In re Automotive Refinishing Paint Antitrust
| Decision Date | 13 February 2004 |
| Docket Number | No. 02-4272.,02-4272. |
| Parties | In re: AUTOMOTIVE REFINISHING PAINT ANTITRUST LITIGATION BASF AG and BASF Coatings AG, Appellants. |
| Court | U.S. Court of Appeals — Third Circuit |
Stephen Fishbein (Argued), Shearman & Sterling, New York, Edward W. Madeira, Jr., Matthew J. Hamilton, Pepper Hamilton, Philadelphia, Raymond A. Just, Shearman & Sterling, San Francisco, for Appellant.
Geoffrey C. Hazard, Jr. (Argued), University of Pennsylvania, The Law School, Philadelphia, Gerald J. Rodos, Barrack, Rodos & Bacine, Philadelphia, Warren
Rubin, Law Offices of Bernard M. Gross, Philadelphia, Joseph C. Kohn, Robert J. LaRocca, Kohn, Swift & Graf, Philadelphia, Howard I. Langer, Columb, Honik & Langer, Philadelphia, for Appellees.
William T. Hangley, Hangley, Aronchick, Segal & Pudlin, Philadelphia, for Amicus-Appellant, Fedr. German Ind.
James J. Rodgers, Dilworth Paxson, Philadelphia, for Amicus-Appellant, Fed. Republic Germany.
Before ROTH, McKEE, and ROSENN, Circuit Judges.
This certified interlocutory appeal, arising out of alleged unlawful price-fixing by both domestic and foreign corporations, raises questions of considerable importance in antitrust litigation involving foreign nationals. Three of the issues are of first impression to this Court. The first issue is whether worldwide service of process authorized under Section 12 of the Clayton Act, 15 U.S.C. § 22, upon foreign corporations is independent of the specific venue provision contained in that statute. The second issue is whether a federal court's personal jurisdiction over a foreign corporation in antitrust litigation may be predicated on the foreign corporation's contacts with the United States as a whole (national contacts analysis), rather than with the specific forum in which the court sits (local contacts analysis). The final issue is whether jurisdictional discovery from foreign nationals may proceed under the Federal Rules of Civil Procedure without first resorting to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Convention or Convention). 23 U.S.T. 2555, reprinted in 28 U.S.C. § 1781 Note.
The District Court denied the motions to dismiss for lack of personal jurisdiction and the joint motion for a protective order filed by two German corporations, BASF Aktiengesellschaft (BASF AG) and BASF Coatings Aktiengesellschaft (BASF Coatings) (collectively "appellants"), defendants in the underlying antitrust litigation. The District Court construed Section 12 of the Clayton Act as authorizing worldwide service of process independently of the specific venue provision contained in that statute. The Court also held that personal jurisdiction over the foreign corporations would be measured on their contacts with the United States as a whole, rather than with the forum state. The Court finally rejected a rule favoring first resort to Hague Convention procedures for jurisdictional discovery of foreign defendants. BASF AG and BASF Coatings timely appealed. We affirm.
The underlying federal antitrust class litigation involves sixty-three actions filed in five states, Pennsylvania, New Jersey, Ohio, Kentucky, and Delaware, by private parties. Those actions were transferred to, and consolidated in, the United States District Court for the Eastern District of Pennsylvania for pre-trial purposes by the Judicial Panel on Multidistrict Litigation.1 The class action complaint alleges that from 1993 to at least December 31, 2000, the foreign and domestic defendants conspired to raise and maintain the prices of automotive refinish paint throughout the United States. All defendants, except the appellants, have stipulated to certification of a national class consisting of all direct purchasers of automotive refinishes from the defendants.
The appellants filed motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. In support of their motions to dismiss, the appellants submitted affidavits stating that they did not have presence in the state of Pennsylvania and never sold any automotive refinish paint to any customers in Pennsylvania. The plaintiffs replied that the appropriate forum for measuring the appellants' contacts for purposes of personal jurisdiction is the United States as a whole, rather than the forum state of Pennsylvania. The plaintiffs opposed the motions to dismiss and also served jurisdictional discovery requests pursuant to the Federal Rules of Civil Procedure, seeking production of documents concerning the appellants' contacts with the United States as a whole.
The plaintiffs submitted publicly available information to show a threshold case of personal jurisdiction based on the appellants' contacts with the United States and support their request for jurisdictional discovery.2 In response to the plaintiffs' request for jurisdictional discovery, the appellants filed a joint motion for a protective order, contending that the plaintiffs' discovery request was overly broad and burdensome. They argued also that any jurisdictional discovery should proceed first under the Hague Convention, of which the United States and Germany are signatories.
The reasons proffered by the appellants' expert, Martin Reufels, were that Germany, unlike the United States, viewed the gathering of evidence as a judicial, rather than private, function. Therefore, Germany had a sovereign interest in keeping discovery conducted within its borders in conformity with its laws. According to Reufels, compelling the appellants to produce documents pursuant to the Federal Rules of Civil Procedures would offend Germany's sovereign interests.
In its order and careful accompanying opinion, the District Court, Surrick, J., denied without prejudice the appellants' motions to dismiss. Rejecting the appellants' contrary arguments, the Court construed Section 12 of the Clayton Act as authorizing worldwide service of process independently of the specific venue provision contained in that statute. The Court held that the relevant forum for purposes of proof of personal jurisdiction was the United States as a whole, rather than the forum state of Pennsylvania. The Court concluded that the plaintiffs had made a threshold showing of personal jurisdiction that warranted jurisdictional discovery.3 In a separate order and accompanying opinion, the Court denied the appellants' joint motion for a protective order requiring the plaintiffs to conduct their jurisdictional discovery first under the Hague Convention procedures, rather than the Federal Rules of Civil Procedure.
Both the District Court and this Court granted the appellants' petition for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). The appellants raise two issues for review on this interlocutory appeal. The first issue is whether a plaintiff may invoke the worldwide service of process provision contained in Section 12 of the Clayton Act and, thus, national contacts analysis, without satisfying the specific venue provision also contained in that statute. The second issue is whether a plaintiff may be permitted to seek jurisdictional discovery from foreign defendants under the Federal Rules of Civil Procedure without first resorting to the Hague Convention. We agree with the District Court and answer both in the affirmative.4
The first issue raised by the appellants involves two conceptually distinct, though intertwined, sub-issues. One is whether the District Court erred in ruling that the service of process provision contained in Section 12 of the Clayton Act is independent of the venue provision also contained in that statute. Two is whether the Court erred in ruling that in federal antitrust litigation, personal jurisdiction should be assessed on the basis of the appellants' contacts with the United States as a whole (national contacts analysis), rather than with the forum state (local contacts analysis). The two sub-issues are intertwined because if there is no specific venue limitation in federal antitrust litigation involving a foreign corporate defendant, the defendant can be sued in any federal district court based on its aggregate contacts with the United States as a whole. Because they are intertwined and because the appellants present them as a single integrated issue, we discuss them together.5
Section 12 of the Clayton Act provides:
Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.
15 U.S.C. § 22 (emphasis added).6
Section 12, a long sentence, consists of two separate clauses, the first relating to venue and the second concerning service of process and, therefore, personal jurisdiction. It is undisputed that the second clause authorizes nationwide, indeed worldwide, service of process on a defendant corporation in federal antitrust litigation. The clause provides that the defendant may be served "wherever it may be found," that is, wherever it is "doing business." See, e.g., Go-Video, Inc. v. Akai Elec. Co., Ltd., 885 F.2d 1406, 1413 (9th Cir.1989) ().
The parties dispute whether the two clauses of Section 12 should be read as an integrated whole or independently of each other. Specifically, they dispute whether the venue provision contained in the first clause of Section 12 must be satisfied before the plaintiffs could avail themselves of the authorization of worldwide service of process contained in the second clause. As explained by one court:
[t]he dispute centers on whether the jurisdiction provision operates independently from the venue provision,...
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