Carrier Corp. v. Outokumpu Oyj

• Decision Date: 02 March 2012
• Docket Number: 07–6114.,Nos. 07–6052,s. 07–6052
• Parties: CARRIER CORPORATION; Carrier SA; Carrier Italia S.p.A., Plaintiffs–Appellants/Cross–Appellees, v. OUTOKUMPU OYJ; Outokumpu Copper Products Oy; Outokumpu Copper Franklin, Inc.; Outokumpu Copper (U.S.A.), Inc., Defendants–Appellees/Cross–Appellants,Mueller Industries, Inc.; Mueller Europe Ltd; Europa Metalli spa; Trefimetaux sa, Defendants.
• Court: U.S. Court of Appeals — Sixth Circuit

2012-1 Trade Cases P 77,814

673 F.3d 430

CARRIER CORPORATION; Carrier SA; Carrier Italia S.p.A., Plaintiffs–Appellants/Cross–Appellees,

v.OUTOKUMPU OYJ; Outokumpu Copper Products Oy; Outokumpu Copper Franklin, Inc.; Outokumpu Copper (U.S.A.), Inc., Defendants–Appellees/Cross–Appellants,Mueller Industries, Inc.; Mueller Europe Ltd; Europa Metalli spa; Trefimetaux sa, Defendants.

Nos. 07–6052

07–6114.

United States Court of Appeals, Sixth Circuit.

Argued: Oct. 13, 2009.Decided and Filed: March 2, 2012.Rehearing and Rehearing En Banc* Denied April 30, 2012.

ARGUED: David M. Schnorrenberg, Crowell & Moring LLP, Washington, D.C., for Appellants. William H. Rooney, Willkie Farr & Gallagher LLP, New York, New York, Eric Mahr, Wilmer Hale, Washington, D.C., for Appellees. ON BRIEF: David M. Schnorrenberg, Crowell & Moring LLP, Washington, D.C., for Appellants. William H. Rooney, Willkie Farr & Gallagher LLP, New York, New York, Eric Mahr, Caroline T. Nguyen, Wilmer Hale, Washington, D.C., Robert L. Crawford, Wyatt, Tarrant & Combs, LLP, Memphis, Tennessee, for Appellees.Before: MOORE and COOK, Circuit Judges; LUDINGTON, District Judge. ^**

OPINION

KAREN NELSON MOORE, Circuit Judge.

Plaintiffs–Appellants Carrier Corporation, Carrier SA, and Carrier Italia S.p.A. (collectively “Carrier”) appeal the district court's dismissal of their claims under the Sherman Act and the Tennessee Trade Practices Act for lack of subject-matter jurisdiction and for failure to state a claim. Defendants–Appellees Outokumpu Oyj (“OTO”), Outokumpu Copper Products Oy (“OCP”), Outokumpu Copper (U.S.A.), Inc. (“Outokumpu U.S.A.”), and Outokumpu Copper Franklin, Inc. (“Outokumpu Franklin”) (collectively “Outokumpu”), and Mueller Industries, Inc. and Mueller Europe LTD cross-appealed, arguing that the district court's ruling can be affirmed on the alternative bases that Carrier's complaint is time-barred and that the district court lacked personal jurisdiction over Mueller Europe, OTO, and OCP. Carrier has since settled its claims with the two Mueller entities, and those defendants have been dismissed from this appeal. As to the remaining parties, we conclude that the district court had subject-matter jurisdiction over the present dispute and that Carrier's complaint is not time-barred. We further conclude that Carrier's complaint adequately states a Sherman Act claim against all of the Outokumpu Defendants and that the district court had personal jurisdiction over OTO and OCP individually. We therefore REVERSE district court's judgment as to all Outokumpu Defendants and REMAND for proceedings consistent with this opinion.

I. BACKGROUND

A. The Copper Tubing Market

Copper tubing normally is “divided into two main product groups.” Joint Appendix (“J.A.”) at 0036 (Am. Compl. ¶ 41). First, there are “plumbing tubes ... which are used for water, oil, gas, and heating installations.” Id. Second, there are “higher value-added industrial tubes.” Id. The latter category is divided into several subgroups, the “most significant [of which] in terms of volume is tubing for air-conditioning and refrigeration (“ACR”) applications.” Id. The present litigation concerns the market for ACR copper tubing.

Plaintiff Carrier Corporation is a Delaware corporation and Plaintiffs Carrier France SA and Carrier Italia S.p.A. are both subsidiaries of Carrier. Carrier, along with its affiliates, is “the world's largest manufacturer of air-conditioning and commercial refrigeration equipment” and consequently, one of the world's largest purchasers of ACR copper tubing. Id. ¶ 1. According to Carrier's complaint, Defendant OTO and its wholly owned subsidiary OCP are two Finnish companies that, during the relevant time period, produced or sold ACR copper tubing and, either directly or through their subsidiaries, imported it into the United States to sell to U.S. customers. Id. ¶¶ 22, 26. Carrier's complaint further states that Defendants Outokumpu U.S.A. and Outokumpu Franklin, both American subsidiaries of OCP, were “engaged in the production or sale of ACR Copper Tubing in the United States.” Id. ¶¶ 23–24. And Outokumpu Franklin in particular allegedly sold “substantial quantities of ACR Copper Tubing to Carrier in the United States.” Id. ¶ 24. The complaint further alleges that OTO “had effective control over the commercial policy and business decisions of its subsidiaries, and did business through its subsidiaries.” Id. ¶ 25.¹

B. The European Commission's 2003 and 2004 Decisions

Much of this lawsuit revolves around two decisions issued by the Commission of the European Communities (“EC”). The first came in December 2003, when the EC found that OTO and OCP, along with several other companies, participated in a conspiracy in which they “agreed on price targets and other commercial terms for industrial tubes, coordinated price increases, [and] allocated customers and market shares” in violation of European law. J.A. at 0283 (EC ACR Decision ¶ 2). The EC determined that this conspiracy lasted from at least May 3, 1988 to March 22, 2001. The EC's findings, however, do not identify any conspiratorial agreements with respect to U.S. markets.

In September 2004, a separate EC decision found a similar violation of European law in the market for plumbing tubes. The EC again found OTO and OCP liable, this time along with Mueller Industries and Mueller Europe. J.A. at 0072 (EC Plumbing Decision ¶¶ 1–2). The EC decision emphasized, however, that “the arrangements pertaining to plumbing tubes on the one hand and those relating to industrial tubes on the other hand involved different companies (and employees), and were organised in a different way.” Id. ¶ 5. Once again, the decision did not address any whether any conspiracy extended beyond the European markets.

C. The Present Litigation

In its amended complaint, Carrier essentially alleges that the European conspiracy uncovered by the EC was also directed at the U.S. market for ACR industrial tubes, thereby violating the Sherman Act and the Tennessee Trade Practices Act. Carrier is not the first plaintiff to make this allegation—the district judge in this case has also dismissed two similar cases involving essentially the same defendants. See Am. Copper & Brass, Inc. v. Boliden AB, No. 04–2771 DV (W.D.Tenn. Oct. 10, 2006) (unpublished opinion); In re ACR Copper Tubing Litig., No. 06–2207 (W.D.Tenn. July 26, 2007) (unpublished opinion).

Carrier specifically alleges that between 1988 and 2001, the Defendants conspired to raise the price for ACR tubing by developing “a customer and market allocation scheme” under which “Carrier's business in the United States was allocated to the Outokumpu defendants.” J.A. at 21 (Am. Compl. ¶ 4). The other conspirators, including Wieland–Werke AG (“Wieland”) and KM Europa Metal AG (“KME”), “agreed not to pursue” Carrier's U.S. business. Id. In return, Wieland and KME received Carrier's European business and the Outokumpu Defendants agreed not to aggressively pursue it. As a result of these agreements, Carrier maintains that it “paid artificially inflated and supra-competitive prices for ACR Copper Tubing in the United States, Europe and elsewhere.” Id. ¶ 2.² Outokumpu, Wieland, and KME were able to do this, Carrier alleges, because “they were the three largest producers of ACR Copper Tubing in the world,” which resulted in “circumstances [that] facilitated the conspiracy.” Id. ¶ 5. Carrier also explains that Outokumpu, Wieland, and KME were eager to preempt alternative suppliers that could undercut their prices. To that end, “[t]hey enlisted the support of others in the conspiracy,” including Mueller Industries and Mueller Europe. Id. ¶ 6. The Mueller entities agreed not to pursue Carrier's business in the ACR tubing market, and in return, the other conspirators allocated different markets to Mueller.

Carrier substantiates these claims in part by drawing from details found in the EC industrial-tubes decision. For instance, like the EC decision, the complaint alleges that Outokumpu and the other co-conspirators coordinated their conspiracy through the biannual meetings of the trade association known as the Cuproclima Quality Association. In doing so, the complaint quotes various incriminating documents uncovered by the EC investigation, details the time and place of specific meetings, and also describes specific price targets set by the alleged conspirators.

Carrier's complaint also includes allegations that were not drawn from the EC decisions. Carrier argues that these allegations provide circumstantial evidence that the market-allocation scheme reached beyond the European markets and into the United States. Indeed, Carrier maintains that the market for ACR copper tubing was global in scope and, as further evidence of such an arrangement, points to an Outokumpu document uncovered in the EC investigation that references a “Global Agreement” between the co-conspirators. Along these lines, Carrier also reasons that any successful conspiracy must have involved the United States so as to prevent a multinational corporation like Carrier from “purchas[ing] all of the corporation's world-wide demand for ACR Copper Tubing in the United States and then ship[ping] those products to facilities world-wide.” Id. ¶ 59. Thus, Carrier maintains that “Defendants and their co-conspirators singled out Carrier and other similarly situated companies by devising a unique global approach for fixing the prices of ACR Copper Tubing offered to Carrier.” Id. ¶ 61. In support of this global conspiracy, Carrier further contends that Outokumpu scheduled yearly contract negotiations with U.S. customers that occurred after the fall Cuproclima meetings and during which the target prices and market allocations were set. Carrier also alleges that prices in the U.S. remained similar to those in other regions, which facilitated consistent pricing levels across the relevant markets. Likewise, Carrier claims that during the...