Opinion ID: 184605
Heading Depth: 2
Heading Rank: 2

Heading: Subject Matter Jurisdiction over Counts II-XI

Text: 18 With the Second Amended Complaint before us, then, we turn to CBS's argument that it made allegations sufficient to support subject matter jurisdiction. C&W argues in response that the complaint does not adequately allege either a harmful effect upon U.S. commerce or a relevant market, and that in any event it does not provide facts to support the allegations made. In our review of the complaint, which is de novo, we assume the truth of the allegations made and construe them favorably to the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). 19 CBS asserts that the district court has jurisdiction under the Sherman Act, see 15 U.S.C. § 1-2, and the Foreign Trade Antitrust Improvements Act of 1982, see 15 U.S.C. § 6a. Although the Sherman Act prohibits monopolization and attempted monopolization of any line of interstate or foreign commerce, section 1 of the FTAIA makes the Sherman Act inapplicable to 20 conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless-- 21 (1) such conduct has a direct, substantial, and reasonably foreseeable effect-- 22 (A) on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations; or 23 (B) on export trade or export commerce with foreign nations, of a person engaged in such trade or commerce in the United States. 24 15 U.S.C. § 6a. A proviso establishes that if the FTAIA applies to conduct involving foreign trade based solely upon clause (B) quoted above, then the offender is subject to the Sherman Act only for injury to export business in the United States. Id. 25 When a plaintiff brings a claim of attempted monopolization or conspiracy to monopolize in a market involving foreign trade, therefore, a court has subject matter jurisdiction only to the extent that the complaint alleges that the challenged conduct had a  'direct, substantial, and reasonably foreseeable effect' on domestic or import commerce, or the export opportunities of a domestic person (as required by the FTAIA). H.R.Rep. No. 97-686, at 3 (1982), U.S. Code Cong. & Admin. News at 2487, 2488. The precise effect of the FTAIA is yet to be determined. See Hartford Fire Insurance Co. v. California, 509 U.S. 764, 797 & n. 23, 113 S.Ct. 2891, 125 L.Ed.2d 612 (1993) (It is unclear ... whether the [FTAIA's] 'direct, substantial, and reasonably foreseeable effect' standard amends ... or merely codifies ... [caselaw holding that the Sherman Act] applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States). It does seem clear, however, that we should use the standard set forth in the FTAIA to analyze whether conduct related to international trade has had an effect of the nature and magnitude necessary to provide us with subject matter jurisdiction. See H.R.Rep. No. 97-686, at 5. The complaint meets this standard. 26 For convenience we discuss first C&W's argument that CBS failed to allege specific facts to support the court's jurisdiction over CBS's claims. In the notice pleading system established by Federal Rule of [331 U.S.App.D.C. 232] Civil Procedure 8, all that is required is a  'short and plain statement of the claim' that will give the defendant fair notice of the plaintiff's claim and the grounds upon which it rests. Sinclair v. Kleindienst, 711 F.2d 291, 293 (D.C.Cir.1983). A complaint satisfies this criterion if it is not so vague or ambiguous that a party cannot reasonably be expected to frame a responsive pleading. F.R.Civ.P. 12(e). In other words, a plaintiff need not allege all the facts necessary to prove its claim so long as it provides enough factual information to make clear the substance of that claim. See Atchinson v. District of Columbia, 73 F.3d 418, 421-22 (1996). 27 Because a plaintiff is not required to plead facts sufficient to prove its allegations, a federal court should not dismiss a complaint either for lack of subject matter jurisdiction or for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Kleindienst, 711 F.2d at 293 (quoting Conley v. Gibson, 355 U.S. at 45-46, 78 S.Ct. 99). After all, the issue presented by a motion to dismiss is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. at 236, 94 S.Ct. 1683. 28 The complaint filed by CBS is sufficient to survive a motion to dismiss, therefore, so long as it makes allegations that, if proven, would show that the challenged conduct had a direct, substantial, and reasonably foreseeable effect upon an aspect of commerce to which the Sherman Act, as qualified by the FTAIA, applies. The complaint does make such allegations. First, CBS alleges (pp 9-14) that there is a significant market for the sale of English-language radio advertising in the Eastern Caribbean, which includes Puerto Rico and the U.S. Virgin Islands. CBS also alleges (pp 9, 15-19, 48A) that many companies based in the United States are customers, and that CCC and CBS are competing sellers, in that market. Finally, CBS alleges (pp 20-26) that there are substantial barriers to entry into the market: both a broadcast license and a large capital investment are necessary; in addition, CCC has locked up the available advertising contracts. Under the circumstances it is quite plausible that the plaintiffs' alleged conduct would have a significant effect upon U.S. commerce. 29 CCC argues that because CBS is merely [a] foreign supplier[ ] it cannot establish the court's jurisdiction by  'piggy-back[ing]' on the alleged injury to U.S. purchasers of media advertising. CCC relies upon a district court holding that a foreign company had to show injury within the United States before the court would have subject matter jurisdiction under the Sherman Act, and that such a company could not do so merely by showing injury to an unrelated American firm. See The 'In' Porters, S.A. v. Hanes Printables, Inc., 663 F.Supp. 494 (M.D.N.C.1987). Even if we were bound by that court's holding, we would not think the case pertinent here because the foreign firm in that case did not sell to American consumers; rather, it attempted to show that the injury it incurred abroad ultimately injured American exporters, from which it purchased fewer goods for resale overseas. The district court held that, because the plaintiff's claimed injury was not an injury to export business in the United States within the meaning of the proviso to the FTAIA, the foreign firm did not have standing. Here, however, the alleged injury is to advertisers in the United States. Consequently, clause 1(A) rather than clause 1(B) of the FTAIA governs, and the location of the suppliers is not relevant to whether the plaintiff has alleged an effect upon U.S. domestic or import commerce. See Hartford, 509 U.S. at 796, 113 S.Ct. 2891 (holding court had subject matter jurisdiction where plaintiff alleged conspiracy among foreign reinsurance companies had affected U.S. purchasers of reinsurance). 30 We now turn to C&W's primary argument, namely, that the complaint fails to allege either harm to U.S. commerce or a relevant market. We find neither part of this argument persuasive. The complaint both describes a relevant market--the market for English-language radio broadcast advertising in the Eastern Caribbean--and alleges that CCC and C&W engaged in intentional conduct that gave them monopoly [331 U.S.App.D.C. 233] power and injured consumers in this market. (pp 12-14) According to CBS, CCC and C&W misrepresented to advertisers that they could reach the entire Caribbean over CCC's station--which in fact reached only a fraction of that area--and therefore that they did not need to advertise with CBS as well. (pp 30-34) The complaint also alleges that CCC and C&W made sham technical objections to CBS's application for a broadcast license for the purpose of defeating that application and thereby ensuring that CCC would continue to enjoy a monopoly. (pp 35-40) 31 Contrary to the arguments of C&W, such allegations do support the district court's subject matter jurisdiction. A would-be monopolist or member of a conspiracy to monopolize comes within the condemnation of the Sherman Act when it engages in anticompetitive conduct. See, e.g., Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993) (holding elements of attempted monopolization claim under § 2 of Sherman Act are intent, anticompetitive conduct, and dangerous probability of success in a relevant market). Anticompetitive conduct can come in too many different forms, and is too dependent upon context, for any court or commentator ever to have enumerated all the varieties. It is a fair inference from the case law, however, that the allegations made here--namely, that the defendants made fraudulent misrepresentations to advertisers and sham objections to a government licensing agency in order to protect their monopoly--bring the defendants' conduct well within that concept. See, e.g., California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972) (holding that complaint alleging conspiracy to misuse state legal and regulatory processes in order to deprive competitors of meaningful access stated claim under Clayton Act); Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 86 S.Ct. 347, 15 L.Ed.2d 247, (1965) (holding that complaint alleging defendant attempted to monopolize by threatening to and pursuing legal enforcement of patent procured by fraud on Patent Office stated claim under § 2 of Sherman Act). 32 Moreover, the complaint alleges specifically that U.S. customers in the relevant market suffered antitrust injury, to wit, they paid excessive prices for advertising because of the unlawful actions of CCC and C&W. (p 48A) It also alleges that CBS was and remains foreclosed from selling advertising to many of those U.S. companies that had purchased advertising time from CCC. (p 47) 33 Paying higher prices is certainly a direct harm to customers. The allegations that CBS was delayed in obtaining its broadcast license and was foreclosed from soliciting many potential advertisers also describe actual, albeit indirect, harms to customers. In this context it appears that antitrust injury to CBS is ultimately a harm to U.S. purchasers of radio advertising. By keeping CBS out of the market, CCC and C&W denied such purchasers the benefit of competition. 34 Construing the complaint liberally, then, we understand it to say that CCC and C&W intentionally and successfully, by means of fraud and deceit, secured monopoly power in the relevant market, used this power to raise prices, and thereby hurt U.S. advertisers. Indeed, C&W virtually admits that CBS's complaint alleges antitrust injury when it argues that CBS described markets so narrowly configured that any commercial harm to CBS [is], ipso facto, harm to competition in those markets and hence has a substantial effect upon U.S. commerce. Be that as it may, we hold that CBS made sufficient allegations to support the subject matter jurisdiction of the district court. 35