Helmac Products Corp. v. Roth (Plastics) Corp., Civ. A. No. 84-8225.

• Decision Date: 14 July 1992
• Docket Number: Civ. A. No. 84-8225.
• Parties: HELMAC PRODUCTS CORPORATION, a Michigan corporation, Plaintiff, v. ROTH (PLASTICS) CORPORATION, a Canadian corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

814 F. Supp. 560

HELMAC PRODUCTS CORPORATION, a Michigan corporation, Plaintiff, v. ROTH (PLASTICS) CORPORATION, a Canadian corporation, Defendant.

Civ. A. No. 84-8225.

United States District Court, E.D. Michigan, S.D. at Flint.

July 14, 1992.

COPYRIGHT MATERIAL OMITTED

David A. Ettinger, James K. Robinson, Honigman, Miller, Schwartz & Cohn, Detroit, MI, Thomas J. Kenny, Raymond & Dillon, Southfield, MI, for plaintiff.

Lori Silsbury, Roger K. Timm, Dykema Gossett, Detroit, MI, for defendant.

MEMORANDUM OPINION AND ORDER

NEWBLATT, District Judge.

Several motions are pending before the Court. The main focus of this Opinion will be upon the Motion for Default Judgment, brought by plaintiff Helmac, which alleges that the defendant willfully withheld, and possibly destroyed, documents that were responsive to document production requests. The defendant, Roth (plastics), denies the allegations. An evidentiary hearing was held, beginning on August 13, 1991 and continuing intermittently until August 30, 1991. Substantial amounts of testimony and exhibits were presented to the Court, and the parties offered opening and closing argument to the Court. After a review of the evidence, and the legal arguments made by the parties, the Court is inclined to grant Helmac's motion.

Other motions have a bearing on Helmac's Motion for Default, however. The Court will consider first Eric Roth's Motion for Summary Judgment to determine which defendants will be subject to any default judgment which might be entered. In its own Motion for Default Judgment, Roth (plastics) alleges that Helmac engaged in its own discovery abuses. Since Roth (plastics)' conduct should not be viewed in a vacuum, it is also necessary to consider the implication of the allegations contained in Roth (plastics)' Motion for Default Judgment before entering a default judgment against the defendant. Finally, disposition of several of Roth (plastics)' Motions in Limine may shape the extent of damages which Helmac would be able to recover following entry of the judgment.

For these reasons, disposition of Helmac's Motion for Default Judgment is withheld pending disposition of Roth (plastics)' Motion for Default Judgement and Motions in Limine affecting damages arising from the sale of products allegedly produced in the United States.

I. ERIC ROTH'S MOTION FOR SUMMARY JUDGMENT

Before the evidentiary hearing was held on Helmac's Motion for Default, the Court permitted Helmac to file an amended complaint which differed from the original complaint only in the addition of Eric Roth as an additional party defendant. Also before the evidentiary hearing, Eric Roth filed a motion for summary judgment arguing that Helmac's claim against Eric Roth was barred by the applicable statute of limitations.

A. Relation back

Helmac's first argument in response is that the amendment and addition of Eric Roth relates back to the filing of the original complaint, pursuant to Fed.R.Civ.P. 15(c). The Court rejects this argument. Rule 15(c) permits the naming of new parties only in cases of misnomer. It permits the inclusion of a new defendant when that defendant had notice of the claim before the limitations period expired, and when the new defendant would know that, "but for the mistake concerning the identity of the proper party, the action would have been brought against that party." Fed.R.Civ.P. 15(c).

There is no question that this claim was properly filed against Roth (plastics), and that no mistake was made in this regard. Eric Roth would not have read the complaint against Roth (plastics) in 1984 and concluded that Helmac intended to sue him as well. Indeed, there is no reason why Helmac could not have added Mr. Roth earlier in the proceedings of this case. He could reasonably conclude that Helmac did not intend to sue him for violations of the Antidumping Act.

Because there was no reason for Eric Roth to believe that Helmac intended to name him as the defendant in the antidumping claim, but named his corporation, Roth (plastics) by mistake, Rule 15(c) does not apply to relate the addition of Eric Roth as a party defendant to the time of the filing of the original complaint.

B. Limitations period

What must be determined next, then, is the appropriate limitations period to be applied to a claim arising under the Antidumping Act of 1916. Both parties acknowledge that the statute contains no limitations period within its terms, and that the Court must apply a period from the most analogous statute. Eric Roth argues for application of the four year period used in the Clayton Act, which would have expired in the end of 1990. Helmac urges use of the five year period provided in the Tariff Act of 1930, 19 U.S.C. § 1621, which would have expired at the end of 1991. The addition in March of 1991 of Eric Roth as a party defendant would be untimely under the former, and timely under the latter.

1. Zenith Radio and the Antidumping Act as an antitrust statute

There is no question that the Antidumping Act of 1916 is not subject to easy characterization. The statute resulted from the clash of two ideologies, one which sought to serve industry and labor by protecting American industries and jobs from foreign competition, and the other which sought to serve the American consumer by fostering competition from any source, domestic or foreign. In support of his position, Eric Roth cites Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 494 F.Supp. 1190 (E.D.Pa.1980). "We conclude then, on the basis of the statutory text, that the 1916 Act is an antitrust, not a protectionist statute. That conclusion is strongly corroborated by the political and legal history of the relevant era, and the legislative history of the 1916 Act...." Id. at 1215.

The Zenith Radio court carefully analyzed the legislative history, giving careful consideration to the positions of the political parties competing at the time the statute was passed. To summarize the Zenith Radio court's discussion, see Zenith Radio 494 F.Supp. at 1215-20, the Democratic Party advocated free-trade and strongly disapproved of the protectionist policies advanced by the Republican Party. All were aware of the competitive gains enjoyed by domestic industries as a result of the havoc wreaked on the European competitors by the First World War. All were equally aware that the end of the war would permit the European industries to attempt to recapture market share lost to American industries which, in 1916, still were unscathed by the Great War. There was consensus that the American industries' gains needed to be protected, but the parties evidently differed over methodology.

The anti-protectionist, free-trade Democrats opposed the imposition of tariffs to protect the American market from the European goods. According to the Zenith Radio court, the Democrats did not want to protect domestic producers from all competition, but only from unfair competition. They turned to antitrust law and applied its doctrines and theories to international trade. To support this conclusion, the court quotes a more contemporaneous analysis of the circumstances surrounding adoption of the Antidumping Act of 1916.

The Wilson administration, while showing itself wholly sympathetic with the desire for adequate protection from unfair foreign competition, was determined that it should not be employed to build up sentiment for an upward revision of the existing tariff act. It therefore recommended that any measure adopted to meet the problem should be divorced from customs legislation and should take the form of a further extension to those engaged in the import trade of the restraints against unfair competition which had been imposed on domestic commerce.

Zenith Radio, 494 F.Supp. at 1220 (quoting J. Viner, Dumping: A Problem in International Trade, 242-43 (1923, reprinted 1966)).

2. Helmac's View — The Antidumping Act's protectionist purposes

Helmac has a different view of Congress' intent in passing the Antidumping Act of 1916 and of the implications this intent has on the selection of an appropriate limitations period. Helmac concludes that Congress intended the Antidumping Act of 1916 to be a protectionist statute. Because the intent of the Congress in enacting the Antidumping Act of 1916, the protection of domestic industry, is antithetical to the intent of antitrust doctrine, the preservation of competition, Helmac argues that it would be inappropriate to use antitrust periods of limitations, and more appropriate to turn to the protectionist and tariff statutes.

Whether the Antidumping Act of 1916 is protectionist in nature, and therefore antithetical to the goal of antitrust statutes which were designed to preserve competition, depends on a divination of Congress' intent. Helmac can cite no similar case law to support its position that the Antidumping Act of 1916 was intended to be a protectionist statute analogous to the Tariff Act of 1930 and subject to a five year limitations period, instead of an antitrust statute similar to the Clayton Act and subject to a four year limitations period.

a. Helmac's cases are distinguishable

Its citation to Isra Fruit Ltd. v. Agrexco Agric. Export Co. Ltd., 631 F.Supp. 984, 989 (S.D.N.Y.1986) is misplaced. Although the court refers to the statute's protectionist purpose, it also refers to the statute's use of "`the same price discrimination law applicable to domestic commerce.'" Id. (citing Zenith Radio, 494 F.Supp. at 1216)). The court's discussion has nothing to do with the proper characterization of the Antidumping Act of 1916 as a protectionist or antitrust statute, but rather considers the plaintiff's standing to sue given the absence of domestic producers of the allegedly dumped product. Isra Fruit, 631 F.Supp. at 988-89.

Western Concrete Structures v. Mitsui & Co. (U.S.A.), Inc., 760 F.2d 1013 (9th Cir.), cert. denied, 474 U.S. 903, 106 S.Ct. 230, 88 L.Ed.2d 229 (1985) similarly considers...