2004 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-9-2004

BHP New Zealand Ltd v. UCAR Intl Inc

Precedential or Non-Precedential: Non-Precedential

Docket No. 01-3329

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Recommended Citation

"BHP New Zealand Ltd v. UCAR Intl Inc" (2004). 2004 Decisions. Paper 407.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

 

No. 01-3329

 

BHP NEW ZEALAND LTD.;

NEW BHP STEEL PTY LTD.;

BHP STEEL (JLA) PTY LTD.;

BROKEN HILL PROPRIETARY COMPANY, LTD.,

Appellants

v.

UCAR INTERNATIONAL, INC.;

UCAR CARBON COMPANY, INC.;

SGL CARBON A.G.;

TOKAI CARBON CO., LTD.;

TOKAI CARBON U.S.A. INC.;

THE CARBIDE/GRAPHITE GROUP, INC.;

NIPPON CARBON CO., LTD.;

SEC CORPORATION

(D.C. Civil No. 99-cv-04772)

(Amended in accordance with Clerk’s Order dated 2/21/02)

 

No. 01-3340

 

IN RE: GRAPHITE ELECTRODES ANTITRUST LITIGATION

(MDL No. 1244)

FERROMIN INTERNATIONAL TRADE CORPORATION;

EKINCILER DIS TICARET A.S.; EKINCILER DEMIR

CELIK SANAYI A.S.; ASIL CELIK SANAYI VE

TICARET, A.S.; DILER DEMIR CELIK ENDUSTRISI VE

TICARET A.S.; YAZICI DEMIR CELIK SANAYI VE
2

TICARET A.S.; COLAKOGLU METALURJI A.S.; SIAM

YAMATO STEEL COMPANY, LIMITED; SIAM

CONSTRUCTION STEEL COMPANY, LIMITED; SIAM

IRON AND STEEL COMPANY, LIMITED; SMORGON

STEEL GROUP, LTD.; SHANGHAI PUDONG IRON &

STEEL (GROUP) CO., LTD.; SHANGHAI NO. 5 STEEL

(GROUP) CO., LTD.; FU SHUN STEEL PLANT IMPORT

& EXPORT COMPANY; INTERNATIONAL ECONOMIC

& TRADING CO. (WUGANG GROUP); CHINA

METALLURGICAL IMPORT & EXPORT MAGANG CO.;

LAI WU IRON & STEEL COMPANY; DAYE STEEL

GROUP IMPORT & EXPORT CO.; ZHANGJIAGANG

NOVEL STEEL CO. LTD.; JIANGSU SHAGANG GROUP

CO., LTD.; ZHANGJIAGANG SHEEN FAITH STEEL CO.,

LTD.; GUANGZHOU IRON & STEEL CO., LTD.;

GUANGZHOU IRON & STEEL HOLDING LTD. CORP.; 

IZMIR DEMIR CELIK SANAYI A.S.; ICDAS CELIK 

ENERJI TERSANE VE ULASIM SANAYI A.S.

v.

UCAR INTERNATIONAL, INC.; UCAR CARBON COMPANY, INC.;

SGL CARBON A.G.; TOKAI CARBON CO., LTD.; TOKAI CARBON

U.S.A., INC.; THE CARBIDE/GRAPHITE GROUP, INC.; NIPPON

CARBON CO., LTD.; SEC CORPORATION

(D.C. Civil No. 99-cv-00693)

Ferromin International Trade Corporation, Ekinciler Dis

Ticaret AS, Ekinciler Demir Celik Sanayi AS, Asil Celik

Sanayi VE Ticaret, AS, Diler Demir Celik Endustrisi BE

Ticaret AS, Yazici Demir Celik Sanayi VE Ticaret AS,

Colakoglu Metalurji AS, Siam Yamato Steel Company,

Limited, Siam Construction Steel Company, Limited, Siam

Iron and Steel Company, Limited, Smorgon Steel Group, Ltd,

Shanghai Pudong Iron & Steel (Group) Co., Ltd., Shanghai

No. 5 Steel (Group) Co., Ltd., FU Shun Steel Plant Import &

Export Company, International Economic & Trading Co.

(Wugang Group), China Metallurgical Import & Export

Magang Co., Lai Wu Iron & Steel Company, Daye Steel

Group Import & Export Co., Zhangjiagang Novel Steel Co.
3

Ltd, Zhangjiagang Sheen Faith Steel Co., Ltd., Guangzhou

Iron & Steel Co., Ltd., Guangzhou Iron & Steel Holding Ltd.

Corp., Izmir Demir Celik Sanayi AS, and Icdas Celik Enerji

Tersane VE Ulasim Sanayi AS,

Appellants

(Amended in accordance with Clerk's Order dated 2/21/02)

 

No. 01-3991

 

IN RE: GRAPHITE ELECTRODES ANTITRUST LITIGATION

(MDL No. 1244)

FERROMIN INTERNATIONAL TRADE CORPORATION;

EKINCILER DIS TICARET A.S.; EKINCILER DEMIR

CELIK SANAYI A.S.; ASIL CELIK SANAYI VE

TICARET, A.S.; DILER DEMIR CELIK ENDUSTRISI VE

TICARET A.S.; YAZICI DEMIR CELIK SANAYI VE

TICARET A.S.; COLAKOGLU METALURJI A.S.; SIAM

YAMATO STEEL COMPANY, LIMITED; SIAM

CONSTRUCTION STEEL COMPANY, LIMITED; SIAM

IRON AND STEEL COMPANY, LIMITED; SMORGON

STEEL GROUP, LTD.; SHANGHAI PUDONG IRON &

STEEL (GROUP) CO., LTD.; SHANGHAI NO. 5 STEEL

(GROUP) CO., LTD.; FU SHUN STEEL PLANT IMPORT

& EXPORT COMPANY; INTERNATIONAL ECONOMIC

& TRADING CO. (WUGANG GROUP); CHINA

METALLURGICAL IMPORT & EXPORT MAGANG CO.;

LAI WU IRON & STEEL COMPANY; DAYE STEEL

GROUP IMPORT & EXPORT CO.; ZHANGJIAGANG

NOVEL STEEL CO. LTD.; JIANGSU SHAGANG GROUP

CO., LTD.; ZHANGJIAGANG SHEEN FAITH STEEL CO.,

LTD.; GUANGZHOU IRON & STEEL CO., LTD.;

GUANGZHOU IRON & STEEL HOLDING LTD. CORP.;

IZMIR DEMIR CELIK SANAYI A.S.; ICDAS CELIK

ENERJI TERSANE VE ULASIM SANAYI A.S.
4

v.

UCAR INTERNATIONAL, INC.; UCAR CARBON COMPANY, INC.;

SGL CARBON A.G.; TOKAI CARBON CO., LTD.; TOKAI CARBON

U.S.A., INC.; THE CARBIDE/GRAPHITE GROUP, INC.; NIPPON

CARBON CO., LTD.; SEC CORPORATION

(D.C. Civil No. 99-cv-00693)

Ucar International, Inc., Ucar Carbon Co., Inc., The

Carbide/Graphite Group, Inc., Nippon Carbon Co., Ltd., SEC

Corporation, SGL Carbon AG, Tokai Carbon Co., Ltd. and

Tokai Carbon U.S.A., Inc.,

Appellants

(Amended in accordance with Clerk's Order dated 2/21/02)

 

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Nos. 99-cv-04772 and 99-cv-00693)

District Judge: Hon. Charles R. Weiner

 

Argued March 11, 2003

Before: SLOVITER, NYGAARD, and ALARCÓN*, Circuit Judges

(Filed August 9, 2004)

 

 

*Honorable Arthur L. Alarcón, United States Circuit Judge for the Ninth Circuit, sitting

by designation.
5

James vanR. Springer (Argued)

Kenneth L. Adams

R. Bruce Holcomb

James R. Martin

Dickstein Shapiro Morin & Oshinsky LLP

Washington, D.C. 20037-1526

Attorneys for all Appellants

Kevin R. Sullivan (Argued)

Grace M. Rodriguez

Peter M. Todaro

Jeffrey T. Tao

King & Spalding

Washington, D.C. 20006-4706

Francis Patrick Newell

Montgomery, McCracken, Walker & Rhoads, LLP

Philadelphia, PA 19109-1029

Attorneys for Appellees/Cross-Appellants,

UCAR International Inc. and UCAR Carbon Co., Inc.

Stuart J. Baskin

Jerome S. Fortinsky

Paul S. Hessler

Shearman & Sterling

New York, New York 10022

Daniel Segal

Hangley Aronchick Segal & Pudlin

Philadelphia, PA 19103

Attorneys for Appellee/Cross-Appellant,

SGL Carbon AG
6

Craig D. Bachman

Kenneth R. Davis II

Thomas W. Sondag

Lane Powell Spears Lubersky LLP

Portland, OR 97204-3158

Matthew A. White

Wolf Block Schorr & Solis-Cohen

Philadelphia, PA 19103

Attorneys for Appellees/Cross-Appellants,

Tokai Carbon Co., Ltd. and Tokai Carbon U.S.A., Inc.

Kenneth I. Schacter

Timothy A. Valliere

Bingham McCutchen LLP

New York, New York 10022

Attorneys for Appellee/Cross-Appellant,

Nippon Carbon Co., Ltd.

A. Paul Victor

Scott Martin

Christopher V. Roberts

Weil, Gotshal & Manges, LLP

New York, New York 10153-0119

Jerome R. Richter

William H. Roberts

Blank Rome

Philadelphia, PA 19103

Attorneys for Appellee/Cross-Appellant,

SEC Corporation

Stephen D. Brown

Joseph A. Tate

George G. Gordon
 

1

 The BHP-led plaintiffs include: BHP New Zealand Steel Ltd.; NSW BHP Steel Pty

Ltd.; BHP Steel (JLA) Pty Ltd.; and Broken Hill Proprietary Company, Ltd. App. at 3.

 

2

 Plaintiffs in the Ferromin-led action were Ferromin International Trade

Corporation; Ekinciler dis Ticaret A.S.; Ekinciler Demir Celik Sanayi A.S.; Asil Celik

Sanayi VE Ticaret, AS; Diler Demir Celik Endustrisi VE Ticaret AS; Yazici Demir Celik

Sanayi VE Ticaret AS; Colakoglu Metalurji A.S.; Siam Yamato Steel Company, Ltd.;

Siam Construction Steel Company, Ltd.; Siam Iron and Steel Company, Ltd.; Smorgon

Steel Group, Ltd.; Shanghai Pudong Iron & Steel (Group) Company, Ltd.; Shanghai No.

7

Carolyn H. Feeney

Dechert

Philadelphia, PA 19103

Attorneys for Appellee/Cross-Appellant,

Carbide Graphite Group

OPINION OF THE COURT

SLOVITER, Circuit Judge.

The appeals before us stem from two antitrust actions filed by two groups of

plaintiffs, which include foreign corporations engaged in the production of steel and a

U.S. corporation that acted on behalf of two such foreign steel producers. One action, led

by BHP New Zealand, was filed by a New Zealand company and three Australian

companies (collectively referred to as “BHP”).1 The other action, led by Ferromin

International Trade Corp., was filed by 26 foreign corporations with their principal places

of business in the United States, Thailand, Turkey, Australia, China, Austria, and

Sweden, and one U.S.-based affiliate that acted on behalf of two of the Turkish plaintiffs

in this group (collectively referred to as “Ferromin”).2 The actions were filed against a
5 Steel (Group) Company, Ltd.; FU Shun Steel Plant Import & Export Company;

International Economic & Trading Company (Wugang Group); China Metallurgical

Import & Export Magang Company; Lai Wu Iron & Steel Company; Daye Steel Group

Import & Export Company; Zhangjiagang Novel Steel Company, Ltd.; Zhangjiagang

Sheen Faith Steel Company, Ltd.; Guangzhou Iron & Steel Company, Ltd.; Guangzhou

Iron & Steel Holding Ltd. Corporation; Izmir Demir Celik Sanayi A.S.; Bohler Edelstahls

GMBH; Uddeholm Tooling AB; and Icdas Celik Enerji Tersane VE Ulasim Sanayi A.S. 

App. at 1 (Ferromin, et al., Notice of Appeal).

Jiangsu Shagang Group Company, Ltd., was a plaintiff in the Ferromin action. 

Although we do not have any record of Jiangsu Shagang abandoning its claims against

UCAR, it is not listed among the Appellants in the Notice of Appeal. App. at 1.

Bohler Edelstahl GMBH and Uddeholm Tooling AB, subsequent to the filing of

the Notice of Appeal, have abandoned their claims against UCAR and were dismissed

from the case on February 21, 2002. 

 

3

 The Ferromin and BHP actions name the same defendants: UCAR International,

Inc.; UCAR Global Enterprises, Inc.; UCAR Carbon Company, Inc.; SGL Carbon A.G.;

Tokai Carbon Company, Ltd.; Tokai Carbon U.S.A., Inc.; The Carbide/Graphite Group,

Inc.; Nippon Carbon Company, Ltd.; and SEC Corp.

Subsequent to the filing of the Notices of Appeal, on February 21, 2002, UCAR

Global Enterprises, Inc. was removed as an appellee/cross-appellant from appeal 01-

3329, 01-3340, and 01-3991.

8

group of American, Japanese, and German companies that manufacture and sell graphite

electrodes in the domestic and foreign graphite electrode markets (collectively referred to

as “UCAR”).3 The two actions were consolidated in the District Court.

To produce steel, plaintiffs use a high-temperature technique that requires the

burning of large quantities of graphite electrodes. Plaintiffs allege that defendants

conspired to artificially inflate graphite electrode prices by establishing a global cartel

that fixed prices and allocated business among graphite electrode producers throughout
9

the worldwide market. App. at 58-59, 107-08.

Defendants filed motions to dismiss pursuant to Federal Rule Civil Procedure

12(b)(1), arguing that the plaintiffs’ claims were beyond the subject matter of the

Sherman Act. The District Court, by order of June 13, 2001, granted in part and denied in

part the defendants’ motions to dismiss the complaints. See Ferromin Int’l Trade Corp. v.

UCAR Int’l, Inc., 153 F. Supp. 2d 700 (E.D. Pa. 2001). UCAR cross-appeals the same

order. The District Court held that it had no subject matter jurisdiction over antitrust suits

for overcharges on electrodes purchased outside the United States. It also ruled that

claims based on items purchased abroad but invoiced in the United States were within the

jurisdiction of the federal courts. Both sets of parties appeal, following certification by

the District Court of certain of its rulings under 28 U.S.C § 1292(b) and its certification of

the other rulings with the statements required under Federal Rule Civil Procedure 54(b).

The principal question before us on appeal is whether the Sherman Act’s coverage

with respect to activities involving foreign commerce, as defined by the general

exclusionary rule and the specific exceptions contained in the Foreign Trade Antitrust

Improvement Act (“FTAIA”), 15 U.S.C. § 6a, extends to the specific antitrust claims

asserted by plaintiffs. While this case was pending our decision, the Supreme Court

issued its opinion in F. Hoffman-LaRoche Ltd. v. Empagran S.A., 124 S.Ct. 2359 (2004),

in which it held that where the alleged anticompetitive conduct causes an adverse foreign

effect that is independent of the domestic effects of the conduct, “the FTAIA [domestic-
10

injury] exception does not apply (and thus the Sherman Act does not apply) . . . .” Id. at

2366. The Court reasoned that “two sets of considerations, the one derived from comity

and the other reflecting history, convince us that Congress would not have intended the

FTAIA’s exception to bring independently caused foreign injury within the Sherman

Act’s reach.” Id. at 2371. The Court, however, stated no position regarding situations in

which the foreign injury was not independent of the alleged anticompetitive conduct’s

domestic effects because the Court of Appeals had not addressed that issue. Id. at 2372. 

We requested that the parties provide us with letter memoranda addressing the

effect of the Supreme Court’s opinion in Empagran on the appeal before us. Both parties

agree that, to the extent that plaintiff steel producers claim foreign injuries that are

independent of the domestic effects of the alleged anticompetitive conduct, Empagran

controls our ruling on such claims. Letter from plaintiff-appellants’ counsel to the court

of June 30, 2004, at 1-2; Letter from defendant-appellees’ counsel to the court of July 1,

2004, at 1. Plaintiffs, however, assert that the basic questions on appeal, in light of

Empagran, are:

Have plaintiffs made a preliminary showing, sufficient to proceed with this

litigation, that the prices they paid for graphite electrodes were linked to,

and not “independent” from, the raising of prices in the United States by

defendants’ alleged global price-fixing cartel?

If not, should plaintiffs have an opportunity to make such a showing on

remand?

Letter from plaintiffs-appellant’s counsel, at 1. Defendants, on the other hand, maintain
11

that the District Court erred in allowing the claims of certain plaintiffs based on foreign

purchases of graphite electrodes that were invoiced in the United States to proceed. 

Letter from defendants-appellees’ counsel, at 4.

Because the District Court, and the parties, did not have the benefit of Empagran,

we will remand the case to the District Court for its reconsideration. The District Court,

should it deem it necessary or helpful, may give the parties the opportunity to present

evidence as to whether the alleged anticompetitive conduct’s domestic effects were linked

to the alleged foreign harm. The District Court may consider and take evidence, if

necessary, on any other related issue. For the reasons set forth above, we will vacate the

decision of the District Court and remand for further proceedings consistent with this

opinion.