Kolon Industries Incorporated v. E. I. DuPont De Nemour
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 3:11-cv-00622-REP. [999329344]. [12-1587]
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1587
KOLON INDUSTRIES INCORPORATED,
Plaintiff – Appellant,
v.
E.I. DUPONT DE NEMOURS & COMPANY,
Defendant – Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.
Robert E. Payne, Senior
District Judge. (3:11-cv-00622-REP)
Argued:
May 17, 2013
Decided:
April 3, 2014
Before SHEDD and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by published opinion. Judge Diaz wrote the opinion, in
which Senior Judge Davis joined. Judge Shedd wrote a dissenting
opinion.
ARGUED: Stephen Blake Kinnaird, PAUL HASTINGS LLP, Washington,
D.C., for Appellant.
Kent A. Gardiner, CROWELL & MORING, LLP,
Washington, D.C., for Appellee.
ON BRIEF: Daniel B. Goldman,
PAUL HASTINGS LLP, New York, New York; Jeff G. Randall, Igor V.
Timofeyev, Samer M. Musallam, PAUL HASTINGS LLP, Washington,
D.C., for Appellant. David D. Cross, Jeffrey L. Poston, CROWELL
& MORING, LLP, Washington, D.C.; Adam H. Charnes, KILPATRICK
TOWNSEND & STOCKTON LLP, Winston-Salem, North Carolina, for
Appellee.
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DIAZ, Circuit Judge:
In this Sherman Act case, we review the district court’s
grant of summary judgment in favor of Defendant-Appellee E.I. du
Pont
de
Nemours
and
Company
(“DuPont”).
We
also
consider
challenges by Plaintiff-Appellant Kolon Industries Incorporated
(“Kolon”) to certain of the district court’s discovery rulings
and its denial of Kolon’s recusal motion.
Finding no reversible
error, we affirm.
I.
A.
The merits of this case concern Kolon’s claim that DuPont
attempted to wield, or did wield, monopoly power over the U.S.
para-aramid
fiber
market
in
Sherman Act, 15 U.S.C. § 2. 1
violation
of
Section
2
of
the
Para-aramid is a strong, complex
synthetic fiber used in body armor, tires, fiber optic cables,
and a variety of other industrial products.
producers--DuPont,
Teijin
Aramid
1
(formerly
Three para-aramid
a
division
of
the
We recite the relevant facts in the light most favorable
to Kolon.
In so doing, we have done our best to honor the
parties’ oft-overzealous desires to keep certain purportedly
sensitive information under seal.
However, to the extent the
district court has already disclosed (without objection) such
information, we treat it as public knowledge.
2
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Dutch
company
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Akzo
N.V.),
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and
Kolon--sell
their
para-aramid
fibers to U.S. consumers.
DuPont invented para-aramid fiber in 1965, and for a period
controlled the entire U.S. para-aramid market with its Kevlar©
fiber.
Teijin introduced its competing Twaron© fiber to the
U.S. market in 1987 and has chipped away at DuPont’s share of
that market every year since 1990.
According to one of Kolon’s
expert witnesses, during 2006-2009 (the relevant time period),
DuPont’s
share
of
the
U.S.
para-aramid
market
(the
relevant
geographic and product markets) fell from a high of 59% in 2006
to 55% in 2009, with most of this loss going to Teijin.
The U.S. para-aramid market is highly concentrated between
Dupont and Teijin, which together account for 99% of U.S. sales.
This extreme market concentration owes at least in part to the
industry’s high entry barriers.
production
is
time-intensive
As Kolon showed, para-aramid
and
expensive,
and
potential
customers test and “qualify” each para-aramid product to ensure
it meets their particular needs, a process that typically takes
six months to three years.
In addition to this evidence of
market concentration and high barriers to entry, Kolon adduced
evidence
that
DuPont,
despite
Teijin’s
encroachment,
earned
profit margins of as high as 75% between 1997 and 2005 and had
the ability to price discriminate among its customers.
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Kolon made its foray into the U.S. para-aramid market in
2005 with its Heracron© fiber.
DuPont
considered
Anticipating
Kolon’s
Kolon’s
Kolon’s evidence showed that
market
potential
entry
to
be
encroachment,
a
threat.
DuPont
began
identifying segments of the market that it viewed as hospitable
to
entry,
gaskets),
cables.
including
tires,
auto
short
manufactured
fibers
rubber
(pulp
goods,
for
and
brakes
fiber
and
optic
According to Kolon, DuPont then undertook a strategy of
executing
multi-year
supply
agreements
with
high-volume
customers in each identified segment, requiring these customers
to purchase most or all of their para-aramid requirements from
DuPont during the relevant time period.
These
supply
contracts
contained
restrictions,
such
as
volume purchase commitments and “meet and release” clauses, that
required any competing para-aramid seller to propose a bid at a
designated lower amount than DuPont’s existing price, prohibited
the customer from informing the competing seller of DuPont’s
price, and gave DuPont a right to match any competing offer.
a
result
of
these
allegedly
anticompetitive
practices,
As
Kolon
insists, it never achieved more than a de minimis market share
during the relevant time period.
By contrast, Kolon was able to
penetrate other comparable para-aramid markets, such as Europe.
DuPont,
penetrate
for
the
its
U.S.
part,
market
attributes
to
4
Kolon’s
Kolon’s
own
failure
to
shortcomings.
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According to DuPont, Kolon undertook only a “feeble effort” to
establish
a
U.S.
foothold,
using
only
seven
sales
agents,
inadequately investing in product offerings and supply capacity,
and contacting only a small percentage of potential customers as
of
October
2009.
Meanwhile,
DuPont
defends
its
supply
agreements as a competitive response to Teijin’s use of such
practices, and as driven by consumer demands.
DuPont also attempts to diminish the reach of its supply
agreements,
noting
agreements
with
that
it
entered
twenty-one
U.S.
into
only
customers,
twenty-five
collectively
accounting for only a small percentage of its U.S. revenue.
those
agreements,
customer
to
DuPont
purchase
says,
some
only
amount
a
of
portion
Kevlar,
typical durations of two years or shorter.
obligated
and
these
Of
the
had
Meanwhile, none of
DuPont’s supply agreements precluded competitors from qualifying
their products with the customer while the DuPont agreement was
in effect.
And of the group of “key” customers Kolon identified
as necessary to establish a foothold for effective competition,
DuPont
notes
that
the
majority
had
DuPont during the relevant period.
no
supply
agreement
Appellee’s Br. at 38.
with
In
short, DuPont submits that myriad self-inflicted failures--not
DuPont’s
supply
agreements--frustrated
penetration.
5
Kolon’s
U.S.
market
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B.
DuPont brought suit against Kolon alleging the theft and
misappropriation of its Kevlar trade secrets (the “trade secrets
case”).
Kolon’s answer included the instant counterclaim (the
“antitrust
case”),
monopolized
and
market
through
attempted
its
aramid customers.
Procedure
alleging
to
supply
that
DuPont
monopolize
agreements
the
with
had
U.S.
illegally
para-aramid
high-volume
para-
DuPont moved, under Federal Rule of Civil
counterclaim.
The
district court granted that motion, with leave to amend.
Kolon
filed
an
12(b)(6),
amended
to
dismiss
counterclaim,
Kolon’s
followed
by
a
second
amended
counterclaim, which was also dismissed for failure to state a
claim, again with leave to amend.
Kolon declined to further
amend the counterclaim, opting instead to appeal the dismissal.
We reversed, holding that Kolon had adequately pleaded both its
actual and attempted monopoly claims, and remanded the matter to
the district court for further proceedings.
E.I. du Pont de
Nemours & Co. v. Kolon Indus., Inc. (DuPont I), 637 F.3d 435
(4th Cir. 2011).
On remand, the district court tried the trade secrets claim
separately, culminating in a $919.9 million jury verdict for
DuPont on September 14, 2011.
the two claims.
to
Kolon
in
the
The court then formally severed
The court also issued several rulings adverse
antitrust
case.
6
First,
the
district
court
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denied
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Kolon’s
motions
transaction-level
sales
to
and
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compel
cost
DuPont’s
data,
production
concluding
that
of
this
discovery would significantly burden DuPont and would not be any
more useful than the aggregate sales and cost data DuPont had
already
produced.
motions--filed
on
The
district
grounds
court
described
also
denied
below--for
Kolon’s
recusal
and
disqualification in both the antitrust and trade secrets cases.
The district court further denied Kolon’s request to depose a
DuPont corporate representative concerning its strategic use of
supply agreements.
Finally, the district court granted summary
judgment to DuPont on both Sherman Act claims, dismissing them
with prejudice.
Kolon timely noted this appeal.
II.
Before turning to the merits of the antitrust claims, we
first consider Kolon’s argument that the district court judge
was required to recuse himself in both the instant antitrust
case and the trade secrets case, which is also now before us on
appeal.
See E.I. du Pont de Nemours & Co. v. Kolon Indus.,
Inc., No. 12-1260 (argued May 17, 2013).
A.
Kolon’s
recusal
motion
is
based
on
the
district
court
judge’s involvement, while in private practice, in litigation
that, according to Kolon, presents a matter in controversy in
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the
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instant
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Teijin’s
dispute.
In
predecessor,
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the
1980s,
became
DuPont
embroiled
and
in
Akzo
several
N.V.,
patent
lawsuits relating to the manufacture and sale of para-aramid
fibers.
In one such dispute, Akzo sued DuPont in the United
States District Court for the Eastern District of Virginia for
infringement of an Akzo para-aramid patent.
In the Akzo case, DuPont was defended by the law firms
Fitzpatrick, Cella, Harper & Scinto (“Fitzpatrick Cella”) and
McGuire Woods & Battle (now “McGuireWoods”).
In the 1980s and
at the time of the Akzo case, the district court judge was a
partner at McGuireWoods.
As a result, he was a limited partner
in an affiliated entity, and continued to receive small payments
from McGuireWoods of rent for furnishings.
Because McGuireWoods
also served as counsel to DuPont in the present litigation, in
May
2009
the
clerk
of
court
issued
a
notice
informing
parties of the judge’s related financial interest.
the
The judge
noted then that he did not believe grounds for disqualification
existed, but he instructed the parties to file a motion within
20
days
motion
if
or
they
believed
otherwise
otherwise.
objected
to
Neither
the
party
judge’s
filed
a
continued
participation in the case.
Kolon
believed
the
Akzo
matter
was
central
to
both
its
defense of the trade secrets case and its maintenance of the
antitrust
case.
In
the
antitrust
8
case,
Kolon
began
seeking
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discovery of the Akzo case files in August 2009.
that
the
Akzo
litigation--which
also
included
It contended
a
counterclaim
filed by DuPont, and which was ultimately resolved pursuant to a
settlement that restricted Akzo’s exports to the United States-was relevant evidence of DuPont’s anticompetitive practices and
its intent to monopolize the U.S. para-aramid market.
In the trade secrets case, beginning in April 2010, Kolon
conducted extensive discovery into the Akzo litigation on the
theory that DuPont’s asserted trade secrets had been revealed in
the
course
secret.
of
In
that
litigation
August
therefore
the
2010,
and
district
were
no
court
longer
ordered
McGuireWoods, DuPont, and Fitzpatrick Cella to review the Akzo
case
files
and
to
produce
responsive
documents.
Later
that
month, DuPont produced approximately thirty boxes of documents,
along with a privilege log, from Fitzpatrick Cella’s files.
One of the entries on the privilege log showed that in May
1985, Mr. Fitzpatrick of Fitzpatrick Cella had sent the district
court judge, then a partner at McGuireWoods, a letter confirming
a
telephone
conversation
in
which
Fitzpatrick
had
asked
the
judge to send him a facsimile of the complaint filed by Akzo.
The privilege log also indicated that, per Mr. Fitzpatrick’s
request, the judge had faxed him a copy of the complaint.
Nearly
a
year
later,
on
July
20,
2011,
Kolon
filed
a
memorandum opposing one of DuPont’s proposed jury instructions
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in the trade secrets case.
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In that memorandum, Kolon stated
that it was “compelled to point out that there is some question
whether Your Honor should be adjudicating these matters [due to
DuPont’s
production
of
documents]
indicating
a
role
by
Honor in the earliest stage of the Akzo litigation.”
Your
Kolon
Indus., Inc. v. E.I. du Pont de Nemours & Co., 846 F. Supp. 2d
515, 519 (E.D. Va. 2012) (quoting 3:09-cv-58, Docket No. 1247)
(emphasis omitted).
the
court,
In a subsequent telephone conference with
Kolon’s
counsel
explained
that
the
source
of
its
concern was the May 1985 letter from Mr. Fitzpatrick to the
district court judge.
The district court judge then ordered DuPont to produce any
documents
which
concerning
ultimately
his
involvement
comprised
only
in
the
the
two
Akzo
litigation,
documents
described
above: the May 1985 letter from Mr. Fitzpatrick to the judge
requesting
a
copy
of
the
Akzo
Complaint,
and
the
judge’s
responsive facsimile cover sheet, with the Complaint attached.
Following
further
represented
documents
that
from
those
documents
made
similar
inquiry
they
the
into
had
the
reviewed
Fitzpatrick
contained
matter,
the
representations
all
Cella
with
privileged documents.
10
the
files
judge’s
Kolon’s
name;
respect
counsel
non-privileged
and
that
DuPont’s
to
the
none
of
counsel
files’
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After reviewing the two relevant documents, the district
court
judge
determined
that
he
had
no
recollection
of
the
communication with Fitzpatrick or of any involvement in the Akzo
litigation.
Kolon said nothing more then about the issue.
During these inquiries, the trade secrets trial began as
scheduled, and the jury returned a $920 million dollar verdict
for DuPont after a seven-week trial.
the
antitrust
case
was
underway
Meanwhile, discovery in
following
our
March
reversal of the district court’s initial dismissal.
2011
As in the
trade secrets case, the parties came to a head over Kolon’s
proposed
September
discovery
and
of
October
the
Akzo
of
2011
litigation
filed
files,
reciprocal
and
in
motions
respectively seeking to compel and protect that information.
Then,
on
November
30,
2011,
two
months
after
the
jury
verdict in the trade secrets case, and two days before motions
for summary judgment were due in the antitrust case, Kolon filed
its recusal motion, which the district court denied. 2
2
In its motion and supporting memorandum, Kolon also
suggested that the district court “revisit its refusal to
recuse” from the trade secrets case, apparently referring to the
discussion of recusal in July. Docket No. 247, at 2; Docket No.
248, at 31.
Kolon filed no separate motion for recusal in the
trade secrets case at that time, but did briefly reference
recusal in several subsequent filings.
On December 9, 2011,
Kolon filed a reply in support of its motion for a judgment as a
matter of law; in a footnote, it reminded the court of its
position that the judge should not have ruled regarding the
adverse jury instructions.
See Docket No. 1738, at 13.
On
(Continued)
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B.
28 U.S.C. § 455(b)(2), the provision on which Kolon relies,
provides that any judge of the United States shall disqualify
himself
[w]here in private practice he served as a lawyer in
the matter in controversy, or a lawyer with whom he
previously
practiced
law
served
during
such
association as a lawyer concerning the matter, or the
judge or such lawyer has been a material witness
concerning it.
28
U.S.C.
§ 455(a),
which
also
has
some
relevance
to
our
inquiry, provides that “[any judge] of the United States shall
disqualify himself in any proceeding in which his impartiality
might reasonably be questioned.” 3
December 23, Kolon asked the court to consider recusal in its
memorandum supporting its motion to stay the injunction
proceedings.
See Docket No. 1813, at 19.
And in its reply
regarding that motion, on January 11, Kolon insisted that a
formal motion for recusal was unnecessary. See Docket No. 1843,
at 19 (responding to Docket No. 1830, at 26-27).
During a
January 2012 hearing on Kolon’s motion for a new trial and
judgment as a matter of law in the trade secrets case, counsel
for Kolon again requested that the district court judge recuse
himself. The judge refused to do so, explaining that he did not
have a recusal motion before him in that case.
Three days
later, on January 27, 2012, Kolon filed its motion for recusal
and disqualification in the trade secrets case.
The district
court denied the recusal motions in both cases on February 21.
3
A separate recusal statute, 28 U.S.C. § 144, provides
parties with one opportunity per case to file an affidavit that
the presiding judge has a personal bias or prejudice regarding a
party.
If the affidavit is sufficient, accompanied by a
certificate of good faith, and timely filed, another judge will
(Continued)
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The district court reasoned that although § 455 is itself
silent on whether a party seeking recusal must timely file a
motion
with
the
court,
and
despite
the
mandatory
text
of
§ 455(b) (“[Any judge] . . . shall disqualify himself . . . .”),
the majority of circuits, including this one, have found that
§ 455 includes a timeliness requirement.
Kolon Indus., 846 F.
Supp. 2d at 522 (citing, inter alia, United States v. Owens, 902
F.2d 1154, 1155 (4th Cir. 1990)).
Accordingly, because Kolon
had delayed in filing its recusal motion for almost a year after
it learned of the alleged conflict, the district court denied
Kolon’s motion as untimely.
Ruling in the alternative on the merits, the district court
concluded that even ignoring the untimeliness of Kolon’s motion,
recusal
was
unnecessary
under
§ 455(b)(2)
since
the
Akzo
litigation was not “sufficiently related” to the instant action
to “constitute parts of the same matter in controversy.” 4
Id. at
528 (quoting United States v. DeTemple, 162 F.3d 279, 286 (4th
Cir. 1998)).
be assigned to the proceeding.
Kolon did not seek recusal on
this ground in the district court.
4
Additionally, the district court held that recusal was
unnecessary under § 455(a).
Since Kolon does not appeal that
ruling, we do not address it.
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C.
We
review
discretion.
a
judge’s
recusal
decision
for
abuse
of
United States v. Mitchell, 886 F.2d 667, 671 (4th
Cir. 1989).
We first consider Kolon’s challenge to the district court’s
holding that
§ 455(b)(2)
includes
a
timely-filing
requirement
that Kolon failed to satisfy.
Kolon maintains that the district
court
Owens,
erred
by
relying
on
in
which
we
said
that
“[t]imeliness is an essential element of a recusal motion,” and
that notwithstanding the absence of an explicit timely-filing
requirement
implied.”
in
§ 455,
such
a
requirement
is
“judicially
902 F.2d at 1155.
This language, Kolon submits, does not control here because
it speaks only “broadly about section 455 and did not specify
whether this requirement should apply to both subsections (a)
and (b) or solely to [sub]section 455(a).”
58.
Appellant’s Br. at
In Kolon’s view, Owens “more likely” involved a situation
under § 455(a) in which the judge’s “impartiality might [have]
reasonably
implicating
be[en]
questioned,”
“personal
bias
or
5
not
a
§ 455(b)(1)
prejudice.” 5
Id.
scenario
at
59.
28 U.S.C. § 455(b)(1) requires a judge to recuse himself
“[w]here he has a personal bias or prejudice concerning a party,
or personal knowledge of disputed evidentiary facts concerning
[a] proceeding.”
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Accordingly, Kolon believes Owens merely resolved that a timely
motion is required when recusal is implicated under § 455(a),
leaving open that question with respect to § 455(b).
In
different
Kolon’s
enough
view,
the
§ 455(a)
to
explain
the
and
(b)
presence
provisions
of
a
are
timeliness
requirement in the former despite the absence of such in the
latter.
Unlike § 455(a), § 455(b) may not be waived by the
parties.
See 28 U.S.C. § 455(e) (“No [judge] shall accept from
the
parties
to
the
proceeding
a
waiver
of
disqualification enumerated in subsection (b).
any
ground
for
Where the ground
for disqualification arises only under subsection (a), waiver
may
be
accepted . . . .”).
From
Kolon’s
perspective,
subsections 455(b) and (e) create a “jurisdictional limitation
on the authority of a judge to participate in a given case,”
leaving the judge with a sua sponte obligation to recuse himself
or herself when he or she knows the predicate facts implicating
§ 455(b).
Appellant’s
Br.
at
60
(quoting
United
States
v.
Gipson, 835 F.2d 1323, 1325 (10th Cir. 1988) (internal quotation
marks omitted)).
party
motion
as
Thus, Kolon continues, “requiring a timely
a
condition
precedent
to
enforcing
section
455(b) runs contrary to statutory design, effectively relieving
the judge of his personal statutory duty.”
15
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D.
While
Kolon’s
arguments
do
not
entirely
lack
merit,
we
conclude that § 455(b), like § 455(a), includes a timely-filing
requirement under Owens and that Kolon failed to comply with it.
As the parties and the district court have acknowledged,
the
party
seeking
recusal
in
Owens
did
not
specify
which
provision of § 455 required it, and we did not cabin our holding
to
any
specific
defendant,
after
provision
publicly
of
that
accusing
section.
the
In
Owens,
then-Governor
of
the
West
Virginia of bribery, filed a motion for recusal based on the
presiding judge’s “long association” with the Governor, who was
responsible for the judge’s appointment to various offices.
902
F.2d at 1155.
In our view, these facts could plausibly fit under either
of two subsections, 455(a) or 455(b)(1).
On the one hand, the
scenario in Owens could certainly speak to § 455(a)’s concern
with situations where a judge’s impartiality might reasonably be
questioned.
determined,
But
the
on
the
judge’s
other,
as
perceived
the
district
allegiance
to
court
here
the
West
Virginia Governor could reasonably have concerned “a personal
bias
or
prejudice
concerning”
the
accuser--thus implicating § 455(b)(1).
are
left
only
with
Owens’s
defendant--the
Governor’s
Given this ambiguity, we
unqualified
announcement
that
“[t]imeliness is an essential element of a recusal motion” which
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is “judicially implied in § 455.”
blanket
prescription,
we
902 F.2d at 1155.
decline
to
read
Given that
Owens’s
timeliness
requirement so narrowly as to exclude § 455(b).
Our
dissenting
colleague
correctly
observes
that
Owens
cites a case discussing § 455(a) alone, and that our later cases
in that line have yet to address § 455(b). 6
The limitations of
past cases, however, are not controlling, particularly because
the policy rationale underlying Owens’s timeliness requirement
applies just as forcefully to § 455(b) as to any other recusal
scenario.
Here--just
as
with
a
§ 455(a)
recusal,
for
example--the
requirement of timeliness “prohibits knowing concealment of an
ethical issue for strategic purposes,” United States v. York,
888
F.2d
1050,
1055
(5th
Cir.
1989),
and
“is
vital . . . to
prevent waste and delay,” Owens, 902 F.2d at 1156.
the
non-waivability
of
a
§ 455(b)
6
recusal
does
not
Meanwhile,
excuse
a
The dissent says that our decision in United States v.
Lindsey, 556 F.3d 238 (4th Cir. 2009), cuts against imposing a
timeliness requirement under § 455(b). With all respect, we do
not share that view.
In Lindsey, the presiding district court
judge had participated in defendant Lonnie Robinson’s case
twelve years earlier as an Assistant United States Attorney.
Though the judge did not recall his participation in the earlier
case, nor was he made aware of it, we vacated his order. But in
that case, Robinson did not learn of the judge’s prior
involvement until after filing his appeal.
See id. at 246–47.
Thus, no timeliness issue ever arose: the case is wholly
inapposite here.
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party’s
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delay
in
filing.
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As
the
Fifth
Circuit
“waiver and timeliness are distinct issues.”
1055.
Whereas
parties
from
“section
agreeing
455(e)
among
prohibits
themselves
explained,
York, 888 F.2d at
the
to
judge
and
abrogate
the
section
455(b),” a “timeliness requirement forces the parties to raise
the
disqualification
litigation.”
Id.
issue
at
a
reasonable
time
in
the
And even if the mandatory text of § 455 does
imply a quasi-jurisdictional limitation on a judge’s authority
to hear a case, in our view, that limitation must be balanced
against the interests of fairness and efficiency served by the
timeliness requirement we announced in Owens.
The dissent criticizes our reading of Owens as finding no
support in the statutory text of § 455(b).
support
for
a
§ 455(a)
timeliness
We note that textual
requirement
is
similarly
lacking, and that the language under that provision is similarly
mandatory, yet under our precedent that requirement is beyond
dispute.
In
analysis
must
any
event,
begin
while
with
the
we
certainly
statute’s
agree
plain
that
our
language,
the
absence of a timeliness provision does not foreclose further
inquiry
here.
Even
the
plain
meaning
of
a
statute
is
not
conclusive “in the rare cases [in which] the literal application
of a statute will produce a result demonstrably at odds with the
intentions of its drafters.”
United States v. Ron Pair Enters.,
Inc.,
(1989)
489
U.S.
235,
242
18
(alteration
in
original)
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‘promote
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quotation
public
process.’ ”
marks
Pg: 19 of 60
omitted).
confidence
in
the
Section
integrity
455
of
“serves
the
to
judicial
Dissent at 50 (quoting Liljeberg v. Health Servs.
Acquisition Corp., 486 U.S. 847, 858 n.7 (1988)).
In our view,
failing
to
for
recusal
under
insist
on
a
§ 455(b)
timeliness
directly
requirement
undermines
that
seeking
legislative
goal. 7
In
keeping
with
that
end,
our
sister
circuits
have
overwhelmingly found a timely filing requirement to be implied
despite the text’s silence.
See, e.g., Am. Prairie Constr. Co.
v. Hoich, 560 F.3d 780, 789-91 (8th Cir. 2009) (§ 455(a) and
(b)); Omega Eng’g, Inc. v. Omega, S.A., 432 F.3d 437, 447-48 (2d
Cir. 2005) (§ 455(b)); Stone Hedge Props. v. Phoenix Capital
Corp.,
71
F.
App’x
138,
141
(3d
Cir.
2003)
(unpublished)
(§ 455(b)); United States v. Rogers, 119 F.3d 1377, 1380-83 (9th
7
Section 455’s legislative history is murky at best.
See
Delesdernier v. Porterie, 666 F.2d 116, 119–121 (5th Cir. 1982).
When Congress revised the statute in 1974, the Justice
Department did suggest adding an explicit timeliness requirement
like that found in § 144. Id. at 120. Congress declined to do
so, and our friend in dissent believes that decision “end[s] our
inquiry.”
Dissent at 48.
But the Justice Department’s
suggestion is hardly the only piece of relevant legislative
history.
Rather, “prior to the 1974 amendment[,] courts had
generally held that a timely objection under the old § 455 was
necessary.”
Delesdernier,
666
F.2d
at
121.
“Thus[,]
Congress’[s] failure to act could as easily have been the result
of a belief that the judicial gloss on old section 455 would
survive.” Id. (internal quotation marks omitted).
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Cir. 1997) (§ 455(a) and (b)); Summers v. Singletary, 119 F.3d
917, 920-21 (11th Cir. 1997) (§ 455(b)); York, 888 F.2d at 105355 (5th Cir. 1989) (§ 455(a) and (b)).
Meanwhile,
only
two
timeliness requirement.
circuits
have
refused
to
read
in
a
The Seventh Circuit did so first, in
SCA Services v. Morgan, 557 F.2d 110, 117 (7th Cir. 1977), but
has since called that decision into question on more than one
occasion, see Schurz Commc’ns, Inc. v. FCC, 982 F.2d 1057, 1060
(7th Cir. 1992) (“SCA Services is a weak precedent[.]”) (Posner,
J., in chambers); United States v. Murphy, 768 F.2d 1518, 1539
(7th Cir. 1985) (observing that “our decision [in SCA Services]
stands alone”).
The Federal Circuit has also declined to impose
a formal § 455 filing requirement, but in doing so created what
amounts
to
a
de
facto
filing
obligation
under
principles
of
equity.
See Polaroid Corp. v. Eastman Kodak Co., 867 F.2d 1415,
1421 (Fed. Cir. 1989) (finding no strict timeliness requirement
but denying Kodak’s requested relief due to its unreasonably
tardy § 455 objection).
We recognize the countervailing interest in removing any
judge who bears even the slightest appearance of partiality.
But we should not ignore the harm that would ensue if litigants
were permitted to treat motions for recusal as little more than
a
stratagem.
legitimately
As
be
the
asked
Fifth
whether
Circuit
the
20
observed,
spectacle
of
“it
an
might
attorney
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dragging his opponent through a long and costly proceeding, only
to conclude by moving for disqualification of the judge, is not
equally
detrimental
to
public
impressions
of
system” as is a potentially biased judge.
the
Delesdernier, 666
F.2d at 121 (internal quotation marks omitted).
not
enact
§ 455(a)
to
allow
counsel
to
make
subvert
that
legislative
intent
merely
“Congress did
a
federal judiciary’s ethical obligations . . . .”
not
judicial
game
Id.
of
the
We should
because
a
party
instead seeks recusal under § 455(b).
Nor are we moved by the fact that parties may not waive
recusal under § 455(b).
and
the
parties)
nonetheless
prejudice
to
one
has
ignore
party
in
In that context, everyone (the judge
acknowledged
it.
Thus,
particular,
a
conflict,
waiver
and
cannot
will
not
but
be
seeks
said
produce
to
the
gamesmanship we condemn here.
The same must be said of § 455(f).
That provision permits
a judge with a financial conflict of interest under § 455(b)(4)
to remain on the case if he has devoted substantial time to the
matter and divests himself of the interest 8.
The dissent reads
the limitation of this provision to financial conflicts alone as
8
The district judge’s May 2009 disclosure of a financial
interest does
not
present
an
issue
under
§ 455(f),
as
§ 455(b)(4) requires recusal only where a financial interest not
immediately in controversy “could be substantially affected by
the outcome of the proceeding.”
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a legislative determination that “timeliness and efficiency are
less
important
judiciary
is
than
ensuring
upheld.”
that
Dissent
at
the
impartiality
50.
As
with
of
the
the
waiver
provision, however, § 455(f) presents a clean trade-off between
efficiency and impartiality.
It does not address the concerns
about tactical sandbagging present in this case.
The dissent also contends that our decision today “pivots
responsibility [for recusal] from the judges to the litigants.”
Dissent at 52.
That is not entirely correct.
We agree with our
friend that when a judge “is aware of grounds for recusal under
section
455,
herself.”
The
that
judge
has
a
duty
to
recuse
himself
or
Dissent at 51 (internal quotation marks omitted).
scenario
independently
we
address
determines,
here
even
arises
if
only
wrongly,
when
that
a
he
judge
need
not
recuse and a party does not affirmatively seek recusal--that is,
until an adverse decision has been handed down.
Both efficiency
and integrity require that we not reward a party’s tactics in
these circumstances.
E.
Having held that Owens’s timely-filing requirement applies
to
recusal
consider
“rais[ing]
motions
whether
the
under
Kolon
§ 455(a)
complied
and
with
disqualification . . . [of
(b)
that
the
alike,
next
requirement
by
judge] at
the
earliest moment after [its] knowledge of the facts.”
22
we
Owens, 902
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at
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1156
(quoting
Pg: 23 of 60
Satterfield
v.
Edenton-Chowan
Educ., 530 F.2d 567, 574-75 (4th Cir. 1975)).
Bd.
of
It did not.
The fact that the district court judge had been a partner
at McGuireWoods at the time of the Akzo litigation was public
knowledge when Kolon first sought discovery of the Akzo case
materials in the antitrust case in August 2009.
Given Kolon’s
scouring of the Akzo litigation court records, it further seems
clear that Kolon had long known that McGuireWoods represented
DuPont in the Akzo case.
Kolon was also formally alerted to the
potential conflict in May 2009, when the clerk of court issued
its
notice
to
the
parties
informing
them
of
the
judge’s
financial interest in an entity affiliated with McGuireWoods.
Finally,
Kolon
became
aware
of
the
judge’s
direct
(if
negligible) involvement in the Akzo litigation in August 2010,
when DuPont produced the Akzo files and privilege log.
In sum, Kolon knew every fact that eventually predicated
its
recusal
motion
almost
a
year
before
it
first
suggested
recusal might be appropriate, in July 2011, and over a year
before it finally filed its first recusal motion, in November
2011.
On this record, Kolon quite clearly failed to “raise the
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disqualification . . .
[of
the
Pg: 24 of 60
judge]
after [its] knowledge of the facts.”
at
the
earliest
moment
Id. 9
Nor, in our view, is Kolon’s untimeliness excused by the
fact
that
DuPont
knew
first
of
the
district
court
judge’s
involvement in the Akzo case and failed to alert the court of
that
fact
until
August 2010.
it
eventually
produced
its
privilege
log
in
For one, the judge’s direct involvement in the
Akzo case was not the only (or even necessarily the strongest)
basis for Kolon’s eventual § 455(b)(2) recusal motion: if, as
Kolon believed, the Akzo litigation was actually a matter in
controversy,
the
mere
involvement
of
the
judge’s
former
law
partners--of which Kolon was clearly aware--would have required
his recusal.
For another, DuPont’s initial withholding of the
relevant communications does not explain why, after its eventual
9
We recognize that Kolon filed its motion to recuse in this
case before the district court’s issuance of an adverse ruling
on summary judgment. But its actions here should not be viewed
in a vacuum.
Recall that Kolon’s antitrust claims arose as a
counterclaim to DuPont’s trade secrets action, which proceeded
more quickly than the antitrust case, before the same district
judge.
In that case, the judge issued a series of rulings
universally adverse to Kolon, and a jury rendered a $920 million
verdict for DuPont.
This had all transpired by the time Kolon
filed its recusal motion in the antitrust case.
So while
Kolon’s sandbagging may not be obvious in the isolated context
of the antitrust case, a global view of the relevant events
makes clear that Kolon held its fire on recusal until after
suffering a defeat in the trade secrets case.
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disclosure, Kolon failed to raise the disqualification issue for
nearly a year.
Our
dissenting
colleague
warns
that
our
decision
as
to
recusal will only diminish public respect for our profession.
"At the end of the day," he writes, our "determination that
Kolon's recusal requests were untimely means that a district
judge
who
.
.
.
is
no
longer
permitted
to
conduct
further
proceedings involving the trade secrets claims[] presided over a
trial that ended in a one billion dollar verdict and a twentyyear worldwide production shutdown injunction."
(emphasis omitted).
Dissent at 57
The district judge did preside over such a
trial, and our decision here cannot rewrite the past.
We have
concluded separately, however, that the trade secrets verdict
must be vacated based on the judge’s evidentiary rulings.
In
our view, a single verdict--however large--that no longer exists
can
hardly
impair
public
confidence
more
than
would
a
rule
transforming recusal under § 455 into an “additional arrow in
the quiver of advocates in the face of [anticipated] adverse
rulings.”
In re Kan. Pub. Emps. Ret. Sys., 85 F.3d 1353, 1360
(8th
1996)
Cir.
marks omitted).
(alteration
in
original)
(internal
quotation
We therefore hold that the district court acted
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within
its
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discretion
in
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denying
Kolon’s
recusal
motion
on
timeliness grounds. 10
III.
We
next
consider
Kolon’s
challenges
district court’s discovery rulings.
abuse
of
discretion,
has
substantial
discovery
which
caused
may
to
certain
of
the
We review such rulings for
be
found
where
of
Nicholas
prejudice.”
“denial
v.
Wyndham Int’l, Inc., 373 F.3d 537, 543 (4th Cir. 2004).
A.
Throughout
their
analysis,
discovery,
Kolon
to
sought
enable
access
its
to
experts
DuPont’s
to
perform
transaction-
level and market-segment sales, pricing, and margin data.
district
court
information
Kolon
leave
as
to
denied
overly
Kolon’s
broad
reformulate
and
its
initial
requests
unduly
burdensome,
request.
Conceding
for
but
that
The
this
gave
its
initial requests had been overbroad, Kolon eventually requested
production of a spreadsheet with data fields relevant to certain
contested issues.
document
database.”
should
The request indicated that the responsive
be
in
native
format
from
“any
existing
Appellee’s Br. at 43 (emphasis omitted).
10
In light of our holding, we do not address the district
court’s alternative ruling that, on the merits, recusal was not
required.
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The district court again denied Kolon’s request, concluding
that (1) DuPont had already produced extensive documentation on
the pertinent topics, such that the requested data would not be
any
more
relevant
than
the
information
DuPont
had
already
provided; (2) the request remained “sweeping and extensive”; (3)
DuPont
had
shown
that
production
of
the
requested
documents
would be “significantly burdensome”; and (4) the request had
been filed very late in the discovery period, without adequate
explanation for the delay by Kolon.
J.A. 1020-22.
While we do not necessarily share the district court’s view
that Kolon’s requested transaction-level data would have been no
more relevant than the aggregate data DuPont had theretofore
provided, we nevertheless find that the discovery denial was
sufficiently
justified
by
the
court’s
determination
production would have been unduly burdensome.
that
the
Kolon insists
that the burden to DuPont was minimal because it requested only
a “single spreadsheet” which it said could be “readily compiled
from any existing database,” Appellant’s Br. at 43 (emphasis
omitted),
and
because
an
affidavit
from
DuPont’s
Global
Financing Director indicated that DuPont already had an existing
spreadsheet containing some of the requested transaction-level
data.
But this ignores the sweeping nature of the information
requested,
regarding
which
included
customers,
all
geographic
27
transaction-level
location,
dates,
details
products,
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amounts, price, cost, margins, and profits.
And even if DuPont
did have this information in “existing database[s],” that does
not mean it would not have been very burdensome to compile the
information into a “single spreadsheet.”
Particularly
considering
the
Id.
district
court’s
“wide
latitude in controlling discovery,” Rowland v. Am. Gen. Fin.,
Inc., 340 F.3d 187, 195 (4th Cir. 2003), we decline to disturb
its ruling.
B.
Kolon
also
appeals
the
district
court’s
grant
of
a
protective order barring a Rule 30(b)(6) deposition of DuPont on
its strategic use of supply agreements.
Justifying that order,
the district court explained that Kolon had violated Federal
Rule of Civil Procedure 30(b)(1) and Rule 30(H) of the Local
Rules
for
District
the
of
United
States
Virginia
notice . . . for
by
[a]
District
“failing
replacement
to
Court
give
the
Eastern
reasonable
written
deposition
for
notice
that
it
served on October 21, 2011,” and had wasted the time the court
had extended it for completion of its depositions.
Again,
we
see
no
discretionary ruling.
cause
to
disturb
the
J.A. 2715.
district
court’s
While Kolon attempts to pin blame for the
discovery delays on DuPont, it concedes that it gave only five
days’ notice for the replacement deposition notice it served on
October
21,
2011.
As
the
district
28
court
determined,
this
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violated Local Civil Rule 30(H), which generally requires eleven
days’ advance notice of a deposition, and Federal Rule Civil
Procedure
30(b)(1),
Although
Kolon
reasonable
under
which
maintains
the
requires
that
the
circumstances,
“reasonable”
five-days’
the
notice.
notice
district
court
was
acted
within its discretion in concluding otherwise.
IV.
Finally,
we
consider
Kolon’s
challenge
to
the
district
court’s grant of summary judgment on its two antitrust claims--a
ruling
we
review
de
novo,
viewing
all
facts
and
reasonable
inferences therefrom in the light most favorable to Kolon, the
nonmoving party.
See Pueschel v. Peters, 577 F.3d 558, 563 (4th
Cir. 2009).
In general, summary judgment is appropriate where there is
no genuine issue as to any material fact.
56(a).
Fed. R. Civ. P.
A genuine issue of material fact exists when there is
sufficient evidence on which a reasonable jury could return a
verdict in favor of the nonmoving party.
Lobby, Inc., 477 U.S. 242, 248 (1986).
summary
judgment
is
“an
important
Anderson v. Liberty
We have explained that
tool
for
dealing
with
antitrust cases,” Oksanen v. Page Mem’l Hosp., 945 F.2d 696, 708
(4th
Cir.
1991)
(en
banc),
and
that
antitrust
cases
are
“particularly well-suited for Rule 56 utilization” due to the
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“unusual entanglement of legal and factual issues” they often
present, Thompson Everett, Inc. v. Nat’l Cable Adver., L.P., 57
F.3d 1317, 1322 (4th Cir. 1995).
A.
We
first
review
the
district
court’s
grant
of
summary
judgment on Kolon’s monopolization claim.
Under § 2 of the Sherman Act, a defendant is liable for a
monopolization claim when that defendant (1) possesses monopoly
power
and
(2)
willfully
acquires
DuPont I, 637 F.3d at 441.
or
maintains
that
power.
In granting summary judgment to
DuPont, the district court held that Kolon failed to create a
genuine issue of material fact on either prong, concluding that
DuPont neither possessed monopoly power nor engaged in willful
maintenance of such power.
We address each element in turn.
1.
“Monopoly power is the power to control prices or exclude
competition.”
United States v. E.I. du Pont de Nemours & Co.,
351 U.S. 377, 391 (1956).
in
the
market.”
relevant
market
A defendant possesses monopoly power
if
it
is
“truly
predominant
in
the
White Bag Co. v. Int’l Paper Co., 579 F.2d 1384, 1387
(4th Cir. 1974).
Although there is no fixed percentage market
share that conclusively resolves whether monopoly power exists,
the Supreme Court has never found a party with less than 75%
market share to have monopoly power.
30
Antitrust Laws & Trade
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Regulation: Desk Ed. § 3.02[2][c][ii].
And we have observed
that
found
“when
controlled
market.”
monopolization
seventy
to
has
one
been
hundred
percent
the
of
defendant
the
relevant
DuPont I, 637 F.3d at 450 (quoting White Bag, 579 F.2d
at 1387).
Beyond
focused
percentage
on
the
particularly
durability
with
an
enter the market.”
Applying
market
eye
share,
of
the
toward
“some
courts
defendant’s
other
firms’
have
market
also
power,
(in)ability
to
Id. at 451 (citing cases).
these
standards,
DuPont lacked monopoly power.
the
district
court
held
that
Whereas (according to our ruling
in DuPont I) Kolon had adequately pleaded the monopoly power
element by alleging that DuPont had controlled over 70% of the
relevant
market,
at
the
summary
judgment
stage
the
district
court found that DuPont actually possessed significantly less
than the alleged 70% of that market.
Kolon Indus., Inc., v.
E.I. du Pont Nemours & Co., No. 3:11-cv-622, 2012 WL 1155218, at
*12 (E.D. Va. Apr. 5, 2012).
“In fact,” the court observed,
“Kolon’s own expert takes the view that DuPont had a maximum
market share of 59 percent during the relevant time period, and
that DuPont’s market share decreased to 55 percent during that
three year period rather than increased.”
This
decline
in
DuPont’s
market
Id.
share,
combined
with
Teijin’s corresponding ascendance and the fact that DuPont was
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charging lower prices in the United States than in Europe (which
Kolon identified as a comparable market), led the court to its
conclusion.
barriers,”
“[T]he
the
fact
district
that
court
there
are
continued,
significant
“is
entry
insufficient
fill the factual gaps in Kolon’s monopolization claim.”
to
Id.
“DuPont clearly lacks the power to control prices and exclude
competition,” the court summarized, “otherwise, it would have
been able to prevent the decrease in its market share and the
rise of one of its major competitors.”
Id.
Even viewing all evidence in the light most favorable to
Kolon, we agree with the district court that DuPont did not
possess monopoly power in the U.S. para-aramid market during the
relevant period between 2006 and 2009.
First, although Kolon is
correct that DuPont’s market share of less than 60% during the
relevant
period
does
not
necessarily
foreclose
a
finding
of
monopoly power, it does weigh heavily against such a finding.
Quite simply, this percentage falls significantly short of where
we
have
previously
drawn
the
line
for
monopoly
power.
See
DuPont I, 637 F.3d at 450 (identifying 70% market share as the
bottom of the range for a finding of monopoly power).
Meanwhile,
although
Kolon
is
also
correct
that
certain
other factors do demonstrate DuPont’s strength in the market
(e.g., high barriers to entry, ability to price discriminate,
high profit margins), a showing of DuPont’s “market power” is
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not itself sufficient to prove that DuPont possesses “monopoly
power.”
See Eastman Kodak Co. v. Image Technical Servs., Inc.,
504 U.S. 451, 481 (1992) (“Monopoly power under § 2 requires, of
course,
something
Furthermore,
durability
this
in
uncontested
greater
evidence
the
facts
than
market
falls
market.
As
demonstrate
short
the
that
power
of
showing
district
DuPont
under
court
has
§ 1.”).
DuPont’s
observed,
experienced
a
steady, decades-long loss in significant market share to Teijin.
Ultimately, in light of DuPont’s reduced market share and
lack of durable market power, the evidence cannot sustain a jury
finding that DuPont had the “power to control prices or exclude
competition,” United States v. DuPont, 351 U.S. at 391, or was
“truly predominant in the market” during the relevant period,
White Bag, 579 F.2d at 1387.
2.
Even
if
Kolon
had
presented
a
triable
issue
on
the
monopoly-power element, Kolon also needed to show that DuPont
willfully
maintained
that
power.
To
violate
this
prong,
a
defendant must engage in conduct “to foreclose competition, to
gain
a
competitive
advantage,
or
Eastman Kodak, 504 U.S. at 482-83.
to
destroy
a
competitor.”
On this element, Kolon’s
theory was--and is--that DuPont maintained its alleged monopoly
power through the use of long-term, multi-year, exclusive supply
agreements with certain U.S. para-aramid customers.
33
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Although
illegal,
Filed: 04/03/2014
exclusive
they
“may
Pg: 34 of 60
dealing
be
an
maintaining a monopoly.”
agreements
improper
are
means
not
se
acquiring
of
per
or
DuPont I, 637 F.3d at 451 (citing
United States v. Grinnell Corp., 384 U.S. 563, 576 (1966).
The
Supreme Court has held that an exclusive dealing arrangement
does not violate antitrust laws unless its probable effect is to
“foreclose competition in a substantial share of the line of
commerce affected.”
Tampa Elec. Co. v. Nashville Coal Co., 365
U.S. 320, 327 (1961).
The Court explained:
To determine substantiality in a given case, it is
necessary to weigh the probable effect of the contract
on the relevant area of effective competition, taking
into account the relative strength of the parties, the
proportionate volume of commerce involved in relation
to the total volume of commerce in the relevant market
area, and the probable immediate and future effects
which pre-emption of that share of the market might
have on effective competition therein.
Id. at 329.
Along
share
these
lines,
foreclosed
adversely
traders
affect
to
enter
is
we
important
competition,
into
or
significantly limited[.]’”
Tampa
Elec.,
demonstrated
demonstrate
365
U.S.
the
observed
because,
‘the
remain
that
for
“[t]he
the
contract
opportunities
in
that
market
for
market
to
other
must
be
DuPont I, 637 F.3d at 451 (quoting
at
substantial
that
have
328).
Once
foreclosure,
conduct
34
had
“a
it
a
plaintiff
must
negative
then
impact
has
also
on
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competition in the market as a whole.”
Chuck’s Feed & Seed Co.
v. Ralston Purina Co., 810 F.2d 1289, 1295 (4th Cir. 1987).
The district court held there was no genuine issue that
DuPont’s
supply
agreements
portion of the market.
had
not
foreclosed
a
substantial
In its view, Kolon had not sufficiently
attempted to quantify foreclosure of the entire relevant market,
and instead had focused only on DuPont’s alleged foreclosure of
particular market segments.
Kolon’s evidence of the degree of
foreclosure in those segments, which the court characterized as
“scant
at
best,”
did
“nothing
to
reveal
the
amount
foreclosure in the [para-aramid] market as a whole.”
2012 WL 1155218, at *14.
had
supply
of
Kolon,
The court concluded that since DuPont
agreements--many
of
which
were
non-exclusive--with
only twenty-one of approximately 1,000 potential commercial U.S.
para-aramid customers, the percentage of foreclosure could not,
“as a matter of law, constitute sufficient grounds for a finding
of substantial foreclosure.”
The
court
also
Id. at *15.
concluded
that
Kolon
had
“put
forth
no
evidence” that DuPont’s supply agreements had a negative effect
on
overall
ascendance”
competition,
fatally
noting
undercut
that
that
claim.
Teijin’s
Id.
“relentless
Finally,
the
court rejected Kolon’s argument that DuPont’s twenty-one supply
arrangements substantially foreclosed the entire relevant market
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by blocking Kolon from crossing a “critical bridge” to “high
volume” customers.
On
appeal,
theory.
While
Id. at *16-18.
Kolon
it
again
does
stresses
not
deny
its
“critical
that
DuPont
bridge”
had
supply
agreements with only twenty-one of the roughly 1,000 potential
U.S. commercial para-aramid customers, Kolon contends that the
district court’s emphasis on those figures--and its disregard of
the “probable effect of the contract[s] on the relevant area of
effective
competition,”
shortsighted.
Kolon’s
market
Tampa
Pointing
entry
as
to
a
Elec.,
evidence
threat,
365
U.S.
that
Kolon
at
DuPont
argues
329--was
perceived
that
DuPont
“strategically entered into supply agreements with high-volume
customers
in
the
key
commercially
sustainable
segments . . . that Kolon sought to enter.”
7, 27-28.
and
short
entry
Appellant’s Br. at
Kolon submits that despite the relatively low number
duration
of
DuPont’s
supply
agreements,
these
agreements “choked off the ‘critical bridge’ to Kolon’s entry
into the U.S. market” because they foreclosed Kolon’s access to
the most important high-volume customers.
Id. at 32.
Kolon points to two cases from the Third Circuit which, in
its view, embrace this “critical bridge” approach.
See United
States v. Dentsply Int’l, Inc., 399 F.3d 181 (3d Cir. 2005)
(reversing summary judgment, holding that Dentsply’s exclusivity
agreements with key product distributors could deny efficient
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scale to competitors); LePage’s Inc. v. 3M, 324 F.3d 141, 160
(3d Cir. 2003) (en banc) (reversing summary judgment, holding
that 3M’s bundled rebate agreements with superstores like K-Mart
and
Wal-Mart
could
have
cut
LePage’s
off
from
“key
retail
pipelines necessary to permit it to compete profitably”).
While
we
acknowledge
that
a
singular
emphasis
on
the
percentage of customers foreclosed cannot resolve the inquiry
(as foreclosure of a few important customers could substantially
foreclose access to a market), we agree with the district court
that
Kolon
commerce”
in
failed
to
show
the
entire
what
relevant
DuPont’s supply agreements.
“proportionate
market
of
foreclosed
was
volume
by
Tampa Elec., 365 U.S. at 329; see
also DuPont I, 637 F.3d at 451 (discussing the importance of
market share foreclosed).
Likewise, although Kolon’s “critical
bridge” theory is certainly plausible, the evidence does not
support its application here.
Unlike
the
plaintiffs
in
Dentsply
and
LePage’s,
Kolon
offered no evidence that access to the foreclosed customers (or
even to the identified market segments) was necessary to achieve
scale in the broader U.S. para-aramid market.
And even if we
assume the significance of those customers and market segments,
Kolon does not dispute that DuPont had supply agreements with
fewer than half of its identified “key” customers within those
segments.
37
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Meanwhile, DuPont persuasively distinguishes Dentsply and
LePage’s
based
“critical
on
bridge”
the
fact
cases
that
foreclosed
the
the
defendants
in
plaintiffs’
those
access
to
distribution networks rather than end-customers.
We are not
convinced
distinction
that,
as
Kolon
without a difference.”
observed,
unlike
contends,
this
Reply Br. at 15.
with
Dentsply’s
and
is
“a
As the district court
3M’s
agreements
that
foreclosed access to distribution networks shown to be necessary
to reach many end-customers, “the record presents no reason to
think that Kolon could not sell to other customers occupying the
same segment of the para-aramid market . . . as customers that
have supply agreements with DuPont.”
Kolon, 2012 WL 1155218, at
*18.
In
sum,
we
conclude
that
neither
the
probable
nor
the
actual effect of DuPont’s supply agreements was to “foreclose
competition
in
a
substantial
share
of
the
affected.”
Tampa Elec., 365 U.S. at 327.
line
of
commerce
Accordingly, those
agreements do not violate the willful maintenance prong of our
§ 2 monopolization inquiry.
genuine
issue
of
material
Because Kolon failed to raise a
fact
as
to
either
prong,
summary
judgment was appropriate on its monopolization claim.
B.
We
next
review
the
district
court’s
grant
judgment on Kolon’s attempted monopolization claim.
38
of
summary
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“Attempted
Pg: 39 of 60
monopolization
employs
‘methods,
means
and
practices which would, if successful, accomplish monopolization,
and which, though falling short, nevertheless approach so close
as to create a dangerous probability of it.’ ”
F.3d
at
453
(quoting
M
&
M
Med.
Supplies
&
DuPont I, 637
Serv.,
Inc.
v.
Pleasant Valley Hosp., Inc., 981 F.2d 160, 166 (4th Cir. 1992)).
To prevail on an attempted monopolization claim under § 2, a
claimant
must
show
(1)
a
specific
intent
to
monopolize
a
relevant market, (2) predatory or anticompetitive acts, and (3)
a dangerous probability of successful monopolization.
Spectrum
Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993).
Focusing only on the final two prongs, the district court
found
neither
demonstrate
satisfied
substantial
since
(1)
foreclosure
Kolon
of
the
had
failed
relevant
to
market
resulting from DuPont’s supply agreements, meaning there was no
anticompetitive conduct; and (2) DuPont had lost market share
during the relevant period and had failed to prevent Teijin’s
ascendance,
meaning
there
was
no
dangerous
probability
of
successful monopolization by DuPont.
Kolon first contends that DuPont’s supply agreements were
anticompetitive,
arguing
that
DuPont
entered
these
agreements
against its own interest in order to block Kolon’s market entry.
Appellant’s Br. at 31-32 (citing M & M Med. Supplies, 981 F.2d
at 166 (noting that where “a firm has been attempting to exclude
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on
Filed: 04/03/2014
some
basis
other
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than
efficiency,
characterize its behavior as predatory”)).
probability
of
success”
prong,
Kolon
it
is
fair
to
On the “dangerous
maintains
that
even
if
DuPont’s share of the U.S. para-aramid market did not constitute
actual
monopoly
power,
it
was
at
least
consistent
“dangerous probability” of achieving such power.
with
a
Id. at 23-24
(citing M & M Med. Supplies, 981 F.2d at 168 (4th Cir. 1992)
(“[C]laims involving greater than 50% share should be treated as
attempts at monopolization when the other elements for attempted
monopolization are also satisfied.”)).
And Kolon notes that
even though “DuPont’s market share declined slightly over the
three-year period, that does not, as a matter of law, preclude a
finding of monopoly power, much less a dangerous probability of
achieving it.”
Id. at 24 (citing cases finding monopoly power
despite a declining market share).
But
again,
even
viewing
the
evidence
in
the
light
most
favorable to Kolon, the claim fails.
First, as discussed above, DuPont’s alleged anticompetitive
conduct--its
customer
supply
agreements--did
not
have
the
probable effect of “foreclos[ing] competition in a substantial
share of the line of commerce affected.”
Tampa Elec., 365 U.S.
at 327; see also IIIB Areeda & Hovenkamp, Antitrust Law ¶ 806a,
at
412
(3d
exclusionary
ed.
2008)
conduct
(“[T]he
should
apply
40
same
to
basic
both
definition
of
monopolization
and
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attempt claims.”).
show
that
business
the
Pg: 41 of 60
Nor, contrary to its suggestion, did Kolon
agreements
justification
or
were
anticompetitive
against
DuPont’s
as
own
without
interest.
Rather, DuPont introduced unrebutted evidence that it entered
the supply agreements as a competitive response to Teijin’s use
of that same practice, and because customers requested them.
Second, Kolon has not raised a genuine issue that DuPont
had a “dangerous probability” of successfully achieving monopoly
power
during
the
relevant
period.
As
the
district
court
observed, DuPont’s market share had been in steady decline for
seventeen years, and DuPont has proven unable to control U.S.
prices or exclude Teijin from entering the market.
And even if
declining market share does not preclude a finding of monopoly
power, Kolon pointed to no affirmative evidence indicating a
“dangerous probability” that DuPont would sooner or later regain
its former market dominance.
Accordingly,
we
affirm
the
district
court’s
grant
of
summary judgment to DuPont on Kolon’s attempted monopolization
claim.
V.
In sum, we conclude that following Owens, recusals under 28
U.S.C.
§ 455(b)
requirement,
and
include
that
a
the
judicially
district
41
implied
court
timely-filing
acted
within
its
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discretion when it denied Kolon’s recusal motion on timeliness
grounds.
We defer to the district court’s considerable discretion in
overseeing discovery and will not disturb its discovery rulings.
On
the
merits
of
Kolon’s
antitrust
suit,
we
agree
with
the
district court that Kolon failed to raise a triable issue of
material
fact
sufficient
to
sustain
either
its
attempted
or
actual monopolization claims.
The judgment of the district court is hereby
AFFIRMED.
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SHEDD, Circuit Judge, dissenting:
I dissent.
Federal judges have an “absolute duty . . . to
hear and decide cases within their jurisdiction,” United States
v.
Will,
requires
United
449
an
U.S.
200,
absence
States
v.
215
(1980),
of
actual
bias
Werner,
916
F.2d
but
in
the
175,
(internal quotation marks omitted).
“[f]airness
178
trial
of
(4th
.
.
.
cases,”
Cir.
1990)
To that end, “our system of
law has always endeavored to prevent even the probability of
unfairness.”
Id.
(internal
quotation
marks
omitted).
Consistent with this principle, Congress has explicitly created
another
absolute
duty
for
federal
judges:
they
must
recuse
themselves from any case where, “in private practice [the judge]
served as a lawyer in the matter in controversy, or a lawyer
with whom [the judge] previously practiced law served during
such association as a lawyer concerning the matter.”
§ 455(b)(2).
In
creating
this
duty,
Congress
28 U.S.C.
“placed
the
obligation to identify the existence of those grounds upon the
judge himself, rather than requiring recusal only in response to
a party affidavit.”
Liteky v. United States, 510 U.S. 540, 548
(1994).
I thus disagree with the majority’s unwarranted imposition
of a timeliness requirement that shifts the burden of bringing
forward recusal grounds under § 455(b)(2) from the judge to the
litigants.
That
decision
flies
43
in
the
face
of
the
plain
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language
Filed: 04/03/2014
and
thwarts
§ 455(b)(2).
the
Pg: 44 of 60
clear
congressional
purpose
It is also inconsistent with our precedent.
of
See
United States v. Lindsey, 556 F.3d 238, 246-47 (4th Cir. 2009).
Even accepting that timeliness plays some limited role under §
455(b)(2),
I
further
disagree
with
the
majority’s
conclusion
that Kolon Industries, Inc. (Kolon), acted in an untimely manner
here.
Rather, Kolon moved for the district judge’s recusal (on
grounds with which the judge was already well aware) within a
reasonable time after being presented with voluminous discovery
that
had
been
(DuPont).
impeded
by
E.I.
DuPont
De
Nemours
&
Company
Finally, in my view, the district judge presiding in
this case falls squarely within the terms of § 455(b)(2) in both
this appeal and the companion appeal,
E. I. DuPont De Nemours &
Co. v. Kolon Industries Inc., No. 12-1260 (Trade Secrets Case).
I would thus vacate the summary judgment order in this appeal
and remand for further proceedings.
I.
I begin with a brief recitation of the pertinent facts.
DuPont has commercially produced para-aramid fibers under the
name Kevlar© since the 1970s.
worldwide
litigation
para-aramid
fiber,
with
In the 1980s, DuPont engaged in
Akzo
Twaron©,
N.V.,
including
which
a
sold
case
a
filed
Eastern District of Virginia (the Akzo litigation).
competing
in
the
In that
litigation, DuPont was represented by McGuire Woods & Battle
44
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(now
Filed: 04/03/2014
McGuireWoods)
and
(Fitzpatrick Cella).
Pg: 45 of 60
Fitzpatrick,
Cella,
Harper
&
Scinto
During the time of the litigation, the
district judge below was a partner at McGuireWoods’ Richmond
office.
Documents reflect that during the Akzo litigation the
district judge spoke with co-counsel from Fitzpatrick Cella on
the phone and sent a letter with a copy of Akzo’s complaint
attached to him.
In
2009,
DuPont
instituted
this
action
against
Kolon,
arguing that Kolon misappropriated its trade secrets.
majority
court,
judge’s
recounts,
issued
prior
a
the
brief
district
partnership
at
through
informing
notice
judge,
the
McGuireWoods
As the
the
clerk
parties
of
the
instructed
the
and
of
parties to move for recusal if they believed it was warranted.
The judge took no further action on the issue.
Kolon filed an
answer and a counterclaim, contending that DuPont’s actions in
the market for para-aramid fibers violated the antitrust laws.
In
August
2009,
early
in
discovery,
Kolon
sought
access
to
documents from the Akzo litigation, believing that DuPont had
made public the trade secrets it was now claiming Kolon had
misappropriated.
DuPont’s counsel (McGuireWoods) informed Kolon
that
documents
it
had
no
from
the
Akzo
litigation.
Kolon
renewed this request prior to the close of discovery in April
2010
and
documents.
was
again
informed
Undeterred,
that
after
the
45
McGuireWoods
close
of
possessed
discovery
no
Kolon
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a
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subpoena
on
Pg: 46 of 60
Fitzpatrick
Cella,
which
revealed
that
Fitzpatrick Cella did have documents from the Akzo litigation.
These materials were turned over to Kolon in August 2010.
The
involvement of the district judge, including the letter he sent
to Fitzpatrick Cella, was not highlighted, but was part of a
roughly 59,000 page production.
While the district judge was not made aware of the letter
until July 2011, it cannot be disputed that throughout discovery
the judge was aware that Kolon intended to defend itself against
DuPont’s claims by contending that DuPont had publicized the
trade secrets in the Akzo litigation.
Upon being informed of
the letter in July 2011, prior to trial in the trade secrets
case and prior to severance of the antitrust claims, 1 the judge
stated
that
he
had
“no
recollection
involvement in that litigation.
whatsoever”
(J.A. 689).
of
any
As the majority
further recounts, the judge refused to rule on recusal until
Kolon formally filed a motion for recusal in both the trade
secrets and the antitrust case.
Eventually, the trade secrets claims proceeded to trial and
culminated in a jury award of $919.9 million.
The district
judge later entered a twenty-year worldwide production shutdown
1
The antitrust claims, which are the subject of this
appeal, were severed from the trade secrets claims in September
2011.
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injunction against Kolon and granted DuPont’s motion for summary
judgment on the antitrust claims.
II.
Section 455(b) provides that recusal is mandatory, inter
alia,
“[w]here
in
private
practice
[the
judge]
served
as
a
lawyer in the matter in controversy, or a lawyer with whom he
previously practiced law served during such association as a
lawyer
concerning
the
matter.”
28
U.S.C.
§ 455(b)(2).
Mandatory recusal is not waivable by the parties.
§ 455(e).
28 U.S.C.
The majority concludes that, although not waivable, a
mandatory recusal under § 455(b) is nonetheless subject to a
stringent timeliness requirement and that Kolon simply waited
too long in this case.
The
majority’s
for several reasons.
I disagree.
timely-filing
requirement
is
misconstrued
First, it simply constitutes the addition
of words to the statute.
“When interpreting statutes we start
with the plain language.”
U.S. Dep’t of Labor v. N.C. Growers
Ass’n,
377
F.3d
345,
350
(4th
Cir.
2004).
“It
is
well
established that when the statute’s language is plain, the sole
function of the courts-at least where the disposition required
by the text is not absurd 2-is to enforce it according to its
2
The majority’s reference to the absurdity canon is
misplaced.
There is nothing absurd about my reading of
§ 455(b)—as discussed infra, given the purpose of the statute,
(Continued)
47
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terms.”
Filed: 04/03/2014
Pg: 48 of 60
Lamie v. United States Tr., 540 U.S. 526, 534 (2004)
(internal quotation marks omitted).
§ 455(b)
could
requirements.”
Cir. 1980).
120
(5th
not
be
plainer;
it
The statutory language of
“sets
forth
no
procedural
United States v. Sibla, 624 F.2d 864, 867 (9th
See also Delesdernier v. Porterie, 666 F.2d 116,
Cir.
1982)
(noting
that
“even
after”
statutory
amendments in 1974 Ҥ 455 still contains no explicit procedural
requirements”).
Congress’
omission
of
any
reference
to
a
timely-filed motion as a prerequisite to § 455(b) recusal should
end our inquiry. 3
After all, “[w]e do not lightly assume that
it is entirely plausible that Congress did not intend to impose
a timely-filing requirement.
The absurdity canon allows courts
to disregard statutory text when adhering to the text “would
result in a disposition that no reasonable person could
approve.” Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 234 (2012). But the canon “can be
a slippery slope. It can lead to judicial revision of public and
private texts to make them (in the judges' view) more
reasonable.” Id. at 237. The hurdle for invoking the canon is
thus “a very high one.” Id. The fact that there is a “plausible
reason[]” for omitting a timely-filing requirement in § 455(b)
“forecloses recourse to the absurdity canon.”
Little v. Shell
Exploration & Prod. Co., 690 F.3d 282, 291 (5th Cir. 2012).
3
The majority compounds its error by requiring not only
that recusal be raised in a timely fashion by the parties, but
that recusal be raised in a formal motion.
As noted, § 455(b)
includes no procedural requirements.
Moreover, the requirement
of a motion is further undercut by the existence of 28 U.S.C.
§ 144. That statute provides:
Whenever a party to any proceeding in a district court
makes and files a timely and sufficient affidavit that
the judge before whom the matter is pending has a
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Congress has omitted from its adopted text requirements that it
nonetheless intends to apply.”
Jama v. Immigration and Customs
Enforcement, 543 U.S. 335, 341 (2005).
Second, as if this silence were not enough, § 455 contains
two
additional
signals
required
under
mandatory
recusals
accepting
that
that
§ 455(b).
may
not
“waiver
and
a
timely-filed
First,
be
§
waived
timeliness
455(e)
by
the
are
motion
is
provides
parties.
distinct
not
that
Even
issues,”
United States v. York, 888 F.2d 1050, 1055 (5th Cir. 1989), the
non-waiver of § 455(b) recusals reinforces the mandatory nature
of the section; if the presiding judge has a triggering event
under § 455(b), the judge is disqualified and must recuse even
if the parties oppose his recusal.
Second, § 455(f) provides
personal bias or prejudice either against him or in
favor of any adverse party, such judge shall proceed
no further therein, but another judge shall be
assigned to hear such proceeding.
The affidavit shall state the facts and the reasons
for the belief that bias or prejudice exists, and
shall be filed not less than ten days before the
beginning of the term at which the proceeding is to be
heard, or good cause shall be shown for failure to
file it within such time. A party may file only one
such affidavit in any case. It shall be accompanied by
a certificate of counsel of record stating that it is
made in good faith.
Section 144, which was in existence at the time Congress
amended § 455, clearly illustrates that Congress knew how to
require a formal filing raising a judge’s bias or prejudice and
declined to do so in § 455(b).
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yet
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another
signal.
“[n]otwithstanding”
the
Pg: 50 of 60
That
statute’s
provision
preceding
states
that,
provisions,
if
a
judge has invested “substantial judicial time” “to the matter”
and then discovers that he has a financial conflict of interest
under
§ 455(b)(4),
“divests
himself
§ 455(f).
the
or
This
judge
may
herself
in
the
the
case
interest.”
represents
provision
of
remain
28
Congress’s
if
he
U.S.C.
response
to
judicial economy concerns, and, importantly, it is limited to a
single
provision
specifically
efficiency
to
of
§ 455(b).
this
are
less
one
The
area
fact
important
than
Congress
that
suggests
that
timeliness
ensuring
spoke
that
and
the
impartiality of the judiciary is upheld.
In addition, I believe a timely-filing requirement subverts
the statute’s intent.
Section 455 serves to “promote public
confidence in the integrity of the judicial process.”
v.
Health
(1988).
Acquisition
Corp.,
486
U.S.
847,
858
n.7
See also Delesdernier, 666 F.2d at 121 (noting statute
serves
“to
removing
“Put
Servs.
Liljeberg
increase
even
simply,
the
public
confidence
appearance
avoiding
the
of
in
the
impropriety
appearance
of
or
judiciary
by
partiality”).
impropriety
is
as
important in developing public confidence in our judicial system
as avoiding impropriety itself.”
F.3d 152, 155-56 (5th Cir. 1995).
50
United States v. Jordan, 49
The statute was amended in
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1974 4 to harmonize § 455 with existing law by “clarify[ing] and
broaden[ing] the grounds for judicial disqualification and to
conform with the recently adopted ABA Code of Judicial Conduct,
Canon 3C (1987).”
Liljeberg, 486 U.S. at 858 n.7.
These codes
of conduct exist independently of § 455 and must be followed by
judges absent action by a party.
Indeed, our entire recusal
system
that,
is
based
upon
the
notion
when
the
judge
has
information that triggers one of the subsections of § 455(b),
that
judge
will
recuse
urging by a party.
himself
or
herself
regardless
of
any
In recognition of this fact, § 455 “is
directed to the judge, rather than the parties, and is selfenforcing on the part of the judge.”
Thus,
if
section
the
455,
herself.”
judge
that
“is
aware
judge
has
Id. at 868.
of
a
Sibla, 624 F.2d at 867-68.
grounds
duty
to
for
recusal
recuse
under
himself
or
While these provisions “may be asserted
also by a party to the action,” the primary duty remains with
the judge.
4
United States v. Conforte, 624 F.2d 869, 880 (9th
Prior to the 1974 amendments the statute provided:
Any justice or judge of the United States
disqualify himself in any case in which he
substantial interest, has been of counsel, is
been a material witness, or is so related
connected with any party or his attorney as to
it improper, in his opinion, for him to sit
trial, appeal, or other proceeding therein.
28 U.S.C. § 455 (1970 ed.).
51
shall
has a
or has
to or
render
on the
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Cir. 1980). 5
the
majority,
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The timely filing requirement, as implemented by
pivots
responsibility
from
the
judges
to
the
litigants when that duty and responsibility should lie with us.
As the Federal Circuit has explained:
Application of a “timeliness” requirement requires a
fixed point or bench mark from which the timeliness or
untimeliness of an action can be measured (e.g. 10
days after event X; before event Y). There is no such
provision anywhere in section 455.
Nor could there
be.
The statute deals only with action of a judge.
It has nothing to do with actions of counsel.
Polaroid Corp. v. Eastman Kodak Co., 867 F.2d 1415, 1418 (Fed.
Cir. 1989) (emphasis added).
Finally, to the extent one insists that timeliness should
play a role in recusal, I agree with Kolon that the role should
be tied to equitable considerations and limited in scope.
In
fact, the earliest cases applying a timeliness requirement were
concerned primarily with parties’ gamesmanship after losing a
case.
For instance, in York, 888 F.2d at 1055, cited by the
majority, the court noted that a timeliness requirement served
to
“proscribe
completed
motions
trial”
and
that
would
chastised
have
parties
invalidated
that
would
a
fully
sit
on
information gleaned prior to trial until the trial’s outcome.
5
To this end, we require parties to file a Corporate
Disclosure Statement under Federal Rule of Appellate Procedure
26.1 so that we can generate our own disqualifications; we do
not require each party in every appeal to file a motion
requesting the recusal of certain judges.
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See also Conforte, 624 F.2d at 879-880 (finding recusal motion
untimely where information was learned prior to trial but not
raised until after trial); Stone Hedge Props. v. Phoenix Capital
Corp., 71 Fed. App’x 138, 141 (3d Cir. 2003) (motion untimely
when party learned of information prior to judgment but recusal
was not raised until five years later, well after judgment and
appeal); Apple v. Jewish Hosp. & Med. Ctr., 829 F.2d 326, 334
(2d Cir. 1987) (noting whether motion was “made after the entry
of judgment” is one of four factors in determining if request
was timely).
A timeliness requirement in such circumstances—
where a party learns of information that the judge does not (or
may
not)
possess
litigation
equity.
but
then
strategy—makes
sits
sense
on
as
a
that
information
matter
of
as
fairness
a
or
Thus, in most of these cases “[t]he refusal of courts
to ‘start over’ has rested not on the mere passage of time, but
on
the
events
equity/fairness
that
had
occurred
considerations
in
those events from history’s pages.”
and
deciding
the
balancing
whether
to
of
expunge
Polaroid Corp., 867 F.2d at
1419.
Applying such a limited rule here leads inescapably to the
conclusion that Kolon acted in a timely fashion.
As recounted
above, DuPont impeded the discovery of Akzo documents and turned
over voluminous discovery that did not highlight the district
judge’s role in the prior litigation.
53
Moreover, at all times
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the district court was aware that Kolon was pursuing discovery
of
the
Akzo
litigation.
Given
these
circumstances,
Kolon’s
specific raising of recusal prior to trial in the trade secrets
claims is sufficiently timely under § 455(b)(2).
The
majority
reaches
the
opposite
conclusion
by
misconstruing, and then incorrectly relying on, United States v.
Owens, 902 F.2d 1154, 1155 (4th Cir. 1990). 6
In my view, Owens
is limited to recusals under § 455(a) and has no relevance to
cases,
like
provides
this
that
proceeding
a
in
questioned.”
one,
involving
§ 455(b).
“shall
disqualify
judge
which
his
impartiality
28 U.S.C. § 455(a).
Section
himself
might
455(a) 7
in
reasonably
any
be
Owens itself relied on a case
interpreting only § 455(a), see Delesdernier, 666 F.2d at 121, 8
and our cases citing to Owens’ timeliness requirement have all
arisen
under
§
455(a),
see
Newport
News
Holdings
Corp.
v.
6
The majority also relies, in part, on the decisions of our
sister circuits imposing a timeliness requirement.
Of course,
“agreement among courts of appeals on an issue . . . does not
invariably garnish Supreme Court approval.”
McMellon v. United
States, 387 F.3d 329, 361 (4th Cir. 2004) (en banc) (Motz, J.,
dissenting). Given the plain language of § 455(b), I find these
decisions unpersuasive.
7
This section, like § 455(b) has no specific timeliness
requirement.
Nonetheless, for purposes of this case, I accept
that the language is more susceptible to a requirement that the
party raise the issue with the judge and that such a requirement
is mandated by Owens.
8
In fact, Delesdernier specifically reserved the timeliness
question under § 455(b). See Delesdernier, 666 F.2d at 123 n.3.
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Virtual City Vision, Inc., 650 F.3d 423, 432 (4th Cir. 2011);
United States v. Whorley, 550 F.3d 326, 339 (4th Cir. 2008).
Conversely, of more relevance here is United States v. Lindsey,
556 F.3d 238, 246-47 (4th Cir. 2009).
In Lindsey, the district
judge
Assistant
had
previously
worked
as
an
United
States
Attorney on the criminal defendant’s case more than a decade
earlier.
U.S.C.
For the first time on appeal of the denial of his 18
§3582(c)
motion,
potential
recusal
Although
the
recusal
was
the
district
participation,
participation
of
and
at
no
that
thus
the
criminal
district
judge
one
time
required.
judge
was
brought
is
Id.
defendant
under
unaware
it
to
nonetheless
at
247.
the
§ 455(b)(3).
of
his
raised
his
prior
attention,
“his
undisputed,”
and
In
reaching
this
result, we included neither a citation to Owens nor a discussion
of timeliness.
Instead, we simply concluded that, because the
district
fell
judge
within
§ 455(b),
regardless of when the issue was raised.
recusal
was
required
Thus, contrary to the
majority, I believe our most relevant precedent supports the
conclusion that timeliness is not relevant under § 455(b). 9
9
The majority misapprehends the importance of Lindsey.
According to the majority, Owens mandates a timely-filing
requirement in all § 455 cases.
In Lindsey, although the
recusal issue was not raised until appeal, there is no
discussion about timeliness, which is wholly consistent with my
view that timeliness is irrelevant to § 455(b) cases because
they hinge on the mandatory nature of the recusal, not the
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In sum, the rule employed by the majority—that a recusal
motion is timely only if raised “at the earliest moment after
[its] knowledge of the facts,” (Majority Op. at 22), regardless
of whether any delay was caused by gamesmanship or whether it
was
raised
early
enough
in
the
litigation
that
no
prejudice
would result—is incompatible with the language and purpose of
§ 455(b) and is not required by our precedent.
the
point.
The
district
judge
knew,
from
This case proves
the
outset
of
litigation, that his prior law firm was representing a client
that it represented when he was partner.
As discovery began,
the judge had before him multiple requests from Kolon to look
into the Akzo litigation and pleadings and filings, indicating
that the Akzo litigation was central to Kolon’s defense on the
merits of the trade secrets claims.
This is not a case in which
a party discovered, for instance, financial information that the
judge was unaware of and sat on that information until after
trial.
In this case the judge was, at all times, aware of the
facts relevant to recusal under § 455(b)(2) and it was up to the
timely raising of it.
If timeliness was as important in all §
455 cases, as the majority suggests, surely the issue would have
at least been identified in Lindsey.
Lindsey’s silence on
timeliness only reinforces the case’s thorough discussion of
recusal under § 455(b) as a mandatory proposition.
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to
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self-enforce
those
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statutory
provisions. 10
To
the
extent any burden is placed on Kolon, it satisfied that burden
by
raising
the
issue
in
July,
prior
to
trial
on
the
trade
secrets claims.
At the end of the day, the majority’s determination that
Kolon’s recusal requests were untimely means that a district
judge who, by the majority’s own determination, is no longer
permitted
secrets
to
conduct
claims,
further
presided
proceedings
over
a
trial
involving
that
ended
the
in
trade
a
one
billion dollar verdict and a twenty-year worldwide production
shutdown injunction.
Such a result does not, I think, inspire
public confidence in the judiciary.
The majority’s rule leaves
judges with no enforceable duty to remove themselves from cases
absent action by a party.
This result cannot be squared with
the statute’s purpose or language.
III.
Having
concluded
that
Kolon’s
request
is
appropriately
before this court, I now address whether recusal was required
10
My opinion should not be read to suggest that the
district judge engaged in actual bias or impartiality in this
case.
Rather, the purpose of § 455(b)(2) is to disqualify
judges, even if they have no actual bias in a particular case,
because of the great risk of the appearance of bias or
impartiality in a certain set of cases. That appearance is the
issue in this case.
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under § 455(b)(2). 11
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We have held that a judge “need not recuse
himself simply because he possesses some tangential relationship
to the proceedings.”
(4th Cir. 2003).
United States v. Cherry, 330 F.3d 658, 665
In this case, however, the district judge had
more than a “tangential” relationship.
Our precedent establishes that the “matter in controversy”
includes more than the claims brought by DuPont.
In In re
Rodgers, 537 F.2d 1196 (4th Cir. 1976), the criminal defendants
were charged with using illegal means to procure the passage of
a
racetrack
judge’s
consolidation
former
individuals
who
law
firm
were
not
similar lobbying efforts.
bill
had
in
Maryland.
represented
criminally
a
The
presiding
separate
charged
but
group
of
engaged
in
The criminal defendants thus argued
that the judge should recuse; as part of this argument, the
defendants argued that they were intending to have his former
law partner (and some of the clients) testify as to the means
they undertook to gain passage of the consolidation bill.
The
Government opposed recusal, contending that the “matter” was not
the “matter in controversy” because it was not the “actual case
before the court.”
Id. at 1198.
11
Even accepting that reading of
The majority declines to address this issue, yet in the
companion case, uses its “supervisory powers” under 28 U.S.C. §
2106 to remand the case for further proceedings before another
district judge. See Trade Secrets Case at 15-16.
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the statute, we found recusal was required because “the actual
case before the court consists of more than the charges brought
by the government.
accused.”
Id.
It also includes the defense asserted by the
In that case, recusal was thus triggered because
the defendants’ proposed defense “in part at least, will consist
of
evidence
of
matters
served as a lawyer.”
in
Id.
which
the
judge’s
former
partner
See also Preston v. United States,
923 F.2d 731, 733-35 (9th Cir. 1991) (finding §455(b)(2) matter
in
controversy
requirement
satisfied
when
judge’s
former
law
partners represented a company that was not a party to the court
case but might be liable in an indemnification proceeding if the
plaintiffs prevailed in the underlying case).
As Rodgers makes clear, Akzo is a matter in controversy in
this action.
Kolon’s defense to DuPont’s trade secrets claims
is that DuPont made public many of these secrets during the Akzo
litigation.
It cites to, including other materials, a letter
from DuPont’s counsel, McGuireWoods, stating that DuPont agreed
to “totally declassify all trial exhibit documents, all proposed
findings
of
fact
and
submitted to the Court.”
court
excluded
reversible
this
error.
all
deposition
and
(J.A. 12-1260 at 13347).
evidence—an
See
excerpts
Trade
exclusion
Secrets
we
Case
The district
today
at
summaries
rule
14-15.
was
This
evidence, so pertinent to Kolon’s defense, makes Akzo a matter
in controversy.
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DuPont
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contends—at
least
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as
to
this
appeal—that
the
antitrust claims are too attenuated from Akzo to be the same
matter in controversy.
In reality, this litigation is all the
same action and the same case.
Moreover, in my view, recusal
was required, at the very latest, by July 2011, prior to the
severance
of
the
trade
secret
claim
from
the
counterclaim, which occurred on September 21, 2011.
antitrust
Thus, the
district court’s mandatory recusal in the trade secrets claims
likewise mandates recusal on the antitrust counterclaims brought
by Kolon.
IV.
For the foregoing reasons, I would vacate summary judgment
and
remand
judge.
for
new
proceedings
I therefore dissent.
60
before
a
different
district
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