AGFA Corporation v. The Goldman Sachs Group, Inc. et al
CORRECTED OPINION & ORDER re: (204 in 1:14-cv-03116-KBF) MOTION to Dismiss Eastman Kodak Company's Amended Complaint. filed by Pacorini Metals AG, Pacorini Metals USA LLC, (36 in 1:14-cv-06849-KBF) MOTION to Dismiss Notice of Motion by Defendant s to Dismiss the Amended Complaint. filed by Glencore Ltd., Pacorini Metals AG, Pacorini Metals USA L.L.C., Henry Bath LLC, JP Morgan Chase & Company, Metro International Trade Services L.L.C., The Goldman Sachs Group Inc, (648 in 1:13-md-02481-KBF) MOTION to Dismiss Eastman Kodak Company's Amended Complaint. filed by Pacorini Metals AG, Pacorini Metals USA, LLC, (649 in 1:13-md-02481-KBF) MOTION to Dismiss Notice of Motion by Defendants to Dismiss the Amended Complaint. filed by Glencore L td., Pacorini Metals AG, Pacorini Metals USA, LLC, Henry Bath LLC, The Goldman Sachs Group Inc., JP Morgan Chase & Co, Metro International Trade Services, L. L. C. For all of the reasons set forth above, defendants' motion to dismiss the JAC (EC F No. 649) is GRANTED as to The Goldman Sachs Group, Inc., JPMorgan Chase & Co., and Pacorini Metals AG. The motion by Pacorini Metals USA, LLC and Pacorini Metals AG to dismiss the JAC (ECF No. 648) is GRANTED as to Pacorini Metals AG. Plaintiffs 39; motions for leave to amend their complaints (ECF Nos. 608, 610, 631) are DENIED to the extent they seek to join The Goldman Sachs Group, Inc., JPMorgan Chase & Co., Glencore International AG, Glencore UK Ltd.,and Pacorini Metals AG as defendants. (Signed by Judge Katherine B. Forrest on 3/23/2015) Filed In Associated Cases: 1:13-md-02481-KBF, 1:14-cv-00211-KBF, 1:14-cv-00217-KBF, 1:14-cv-03116-KBF, 1:14-cv-06849-KBF(kko)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE ALUMINUM WAREHOUSING
KATHERINE B. FORREST, District Judge:
DOC #: _________________
DATE FILED: March 23, 2015
and all related cases
OPINION & ORDER
This is the second of three Opinions & Orders in this large multidistrict
litigation (“MDL”) in which various plaintiffs have brought federal antitrust and
state law claims against a number of defendants. There are two proposed pleadings
before the Court: the Third Amended Complaint (“TAC”) filed by four plaintiffs who
are self-styled “Direct Purchaser Plaintiffs,” who the Court has referred to as the
“First Level Purchasers” or “FLPs,” and the Joint Amended Complaint (“JAC”) from
plaintiffs Agfa Corporation, Agfa Graphics, N.V. (collectively, “Agfa”), Mag
Instrument, Inc. (“Mag”), and Eastman Kodak Company (“Kodak”).2 Both proposed
A previous version of this Opinion & Order incorrectly referred to plaintiffs Agfa Corporation, Agfa
Graphics, N.V., Mag Instrument, Inc., and Eastman Kodak Company as “defendants” in the opening
2 Plaintiffs filed the JAC and the TAC in connection with two consolidated motions to amend in
support thereof. (ECF Nos. 608, 610.) As the Court noted in footnote 1 of its Opinion & Order dated
March 3, 2015 (ECF No. 728), Kodak is in a different procedural posture from the other plaintiffs.
That difference does not have substantive significance for purposes of the instant motions. The JAC
is in fact an amended pleading for Kodak and motions to dismiss it are therefore evaluated under
Rule 12(b)(6). For the remaining plaintiffs, the pleadings are “proposed” and evaluated under the
futility standard for amendments set forth in Rule 15 and interpreting case law. See Xiang Li. v.
Morrisville State Coll., 434 Fed. App’x 34, 35 (2d Cir. 2011) (summary order) (justice does not require
a court to grant a plaintiff leave to amend a complaint under Rule 15(a)(2) “if amendment would be
futile”). But at bottom, the 12(b)(6) standard and the Rule 15 futility standard are essentially the
same. Lucente v. Int’l Bus. Mach. Corp., 310 F.3d 243, 258 (2d Cir. 2002) (“An amendment to a
pleading is futile if the proposed claim could not withstand a motion to dismiss pursuant to Fed. R.
Civ. P. 12(b)(6).”).
pleadings allege that defendants, who consist of companies operating both metals
warehouse storage businesses and the commodities trading arms of several
investment banks, engaged in anticompetitive acts that drove up prices for
aluminum. All defendants have moved to dismiss, and this Court has already
resolved certain motions as to four foreign defendants. This Opinion and Order
resolves the pending motions as to five of the many remaining defendants.
Two of the defendants that are the subject of this Opinion are holding
companies: The Goldman Sachs Group, Inc. and JPMorgan Chase & Co. The
allegations with regard to three other defendants, Glencore International AG,
Glencore UK Ltd., and Pacorini Metals AG, are insufficient under the basic
pleading standards set forth in Rule 8 and Supreme Court precedent.3
LEGAL STANDARD ON MOTION TO DISMISS
To survive a Rule 12(b)(6) motion to dismiss, the factual allegations in a
complaint must raise plaintiffs’ right to relief above the speculative level. Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007). In other words, a complaint must
allege enough facts to “state a claim to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678. In applying that standard, a court accepts as true
all well-pleaded factual allegations, but does not credit “mere conclusory
3 In the TAC, plaintiffs group “Glencore,” Pacorini Metals USA LLC, Pacorini Metals AG, and nondefendant Pacorini BV into the single collective term “Pacorini.” (TAC ¶ 125.) Mag, Agfa, and
Kodak have not named Glencore International AG or Glencore UK Ltd. as defendants.
statements” or “threadbare recitals of the elements of a cause of action.” Id.
Similarly, a court need not accept “legal conclusions couched as factual allegations.”
Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir. 2010) (quoting Port
Dock, 507 F.3d at 121).
If the Court can infer no more than “the mere possibility of misconduct” from
the factual averments—that is, if the well-pleaded allegations of the complaint have
not “nudged [plaintiffs’] claims . . . across the line from conceivable to plausible”—
dismissal is appropriate. Iqbal, 556 U.S. at 679-80 (quoting Twombly, 550 U.S. at
The “plausibility” requirement should not, however, be misunderstood as a
“probability” standard. Twombly, 550 U.S. at 556; Anderson News, L.L.C. v. Am.
Media, Inc., 680 F.3d 162, 184 (2d Cir. 2012). “Because plausibility is a standard
lower than probability, a given set of actions may well be subject to diverging
interpretations, each of which is plausible.” Anderson News, 680 F.3d at 184. On a
Rule 12(b)(6) motion, the Court may not choose between two plausible inferences
that may both be drawn from the factual allegations. Id. at 185. This is so even if a
court finds one of the two versions more plausible. Id.
Rule 8 provides that a defendant is entitled to notice of the claims brought
against him; Twombly makes clear that at the pleading stage in this antitrust case,
that means that each defendant is entitled to know how he is alleged to have
conspired, with whom and for what purpose. See Twombly, 550 U.S. at 557-58.
Mere generalizations as to any particular defendant—or even defendants as a
group—are insufficient. See Twombly, 550 U.S. at 555-56. The fact that two
separate legal entities may have a corporate affiliation does not alter this pleading
requirement. In the absence of allegations that corporate formalities have been
ignored, courts appropriately and routinely adhere to legal separateness. See, e.g.,
De Letelier v. Republic of Chile, 748 F.2d 790, 794-95 (2d Cir. 1984).
FACTS ALLEGED AS TO THESE FIVE DEFENDANTS
Both the JAC and the TAC allege a bare number of specific facts as to the five
defendants who are the subject of this Opinion. Both pleadings then purport to
lump these defendants together within a grouping with several affiliated
companies, and both assert a naming convention that purports to capture all of the
affiliated companies together. For instance, after introducing myriad separate
companies affiliated with Pacorini Metals USA LLC, plaintiffs then state that
thereafter they will refer to all of them together as “Pacorini.” (JAC ¶ 80; TAC ¶
125.) The same is true with regard to the TAC’s use of the term “Glencore.” (TAC ¶
114.) In the JAC, plaintiffs state generally that the term “Defendant” or
“Defendants” refers to any company’s wholly owned subsidiaries or affiliates. (JAC
¶ 82.) Plaintiffs further allege that each defendant named therein “acted as the
agent or joint-venturer of or for the other Defendants with respect to the acts,
violations and common course of conduct alleged [t]herein.” (JAC ¶ 84; TAC ¶ 131.)
Plaintiffs allege that The Goldman Sachs Group, Inc. is an international
finance company headquartered in New York. (JAC ¶ 50; TAC ¶ 86.) The Goldman
Sachs Group, Inc. is not alleged to itself have any operations; rather, it is alleged to
act through its principal operating subsidiaries, Goldman Sachs & Co. and Goldman
Sachs International (JAC ¶ 52; TAC ¶¶ 87, 89, 90, 91), and through its ownership of
two other defendants, Metro International Trade Services LLC (“Metro”) and J.
Aron & Company. (JAC ¶¶ 50, 53, 55; TAC ¶¶ 86, 92.)
Plaintiffs allege that JPMorgan Chase & Co. is also an international finance
company headquartered in New York. (JAC ¶ 57; TAC ¶ 96.) It is alleged to engage
in storage, transportation, marketing, or trading of commodities. (TAC ¶ 96; JAC ¶
57.) Other allegations in the pleadings make it clear that these operations are
conducted through JPMorgan Chase & Co.’s operating subsidiaries, including
JPMorgan Securities plc and Henry Bath LLC. (See JAC ¶¶ 58-60, 68; TAC ¶¶ 9799, 107.)
Both the JAC and the TAC seek to join various Glencore-affiliated companies
as defendants. The pleadings differ as to which entities they seek to join. The TAC
(but not the JAC) includes Glencore International AG as a defendant, alleging that
it is a Swiss company that is wholly owned by Glencore plc. (TAC ¶¶ 110, 115.) The
TAC (but not the JAC) also includes Glencore AG as a defendant. (TAC ¶¶ 116-17.)
It alleges that Glencore AG is a customer of Metro, and is the largest shareholder of
Century Aluminum Company, one of the largest aluminum producers in the United
States. (TAC ¶¶ 116-17). Finally, the TAC (but not the JAC), includes Glencore UK
Ltd. as a defendant. (TAC ¶ 119.) In the TAC, plaintiffs allege that Glencore UK
Ltd. is an operating company engaged in commodities trading, organized under the
laws of the U.K. and with its headquarters in the U.K. (TAC ¶ 119.)
Each of The Goldman Sachs Group, Inc. and JPMorgan Chase & Co.,
Glencore International AG, Glencore UK Ltd., and Pacorini Metals AG are alleged
to be separate and distinct corporate entities; there are no factual allegations that
any of these entities failed to observe corporate formalities. As independent
entities, claims against them are plausible only if there are factual allegations that
specifically pertain to them—as distinct from those applicable to their corporate
affiliates—that are sufficient to state a claim as to them individually.
Here, plaintiffs have alleged various federal antitrust and state law claims
against these defendants. Neither of the two complaints sets forth any specific facts
that suggest any participation by any one of these specific entities in the allegedly
unlawful conduct. Instead, the claims as to them are based solely on corporate
proximity. Both Rule 8 of the Federal Rules of Civil Procedure and Twombly
require more than that—mere speculative generalizations as to a defendant are
insufficient. See Twombly, 550 U.S. at 555-57. The fact that two separate legal
entities may have a corporate affiliation does not alter this pleading requirement.
In the absence of allegations that corporate formalities have been ignored,
defendants are presumed to be legally separate.4 See, e.g., De Letelier, 748 F.2d at
4 All of the foregoing analysis is equally applicable to the FLPs’ proposed Fourth Amended
Complaint (ECF No. 691), which was filed by the FLPs in connection with their reply brief in further
support of their motion for leave to amend. The Fourth Amended Complaint does not add any
allegations that would alter the result herein.
For all of the reasons set forth above, defendants’ motion to dismiss the JAC
(ECF No. 649) is GRANTED as to The Goldman Sachs Group, Inc., JPMorgan
Chase & Co., and Pacorini Metals AG.5 The motion by Pacorini Metals USA, LLC
and Pacorini Metals AG to dismiss the JAC (ECF No. 648) is GRANTED as to
Pacorini Metals AG. Plaintiffs’ motions for leave to amend their complaints (ECF
Nos. 608, 610, 631) are DENIED to the extent they seek to join The Goldman Sachs
Group, Inc., JPMorgan Chase & Co., Glencore International AG, Glencore UK Ltd.,
and Pacorini Metals AG as defendants.
New York, New York
March 23, 2015
KATHERINE B. FORREST
United States District Judge
This Opinion does not address any motions by any other companies affiliated with these companies.
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