Den Norske Stats Oljeselskap v. Heeremac Vof

• Decision Date: 05 February 2001
• Docket Number: No. 99-20763,DERMOTT-ETP,INC,99-20763
• Citation: 241 F.3d 420
• Parties: (5th Cir. 2001) DEN NORSKE STATS OLJESELSKAP AS, Plaintiff-Appellant, v. HEEREMAC VOF; HEERMA MARINE CONTRACTORS; HEEREMA OFFSHORE SERVICES US, INC.; HEEREMA OFFSHORE CONSTRUCTION GROUP, INC.; JAN MEEK; PIETER HEEREMA; McDERMOTT INTERNATIONAL, INC.; McDERMOTT, INC.; J. RAY McDERMOTT, SA; J. RAY McDERMOTT, INC.; J. RAY McDERMOTT GULF CONTRACTORS, INC.; McDERMOTT ENGINEERS & CONSTRUCTORS (USA), INC.; McDERMOTT ENGINEERING HOUSTON LLC; Mc; SAIPEM SPA; SAIPEM INTERNATIONAL BV; SAIPEM UK LIMITED; SAIPEM (PORTUGAL)-COMERCIO MARITIMO, SOCIEDADE UNIPESSOAL, SA, Defendants-Appellees
• Court: U.S. Court of Appeals — Fifth Circuit

Page 420

241 F.3d 420 (5th Cir. 2001)

DEN NORSKE STATS OLJESELSKAP AS, Plaintiff-Appellant, v. HEEREMAC VOF; HEERMA MARINE CONTRACTORS; HEEREMA OFFSHORE SERVICES US, INC.; HEEREMA OFFSHORE CONSTRUCTION GROUP, INC.; JAN MEEK; PIETER HEEREMA; McDERMOTT INTERNATIONAL, INC.; McDERMOTT, INC.; J. RAY McDERMOTT, SA; J. RAY McDERMOTT, INC.; J. RAY McDERMOTT GULF CONTRACTORS, INC.; McDERMOTT ENGINEERS & CONSTRUCTORS (USA), INC.; McDERMOTT ENGINEERING HOUSTON LLC; McDERMOTT-ETPM, INC.; SAIPEM SPA; SAIPEM INTERNATIONAL BV; SAIPEM UK LIMITED; SAIPEM (PORTUGAL)-COMERCIO MARITIMO, SOCIEDADE UNIPESSOAL, SA, Defendants-Appellees.

No. 99-20763

IN THE UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT

February 5, 2001

Appeal from the United States District Court for the Southern District of Texas.

Before JOLLY, HIGGINBOTHAM, and EMILIO M. GARZA, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This appeal requires us to interpret the scope of the United States antitrust laws and their application to foreign conduct. The plaintiff is a Norwegian oil corporation that conducts business solely in the North Sea. It seeks redress under the United States antitrust laws against the defendants for an alleged anticompetitive conspiracy that supposedly inflated the plaintiff's operating costs in the North Sea. Supreme Court precedent makes clear as a general proposition that United States antitrust laws "do not regulate the competitive conditions of other nations' economies," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 582, 106 S.Ct. 1348 (1986). More specifically, today we are bound by the plain language of the Foreign Trade Antitrust Improvements Act (FTAIA). Thus, even though the plaintiff alleges that the antitrust conspiracy raised prices in the United States, it fails to assert jurisdiction under the antitrust laws because the plaintiff's injury did not arise from that domestic anticompetitive effect. Accordingly, we find that the district court properly dismissed the plaintiff's antitrust claims for lack of subject matter jurisdiction. It follows that we affirm the court's determination that the plaintiff lacked antitrust standing to bring these claims in United States federal court.

I

We begin with the basics. Sections 1 and 2 of the Sherman Act prohibit restraints of trade and monopolization. Section 1 reads:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.

15 U.S.C. § 1. Section 2 of the Sherman Act states:

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony. . . .

15 U.S.C. § 2. The FTAIA, enacted by Congress in 1982 to clarify the application of United States antitrust laws to foreign conduct, limits the application of such laws when non-import foreign commerce is involved. The FTAIA states that the antitrust laws will not apply to non-import commerce with foreign nations unless the conduct at issue has a "direct, substantial, and reasonably foreseeable effect" on domestic commerce and "such effect gives rise to a claim under" the antitrust laws.¹

II

The plaintiff, Den Norske Stats Oljeselskap As ("Statoil"), is a Norwegian oil company that owns and operates oil and gas drilling platforms exclusively in the North Sea. The defendants are providers of heavy-lift barge services in the Gulf of Mexico, the North Sea, and the Far East. Only six or seven heavy-lift barges exist in the world. These immense vessels have cranes capable of hoisting and transporting offshore oil platforms and decks weighing in excess of 4,000 tons. During the 1993-1997 time frame, which is at issue in this suit, the three defendants controlled these barges.² Between 1993 and 1997, Statoil purchased heavy lift barge services from the HeereMac and Saipem defendants in the North Sea.

Statoil alleges that the defendants conspired to fix bids and allocate customers, territories, and projects between 1993 and 1997. Under the alleged arrangement, the defendants agreed that HeereMac and McDermott would have exclusive access to heavy-lift projects in the Gulf of Mexico, while Saipem would receive a higher allocation of North Sea projects in exchange for staying out of the Gulf. The defendants also allegedly agreed to submit embellished bids on heavy-lift projects. As a result of this conspiracy, Statoil contends that it paid inflated prices for heavy-lift barge services in the North Sea.³ Statoil further argues that the conspiracy compelled it to charge higher prices for the crude oil it exported to the United States.⁴ Finally, Statoil asserts that purchasers of heavy-lift services in the Gulf of Mexico were forced to pay inflated prices for those services because of the conspiracy.⁵

III

By way of background, it should be noted that in December 1997, the United States Department of Justice filed a criminal complaint against defendants HeereMac and Jan Meek, one of HeereMac's managing directors. The complaint alleged that the defendants conspired "to suppress and eliminate competition by rigging bids for the sale of heavy-lift derrick barge and related marine construction services in the United States and elsewhere."⁶ HeereMac and Meek submitted to United States jurisdiction and pled guilty to the charges. They agreed to pay fines of $49 million and $100,000, respectively.

Following the guilty pleas, numerous companies across the globe filed suit in United States federal court seeking redress for injuries stemming from defendants' conduct. The first of these suits was filed in the Southern District of Texas in June 1998 by Phillips Petroleum Company and three of its foreign-based subsidiaries.⁷

On January 22, 1999, the court dismissed Phillips's claims for injuries sustained by its foreign subsidiaries relating to projects in foreign waters but allowed those claims asserting injury from projects in United States waters to proceed. While the court acknowledged the worldwide nature of the alleged conspiracy in its order, it nonetheless held that subject matter jurisdiction did not exist for those claims pled by foreign-based subsidiaries for injuries allegedly sustained on foreign platforms.⁸ Specifically, the court determined that those claims did not fall within the ambit of the United States antitrust laws because the claims did not arise from a direct and substantial effect on United States commerce.⁹

Statoil filed this suit in the same court in December 1998. The court dismissed Statoil's complaint against the defendants on July 12, 1999.¹⁰ In its order, the court relied heavily upon its decision in the Phillips case and found no subject matter jurisdiction over the claims because "Statoil's damages arise from its projects in the Norwegian sector of the North Sea"; thus, the FTAIA's requirement that the effect on domestic commerce "gives rise" to the antitrust claim was not satisfied. See 15 U.S.C. § 6(a)(2). The court also held that the defendants' conspiracy "did not have a direct, substantial, and reasonably foreseeable anticompetitive effect on United States trade or commerce" under the FTAIA. See 15 U.S.C. § 6(a)(1). Finally, the court determined that "Statoil lacks standing to bring a claim under United States antitrust laws because its alleged injuries are not of the type that the antitrust statute was intended to redress."¹¹ Statoil timely appealed the judgment.

IV

The issue presented to us is primarily one of statutory interpretation. Specifically, this appeal requires us to interpret the relevant provisions of the FTAIA to determine whether the defendants' conduct and Statoil's injury in the North Sea presents a justiciable claim in the federal courts of the United States.

It is not helpful that the federal courts have generally disagreed as to the extraterritorial reach of the antitrust laws and have employed assorted tests to determine the scope of the Sherman Act. The history of this body of case law is confusing and unsettled.¹² However, as far as this appeal is concerned, our work is simplified by Congress' passage in 1982 of the FTAIA, which specifically exempts certain foreign conduct from the antitrust laws. This circuit has never interpreted the relevant portions of the FTAIA as they apply to global conspiracies and resulting foreign injury.¹³ Today, we take on this task, and make no claim that it is an easy one.

V

A

We review de novo a district court's ruling on a 12(b)(1) motion to dismiss for lack of subject matter jurisdiction.¹⁴ See Hebert v. United States, 53 F.3d 720, 722 (5th Cir. 1995). In ruling on a motion to dismiss for lack of subject matter jurisdiction, a court may evaluate (1) the complaint alone, (2) the complaint supplemented by undisputed facts evidenced in the record, or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. See Barrera-Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996). Nevertheless, we must accept all factual allegations in the plaintiff's complaint as true. See Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981).

We first outline Statoil's argument that United States antitrust jurisdiction encompasses the conduct and injury in its complaint.

B

Statoil argues that the FTAIA does not preclude the district court's jurisdiction over its antitrust claims. Specifically, Statoil argues that the FTAIA was enacted exclusively to ensure that the conduct providing the basis of the plaintiff's claim have the requisite domestic effects, and was not intended to preclude recovery to foreign plaintiffs based on the situs of the injury.¹⁵ Moreover, Statoil contends that Section 2 of the FTAIA was inserted only to ensure that the effect on United States commerce that provides...