1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-1-1999

Cheminor Drugs v. Ethyl Corp

Precedential or Non-Precedential:

Docket 98-6004

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Recommended Citation

"Cheminor Drugs v. Ethyl Corp" (1999). 1999 Decisions. Paper 51.

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Filed 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 

_________________________________________________________________ 

*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. ("Ethyl")1 

vitiates application of the immunity afforded by the NoerrPennington doctrine and thus defeats Ethyl's "objective 

basis" for petitioning the government for protection of its 

bulk ibuprofen industry from imports of bulk ibuprofen by 

plaintiffs Cheminor Drugs, Ltd. and Reddy-Cheminor, Inc. 

(collectively, "Cheminor"). 

Cheminor's ibuprofen exports to the United States were 

found to be heavily subsidized by the Government of India 

("India"), and Cheminor was found to sell its imported 

ibuprofen in the United States at substantially less than 

fair value. The District Court granted summary judgment in 

favor of Ethyl, holding that Ethyl's petition was not 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 Indian 

_________________________________________________________________ 

1. The Amended Complaint lists the defendants as "Ethyl Corporation 

and John Does 1-10." It describes the "Doe" defendants as "individuals 

and corporate entities including Ethyl's employees, agents, and 

unrelated corporate entities which conspired with Ethyl in the 

misconduct alleged in the complaint." For ease in reference, we will refer 

throughout this opinion to all defendants as "Ethyl." 

 2 
company, and Ethyl is a United States company. On July 

31, 1991, Ethyl complained to the United States 

International Trade Commission ("ITC") and the Department 

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 through 

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 subsidies 

from India, it was dumping ibuprofen at less than fair value 

in the United States, and the domestic industry suffered 

material injury as a result. Before final determinations 

could be made, however, Cheminor withdrew from the U.S. 

market -- its sole distributor, Flavine International, Inc., 

canceled its orders for ibuprofen because the cost to be 

charged by Cheminor was prohibitive. Ethyl then withdrew 

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 claims 

and various state common law claims against Ethyl by a 

complaint filed in the District Court for the District of New 

Jersey. Cheminor moved for summary judgment, claiming 

that Ethyl's administrative complaints to the ITC about 

Cheminor's below-market pricing and the resultant injuries 

to Ethyl were baseless, made in bad faith, contained false 

statements, and were brought only for anti-competitive 

reasons. In response, Ethyl asserted that its administrative 

complaints had a legal basis, were made in good faith, and 

were truthful. As such, Ethyl argued that the NoerrPennington doctrine, which protects the right of citizens and 

corporations to petition the government for grievances and 

is based on the First Amendment of the United States 

Constitution, prohibits Cheminor's antitrust and unfair 

trade claims. 

The District Court granted Ethyl's motion for summary 

judgment, holding that Ethyl was protected from 

Cheminor's federal and state antitrust claims by NoerrPennington immunity. Specifically, the District Court held 

that no genuine issues of fact existed on the question of 

whether Ethyl had an objective basis to file a petition with 

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

discretion, declined to exercise supplemental jurisdiction, 

28 U.S.C. S 1367(c), over Cheminor's tort claims brought 

under state law. The District Court did not consider 

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 matter 

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 admissions on 

file, together with the affidavits, if any, show that there is 

no genuine issue as to any material fact and that the 

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 that it is 

being injured by foreign-made subsidized products that are 

imported into the United States and sold at less than fair 

value, the business or industry may seek relief from 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. 

_________________________________________________________________ 

2. The District Court's order of February 5, 1998 granted Ethyl's motion 

for summary judgment pursuant to Federal Rule of Civil 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"dismissal" of Cheminor's 

complaint and treat the record as a summary judgment record. 

3. The CounterVailing Duty investigation inquires whether the foreign 

company received subsidies from its government. The AntiDumping 

investigation deals with the question of whether the foreign company 

actually brought the subsidized goods into the United 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 

 4 
An AD/CVD petition receives consideration at two levels. 

First, preliminary determinations of subsidies and 

antidumping are made by DOC and a preliminary 

determination of "material injury" or "threat of material 

injury" to the domestic industry is made by the ITC. The 

DOC and the ITC base their preliminary determinations 

upon the complaining firm's petition and questionnaire, the 

respondent firm's questionnaire, if available, and argument 

from all interested parties' counsel. Second, once the 

preliminary determinations have been made in petitioner'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 the 

complainant's petition and questionnaire) and after they 

have heard further arguments from the parties involved.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 subsidies 

from the Indian government and dumping of bulk ibuprofen 

into the United States market at less than fair value. App. 

2077-2147 (ITC report). On December 13, 1991, the DOC 

made a preliminary determination of countervailing duty 

(CVD). DOC determined that India had subsidized 

_________________________________________________________________ 

determines whether the foreign company has received foreign 

government subsidies and whether the foreign company has been 

dumping product at less than fair value. 

5. In a preliminary determination, the ITC must determine whether there 

is a reasonable indication of material injury or the threat thereof to the 

domestic industry "by reason of" the imports under investigation. In its 

final determination, the ITC must determine that there is a material 

injury or threat thereof to the domestic industry by reason of the imports 

under investigation. 

6. The best information available comprised Ethyl's petition and 

questionnaire and arguments from the parties' counsel -- Cheminor 

refused to submit verified information to the ITC. 

7. Ethyl's ibuprofen constituted the entire domestic market because it 

was the only domestic manufacturer of ibuprofen at the time the petition 

was filed. 

 5 
Cheminor 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, Cheminor 

informed the ITC and DOC that it would be withdrawing 

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 being sold 

in the United States at less than fair value and that there 

was an estimated dumping margin of 115.94%. App. 1472.9 

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 market. 

III. 

A party who petitions the government for redress 

generally is immune from antitrust liability. Eastern R.R. 

Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 

(1961); United Mine Workers of Am. v. Pennington, 381 U.S. 

657 (1965) ("Noerr-Pennington doctrine"). This immunity 

extends to persons who petition all types of government 

entities -- legislatures, administrative agencies, and courts. 

California Motor Transport Co. v. Trucking Unlimited, 404 

U.S. 508, 510 (1972) ("The right of access to the courts is 

indeed but one aspect of the right of petition."). "[W]here 

restraint upon trade or monopolization is the result of valid 

_________________________________________________________________ 

8. The Government of India subsidized the production of bulk ibuprofen 

for export by establishing: (1) below interest rate loans for exporters, 

(2) 

post-shipment financing loans to enable exporters to extend credit to 

foreign buyers, (3) tax deductions for foreign sales, (4) a rebate of 

indirect taxes on exported merchandise, and (5) duty-free importation of 

raw materials used in exported products (Advance licenses). App. 2172- 

82. 

9. The basic formula for determining a dumping margin is defined as 

"the amount by which the normal value exceeds the export 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). 

 6 
governmental action, as opposed to private action, no 

violation of the [Sherman] Act can be made out." Noerr, 365 

U.S. at 136 (citations omitted). 

Noerr-Pennington immunity does not apply, however, to 

petitions or lawsuits that are a "mere sham to cover what 

is actually nothing more than an attempt to interfere 

directly with the business relationships of a competitor." 

Noerr, 365 U.S. at 144. Often, a petition to the government 

causes an anti-competitive effect, but "evidence of

anticompetitive intent or purpose alone cannot transform 

otherwise legitimate activity into a sham." Professional 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 precludes a 

finding that an antitrust defendant has engaged in sham 

litigation." Id. at 62. The Court then stated, "Probable cause 

to institute civil proceedings requires no more than a 

reasonable belief that there is a chance that a claim may be 

held valid upon adjudication. . . . the existence of probable 

cause is an absolute defense." Id. at 62-63 (internal 

quotation marks, brackets, and citations omitted). The 

Court concluded its discussion by stating "a proper

probable-cause determination irrefutably demonstrates that 

an antitrust plaintiff [here, Cheminor] has not proved 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 twostep test: 

 First, the lawsuit must be objectively baseless in the 

 sense that no reasonable litigant could realistically 

 expect success on the merits. If an objective litigant 

 could conclude that the suit is reasonably calculated to 

 elicit a favorable outcome, the suit is immunized under 

 Noerr, and an antitrust claim premised on the sham 

 exception must fail. Only if challenged litigation is 

 objectively meritless may a court examine the litigant's 

 subjective motivation. Under this second part of our 

 7 
 definition of sham, the court should focus on 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 anticompetitive 

 weapon. This two-tiered process requires the plaintiff to 

 disprove the challenged lawsuit's legal viability before 

 the court will entertain evidence of the suit's economic 

 viability. 

508 U.S. at 60-61 (1993) (citations omitted) (emphasis in 

original). Accordingly, applying the Court's Noerr-Pennington 

immunity test to Ethyl's petition, we must determine 

whether Ethyl had probable cause to file its petition, and in 

making that determination, we must be satisfied that the 

petition filed was not objectively baseless in the sense that 

Ethyl could not reasonably expect success on the merits.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 sham 

exception to immunity would include situations where the 

litigant had perpetrated "fraud" or had made "other

misrepresentations." Id. at 61 n.6.11 Cheminor argues either 

that Noerr-Pennington immunity does not apply at all to 

petitions containing misrepresentations or that Ethyl's 

_________________________________________________________________ 

10. We recognize that the second step of the Supreme Court's test comes 

into play only if the petition is objectively baseless and therefore 

without 

probable cause. Because, as discussed infra, we are satisfied that Ethyl's 

petition was not "objectively baseless," and that Ethyl had probable 

cause to file its petition, we have no need to discuss 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 . . . from 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 179-80 (Harlan, J., 

concurring), in which the Court held that a purported patent-holder 

could not avoid antitrust liability for his suit against an alleged 

infringer 

if the purported patent-holder's patent was based upon material 

misrepresentations. 

 8 
alleged misrepresentations led to the conclusion that the 

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

objectively baseless. 

We decline to carve out a new exception to the broad 

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 regard to 

those facts that Cheminor alleges Ethyl misrepresented. If 

the alleged misrepresented facts do not infect the core of 

Ethyl's claim and the government's resulting actions, then 

the petition had an objective basis and will receive NoerrPennington immunity under the first step of PRE. While we 

do not condone misrepresentations in a judicial setting, 

neither will we deprive litigants of immunity derived from 

the First Amendment's right to petition the government if 

the alleged misrepresentations do not affect the core of the 

litigant's (here, Ethyl's) case. We note that other remedies 

such as provided by under Federal Rules of Civil Procedure 

11 and 60(b)(3), exist for alleged misrepresentations that do 

not taint the core of the litigant's case. See supra note 11. 

In Music Center S.N.C. De Luciano Pisoni & C. v. Prestini 

Musical Instruments Corp., 874 F. Supp. 543, 549 (E.D.N.Y. 

1995), the court was faced with circumstances similar to 

the circumstances we face here. Because we agree with the 

matters noted for consideration by the Music Center court, 

we will evaluate the information upon which the instant 

petition was based as the court in Music Center evaluated 

the circumstances there: 

 [A] determination [of objective basis] requires 

 consideration, inter alia, of the outcome of the 

 proceedings, including the findings made by the 

 relevant administrative tribunals, the nature of the 

 particular allegations of the petition or actions before 

 the administrative agency claimed to be fraudulent 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 defendants 

were entitled to Noerr-Pennington immunity for filing 

 9 
AD/CVD petition despite allegations of misrepresentations 

in the petitions because the defendants had an objective 

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 litigant's 

(here, Ethyl's) case will preclude Noerr-Pennington

immunity, but not every misrepresentation is material 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 whether 

Ethyl had an objective basis to file its AD/CVD petition, 

that the statements that Ethyl made in its petition and 

questionnaire and are alleged by Cheminor to be false were, 

in fact, false. We note, however, that if this case were to 

proceed to trial, Cheminor might not be able to prove that 

they were false, as Ethyl has articulated reasonable 

explanations for the truth of their statements, or at least, 

that the representations made as to its financial condition 

were reasonable estimates of the profits Ethyl would 

sustain based upon predictions of various research and 

development costs and capital expenditures. 

_________________________________________________________________ 

12. Our approach in requiring that misrepresentations 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 parties who make 

knowing material misrepresentations in the course of a litigative 

proceeding. See Kottle v. Northwest Kidney Ctrs., 146 F.3d 1056 (9th Cir. 

1998) (citing Clipper Exxpress v. Rocky Mountain Motor Tariff, 690 F.2d 

1240, 1260 (9th Cir. 1980)). The District of Columbia 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 rise to the level of 

fraud in order to cause a patent infringement action to fail -- unethical 

behavior alone is insufficient. Nobelpharma AB v. Implant Innovations, 

Inc., 141 F.3d 1059, 1070-71 (Fed. Cir. 1998) (discussing Walker Process 

Equip., Inc. v. Food Machinery & Chem. Corp., 382 U.S. 172 (1965)). 

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

the ITC and DOC, Ethyl must have had a reasonable belief 

that Cheminor was dumping ibuprofen that was subsidized 

by India in the United States at less than fair value, and 

that the dumping caused material injury or threat of 

material injury to the domestic market.13 We are satisfied 

that Ethyl had such an objective basis because (1) India 

was subsidizing at a rate of 43.71% Cheminor's production 

of ibuprofen; (2) Cheminor was dumping the subsidized 

ibuprofen in the United States at a 115.42% margin; and 

(3) Ethyl was suffering material injury or was threatened 

with material injury as a result of the dumping. 

Cheminor takes issue with only one of these three 

conclusions -- that Ethyl was suffering material injury or 

that it was threatened with material injury. 19 U.S.C. 

S 1677(7). Under the statute, the ITC must make three 

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 for 

 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 production 

 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" economic 

factors. 19 U.S.C. S 1677(7)(B)(ii). The statute goes 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 determination for 

material injury, i.e., the impact of the imports on the 

domestic producers (underlined above). 

This third determination is further defined by reference to 

factors in 19 U.S.C. S 1677(7)(C)(iii)(I)-(V): 

_________________________________________________________________ 

13. See Gerald Metals, Inc. v. United States, 132 F.3d 716, 719-20 (Fed. 

Cir. 1997); American Spring Wire Corp. v. United States, 590 F. Supp. 

1273, 1276 (C.I.T. 1984); SMC Corp. v. United States, 544 F. Supp. 194, 

199-200 (C.I.T. 1982). 

 11 
 (iii) Impact on affected domestic industry 

 In examining the impact required to be considered 

 under subparagraph (B)(i)(III), the Commission 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 on the 

 existing development and production efforts in the 

 domestic industry, including efforts to develop a 

 derivative or more advanced version of the domestic 

 like product, and 

 (V) in a proceeding under Part II of this subtitle, the 

 magnitude of the margin of dumping. 

 The Commission shall evaluate all relevant economic 

 factors described in this clause within the context of 

 the business cycle and conditions of competition that 

 are distinctive to the affected industry. 

19 U.S.C. S 1677(7)(C)(iii)(I)-(V). The ITC has discretion 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. United 

States, 544 F. Supp. 194, 199-200 (C.I.T. 1982). A court 

reviews the ITC's (and DOC's) discretionary determinations 

by "evaluating whether they are `unsupported by 

substantial evidence on the record, or otherwise not in 

accordance with law.' " Gerald Metals, Inc. v. United 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 about the 

domestic industry, the market, or the imported product is 

dispositive to the issue of material injury: the record as a 

whole requires evaluation. Music Center, 874 F. Supp. at 

549. 

 12 
Cheminor alleges that Ethyl gave the ITC inaccurate

information regarding its profitability during the first half of 

1991,14 which caused the ITC to determine erroneously that 

Ethyl had suffered material injury. Cheminor cites three 

alleged misrepresentations made by Ethyl that masked 

Ethyl's true profitability: (1) research and development 

costs and capital expenditures were allocated to thefirst 

half of 1991 but were not expected to be charged on Ethyl's 

books until the second half of 1991; (2) research and 

development costs for S+ ibuprofen should not have been 

included at all because S+ ibuprofen was not at issue in the 

AD/CVD petition; and (3) Ethyl falsified its lost sales 

resulting from Cheminor's imported product.15 All of these 

"false" statements, Cheminor alleges, resulted in the 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 material 

injury to Ethyl. 

The statements in Ethyl's petition and questionnaire 

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 material 

injury. In the instant case, the ITC found that the domestic 

market had sustained material injury. The ITC issued a 

report explaining its decision to preliminarily grant Ethyl's 

AC/CVD petition. The ITC's finding set forth in the "Views 

of the Commission" that the domestic industry incurred 

injury, relied only in part on Ethyl's representations of its 

financial condition: 

_________________________________________________________________ 

14. Ethyl provided profitability data for the period 1988 through the 

first 

six months of 1991. Among other charges, Cheminor alleges that the 

data for the first six months of 1991 was misrepresented. However, of 

the charges made by Cheminor, each was refuted by Ethyl in its brief to 

the Court, and in any event, each of Cheminor's charges were deemed to 

be not material by the ITC. See Appellee's Br. at 15-16; infra pp. 13-14 

(discussing the views of the ITC). 

15. Cheminor also alleges that Ethyl made misrepresentations regarding 

Cheminor's market share that made Cheminor's market share look larger 

than it really was. However, Cheminor was in a better 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. 

 13 
 The financial trends provide reasonable indication of 

 present material injury. For example, as illustrated by 

 the public exhibit introduced by Ethyl at the 

 conference, the industry's [Ethyl's] profitability (as 

 measured by the profit-to-sales ratio) declined 

 substantially from the beginning to the end of the 

 investigatory period, despite an increase in 1989 from 

 the 1988 level. 

 Confidential information concerning other factors, 

 such as [Cheminor's] apparent domestic consumption 

 and market share, further provide a reasonable 

 indication of present injury. Accordingly, on the basis 

 of the information gathered in these preliminary 

 investigations, we find a reasonable indication of 

 material injury to the domestic industry producing 

 bulk ibuprofen. 

App. 2097 (footnote omitted). As demonstrated by this 

finding, the ITC relied upon a number of reasons for its 

determination that the domestic industry had been affected 

and thus that Ethyl had suffered material injury. The 

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 before 

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 material 

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 concurring 

opinion to the "Views of the Commission." Brunsdale also 

found that there was material injury to the domestic 

industry, but she did not rely upon Ethyl's assertions of 

decreased profits that Cheminor has alleged to be false. 

_________________________________________________________________ 

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 research costs were higher 

than normal during the first six months of 1991. 

 14 
Instead, she gave three reasons for her material injury 

determination: (1) the Indian imports are a suitable 

substitute for domestic ibuprofen; (2) "the alleged dumping 

and subsidy margins in these investigations are quite 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' imports." 

App. 2105-08. Brunsdale had knowledge of Ethyl's financial 

condition, but she did not find it to be determinative in 

light of the other factors indicating that the domestic 

industry was affected by Cheminor imports of ibuprofen.17 

Thus, all ITC Commissioners, albeit in separatefindings, 

determined that Ethyl had suffered material injury by 

Cheminor's imports based on factors other than Ethyl's 

profitability.18 

_________________________________________________________________ 

17. We note here that the dissent, in referring to the view of Acting 

Chairman Anne Brunsdale, does not refute the fact that Brunsdale did 

not rely on Ethyl's assertions of decreased profits. Commissioner 

Brunsdale's separate opinion itself provides evidence 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 crucial test in the 

determination of the applicability of Noerr-Pennington immunity, as we 

have pointed out. See supra pp. 7-8. Rather, the attempt by the dissent 

to structure a wholly separate exception to Noerr-Pennington for fraud or 

misrepresentation, which is nowhere found in the jurisprudence, cannot 

take the place of PRE's required probable cause standard. Thus, the 

question to be answered in this case under the controlling standard is 

whether by reason of Ethyl's success in having the USTR remove Indian 

ibuprofen from the General System of Preferences list, 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 misrepresentations, if indeed 

they occurred, must be material to be acknowledged in the NoerrPennington context, as we have established. See supra pp. 9-10. Even if 

misrepresentations had been made such that Ethyl's allegations 

regarding its January through June 1991 profitability were unsupported, 

they were not deemed material in the opinions of the Commissioners. 

 15 
Our 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 preliminary 

determination of material injury. Thus, Ethyl's AD/CVD 

petition was not objectively baseless and the alleged 

misrepresentations, even if made, did not taint the"core" of 

Ethyl's AD/CVD petition. Accordingly, the sham exception 

to the Noerr-Pennington doctrine has no application to 

Ethyl's petition, and Ethyl is entitled to First Amendment 

immunity from antitrust liability for its petition to the ITC 

and DOC. 

Moreover, the record reveals that in 1988, Ethyl had 

made a request to United States Trade Representative 

("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 1988 

because Cheminor's impact on the U.S. market was slight 

in 1988. App. 1316. Ethyl renewed its request in 1990 

asking then that the USTR remove Indian ibuprofen from 

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 might 

well be inferred to have given Ethyl probable cause to seek 

further remedies available by petition from the United 

States Government to support Ethyl's continued concern 

about Indian ibuprofen.19 

In determining Ethyl's "objective basis for filing its 

petition," we also cannot ignore the fact that Ethyl posited 

a "threat" of material injury in addition to its present 

material injury. The ITC, as we have discussed, considered 

only Ethyl's present material injury, which we have held 

provided Ethyl with a sufficient objective basis for its 

AD/CVD petition, satisfying the Supreme Court's test. We 

recognize, however, that had the ITC made a contrary 

_________________________________________________________________ 

19. Again, the dissent fails to recognize that the USTR's actions gave 

Ethyl probable cause to file its AD/CVD petition. 

 16 
finding 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 any 

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 attention. 

Hence, even if the ITC had not found present material 

injury based upon Ethyl's claims, the threat of material 

injury stemming from Indian subsidization and dumping 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 injury. 

V. 

Because we hold that Cheminor has not satisfied the first 

step of PRE's sham exception to the Noerr-Pennington 

doctrine, we have no need to address the question of 

whether Ethyl had a subjective intent to abuse government 

process.20 

VI. 

While the district court did not err in granting NoerrPennington immunity to Ethyl, it did err in dismissing 

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 and the 

amount in controversy exceeded $75,000. However, Ethyl 

_________________________________________________________________ 

20. Cheminor requested discovery from Ethyl regarding issues of Ethyl's 

intent. Discovery motions were pending at the time the district court 

granted Ethyl's motion for summary judgment. In light 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; and that Ethyl is a 

Virginia corporation. 

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

on another ground, namely, that Ethyl is entitled to NoerrPennington immunity for the state claims that Cheminor 

has asserted, in the same fashion as Noerr-Pennington 

applies to the federal antitrust claims. 

Specifically, Cheminor has alleged tort claims under New 

Jersey common law for malicious prosecution, tortious 

interference with contract, tortious interference with 

prospective economic advantage, and unfair competition. 

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 no 

persuasive reason why these state tort claims, based on the 

same petitioning activity as the federal claims, would not be 

barred by the Noerr-Pennington doctrine. 

Indeed, at least two New Jersey District Courts have held 

that entry of summary judgment for a defendant on federal 

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 Corp., 

723 F. Supp. 250, 270 (D.N.J. 1989). We are persuaded 

that the same First Amendment principles on which NoerrPennington immunity is based apply to the New Jersey tort 

claims. See Brownsville Golden Age Nursing Home, Inc. v. 

Wells, 839 F.2d 155, 1159-60 (3d Cir. 1988) (Sloviter, J.) 

(holding that Noerr-Pennington immunity precludes tort 

liability for reporting nursing home violations to 

government authorities under Pennsylvania law); 22 see also 

_________________________________________________________________ 

22. Although the dissent argues that Brownsville did not "extend the 

Noerr-Pennington doctrine to state or common law claims," Dissent at 31, 

the court in Brownsville did in fact rely on several Noerr doctrine cases 

to support its holding rejecting a cause of action for malicious 

interference with business relations. In Brownsville, the court stated: 

 Two lines of cases support the Sierra Club decision and that which 

 we uphold here: the defamation cases . . . and the Noerr-Pennington 

 cases teaching that the collusive use by competitors of 

legislative, 

 administrative, or judicial process does not, without more, give 

rise 

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

is hard to see any reason why, as an abstract matter, 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, 1059 (9th 

Cir. 1998) (Washington state antitrust law covered by NoerrPennington). We thus will affirm summary judgment for 

Ethyl on those claims as well as on the federal claims.23 

_________________________________________________________________ 

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

Motor 

 Freight, 365 U.S. 127 (1961); California Motor Transport Co. v. 

 Trucking Unlimited, 404 U.S. 508 (1972). 

Brownsville, 839 F.2d at 160 (underlining added). The 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. See, 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 campaign of NOW against 

 states not ratifying the ERA was neither tortious nor prohibited by 

 the Sherman Act because `the right to petition is of such 

importance 

 that it is not an improper interference even where exercised by way 

 of a boycott'); Protect our Mountain Environment, Inc. v. District 

Court, 

 677 P.2d 1361, 1369 (Colo. 1984) (Noerr-Pennington analysis 

 applicable to suit for abuse of process and civil conspiracy); 

Rudoff 

 v. Huntington Symphony Orchestra, Inc., 91 Misc.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 in allowing free 

challenges 

 to public expenditures that may circumvent the electoral process 

 outweighs any detriment that may result to private contracting 

 parties from such challenges'). Brownsville has neither 

distinguished 

 these cases nor cited any authority to support its underlying 

action. 

 . . . 

Id. 

23. After the district court improperly dismissed the state claims in this 

action, Cheminor refiled its common law state claims in New Jersey state 
court. Ethyl removed that case to federal court. The District Court 

administratively dismissed this second-filed case pending the outcome of 

this appeal. Because we are affirming the District Court's judgment in 

the instant case and are holding that Noerr-Pennington applies to the 

state law claims, those claims would be subject to a res judicata defense. 

Fed. R. Civ. P. 8(b). 

 19 
VII. 

We will affirm the District Court's judgment of February 

5, 1998, which granted Ethyl's motion for summary 

judgment. 

 20 
SLOVITER, Circuit Judge, dissenting. 

I dissent from the decision of the majority for two

reasons. First, I believe the majority errs as a matter of law 

in its reading of the sham exception to the Noerr-Pennington 

doctrine, and thereby diminishes by judicial interpretation 

the scope of the Sherman Act, a seminal congressional 

enactment. Second, I believe the facts of record are 

sufficient to withstand summary judgment. 

I will not repeat in detail the historical facts outlined 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 time 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 with 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 also filed an 

anti-dumping (AD) and countervailing duty (CVD) petition 

with the United States International Trade Commission 

(USITC) and the United States Department of Commerce 

(USDOC) accusing Cheminor of receiving generous 

subsidies from the Indian government and selling bulk 

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 information 

available at the time, there is a reasonable indication of 

material injury to a domestic industry, or threat thereof, by 

reason of the imports under investigation, see 19 U.S.C. 

S 1671b(a), made a preliminary determination on September 

16, 1991, that there was sufficient evidence of material 

injury to the domestic market to justify taking corrective 

action against Cheminor. On December 13, 1991, the 

USDOC preliminarily determined that the Indian 

government had been subsidizing Cheminor in the amount 

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. 

 21 
In response to this significant additional cost, Flavine 

canceled all orders for bulk ibuprofen. This effectively 

forced Cheminor out of the U.S. ibuprofen market. 

Cheminor notified the USITC that it would be withdrawing 

from the market. Only after Cheminor withdrew did Ethyl 

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 proceeding 

is entitled to the protection that the Noerr-Pennington 

doctrine affords from suit under the antitrust laws. I do not 

believe that Noerr-Pennington goes as far as to cover abuse 

of process; I do not believe that it should. 

The rationale given by the Supreme Court for its holding 

in Eastern Railroad Presidents Conference v. Noerr Motor 

Freight, Inc., 365 U.S. 127, 135 (1961), that"no violation of 

the [Sherman] Act can be predicated upon mere attempts to 

influence the passage or enforcement of laws," was the 

dissimilarity between an agreement to lobby for legislation 

and an agreement to price-fix or boycott, id. at 137, the 

concern about impairing the ability of persons to make 

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 right to 

petition, id. at 137-38. This holding was extended to 

attempts to influence the executive branch, specifically the 

Secretary of Labor, in United Mine Workers of America v. 

Pennington, 381 U.S. 657 (1965). Yet another extension was 

 22 
added in California Motor Transport Co. v. Trucking

Unlimited, 404 U.S. 508, 510-11 (1972), when the Court 

ruled that citizens' attempts to influence administrative 

agencies or courts similarly may not engender antitrust 

liability. The majority relies upon this doctrine in holding 

that Cheminor cannot base its antitrust claims on Ethyl's 

attempts to influence the USITC and USDOC. 

However, the Noerr-Pennington exception to the antitrust 

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 influencing 

governmental action, is a mere sham to cover what is 

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 exception 

the antitrust laws applied to the conduct of highway 

carriers who allegedly engaged in concerted action to 

institute state and federal proceedings to resist and defeat 

applications by competitive highway carriers to acquire, 

transfer or register those rights, the Supreme Court held 

that "[m]isrepresentations, condoned in the political arena, 

are not immunized when used in the adjudicatory process." 

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, that the 

"sham" exception to Noerr-Pennington immunity from the 

antitrust laws includes at least two separate and 

independent grounds for holding that a particular litigant is 

not immune from antitrust liability: (1) that the litigation 

was objectively baseless, and (2) that the litigation was 

based on knowing and material misrepresentations. The 

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 subject. 

In Professional Real Estate Investors, Inc. v. Columbia 

Pictures Industries, Inc., 508 U.S. 49 (1993) (PRE), the 

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

antitrust immunity first identified in [Noerr] as that doctrine 

applies in the litigation context," held that "litigation cannot 

be deprived of immunity as a sham unless the litigation is 

objectively baseless." Id. at 51. The majority reads that as 

holding that "objective baselessness" is the only exception 

to Noerr-Pennington. However, nothing in PRE repudiated 

the holding in California Motor Transport. Rather, the PRE 

Court expressly reserved the question whether and to what 

extent the test it announced would apply in the event that 

the litigation involved misrepresentations or other highly 

disfavored conduct. It stated: 

 In surveying the "forms of illegal and reprehensible 

 practice which may corrupt the administrative or 

 judicial processes and which may result in antitrust 

 violations," we have noted that "unethical conduct in 

 the setting of the adjudicatory process often results in 

 sanctions" and that "[m]isrepresentations, condoned 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 here whether 

 and, if so, to what extent Noerr permits the imposition 

 of antitrust liability for a litigant's fraud 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 to the 

position of the two other courts of appeals that have 

considered this issue. Both of these courts read PRE to 

preserve a fraud exception to antitrust immunity, although 

they vary in their interpretation of that exception. See 

Whelan v. Abell, 48 F.3d 1247, 1254-55 (D.C. Cir. 1995); 

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 under 

Noerr-Pennington or under the First Amendment. In 

Whelan, the district court had dismissed the antitrust 

 24 
complaint on the grounds that the defendants were 

immune from liability under Noerr-Pennington because the 

litigation they pursued was not objectively baseless. See 48 

F.3d at 1253. In reversing that decision, the appellate court 

agreed with the plaintiffs that, even if the litigation was not 

baseless, the defendants were not entitled to immunity if 

they made deliberately false and material representations in 

the course of that litigation. The court reasoned that 

because Noerr-Pennington immunity is based, at least in 

part, on respect for the First Amendment right to petition 

for redress of grievances, and because "[h]owever broad the 

First Amendment right to petition may be, it cannot be 

stretched to cover petitions based on known falsehoods," it 

followed that Noerr-Pennington did not immunize the

defendants from liability based on their misrepresentations. 

Id. at 1254-55. 

A fraud exception to Noerr-Pennington in the litigation 

context was also recognized in Kottle, where the Ninth 

Circuit stated, "[I]n the context of a judicial proceeding, if 

the alleged anticompetitive behavior consists of making 

intentional misrepresentations to the court, litigation can 

be deemed a sham if `a party's knowing fraud upon, or its 

intentional misrepresentations to, the court deprive the 

litigation of its legitimacy.' " 146 F.3d at 1060 (quoting 

Liberty Lake Inv., Inc. v. Magnuson, 12 F.3d 155, 158-59 

(9th Cir. 1993)). 

The majority relegates these cases to a footnote for the 

proposition that the misrepresentation must be material, 

without acknowledging that the Ninth and District of 

Columbia Courts of Appeals, unlike it, accept 

misrepresentation as an independent prong of the sham 

exception to Noerr-Pennington. By thus conflating the 

concepts of "material" and "objectively baseless," the 

majority ignores the risk that a party will intentionally use 

fraud and misrepresentation to transform a claim that is 

otherwise weak and unlikely to prevail, although not 

"objectively baseless," into one that succeeds. 

Given the cited appellate authority, it is inexplicable to 

me why the majority has chosen to rely for its precedent on 

the district court decision in Music Center S.N.C. DiLuciano 

Pisoni & C. v. Prestini Musical Instruments Corp., 874 F. 

 25 
Supp. 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 Mountain 

Motor Tariff Bureau, Inc., 690 F.2d 1240 (9th Cir. 1982), a 

case in which the court reversed the summary judgment 

granted to defendant trucking companies and their rate 

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 mantle of 

Noerr-Pennington immunity, noting that, unlike in the 

political arena, immunizing defendants from liability based 

on misrepresentations made in an adjudicatory context 

could undercut the effectiveness of the adjudicatory body. 

It explained: 

 There is an emphasis on debate in the political sphere, 

 which could accommodate false statements and reveal 

 their falsity. In the adjudicatory sphere, however, 

 information supplied by the parties is relied on as 

 accurate for decision making and dispute resolving. 

 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 between 

petitioning the legislature and petitioning a court, I quote 

from other pertinent language in the opinion: 

 Adjudicatory procedures will not always ferret out 

 misrepresentations. Administrative bodies and courts 

 . . . rely on the information presented by the parties 

 before them. They seldom, if ever, have the time or 

 resources to conduct independent investigations. The 

 recognition, however, of a private right of action based 

 on the fraudulent misrepresentation, might be 

 sufficient incentive to induce parties not to 

 fraudulently misrepresent facts. 

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

Whelan, noted that the First Amendment does not protect 

such false petitioning: 

 There is no first amendment protection for furnishing 

 with predatory intent false information to an 

 administrative or adjudicatory body. The first 

 amendment has not been interpreted to preclude 

 liability for false statements. 

Id. at 1261. 

Unlike the majority, I conclude that the District Court 

erred in recognizing only a single exception to NoerrPennington immunity based on "objective baselessness," 

and would remand to that court for further consideration. 

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 Ethyl filed 

the AD/CVD petition, it knew it would not be able to 

establish all of the elements of an antidumping or 

countervailing duty claim, and intentionally and materially 

misrepresented its financial condition in order to overcome 

this difficulty. It alleges that Ethyl misrepresented, inter 

alia, (1) Ethyl's profits and costs,1 (2) the customers Ethyl 

allegedly lost to Cheminor, and (3) specific sales Ethyl 

allegedly lost to Cheminor. Because Cheminor has 

submitted some evidence to support these allegations, 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 misrepresented data for the 

first six months of 1991, Cheminor also contends that Ethyl 

"intentionally and wrongfully underreported its profits to the ITC by $1.5 

million dollars (over three years)" and that Ethyl misrepresented its 1990 

profits. Appellants' Br. at 14, 16. 

 27 
that these misrepresentations were sufficiently material to 

bring them within the sham exception to Noerr-Pennington 

immunity. 

To prevail in the AD/CVD case, Ethyl had to show that 

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 reason of 

Cheminor's exports. A failure to show any one of these 

elements would have defeated Ethyl's claim. A 

misrepresentation was thus material to the extent that the 

truth would have tended to disprove the existence of any 

one of the elements. 

Cheminor contends that Ethyl's misrepresentations were 

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 consider "(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 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 imports 

have had on domestic producers, the USITC must consider 

"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 USITC 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 on [Ethyl's] 

 existing development and production efforts . . ., and 

 (V) . . . the magnitude of the margin of dumping. 

Id. The misrepresentations Cheminor alleges Ethyl made 

directly concern Ethyl's sales, profitability, prices, and 

cashflow -- three of the five statutorily-mandated indicia of 

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

decision making. 

Moreover, as even the majority admits, the USITC 

actually "relied . . . in part on Ethyl's representations of its 

financial condition" in determining that Ethyl's application 

justified imposing punitive tariffs on Cheminor. The USITC 

stated in its "Views of the Commission": 

 The financial trends provide a reasonable indication 

 of present material injury. For example . . . the 

 industry [Ethyl's] profitability (as measured by profit- 

 to-sales ratio) declined substantially from the 

 beginning to the end of the investigatory period, despite 

 an increase in 1989 from the 1988 level. 

 Confidential information concerning other factors, 

 such as apparent domestic consumption and market 

 share, further provide a reasonable indication of 

 present injury. 

App. at JA 2097 (footnote omitted). 

The fact that the USITC also relied on other factors, such 

as Cheminor's market share, in reaching its determination 

cannot disprove the materiality of the misrepresentations. 

Neither Ethyl nor the majority have suggested any reason 

to believe that the USITC would not have reconsidered its 

decision had it known that Cheminor's financial condition 

was improving. The USITC might have decided that strong 

evidence of a financially healthy domestic industry

outweighed any data suggesting that Cheminor's market 

share was increasing. Ethyl's misrepresentations deprived 

the USITC of that opportunity, undermining the legitimacy 

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 the USITC 

considered whether the evidence it submitted established a 

colorable claim of threat of harm. The fact that the 

misrepresentations might not have been material to a 

determination the USITC concededly did not make says 

little about whether the same misrepresentations affected 

 29 
the 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 decision. 

The majority, apparently in an attempt to negate 

materiality, notes that Acting Chairman Anne Brunsdale, 

writing separately, "did not rely on Ethyl's assertions of 

decreased profits" in reaching her decision. An individual 

Commissioner's views do not in any way indicate that the 

misrepresented facts were not material to the other

Commissioners or to the Commission's decision. In any 

event, even Acting Chairman Brunsdale said she found 

Ethyl's financial information "useful in determining whether 

the injury resulting from any dumping and subsidization is 

material." App. at JA 2105. 

The majority's suggestion that the alleged 

misrepresentations are not material because "they were 

deemed to be not material by the ITC" is even less 

persuasive. The Commissioners had not learned of the 

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 majority 

means to say that the Commissioners did not deem Ethyl's 

profitability figures to be material in reaching a decision. 

As I explain above, I find this interpretation of the 

Commissioners' actions untenable. 

Of more concern is the majority's apparent belief that the 

issue turns on whether Ethyl had probable cause tofile its 

petition. As I have explained, a party's use of material 

misrepresentations in filing an action is a separate and 

independent ground for denying Noerr-Pennington 

immunity. 

Finally, I note that the majority extends Noerr-Pennington 

immunity beyond the antitrust context, and holds it also 

governs Cheminor's state common law claims. This court 

has not previously so held, and I believe we should not 

expand the scope of Noerr-Pennington immunity to cover 

claims of any variety -- common law or statutory, federal or 

state -- without significantly more consideration than the 

majority devotes to this issue. See Whelan, 48 F.3d at 

 30 
1253-55 (identifying concerns raised by the application of 

Noerr-Pennington defense to common law claims without 

deciding whether such application is mandated by the First 

Amendment). 

I see no need to engage in a monologue on that issue in 

the posture of this case. I do note that the case the 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 coincidentally) 

I authored, did not purport to extend the Noerr-Pennington 

doctrine to state or common law claims; it merely held that 

"action designed to bring a facility's noncompliance with 

applicable regulations to the attention of the appropriate 

authorities" cannot form the basis of a damage action, and 

drew analogies to cases rejecting claims based on 

petitioning activity. That can hardly be used as support for 

the majority's very different determination that fraudulent 

action, designed to elicit administrative action, is immune 

from any liability, whether under federal, state, statutory 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 determination 

whether its federal claims fall within that exception. 

Because I disagree with the majority's conclusion that Ethyl 

is entitled to immunity from Cheminor's antitrust claims 

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