GLOBE METALLURGICAL INC. v. RIMA INDUSTRIAL S.A. et al
Filing
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MEMORANDUM OPINION granting Defendants' 17 Motion to Dismiss. Signed by Judge Ketanji Brown Jackson on March 31, 2016. (lckbj3, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
GLOBE METALLURGICAL, INC.,
Plaintiff,
v.
RIMA INDUSTRIAL S.A., et al.,
Defendants.
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No. 14-cv-1252 (KBJ)
MEMORANDUM OPINION
Plaintiff Globe Metallurgical Inc. (“Globe”), a corporation based in Beverly,
Ohio, is the leading domestic manufacturer of silicon metal and silicon-based
ferroalloys. (See Am. Compl., ECF No. 16, ¶ 14.) Defendant Rima Industrial S.A.
(“Rima”) is a rival silicon metal manufacturer based in Brazil. (See id. ¶ 3.) Neither
party is based in the District of Columbia or conducts any business here. Nevertheless,
Globe has brought the instant action against Rima and its purported co-conspirators,
claiming that these out-of-state defendants have committed RICO violations, tortious
interference, civil conspiracy, and unjust enrichment. The crux of Globe’s complaint is
the contention that, approximately 15 years ago, Rima acted in concert with its codefendants to lie to the Commerce Department in order to get certain duties on imported
silicon metal revoked, which allowed Rima to export its product to the U.S. market
without the burden of the previous tariffs, thereby costing Globe both sales and
customers.
Before this Court at present is Defendants’ motion to dismiss. (See Defs.’ Mot.
to Dismiss, ECF No. 17.) Defendants make three arguments for dismissal: first, that
this Court lacks personal jurisdiction over the Defendants; second, that Plaintiff’s
claims are untimely; and third, that Plaintiff’s complaint fails to state a claim upon
which relief can be granted. For the reasons explained below, this Court finds that it
need go no further than Defendants’ first contention. It is undisputed that the sole
contact that Defendants have had with the District of Columbia is Rima’s interaction
with the Commerce Department regarding the antidumping order, and under D.C. law,
the assertion of personal jurisdiction cannot be based on such contacts. Furthermore,
although D.C. courts have recognized a narrow “fraud exception” to this government
contacts doctrine, that exception does not apply here because Globe does not allege that
Defendants fraudulently induced unwarranted government action against it, and Globe’s
other arguments for personal jurisdiction are unavailing. Consequently, and as set forth
in the accompanying order, Defendant’s motion will be GRANTED.
I.
BACKGROUND
Silicon metal is produced by combining quartzite, carbon, and a bulking agent
such as woodchips, and the resulting solid is used both to create aluminum and to create
the organic chemicals known as silicones. (Am. Compl. ¶¶ 16–17.) Because silicon
metal is an interchangeable commodity product, competition among its suppliers is
intense and price-sensitive. (See id. ¶¶ 17, 18, 20.) The United States is one of the
largest markets for silicon metal, and domestic producers have often faced “dumping”
by foreign producers—a practice in which those producers sell silicon metal in the
domestic market at “unfairly low prices.” (See id. ¶¶ 22.)
2
According to the allegations in Globe’s Amended Complaint, which the Court
must accept as true at this stage, see Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per
curiam), the U.S. Commerce Department determined in 1990 and 1991 that various
Brazilian silicon metal producers, including Defendant Rima, had been engaged in
dumping silicon metal in the United States. (See Am. Compl. ¶ 27.) As a result, the
Commerce Department issued an order in 1991 that imposed antidumping duties on
imports from various Brazilian silicon metal producers, including Rima. (See id.)
Under Commerce Department regulations, an affected entity can request that the
Commerce Department reconsider an antidumping order that it has issued, and between
1993 and 2002, Rima repeatedly requested administrative review of the antidumping
order that had been issued against it, seeking to have the order lifted (see id. ¶ 30).
According to Globe, the Commerce Department’s review of a request that it lift
an antidumping order involves, among other things, consideration of any costs incurred
by a U.S. affiliate of the company that is subject to the order. (See id. ¶ 32.) 1 The
Department’s review turns in part on the difference between the price the company
charges for its product in its home market and the price it charges as an export in the
United States. In calculating that price differential (also known as the “dumping
margin”), the Department subtracts from the export price any costs that a U.S.-based
affiliate incurred in selling the company’s product in the U.S. market; thus, if
1
Under applicable law, the term “affiliated persons” includes “[a]ny person directly or indirectly
owning, controlling, or holding with power to vote, 5 percent or more of the outstanding voting stock
or shares of any organization and such organization.” 19 U.S.C. § 1677(33)(E). A person is considered
“to control another person if the person is legally or operationally in a position to exercise restraint or
direction over the other person.” Id. § 1677(33).
3
undisclosed affiliate costs go unconsidered, the dumping margin will be inaccurately
small, which could affect the outcome of the Department’s review. (See id. ¶ 33)
In the instant complaint, Globe alleges that Rima hatched a scheme to lie to the
Commerce Department as part of its effort to persuade the agency to lift the 1991
antidumping order: Rima planned to conceal its affiliation with U.S.-based silicon metal
distributor Defendant Polymet Alloys, Inc., an Alabama company, and thereby to
mislead the Commerce Department into miscalculating the applicable dumping margin.
(See id. ¶ 33.) 2 Rima allegedly carried out this scheme over a period of years in
conjunction with its repeated requests for the Commerce Department to reconsider the
1991 antidumping order; according to the complaint, Rima falsely told the Commerce
Department that it had no U.S. affiliate relationships on multiple occasions. (See Am.
Compl. ¶ 36 (alleging that Rima repeatedly stated: “RIMA INDUSTRIAL S/A does not
have affiliated companies in the United States[.]”).) Globe maintains that, as a result of
this intentional misrepresentation, the costs that Polymet incurred in selling Rima’s
silicon metal were improperly excluded from the agency’s analysis during its review of
the antidumping order, and the Commerce Department ultimately (mistakenly) revoked
the antidumping order with respect to Rima on December 17, 2002. (See id.; see also
Silicon Metal from Brazil: Final Results of Antidumping Duty Administrative Review
and Revocation of Order in Part, 67 Fed. Reg. 77,225 (December 17, 2002).)
Rima’s return to unfettered exporting of silicon metal into the U.S. market was
bad news for Globe, which was one of only three domestic producers of silicon metal in
2
Globe also alleges that Defendant Ricardo A. Vicintin, Rima’s CEO, and Defendant Braulio M. Lage,
Polymet’s CEO, were parties to this scheme. (See Am. Compl. ¶ 33.)
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2002 (and has been the sole such producer since 2005). (See Am. Compl. ¶ 33.) What
is more, according to the complaint, Rima has allegedly used the ill-gotten profits that
it reaped after the lifting of the antidumping order to fund the construction of a silicon
metal production facility in Mississippi, for which Polymet will be the exclusive
distributor. (See id. ¶ 46.) 3 And in securing construction permits for the new plant,
Defendants allegedly lied to the Mississippi Department of Environmental Quality
about the project’s production limits and impact on air quality. (See id.)
Globe asserts that the creation of this facility and the deception of the
Mississippi state agency were parts of the same wide-ranging scheme among the
defendants. (See id. ¶¶ 46, 49.) Globe also alleges that it only learned of this scheme
in 2014, when news reports about the new Mississippi plant were published, identifying
both Rima and Polymet personnel as the project’s leaders. (See id. ¶ 57.) According to
Globe, Rima’s actions have done “significant harm” to Globe’s business interests,
insofar as they have resulted in lost sales, lost revenue, and lost disbursements of
antidumping duties. (See id. ¶ 58.) 4
Globe filed an Amended Complaint in this matter on April 21, 2015. (See Am.
Compl.) It contains nine claims, including four counts under the Racketeering
Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961–1968, two counts
3
Defendant Mississippi Silicon LLC (“MS Silicon”) is allegedly the company in charge of the
construction of Rima’s new plant. (See Am. Compl. ¶ 46.) The complaint states that MS Silicon is a
joint venture that is majority owned by Defendant Rima Holding USA, Inc.—a company that “Rima
and/or Vicintin” allegedly owns—and that it was created “as a vehicle to carry out their illegal
schemes.” (Id.)
4
From 2000 through 2006, the U.S. government distributed all the antidumping and countervailing
duties that it collected from foreign producers to domestic silicon metal producers. (See Am. Compl. ¶
24.) Congress repealed the law prescribing this policy in February 2006, but distributions were made
for all duties collected through September 30, 2007. (See id. ¶ 25.)
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of tortious interference under common law, one count of civil conspiracy, and one count
of unjust enrichment. (See id. at 20–39.) As for the requested relief, Globe is seeking a
declaratory judgment; a permanent injunction against the operation of the Mississippi
plant; payment of all the profits that Rima made from U.S. sales of silicon metal after
the revocation of the antidumping order; compensatory, actual, and punitive damages;
and attorney’s fees. (See id. at 39–40.)
Defendants filed the instant motion to dismiss on May 5, 2015. (See Defs.’ Mot.
to Dismiss, ECF No. 17.) They contend that Globe’s complaint must be dismissed for
three separate reasons. First, they argue that this Court lacks personal jurisdiction over
the defendants because Rima’s communications with the Commerce Department are the
sole contacts that any of the defendants has had with the District of Columbia, and
under the “government contacts” doctrine, those contacts cannot be the basis for
asserting personal jurisdiction. (See id. at 17–25.) Second, Defendants claim that the
applicable statute of limitations bars Globe’s claims, because Globe knew or should
have known about its alleged injuries well before the 2014 news reports. (See id. at 25–
29.) Third, and finally, Defendants argue that the complaint fails to state a claim as to
each of its asserted causes of action. (See id. at 29–49.)
The Court held a hearing on Defendants’ motion on February 25, 2016, and took
the motion under advisement.
II.
APPLICABLE LEGAL STANDARDS
Personal jurisdiction over a non-resident defendant “may take the form of
general or specific jurisdiction.” App Dynamic ehf v. Vignisson, 87 F. Supp. 3d 322,
326 (D.D.C. 2015). General personal jurisdiction requires the non-resident defendant to
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maintain “continuous and systematic contacts within the District of Columbia,” Forras
v. Rauf, 812 F.3d 1102, 1106 n.5 (D.C. Cir 2016), and it permits a plaintiff to bring any
and all legal claims against the defendant in the District of Columbia courts, see
Williams v. Romarm, SA, 756 F.3d 777, 783 n.3 (D.C. Cir. 2014). By contrast, specific
personal jurisdiction “exists where [the particular] claim arises out of the non-resident
defendant’s contacts with the forum,” as specified in the District of Columbia’s longarm statute, App Dynamic, 87 F. Supp. 3d at 326, and only to the extent that the
exercise of such jurisdiction would not offend due process, Forras, 812 F.3d at 1106.
The D.C. long-arm statute provides, in relevant part:
A District of Columbia court may exercise personal jurisdiction over a
person, who acts directly or by an agent, as to a claim for relief arising from
the person’s –
(1) transacting any business in the District of Columbia; [or] . . .
(3) causing tortious injury in the District of Columbia by an act or
omission in the District of Columbia . . .
D.C. Code § 13-423(a).
Federal Rule of Civil Procedure 12(b)(2) authorizes a defendant to move to
dismiss a lawsuit filed against him in federal court if the court lacks personal
jurisdiction over him. App Dynamic, 87 F. Supp. 3d at 326. In response to such a
motion, Plaintiff bears the burden of establishing a factual basis for the court’s exercise
of personal jurisdiction over each defendant, see Crane v. New York Zoological Soc.,
894 F.2d 454, 456 (D.C. Cir. 1990), which is usually accomplished by alleging specific
acts that connect each defendant with the forum, see Second Amendment Found. v. U.S.
Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001). The general rule is that a
plaintiff must make a prima facie showing of pertinent jurisdictional facts; bare
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allegations are insufficient. See Second Amendment Found., 274 F.3d at 524. And the
court “has considerable procedural leeway in choosing a methodology for deciding
[such a] motion,” App Dynamic, 87 F. Supp. 3d at 326 (quoting Charles A. Wright &
Arthur R. Miller et al., Federal Practice and Procedure § 1351 (3d ed. 2004) (internal
quotation marks omitted)); it “may rest on the allegations in the pleadings, collect
affidavits and other evidence, or even hold a hearing,” id. However, any discrepancies
regarding such facts must be resolved in favor of the plaintiff. See Crane, 894 F.2d at
456.
For a court to exercise personal jurisdiction over non-resident co-conspirators
under the so-called “conspiracy theory” of jurisdiction, the plaintiff must allege “(1) the
existence of a civil conspiracy . . . , (2) the defendant’s participation in the conspiracy,
and (3) an overt act by a co-conspirator within the forum, subject to the long-arm
statute, and in furtherance of the conspiracy.” FC Inv. Grp. LC v. IFX Markets, Ltd.,
529 F.3d 1087, 1096 (D.C. Cir. 2008) (quoting Kopff v. Battaglia, 425 F. Supp. 2d. 76,
81 n. 4 (D.D.C. 2006)) (internal quotation marks omitted).
III.
ANALYSIS
Defendants have put forward three alternative grounds for dismissal, but this
Court’s analysis begins and ends with the jurisdictional objection. See Forras, 812
F.3d at 1105 (“Ordinarily, determining jurisdiction is a federal court’s first order of
business,” because “[w]ithout jurisdiction, the court cannot proceed at all in any
cause.”). Defendants maintain that personal jurisdiction is lacking with respect to Rima
and all of the co-defendants, but Globe argues that this Court has personal jurisdiction
over Rima because of its “purposeful transaction of business” in the District; namely,
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its contacts with the Commerce Department to seek reconsideration of the 1991
antidumping order. (Am. Compl. ¶ 11; see also id. (asserting that Rima’s “multiple
fraudulent requests submitted to the U.S. Department of Commerce in this District
seeking review and revocation of the 1991 antidumping order” provide a basis for this
Court’s exercise of personal jurisdiction over that defendant in this case).)
Furthermore, Globe insists that this Court has personal jurisdiction over Polymet,
Vicintin, Lage, Rima Holding, and MS Silicon because they are alleged co-conspirators
with respect to Rima’s fraudulent inducement of the revocation of the antidumping
order, as well as its subsequent diversion of the ill-gotten gains into the construction
and operation of the Mississippi plant, and “a substantial part of the tortious conduct
giving rise to Globe’s claims”—i.e., the allegedly fraudulent inducement of the
Commerce Department to revoke the antidumping order—“occurred in [the District].”
(Id.)
In response to Defendants’ argument that the Court must apply the “government
contacts” doctrine and thereby decline to exercise personal jurisdiction on the basis of
Rima’s contacts with the government, Globe points out that the D.C. courts have also
recognized a narrow exception to the government contacts doctrine, which applies
where the plaintiff alleges that the defendant fraudulently petitioned the government
and induced unwarranted government action against the plaintiff. See Companhia
Brasileira Carbureto De Calcio v. Applied Indus. Materials Corp. (Companhia III), 35
A.3d 1127, 1130 (D.C. 2012). Thus, the key issue for this Court to decide for the
purpose of resolving the personal jurisdiction challenge is the scope of Companhia’s
“fraud exception,” and whether or not it embraces Globe’s claims. For the reasons
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explained below, this Court concludes that the “fraud exception” is not currently as
broad as Globe would like it to be, and that there is no other basis in law or fact for this
Court to assert personal jurisdiction over any of the defendants in this action.
Consequently, because this Court lacks personal jurisdiction over these defendants,
Defendants’ motion must be granted, and Globe’s complaint must be dismissed.
A.
Companhia’s Fraud Exception To The Government Contacts Doctrine
Applies When A Plaintiff Alleges That A Defendant Has Fraudulently
Induced Unwarranted Government Action Against The Plaintiff
The District of Columbia Court of Appeals has long interpreted the provision of
the D.C. long-arm statute that authorizes jurisdiction over out-of-state defendants who
“transact[] any business in the District of Columbia” or “caus[e] tortious injury in the
District of Columbia,” D.C. Code § 13-423(a), to pertain to acts that occur in this forum
other than those arising out of a defendant’s interactions with the federal government.
See Envtl. Research Int’l, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 813
(D.C. 1976) (explaining that, under the “government contacts” doctrine, “entry into the
District of Columbia by nonresidents for the purpose of contacting federal government
agencies is not a basis for the assertion of in personam jurisdiction”). This exception
serves at least two purposes: to avoid “convert[ing] the District of Columbia into a
national judicial forum,” and to safeguard “free public participation in government.”
Id. Thus, it is clear that based on the traditional application of this doctrine, Rima’s
communication with the Commerce Department—which is the only alleged business or
tort that Rima or any of its alleged co-conspirators has engaged in within the District of
Columbia—would be categorically “excluded from the jurisdictional calculus.”
Alkanani v. Aegis Def. Servs., LLC, 976 F. Supp. 2d 13, 25 (D.D.C. 2014) (internal
quotation marks and citation omitted). However, the D.C. courts have declined to apply
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the government contacts doctrine where the plaintiff alleges that the defendant
fraudulently petitioned the government and induced unwarranted government action
against the plaintiff. See Companhia III, 35 A.3d at 1130. And the Companhia case
not only featured some of the same parties who are before the Court at present, it also
arose in factual circumstances that are in some ways similar to those presented in the
instant matter.
In Companhia, certain Brazilian producers of ferrosilicon (including, initially,
Rima) brought a complaint in the United States District Court for the District of
Columbia against various American ferrosilicon producers (including Globe). 5 The
plaintiffs alleged that the defendants had submitted fraudulent petitions to the U.S.
International Trade Commission (ITC), and that those petitions had led the agency to
impose import duties on the plaintiffs’ products. See Companhia Brasileira Carbureto
de Calcio-CBCC v. Applied Indus. Materials Corp. (Companhia I), 698 F. Supp. 2d
109, 114–16 (D.D.C. 2010). After the duties were imposed in 1989, several of the
defendants were convicted of illegal price fixing in 1993, which prompted the ITC to
reconsider its original decision to impose duties on the plaintiffs; it lifted the duties in
1999. See id. at 116. The plaintiffs’ complaint claimed that the defendants had
engaged in a conspiracy to defraud the ITC that violated both RICO and the Sherman
Antitrust Act, and sought damages for the financial losses they allegedly had suffered
as a result of having to pay the fraudulently imposed duties for seven years. See id. at
114–16. Notably, none of the defendants were based in the District of Columbia or
5
Rima was originally one of the plaintiffs in the Companhia case, but voluntarily dismissed its claim
before the district court issued its ruling. See Companhia I, 698 F. Supp. 2d at 114 n.3.
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conducted any business here, see id. at 117, and the district court ultimately dismissed
the case for lack of jurisdiction on the ground that “[t]he government contacts doctrine
bars Plaintiffs from relying on Defendants’ participation in ITC proceedings as a basis
for personal jurisdiction.” Id. at 119. The D.C. Circuit examined the issue on appeal,
and concluded that “the scope of the government contacts exception is genuinely
uncertain.” Companhia Brasileira Carbureto de Calicio v. Applied Indus. Materials
Corp. (Companhia II), 640 F.3d 369, 373 (D.C. Cir. 2011). As a result, the circuit
court panel certified the following question to the D.C. Court of Appeals:
Under District of Columbia law, does a petition sent to a federal government
agency in the District provide a basis for establishing personal jurisdiction
over the petitioner when the plaintiff has alleged that the petition
fraudulently induced unwarranted government action against the plaintiff?
Id.
The D.C. Court of Appeals responded, ‘yes.’ See Companhia III, 35 A.3d at
1130. That court reaffirmed that “the unique concerns underlying the government
contacts principle are as compelling today as they were” when the doctrine was first
announced. Id. at 1132. However, it noted that “individuals who enter the District of
Columbia to fraudulently induce unwarranted government action against others” should
not be able “to avoid defending their actions in this jurisdiction by cloaking themselves
in the government contacts doctrine.” Id. at 1133. The court also cautioned that courts
applying this fraud exception must “strict[ly] adhere[] to the standards of pleading” in
order to prevent opening the D.C. courts to “an unrelenting wave of litigation.” See id.
at 1134 (internal quotation marks and citation omitted). It concluded by emphasizing
the narrow scope of its ruling: it explained that the opinion “addressed only the
[certified] legal question” of “whether, under District of Columbia law, a petition
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submitted by a nonresident to a federal government agency in the District provides a
basis for establishing personal jurisdiction over the petitioner when the plaintiff has
alleged that the petition fraudulently induced unwarranted government action against
the plaintiff.” Id. at 1135.
On remand, the federal district court determined that it had personal jurisdiction
over the defendants, relying on the fact that, when the ITC reversed its original decision
to impose tariffs on the plaintiffs, the agency itself had stated that the defendants’
petition to the agency was fraudulent, and it was also material to the agency’s decision
to take action against the plaintiffs. See Companhia Brasileira Carbureto de CalcioCBCC v. Applied Indus. Materials Corp. (Companhia IV), 887 F. Supp. 2d 9, 16–17
(D.D.C. 2012) (“Under the unique circumstances of this case where the ITC has
determined that it had been defrauded, this Court can rely on the ITC’s findings as a
basis for exercising personal jurisdiction.”).
Thus, the Companhia cases for the first time established a limited exception to
the government contacts doctrine: when a plaintiff alleges that a defendant’s petition to
a federal agency in the District of Columbia fraudulently induced unwarranted
government action against the plaintiff, that petition provides a basis for personal
jurisdiction in a District of Columbia court. See Companhia IV, 887 F. Supp. 2d at 14–
15.
B.
The Fraud Exception Does Not Apply In This Case Because Globe
Does Not Allege That Rima Fraudulently Induced Government Action
Against Globe
The question before this Court is whether Rima’s allegedly fraudulent
representations to the Commerce Department at various times between 1993 and 2002
fall within the Companhia fraud exception. If so, then they can form the basis for this
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Court’s exercise of personal jurisdiction over Rima; if not, then Plaintiff must allege
some other jurisdictional hook. As explained below, this Court concludes that
Defendants’ contacts fall outside the narrow fraud exception for two related reasons:
first, because under the fraud exception, the defendant’s alleged fraudulent contact must
have induced unwarranted government action against the plaintiff, and second, because
Globe has not made a persuasive argument that any such government action occurred
against it under the circumstances presented here.
On the first point, the D.C. Court of Appeals in Companhia emphasized that “the
mere filing of a fraudulent petition” was not enough to create jurisdiction; the petition
must provoke government action against the plaintiff. App Dynamic, 87 F. Supp. 3d at
328; see Companhia III, 35 A.3d at 1134 (“[W]e hold that a person who uses the
government as an instrumentality of fraud, and thereby causes unwarranted government
action against another, forfeits the protection of the government contacts exception.”
(citation omitted) (emphasis added)). Other District of Columbia courts, too, have
recognized that government action against the plaintiff is necessary to trigger the
exception that Companhia establishes; to hold otherwise would impermissibly expand
the fraud exception and threaten to undermine the longstanding government contacts
doctrine. See App Dynamic, 87 F. Supp. 3d at 328.
Globe acknowledges this limitation, but claims that its factual situation is
nevertheless on all fours with the Companhia case. This is because, according to
Globe, it suffered collateral damage (lost sales and customers) from the government’s
action taken toward Rima as a result of the alleged fraud (i.e., the Commerce
Department’s fraudulently induced revocation of the antidumping order). As Globe
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sees it, there have, in fact, been four different impacts on Globe arising from the
alleged fraud that should be deemed to qualify as “unwarranted government action
against Globe”: (1) Globe was allegedly a “party” to the administrative reviews of the
antidumping order that the Commerce Department undertook, and thus purportedly
suffered a loss when the agency determined that the antidumping order should be
revoked in 2002; (2) Globe was harmed economically when certain antidumping duties
were refunded to its competitors as a result of the revocation of the order; (3) Globe
missed out on collecting duty-related sums that the government would have distributed
to it had the order remained in place; and (4) the revocation of the antidumping order
itself purportedly exposed Globe to “import injury.” (See Pl.’s Opp’n to Def.’s Mot. to
Dismiss (“Pl.’s Opp’n”), ECF No. 18, at 27.)
In this Court’s view, none of these examples of how the Commerce Department’s
revocation of the antidumping order might be construed as an action against Globe is
persuasive. First of all, neither the complaint nor the record establishes that Globe was
a party to the administrative review of Rima’s antidumping order in any meaningful
sense or that the Commerce Department’s reconsideration of an antidumping order is
tantamount to an adversarial proceeding in which there are necessarily ‘winners’ and
‘losers.’ 6 To the contrary, as Globe’s own allegations make clear, the administrative
review process with respect to an existing antidumping order involves, inter alia, an
examination of U.S. Customs’ entries regarding the merchandise that has been subjected
to the order under review (here, Rima’s silicon metal products) to determine whether
6
Indeed, the assertion that Globe was a party to the administrative review of the antidumping order
appears nowhere in the complaint, and besides the one reference to the term “party” in Globe’s
opposition brief, there appears to be no other mention of this dynamic in the record evidence.
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dumping is still occurring (see Compl. ¶ 29), and in this regard, the result of that review
seems best characterized as an action that is solely for, or against, Rima, not an action
against Globe. Moreover, nothing in the instant record indicates that Globe’s presence
as an interested party changed the fundamental nature of the agency’s review or its
outcome in any way.
Second, while it may be tempting to perceive the highly competitive silicon
metal industry as a zero-sum game, in this Court’s view, a government decision to
provide a refund to one competitor, or to rescind an order that previously required that
competitor to pay duties, is simply and solely government action toward that competitor
(here, Rima) and cannot be fairly characterized as an action “against” another, despite
the fact that the indirect effect will be to benefit one competitor at the theoretical
expense of the others. Put another way, a refund of duties or a rescission of the
antidumping order that favors Rima might well have bolstered that company’s market
position, thereby indirectly harming Globe’s business interests, but that does not
transform government actions that are clearly aimed at Rima into actions against Globe
for present purposes. Third, and finally, while the loss of hypothetical duties could
potentially qualify as a direct harm (see Pl.’s Opp’n at 27), it is not a government
action; it is, if anything, the absence of government action—i.e., the government’s
failure to collect and redistribute duties—and, in any event, the impact of this inaction
cannot reasonably be viewed as “against” Globe in particular, since that same harm
would occur with respect to all domestic silicon metal producers.
In short, this Court squarely rejects Globe’s contention that the mere fact that the
Commerce Department’s allegedly unwarranted lifting of its revocation order had
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consequences for Globe means that it was a “government action against” Globe for the
purpose of the Companhia doctrine. Courts in this jurisdiction have consistently
refused to extend personal jurisdiction under the fraud exception where the fraudulent
contact did not result in the government agency taking any actions against the plaintiff.
See Shaheen v. Smith, 994 F. Supp. 2d 77, 86 (D.D.C. 2013) (finding fraud exception
inapplicable where “no government agency took action against the plaintiff” as a result
of the defendant’s allegedly fraudulent filings); Morgan v. Richmond Sch. of Health &
Tech., Inc., 857 F. Supp. 2d 104, 109 (D.D.C. 2012) (declining to apply the fraud
exception where there was “no allegation that [Defendant] employed the allegedly
fraudulent statements to coax the government into action against any Plaintiff”
(emphasis in original)). And this is as it should be, because to hold otherwise would
expand the “very narrow” fraud exception, Morgan, 857 F. Supp. 2d at 109; accord App
Dynamic, 87 F. Supp. 3d at 328, beyond its logical boundaries. That is, under Globe’s
interpretation, any plaintiff engaged in business anywhere in the world could find in
D.C. a forum to file suit against its competitors, if those competitors have allegedly
fraudulently induced a government agency into making a regulatory determination that
is beneficial to them. Because virtually every action by a federal government agency
will have ripple effects in some economic market, such regulatory action would always
arguably impact the other competitor’s bottom line. Therefore, to consider the indirect
impact of an agency decision to be sufficient to permit the filing of an action in D.C.
against the defendant who fraudulently lobbied for the change would threaten to
transform this district into “a national judicial forum,” Envtl. Research, 355 A.2d at
813, and thereby effectively eviscerate the government contacts doctrine.
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Notably, this Court is not the only one to express reluctance about interpreting
the fraud exception that broadly. In App Dynamic ehf v. Vignisson, an Icelandic
company (App Dynamic) brought suit in the District of Columbia against a former
employee and Icelandic citizen (Vignisson), who was living in Sweden. See 87 F.
Supp. 3d at 324. App Dynamic argued that Vignisson had filed a fraudulent copyright
registration with the U.S. Copyright Office, then attempted to enforce that copyright
against App Dynamic in a Swedish court. See id. at 325. App Dynamic claimed that
the U.S. District Court for the District of Columbia had personal jurisdiction over
Vignisson on the basis of the Companhia fraud exception, because Vignisson “made
multiple misrepresentations to the Copyright Office with the goal of ensuring that the
Copyright Office issued a copyright registration to Defendant in a form that Defendant
could use against Plaintiff.” Id. at 328 (internal quotation marks and citation omitted).
But the court concluded that this was “not enough” to bypass the government contacts
limitation because the plaintiff had made no allegation “that the U.S. Copyright Office
took any unwarranted action against Plaintiff.” Id. at 329 (emphasis in original). This
was the “fatal flaw” in the plaintiff’s argument for personal jurisdiction, the court
explained, because “[t]he fraud exception is limited to petitions to a federal government
agency that fraudulently induce unwarranted government action against the plaintiff[,]”
id. at 328–29 (emphasis omitted) (internal quotation marks and citation omitted); if the
plaintiff had instead asserted that the Copyright Office had imposed a duty on
Plaintiff’s product or forced it to stop selling its product, the situation “might be . . .
different[.]” Id.
18
It is clear to this Court that the instant case is much closer to the facts of App
Dynamic than to those in Companhia. That is, in Companhia, the ITC imposed tariffs
directly on the plaintiff’s products—a clear government action against the plaintiffs—
whereas, in the instant case, the Commerce Department took no direct action against
Globe. Instead, just as in App Dynamic, the Commerce Department has merely
conferred a benefit on the defendant that has had negative consequences for the plaintiff
as a result of subsequent activities (in this case, business competition). In this Court’s
view, that is not enough. 7
C.
There Is No Other Basis for Exercising Personal Jurisdiction Over
Any of the Defendants
Globe’s fallback argument is that, even if Rima is not subject to personal
jurisdiction under the long-arm statute, two other theories of jurisdiction can bring
Defendants within the Court’s reach. (See Pl.’s Opp’n at 28–31.) First, Globe contends
7
During the motion hearing, Globe’s counsel seemed to advance a new argument that attempted to
distinguish App Dynamic on the basis of the fundamental dissimilarity between the antidumping
regulatory scheme and the copyright statutory schemes and their legal consequences. This argument
does not appear in any of Globe’s filings with the Court. Nevertheless, in considering the contention as
it was orally argued, the Court is unpersuaded. A copyright is a property right granted by the U.S.
government that confers on the holder a legal monopoly over the production and distribution of the
copyrighted work. See Goldstein v. California, 412 U.S. 546, 555 (1973) (“Congress may grant to
authors the exclusive right to the fruits of their respective works. An author who possesses an unlimited
copyright may preclude others from copying his creation for commercial purposes without
permission.”). Holding a copyright undoubtedly confers a significant competitive advantage over the
holder’s rivals, as the defendant in App Dynamic demonstrated when he attempted to wield his illgotten copyright against his former employer. See 87 F. Supp. 3d at 325. Nevertheless, the district
court concluded that the U.S. Copyright Office’s conferral of this significant benefit to the defendant
did not constitute an unwarranted government action against the plaintiff, even though that conferral
indirectly caused negative consequences for the plaintiff. Likewise, the Commerce Department’s
revocation of the antidumping order undoubtedly conferred a market advantage onto Rima (or at least
removed a market disadvantage), allowing it to sell its silicon metal at lower prices in the U.S. market
and thereby attract more customers and make more sales. This conferred advantage may well have had
negative consequences for Globe and other domestic silicon metal producers. But those second-hand
effects do not constitute government action against Globe, and the Companhia court was quite clear
that its analysis was limited to “fraudulently induced unwarranted government action against the
plaintiff.” Companhia III, 35 A.3d at 1135.
19
that Rima is “subject to jurisdiction under RICO’s personal jurisdiction provision,” 18
U.S.C. § 1965(a), which provides that any civil RICO action “may be instituted in the
district court of the United States for any district in which such person resides, is found,
has an agent, or transacts his affairs.” (See Pl.’s Opp’n at 28.) But the D.C. Circuit has
explained that § 1965(a) does not obviate the need to establish that at least one
defendant has the requisite minimum contacts with the forum. See FC Inv. Grp., 529
F.3d at 1099 (“[A] civil RICO action can only be brought in a district court where
personal jurisdiction based on minimum contacts is established as to at least one
defendant.” (emphasis in original) (quoting PT United Can Co. Ltd. v. Crown Cork &
Seal Co., 138 F.3d 65, 71 (2d Cir. 1998) (internal quotation marks omitted)). In this
case, Globe concedes that the only contact Rima has had with the district is its
interactions with the Commerce Department for the purpose of getting the antidumping
order lifted, which do not count as contacts for personal jurisdiction purposes due to the
government contacts doctrine, as discussed above. See AGS Int’l Servs. S.A. v.
Newmont USA Ltd., 346 F. Supp. 2d 64, 82, 86–87 (D.D.C. 2004) (holding that there
was no jurisdiction over the defendants under RICO because their only contacts with
the District were exempt under the government contacts exception), abrogation on
other grounds recognized by Estate of Klieman v. Palestinian Auth., 82 F. Supp. 3d
237, 242 (D.D.C. 2015); see also Alkanani, 976 F. Supp. 2d at 25 (explaining that a
non-resident defendant’s government contacts are “excluded from the jurisdictional
calculus”). Thus, RICO does not provide an independent basis for personal jurisdiction
over Rima.
20
Globe’s second contention is similarly unavailing. Globe argues that this Court
has personal jurisdiction over the remaining defendants (Polymet, Vicintin, Lage, Rima
Holding, and MS Silicon) because they are Rima’s co-conspirators. (See Pl.’s Opp’n at
28–29.) Under the so-called “conspiracy theory” of jurisdiction, “[s]o long as any one
co-conspirator commits at least one overt act in furtherance of the conspiracy in the
forum jurisdiction, there is personal jurisdiction over all members of the conspiracy.”
Jung v. Ass’n of Am. Med. Colls., 300 F. Supp. 2d 119, 141 (D.D.C. 2004) (citation
omitted). However, it is well established that, to prevail on such a theory of personal
jurisdiction, the plaintiff must allege “(1) the existence of a civil conspiracy . . . , (2)
the defendant’s participation in the conspiracy, and (3) an overt act by a co-conspirator
within the forum, subject to the long-arm statute, and in furtherance of the conspiracy.”
FC Inv. Grp., 529 F.3d at 1096 (emphasis added) (internal quotation marks and
citations omitted). Here again, the only alleged overt act that was committed by any of
the co-conspirators in the District of Columbia was Rima’s petition to the Commerce
Department, which is not subject to the long-arm statute for the reasons discussed
above. Cf. Companhia II, 640 F.3d at 372–73 (refusing to accept defendants’ petitions
to the ITC as overt acts supporting a conspiracy theory of personal jurisdiction without
first evaluating those petitions under the government contacts doctrine). Thus, Rima’s
interactions with the Commerce Department cannot serve as a jurisdictional anchor that
permits this Court to exercise jurisdiction over the co-conspirators.
IV.
CONCLUSION
If Companhia’s requirement that there must be government action “against the
plaintiff” is to have any meaning, it cannot reasonably be read to include government
21
action against another entity that happens to impact the plaintiff’s relative market
position, and that is the only circumstance that has been presented here. The Court is
mindful that the D.C. Court of Appeals limited itself to addressing only the specific
legal question certified by the D.C. Circuit when it articulated the fraud exception in
Companhia. See Companhia III, 35 A.3d at 1135. But its answer stressed the fact that
the plaintiff in that case was the target of the fraudulently induced government action,
see id. at 1134–35, which makes eminent sense given that the government contacts
doctrine is designed to prevent the District of Columbia courts from being flooded by
cases with only tangential connections to the District, and the fraud exception is the one
conceivable circumstance in which an aggrieved plaintiff should arguably be permitted
to haul an out-of-state defendant into the District of Columbia’s courts to complain that
the defendant fraudulently utilized its contacts with the government to visit direct harm
upon the plaintiff. Perhaps in a future opinion the D.C. Court of Appeals will see fit to
expand the fraud exception beyond these narrow contours. But, for now, this Court
concludes that because Globe does not allege “that the [Commerce Department] took
any unwarranted action against [it],” App Dynamic, 87 F. Supp. 3d at 329 (emphasis in
original), the fraud exception is not triggered in this case, and the government contacts
doctrine precludes this Court’s exercise of jurisdiction under the D.C. long-arm statute.
In that Globe has also failed to provide any other basis for this Court to find that it has
personal jurisdiction over Rima and the other alleged co-conspirators, the Court finds
22
that it lacks personal jurisdiction over any of the defendants, and, consequently, as set
forth in the accompanying order, Defendants’ motion to dismiss Globe’s complaint
must be GRANTED.
DATE: March 31, 2016
Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
23
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