Energy Conversion Devices Liquidation Trust v. Trina Solar Ltd.
| Decision Date | 31 October 2014 |
| Docket Number | Case No. 13-14241 |
| Parties | ENERGY CONVERSION DEVICES LIQUIDATION TRUST, BY AND THROUGH ITS LIQUIDATING TRUSTEE, JOHN MADDEN, Plaintiff, v. TRINA SOLAR LIMITED, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
On October 4, 2013, Plaintiff Energy Conversion Devices Liquidation Trust filed a complaint against Defendants Trina Solar Limited and its wholly-owned American subsidiary Trina Solar (U.S.), Inc. (collectively, "Trina"), Yingli Green Energy Holding Company Limited and its wholly-owned American subsidiary Yingli Green Energy America, Inc. (collectively "Yingli"), and Suntech Power Holdings Company, Ltd. and its wholly-owned American subsidiary Suntech America, Inc. (collectively "Suntech"). Plaintiff alleges that Defendants violated the Sherman Act, 15 U.S.C. § 1, and the Michigan Antitrust Reform Act (the "MARA"), Mich. Comp. Laws § 445.772, by engaging in "an unlawful conspiracy and combination to fix prices at unreasonably low and/or predatory levels and to dump product" in restraint of trade. (Dkt. # 1, Pg. ID 30-31.) Now before the court is Defendants' Rule 12(b)(6) motion to dismiss for failure to state a claim, filed on April 18, 2014. The matter is fully briefed, and no hearing is needed.See E.D. Mich. LR 7.1(f)(2). For the following reasons, Defendants' motion to dismiss will be granted.
From 2003 until 2012, Plaintiff produced flexible, thin-film photovoltaic solar panels. (Dkt. # 1, Pg. ID 7.) Plaintiff earned $239.4 million in revenue from solar panel sales in 2009 and $302 million in 2009. (Id. at 16.) Plaintiff's solar panel revenues dropped to $211 million in 2010 and $193 million in 2011, leading Plaintiff to file for bankruptcy in 2011. (Id. at 2, 17.) According to Plaintiff's complaint, Trina Solar Limited, Yingli Green Energy Holding Company Limited, and Suntech Power Holdings Company, Ltd. are leading manufacturers of solar panels, each incorporated in the Cayman Islands and headquartered in China, with billions in assets and annual revenue. (Id. at 7-11.)
Plaintiff alleges that, through the China New Energy Chamber of Commerce ("China New Energy")—a leading trade association in China for alternative energy—Defendants would, inter alia, "share market and industry information, 'collaborate', [and] coordinate efforts with the government." (Id. at 11.) Plaintiff further alleges that, starting in 2008, Defendants agreed to sell solar panels at artificially low and/or below-cost prices and "simultaneously reduced prices at rates in tandem by approximately 75%" (id. at 17), which forced approximately twenty American companies out of the solar panel market and resulted in Defendants' collective market share exceeding 80%. (Id. at 17-18.) According to Plaintiff, following the annual China New Energy International Forum in 2007, 2008, and 2010, Defendants "uniformly" reduced the price of imported solar panels by 40%, 18%, and then 20%. (Id. at 23-24.)
Federal Rule of Civil Procedure 8(a)(2), requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." In order to survive Defendants' motion to dismiss, the complaint must allege "[f]actual allegations . . . enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Accordingly, the court views the complaint in the light most favorable to the plaintiff and takes all well-pleaded factual allegations as true. Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009). However, the court "need not accept as true legal conclusions or unwarranted factual inferences." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not shown—that the pleader is entitled to relief." Id. at 679.
"In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account." Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir. 2001) (emphasis omitted). The court may also consider documents introduced by defendants in their motion to dismiss if the documents "are referred to in the plaintiff's complaint andare central to her claim." Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir. 1997).
Plaintiff alleges that Defendants violated § 1 of the Sherman Act by engaging in a conspiracy "to fix prices at unreasonably low and/or predatory levels and to dump product." (Dkt. # 1, Pg. ID 30.) Section 1 of the Sherman Act provides, in relevant part, "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 declared to be illegal." 15 U.S.C. § 1. In general, Lie v. St. Joseph Hosp. of Mount Clemens, Mich., 964 F.2d 567, 568 (6th Cir. 1992) (internal quotation marks and citations omitted).
The Supreme Court has set forth "two complementary categories of antitrust analysis." Nat'l Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 692 (1978). Courts typically analyze the alleged conduct under the "rule of reason" which "requires the factfinder to decide whether under all the circumstance of the case the restrictive practice imposes an unreasonable restraint on competition." Arizona v. Maricopa Cnty. Med. Soc., 457 U.S. 332, 344 (1982). The rule of reason analysis requires courts "to 'evaluate[ ] [the agreement] by analyzing the facts peculiar to the business, the history of the restraint, and the reasons it was imposed . . . to form a judgment about thecompetitive significance of the restraint.'" Lie, 964 F.2d at 569 (quoting Nat'l Soc'y of Prof'l Eng'rs, 435 U.S. at 692). However, "agreements whose nature and necessary effect are so plainly anticompetitive that no elaborate study of the industry is needed to establish their illegality . . . are 'illegal per se.'" Nat'l Soc'y of Prof'l Eng'rs, 435 U.S. at 692. "Per se illegal restraints on trade . . . do not require proof of market power." Lie, 964 F.2d at 569. Plaintiff alleges both that Defendants' price-fixing and dumping conspiracy is a per se restraint of trade and that, in the alternative, it is an unreasonable restraint of trade.
In addition to establishing Article III standing, when bringing an action under the Sherman Act, the plaintiff must establish antitrust standing in order to survive a Rule 12(b)(6) motion to dismiss. NicSand, Inc. v. 3M Co., 507 F.3d 442, 449 (6th Cir. 2007) (en banc). To establish antitrust standing, "an antitrust claimant must do more than make 'allegations of consequential harm resulting from a violation of the antitrust laws,' and that is true even when the complaint is 'buttressed by an allegation of intent to harm the [plaintiff].'" Id. (quoting Ass'n Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 545 (1983)). Likewise, a plaintiff does not have antitrust standing when certain "relevant factors—the nature of the [claimant's] injury, the tenuous and speculative character of the relationship between the alleged antitrust violation and the [claimant's] alleged injury, the potential for duplicative recovery or complex apportionment of damages, and the existence of more direct victims of the alleged conspiracy—weigh heavily against judicial enforcement." Id. (citing Ass'n Gen. Contractors of Cal., Inc., 459 U.S. at 545.).
"[A]ntitrust standing 'ensures that a plaintiff can recover only if the loss stems from a competition-reducing aspect or effect of the defendant's behavior.'" Id. (quoting Atl. Richfield Co. V. USA Petroleum Co., 495 U.S. 328, 344 (1990)). As such, a "necessary, but not always sufficient," requirement for antitrust standing is an antitrust injury. Id. at 450 (citing Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 110 n.5 (1986)).1 An antitrust injury is an "injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants' acts unlawful." Id. (citing Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)). "Far from being 'a mere technicality,' antitrust standing 'is the glue that cements each suit with the purposes of the antitrust laws, and prevents abuses of those laws' by claimants seeking to halt the strategic behavior of rivals that increases, rather than reduces, competition." Id. at 449-50 (quoting HyPoint Tech., Inc. v. Hewlett-Packard Co., 949 F.2d 874, 877 (6th Cir. 1991).
Defendants argue that Plaintiff has not suffered antitrust injury and therefore lacks antitrust standing. (Dkt. # 17, Pg. ID 121.) The complaint alleges that Defendants sold solar panels at "unreasonably low and/or [at] predatory levels." (Dkt. # 1, Pg. ID 30.) It asserts that "Defendants directly harmed competition in the United States for commercial and industrial rooftop solar panel...
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