision, the appel late court agreed with the plaintiffs that, even if the litiga tion was not baseless, the defendants were not entitled to immun ity if they made deliberately false and material represent ations in the course of that litigation. The court reasoned t hat because Noerr-Pennington immunity is based, at leas t in part, on respect for the First Amendment right to p etition for redress of grievances, and because "[h]owever b road the First Amendment right to petition may be, it cannot be stretched to cover petitions based on known falseho ods," it followed that Noerr-Pennington did not immunize the defendants from liability based on their misreprese ntations.

Id. at 1254-55.

A fraud exception to Noerr-Pennington in the litiga tion context was also recognized in Kottle, where the Ni nth Circuit stated, "[I]n the context of a judicial pro ceeding, if the alleged anticompetitive behavior consists of ma king intentional misrepresentations to the court, litiga tion can be deemed a sham if `a party's knowing fraud upon, or its intentional misrepresentations to, the court depriv e the litigation of its legitimacy.' " 146 F.3d at 1060 ( quoting Liberty Lake Inv., Inc. v. Magnuson, 12 F.3d 155, 1 58-59 (9th Cir. 1993)).

The majority relegates these cases to a footnote fo r the proposition that the misrepresentation must be mate rial, without acknowledging that the Ninth and District o f Columbia Courts of Appeals, unlike it, accept misrepresentation as an independent prong of the sh am exception to Noerr-Pennington. By thus conflating t he concepts of "material" and "objectively baseless," the majority ignores the risk that a party will intenti onally use fraud and misrepresentation to transform a claim th at is otherwise weak and unlikely to prevail, although no t "objectively baseless," into one that succeeds.

Given the cited appellate authority, it is inexplic able to me why the majority has chosen to rely for its prec edent on

the district court decision in Music Center S.N.C. DiLuciano Pisoni & C. v. Prestini Musical Instruments Corp., 874 F.

25Supp. 543 (E.D.N.Y. 1995). In that case, the court refused

to permit plaintiffs to proceed to discovery in an antitrust claim based on material misrepresentations without first establishing a colorable claim that the challenged litigation was objectively baseless.

Many of the arguments made by the majority are effectively answered in Clipper Exxpress v. Rocky M ountain Motor Tariff Bureau, Inc., 690 F.2d 1240 (9th Cir. 1982), a case in which the court reversed the summary judgme nt granted to defendant trucking companies and their r ate bureau, who had filed protests with the Interstate Commerce Commission with regard to the plaintiff 's shipping rates. The Court of Appeals rejected the defendants' attempts to cloak themselves with the m antle of Noerr-Pennington immunity, noting that, unlike in t he political arena, immunizing defendants from liabili ty based on misrepresentations made in an adjudicatory conte xt could undercut the effectiveness of the adjudicator y body. It explained:

There is an emphasis on debate in the politi cal sphere,

which could accommodate false statements and reveal their falsity. In the adjudicatory sphere, h owever, information supplied by the parties is relie d on as accurate for decision making and dispute res olving. The supplying of fraudulent information thus threatens the fair and impartial functioning of these agencies and does not deserve immunity from the antitrust laws.

Id. at 1261.

To follow further the Clipper court's distinction b etween petitioning the legislature and petitioning a court , I quote from other pertinent language in the opinion:

Adjudicatory procedures will not always ferr et out misrepresentations. Administrative bodies an d courts . . . rely on the information presented by t he parties before them. They seldom, if ever, have the time or resources to conduct independent investigati ons. The recognition, however, of a private right of action based on the fraudulent misrepresentation, might b e sufficient incentive to induce parties not t o fraudulently misrepresent facts.

26Id. at 1262. Moreover, the Clipper court, like the court in

Whelan, noted that the First Amendment does not pro tect such false petitioning:

There is no first amendment protection for f urnishing with predatory intent false information to a n administrative or adjudicatory body. The fir st amendment has not been interpreted to preclu de liability for false statements.

Id. at 1261.

Unlike the majority, I conclude that the District C ourt erred in recognizing only a single exception to Noe rrPennington immunity based on "objective baselessnes s,"

and would remand to that court for further consider ation.

II

IS THERE SUFFICIENT FACTUAL BASIS OF FRAUD

AND MISREPRESENTATION TO WITHSTAND

SUMMARY JUDGMENT?

Cheminor has raised sufficient questions of fact to survive summary judgment under the "sham" exception as I have delineated it. Cheminor alleges that when Et hyl filed the AD/CVD petition, it knew it would not be able t o establish all of the elements of an antidumping or countervailing duty claim, and intentionally and ma terially misrepresented its financial condition in order to overcome this difficulty. It alleges that Ethyl misrepresent ed, inter alia, (1) Ethyl's profits and costs,1 (2) the custo mers Ethyl allegedly lost to Cheminor, and (3) specific sales Ethyl allegedly lost to Cheminor. Because Cheminor has submitted some evidence to support these allegation s, I, like the majority, must assume that the statements Cheminor alleges were false are, in fact, false. I conclude

___________________________________________________ ______________

1. In addition to its contention that Ethyl misrepr esented data for the first six months of 1991, Cheminor also contends th at Ethyl "intentionally and wrongfully underreported its pro fits to the ITC by $1.5 million dollars (over three years)" and that Ethyl misrepresented its 1990 profits. Appellants' Br. at 14, 16.

27that these misrepresentations were sufficiently mat erial to

bring them within the sham exception to Noerr-Penni ngton immunity.

To prevail in the AD/CVD case, Ethyl had to show th at Cheminor received government subsidies, it sold the product at less than fair value, there was material injury to the domestic industry, and this injury was by reaso n of Cheminor's exports. A failure to show any one of th ese elements would have defeated Ethyl's claim. A misrepresentation was thus material to the extent t hat the truth would have tended to disprove the existence o f any

one of the elements.

Cheminor contends that Ethyl's misrepresentations w ere material to the USITC's determination that material injury to the domestic industry probably had occurred. In making that determination, the USITC must by statute consi der "(I) the volume of the imports of the subject merchandis e, (II) the effect of the imports of that merchandise on pr ices in the United States for domestic like products, and ( III) the impact of imports of such merchandise on domestic producers of domestic like products . . . ." 19 U.S .C. S 1677(7)(B)(I). Further, in assessing the impact i mports have had on domestic producers, the USITC must cons ider "all relevant economic factors which have a bearing on the state of the industry in the United States," which in this case was Ethyl. 19 U.S.C. S 1677(7)(C)(iii). The US ITC was specifically directed to consider:

(I) actual and potential decline in [Ethyl's ] . . . sales [and] profits, . . .

(II) factors affecting [Ethyl's] prices,

(III) actual and potential negative effects on [Ethyl's] cash flow, . . .

(IV) actual and potential negative effects o n [Ethyl's] existing development and production efforts . . ., and

(V) . . . the magnitude of the margin of dum ping.

Id. The misrepresentations Cheminor alleges Ethyl m ade directly concern Ethyl's sales, profitability, pric es, and cashflow -- three of the five statutorily-mandated indicia of

28injury. By law, they were thus material to the USIT C's

decision making.

Moreover, as even the majority admits, the USITC actually "relied . . . in part on Ethyl's represent ations of its financial condition" in determining that Ethyl's ap plication justified imposing punitive tariffs on Cheminor. Th e USITC

stated in its "Views of the Commission":

The financial trends provide a reasonable i ndication of present material injury. For example . . . the industry [Ethyl's] profitability (as measure d by profit- to-sales ratio) declined substantially from the beginning to the end of the investigatory pe riod, despite

an increase in 1989 from the 1988 level.

Confidential information concerning other f actors, such as apparent domestic consumption and ma rket share, further provide a reasonable indicati on of present injury.

App. at JA 2097 (footnote omitted).

The fact that the USITC also relied on other factor s, such as Cheminor's market share, in reaching its determi nation cannot disprove the materiality of the misrepresent ations. Neither Ethyl nor the majority have suggested any r eason to believe that the USITC would not have reconsider ed its

decision had it known that Cheminor's financial con dition was improving. The USITC might have decided that st rong evidence of a financially healthy domestic industry outweighed any data suggesting that Cheminor's mark et share was increasing. Ethyl's misrepresentations de prived the USITC of that opportunity, undermining the legi timacy of its decision making process.

Nor can Ethyl refute the materiality of the alleged misrepresentations by claiming that the USITC could have

based its determinations on the threat of material injury. Ethyl admits that neither the District Court nor th e USITC

considered whether the evidence it submitted establ ished a

colorable claim of threat of harm. The fact that th e misrepresentations might not have been material to a determination the USITC concededly did not make say s little about whether the same misrepresentations af fected

29the determination it concededly did make. Similarly , the

USTR's decision to remove Indian ibuprofen from the GSP

in 1990 is irrelevant to the determination whether Ethyl's alleged misrepresentations affected the USITC's dec ision.

The majority, apparently in an attempt to negate materiality, notes that Acting Chairman Anne Brunsd ale, writing separately, "did not rely on Ethyl's assert ions of decreased profits" in reaching her decision. An ind ividual Commissioner's views do not in any way indicate tha t the misrepresented facts were not material to the other

Commissioners or to the Commission's decision. In a ny event, even Acting Chairman Brunsdale said she foun d Ethyl's financial information "useful in determinin g whether the injury resulting from any dumping and subsidiza tion is material." App. at JA 2105.

The majority's suggestion that the alleged misrepresentations are not material because "they w ere deemed to be not material by the ITC" is even less persuasive. The Commissioners had not learned of th e falsity of Ethyl's representations at the time they reached their decision and thus they had no opportunity to judge their materiality. I can only assume that the major ity means to say that the Commissioners did not deem Et hyl's profitability figures to be material in reaching a decision. As I explain above, I find this interpretation of t he

Commissioners' actions untenable.

Of more concern is the majority's apparent belief t hat the issue turns on whether Ethyl had probable cause tof ile its petition. As I have explained, a party's use of mat erial misrepresentations in filing an action is a separat e and independent ground for denying Noerr-Pennington immunity.

Finally, I note that the majority extends Noerr-Pen nington immunity beyond the antitrust context, and holds it also governs Cheminor's state common law claims. This co urt has not previously so held, and I believe we should not expand the scope of Noerr-Pennington immunity to co ver claims of any variety -- common law or statutory, f ederal or state -- without significantly more consideration t han the majority devotes to this issue. See Whelan, 48 F.3d at

301253-55 (identifying concerns raised by the applica tion of

Noerr-Pennington defense to common law claims witho ut deciding whether such application is mandated by th e First
Amendment).

I see no need to engage in a monologue on that issu e in the posture of this case. I do note that the case t he majority refers to for its expansion of the Noerr-Pennington doctrine, Brownsville Golden Age Nursing Home, Inc. v. Wells , 839 F.2d 155, (3d Cir. 1988), which (perhaps not coinci dentally) I authored, did not purport to extend the Noerr-Pen nington doctrine to state or common law claims; it merely h eld that "action designed to bring a facility's noncomplianc e with applicable regulations to the attention of the appr opriate authorities" cannot form the basis of a damage acti on, and drew analogies to cases rejecting claims based on petitioning activity. That can hardly be used as su pport for the majority's very different determination that fr audulent action, designed to elicit administrative action, i s immune from any liability, whether under federal, state, s tatutory or

common law.

Whether Cheminor's state law claims fall within an exception to the Noerr-Pennington doctrine turns on precisely the same considerations as the determinat ion whether its federal claims fall within that excepti on. Because I disagree with the majority's conclusion t hat Ethyl is entitled to immunity from Cheminor's antitrust c laims and its state law claims, I respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

31