In re Diisocyanates Antitrust Litig.
| Decision Date | 09 March 2020 |
| Docket Number | Master Docket Misc. No. 18-1001,MDL No. 2862 |
| Parties | IN RE: DIISOCYANATES ANTITRUST LITIGATION This Document Relates to: All Cases |
| Court | U.S. District Court — Western District of Pennsylvania |
AMBROSE, United States Senior District Judge
SYNOPSIS
This multi-district litigation stems from an alleged conspiracy to reduce supply and increase price for methylene diphenyl diisocyanate ("MDI") and toluene diisocyanate ("TDI"), precursor ingredients for the manufacture of polyurethane foam and thermoplastic polyurethanes.
Before the Court is a joint Motion to Dismiss filed by foreign Defendants BASF SE, Bayer A.G.,1 Covestro A.G., Mitsui Chemicals, Inc. ("Mitsui"), MCNS, and Wanhua Chemical Group Co., Ltd. ("Wanhua") (collectively, "Defendants" or "foreign Defendants"). (ECF No. 229). All of the foreign Defendants assert that this Court lacks personal jurisdiction over them, and seek dismissal pursuant to Fed. R. Civ. P. 12(b)(2). (ECF No. 231). Plaintiffs have filed a response to Defendants' Motion, and Defendants have replied. (ECF Nos. 249, 250, 265). Plaintiffs contend that sufficient aggregate minimum contacts exist in the United States to permit the exercise of jurisdiction, based on four concepts: 1) Defendants' status as co-conspirators with domestic entities; 2) the effects of Defendants' tortious conduct in the United States, per Calder v. Jones, 465 U.S. 783, 790-91, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984); 3)the conduct of Defendants' domestic subsidiaries, under an alter ego theory; and 4) the conduct of Defendants' domestic subsidiaries, under an agency theory.
For the following reasons, the Defendants' Motion will be denied, without prejudice. Further, the Court concludes that a period of limited jurisdictional discovery is warranted.
OPINION" " Patterson v. FBI, 893 F.2d 595, 603-04 (3d Cir. 1990).
"[I]n reviewing a motion to dismiss under Rule 12(b)(2), [the Court] 'must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff.'" Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002). If the moving party submits competent evidence contradicting jurisdiction, the non-moving party bears the burden of showing, by a preponderance of the evidence, that the exercise of jurisdiction is proper. NextGear Capital, Inc. v. Gutierrez, No. 18-1617, 2019 U.S. Dist. LEXIS 71565, at *5 (M.D. Pa. Apr. 29, 2019). "[W]hen the court does not hold an evidentiary hearing on the motion to dismiss, the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). However, a plaintiff may not, at any time, rely on the pleadings alone to meet its burden. Id. at 101 n.6 (3d Cir. 2004); Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984).
Given this Court's contemporaneous decisions on Defendants' Rule 12(b)(2) and Rule 12(b)(6) Motions, it is important to note that the applicable standards differ. "While a 12(b)(6) motion requires a court to accept the allegations of the non-moving party as true, a 12(b)(2)motion 'requires resolution of factual issues outside the pleadings, i.e., whether in personam jurisdiction actually lies.'" Bassil v. Starwood Hotels & Resorts Worldwide, Inc., No. 12-4204, 2014 U.S. Dist. LEXIS 135927, at *3 (E.D. Pa. Sep. 24, 2014) (quoting Time Share Vacation, 735 F.2d at 66 n.9).
"The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful 'contacts, ties, or relations.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S. Ct. 154, 90 L. Ed. 95 (1945)).2 "The foreseeability that is critical to due process analysis ... is that the defendant's conduct and connection with the forum ... are such that he should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183 (1985). "It is essential in each case that there be some act by which the defendant purposely avails itself of the privilege of conducting activities within the forum ..., thus invoking the benefits and protections of its laws." Id. at 475. Under any jurisdictional theory, the "constitutional touchstone" of personal jurisdiction "remains whether the defendant purposefully established 'minimum contacts' in the forum State." Id. at 474. Requiring "minimum contacts" between the defendant and the forum affords a defendant fair warning that he may be called to defend a suit in that forum. Clarity Sports Int'l LLC v. Redland Sports, 400 F. Supp. 3d 161, 170 (M.D. Pa. 2019).
In accordance with these principles, a court may exercise either specific or general jurisdiction over a defendant. Specific jurisdiction "allows the court to adjudicate claims related to defendant's contacts with the forum." In re Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538, 557 (M.D. Pa. 2009). General jurisdiction, in turn, is based on a defendant'scontinuous and systematic contacts with the forum state, regardless of those contacts' relationship to the litigation at hand. See Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408, 414-15, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). "Because an incorporated organization is a 'legal fiction,' the question of whether it 'has made [sufficient] contacts justifying the exercise of personal jurisdiction is, in reality, a question of whether the contacts made by the agents and employees of the corporation are sufficient to justify the exercise of jurisdiction.'" In re Auto. Refinishing Paint Antitrust Litig., 229 F.R.D. 482, 491 (E.D. Pa. 2005) (quoting 16 Moore's Federal Practice § 108.42[3][b][ii]).
After a court has found that minimum contacts exist, those contacts may be considered in light of other factors, to determine whether the exercise of jurisdiction would comport with fair play and substantial justice. Burger King, 471 U.S. at 476. In appropriate cases, the court may consider the burden on the defendant, the forum's interest in adjudicating the dispute, the plaintiff's interest in convenient and effective relief, the interstate judicial system's interest in the efficient resolution of controversies, and the states' shared interest in furthering substantive social policies. Id. at 477. "[M]inimum requirements inherent in the concept of 'fair play and substantial justice' may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities." Id. at 477-78.
As a threshold matter, the parties dispute whether Defendants' contacts nationwide, or instead in a narrower forum, are relevant to the "minimum contacts" inquiry. As Defendant acknowledges, under the so-called "national contacts doctrine," personal jurisdiction in federal antitrust litigation is assessed based on a defendant's aggregate contacts with the United States as a whole. See In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288, 298 (3d Cir. 2004). "This means that personal jurisdiction must comply with the due process requirements of the Fifth Amendment, which requires only that the ... Plaintiffs show that [defendant] had minimum contacts with the United States as a whole." In re Liquid Aluminum Sulfate AntitrustLitig., No. 16-2687, 2019 U.S. Dist. LEXIS 39364, at *38 (D.N.J. Mar. 11, 2019). This principle stems from the notion that if Congress has authorized nationwide or worldwide service of process, a court's jurisdiction is not confined to the state in which the court sits. See, e.g., Pinker., 292 F.3d at 369-70. Pertinent here, Section 12 of the Clayton Act provides as follows:
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.
Defendants contend, however, that because all of them other than Mitsui were served under the Hague Convention, rather than the Clayton Act, a nationwide contacts analysis is inapplicable.3 In support of their argument, Defendants cite to Gen. Cigar Holdings, Inc. v. Altadis, S.A., 205 F. Supp. 2d 1335 (S.D. Fla. 2002).4 In that case, defendant was served under the Hague Convention. Id. at 1340. The Court found that service under the Clayton Act is the event that activates the statute's worldwide service provision. Id. Further, the Court concluded, it would be inappropriate to extend the territorial reach of a statute when service is not effected pursuant to the authorizing statute. Id. at 1340-41. Thus, the Court declined to consider defendant's nationwide contacts. Id.
I decline to follow General Cigar. In the first instance, our Court of Appeals has never endorsed the approach of General Cigar. In Clayton Act cases, our Court of Appeals has used language suggesting that the pertinent inquiry involves the nature of the plaintiff's claim and the breadth of service authorized by statute, rather than the mechanism of service actually used to serve a particular defendant. For example, the Court of Appeals has...
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