497 F.Supp. 637 (S.D.N.Y. 1980), 80 Civ. 1855, Alberta Gas Chemicals, Ltd. v. Celanese Corp.

Docket Nº:80 Civ. 1855.
Citation:497 F.Supp. 637
Party Name:ALBERTA GAS CHEMICALS, LTD., Plaintiff, v. CELANESE CORPORATION and Celanese Chemical Company, Inc., Defendant.
Case Date:October 07, 1980
Court:United States District Courts, 2nd Circuit
 
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Page 637

497 F.Supp. 637 (S.D.N.Y. 1980)

ALBERTA GAS CHEMICALS, LTD., Plaintiff,

v.

CELANESE CORPORATION and Celanese Chemical Company, Inc., Defendant.

No. 80 Civ. 1855.

United States District Court, D. New York

Oct. 7, 1980

Page 638

Freeman, Meade, Wasserman & Schneider, New York City, for plaintiff; Melvyn Freeman, Jack Gumpert Wasserman, Lawrence S. Fogelson, New York City, of counsel.

Debevoise, Plimpton, Lyons & Gates, New York City, for defendants; Asa Rountree, Steven Klugman, New York City, of counsel.

MEMORANDUM OPINION AND ORDER

SOFAER, District Judge:

In this diversity action, Alberta Gas Chemicals, Ltd. ("Alberta Gas") sues for alleged fraud and unfair competition by Celanese Chemical Co., Inc. ("Celanese"), a wholly owned subsidiary of Celanese Corp. Alberta Gas is Canada's largest producer of methanol; Celanese is the largest producer of methanol in the United States. Alberta Gas claims that Celanese engaged in "an unlawful scheme and plan designed, among other things, to delay or prevent Alberta Gas from constructing additional facilities to produce methanol" in Canada and to reduce plaintiff's capacity to compete with Celanese. (Complaint P 8.) The alleged scheme consists entirely of Celanese's conduct at a hearing before the United States International Trade Commission ("Commission"), held to determine whether imports of methanol from Canada were injuring, or were likely to injure, the domestic methanol-producing industry.

Specifically, Celanese is alleged to have "intentionally presented materially false and misleading testimony to the Commission relating to the principal issues before the Commission, including (i) the failure to disclose Celanese's plans for the substantial expansion of its ... methanol producing facilities in Alberta and the United States, and (ii) the projected demand for methanol." (Complaint P 8.) Celanese allegedly failed to tell the Commission that it was planning to construct extensive new facilities to produce methanol. (Complaint P 9.) Moreover, Celanese testified that demand for methanol would increase in the United States during the 1980's at a rate no greater

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than 6% to 7%, whereas it allegedly "believed at the time ... that the demand for methanol in the United States during that period would increase at a rate of at least 10% per annum." (Complaint P 10.)

The Commission concluded unanimously that imports of methanol from Canada were not currently injuring the domestic methanol-producing industry, but determined by a vote of three to two that Canadian imports were likely to injure the industry in the future. Once the Commission made its finding of possible future harm, the Treasury Department was required to issue a so-called Finding of Dumping under the Anti-Dumping Act of 1921, 19 U.S.C. ss 160-171. The effect of this finding was to subject future imports of Canadian methanol to a special dumping duty.

Plaintiff's claim of injury and prayer for relief rest ultimately on its allegation that "(u)pon information and belief, had Celanese Chemical stated the truth as it was known to it with respect (to its expansion plans) and the demand for methanol in the United States, the Commission would not have found that there was a likelihood of future injury to the United States methanol industry by reason of the sale of methanol to the United States by Alberta Gas." (Complaint P 11.) Alberta's alleged injuries have resulted solely...

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