650 F.2d 9 (2nd Cir. 1981), 782, Alberta Gas Chemicals, Ltd. v. Celanese Corp.

Docket Nº:782, Docket 80-9021.
Citation:650 F.2d 9
Party Name:ALBERTA GAS CHEMICALS, LTD., Plaintiff-Appellant, v. CELANESE CORPORATION and Celanese Chemical Company, Inc., Defendants-Appellees.
Case Date:May 12, 1981
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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650 F.2d 9 (2nd Cir. 1981)

ALBERTA GAS CHEMICALS, LTD., Plaintiff-Appellant,


CELANESE CORPORATION and Celanese Chemical Company, Inc.,


No. 782, Docket 80-9021.

United States Court of Appeals, Second Circuit

May 12, 1981

Argued Feb. 26, 1981.

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James M. Brachman, New York City (Freeman, Meade, Wasserman & Schneider, Melvyn Freeman, Jack Gumpert Wasserman, Lawrence S. Fogelson, Barbara E. Olk, New York City, of counsel), for plaintiff-appellant.

J. Asa Rountree, New York City (Debevoise, Plimpton, Lyons & Gates, Steven Klugman, New York City, of counsel), for defendants-appellees.

Before FEINBERG, Chief Judge, OAKES, Circuit Judge, and MOTLEY, District Judge. [*]

FEINBERG, Chief Judge:

This appeal raises unusual issues regarding the power of an administrative agency to insure the integrity of proceedings before it. Alberta Gas Chemicals, Ltd. (Alberta), a Canadian corporation, appeals from a judgment of the United States District Court for the Southern District of New York, Abraham D. Sofaer, J., dismissing Alberta's complaint against Celanese Corporation and Celanese Chemical Company, Inc., 497 F.Supp. 637, (collectively referred to as Celanese). The complaint alleged that Celanese had perpetrated a scheme to defraud and unfairly compete with Alberta by interfering with its construction of new facilities in Canada, and by hindering its efforts to sell methanol in the United States. 1 The gravamen of the complaint was that Celanese presented false testimony before the United States International Trade Commission (Commission), which was considering whether imports from Canada were injuring, or were likely to injure, the domestic methanol producing industry. On Celanese's motion, Judge Sofaer dismissed Alberta's complaint. As indicated below, we adopt one of the alternate grounds indicated in the opinion of the district court, and remand this case to the district court to be held pending further proceedings in accordance with this opinion.


The relevant facts may be simply stated: In March 1979, the Treasury Department concluded that Canadian methanol, exported by Alberta, was being sold in the United States at less than fair value. 44 Fed.Reg. 19,090 (March 30, 1979). This triggered hearings before the Commission in May 1979 pursuant to the Antidumping Act, 19 U.S.C. § 160 et seq., to determine whether the sale here of the Canadian methanol at less than fair value was likely to injure the

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American methanol industry. 2 At the hearing, the Commission received oral and written testimony from many of those involved in the American methanol industry, including employees of Celanese, this country's largest producer. 44 Fed.Reg. 40,734-35 (July 12, 1979).

In June 1979, the Commission decided by a 3-2 vote that the sale in this country of Canadian methanol was likely to be detrimental to domestic producers in the future. This finding of possible future harm required the Treasury Department to issue a Finding of Dumping under 19 U.S.C. § 160(a), thus subjecting future imports of Canadian methanol to a special antidumping duty. See 44 Fed.Reg. 44,154 (July 27, 1979). In August 1979, Alberta challenged this determination by filing an action in the United States Court of International Trade. 3

According to Alberta, it discovered in November 1979 that Celanese employees had perjured themselves in the antidumping proceeding before the Commission by failing to disclose Celanese's plans to expand substantially its methanol producing facilities in Canada and in the United States, and by deliberately underestimating the projected United States demand for methanol. By the time Alberta allegedly discovered this perjury, it had already filed its action in the Court of International Trade, as indicated above. Nevertheless, Alberta did not utilize this information in connection with its case pending there. Nor did Alberta call the alleged perjury to the attention of the Commission. Instead, it filed the present action in April 1980 in the Southern District basing jurisdiction on diversity. Alberta, as already indicated, alleged that Celanese was engaged in an unlawful scheme to hinder Alberta's efforts to produce methanol in Canada and to sell it in the United States, of which the perjury before the Commission was an integral part. The complaint further alleged that the Commission would not have concluded that future importation of Canadian methanol was likely to hurt domestic producers but for the perjured testimony. The complaint prayed for an injunction requiring Celanese to disclose the true facts to the Commission, and also sought damages, both compensatory and punitive.

In its answer, Celanese denied the essential allegations of the complaint, including the perjury, and moved for judgment on the pleadings. Celanese asserted in the alternative that the district court either lacked jurisdiction, or should not exercise its jurisdiction, and that even if the court did reach the merits, the complaint did not state a claim upon which relief could be granted. In a memorandum opinion and order dated October 8, 1980, Judge Sofaer concluded that under federal law, appellant's complaint failed to state a cause of action because it did not allege any wrongful conduct on the part of Celanese other than the alleged perjury before the Commission. The judge went on to say that even if the complaint did state a cause of action, the federal court's jurisdiction over the dispute seemed "dubious" because the matter was within the exclusive jurisdiction of the Court of International Trade; finally, the court noted that under the doctrine of primary jurisdiction the issues relating to Celanese's conduct during the hearing before the Commission should be resolved, in the first instance, by the Commission. This appeal followed.


Based upon the foregoing, the parties have presented and thoroughly briefed a number of legal issues, but we do not find it necessary or appropriate to reach most of

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them. It is quite clear to us that Alberta is trying to obtain a reversal of the Commission's ruling without bothering to attempt to utilize other remedies available to it, and we see no reason to countenance such use of the federal courts.

The claimed perjurious testimony by Celanese related to its plans to expand its methanol production capacity and to its estimate of demand for methanol in the United States. The district court found that the "central issue" in this litigation was...

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