In re Dynamic Random Access Memory (Dram)

• Decision Date: 14 August 2008
• Docket Number: No. 06-15636.,06-15636.
• Citation: 546 F.3d 981
• Parties: In re DYNAMIC RANDOM ACCESS MEMORY (DRAM) ANTITRUST LITIGATION. Centerprise International, Ltd, Plaintiff-Appellant, v. Micron Technology, Inc.; Micron Semiconductor Products Inc.; Crucial Technology, Inc.; Samsung Electronics Co. Ltd.; Samsung Semiconductor, Inc.; Mosel-Vitelic, Inc.; Mosel-Vitelic Corporation (USA); Infineon Technologies, AG; Infineon Technologies North America Corp.; Hynix Semiconductor America, Inc.; Hynix Semiconductor, Inc.; Elpida Memory, Inc.; Elpida Memory, (USA) Inc.; NEC Electronics America, Inc.; Nanya Technology Corp.; Nanya Technology Corp. USA; Winbond Electronics Corp.; Winbond Electronics Corp. America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

546 F.3d 981

In re DYNAMIC RANDOM ACCESS MEMORY (DRAM) ANTITRUST LITIGATION Centerprise International, Ltd, Plaintiff-Appellant, v. Micron Technology, Inc.; Micron Semiconductor Products Inc.; Crucial Technology, Inc.; Samsung Electronics Co. Ltd.; Samsung Semiconductor, Inc.; Mosel-Vitelic, Inc.; Mosel-Vitelic Corporation (USA); Infineon Technologies, AG; Infineon Technologies North America Corp.; Hynix Semiconductor America, Inc.; Hynix Semiconductor, Inc.; Elpida Memory, Inc.; Elpida Memory, (USA) Inc.; NEC Electronics America, Inc.; Nanya Technology Corp.; Nanya Technology Corp. USA; Winbond Electronics Corp.; Winbond Electronics Corp. America, Defendants-Appellees.

No. 06-15636.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 13, 2008.

Filed August 14, 2008.

Amended October 9, 2008.

Henry H. Rossbacher, The Rossbacher Firm; Natalie Finkelman Bennett and James C. Shah (argued), Shepherd, Finkelman, Miller & Shah, LLC, for plaintiff-appellant Centerprise International, Ltd.

Michael D. Blechman (argued), Aton Arbisser, Julian Brew and Tanja Shipman, Kaye Scholer LLP for defendants-appellees Infineon Technologies, AG and Infineon Technologies NA Corp.; Joel Sanders, Gibson Dunn & Crutcher LLP, for defendants-appellees Crucial Technology Inc., Micron Technology, Inc., Micron Semiconductor Products, Inc.; William Goodman, Topel & Goodman LLC for defendants-appellees Mosel-Vitelic Inc., and Mosel-Vitelic Corp.; Paul R. Griffin, Thelen Reid & Priest LLP, for defendant-appellee NEC Electronics America, Inc.; Steven H. Morrissett, Finnegan, Henderson, Farabow, Garrett & Dunner LLP, for defendants-appellees Winbond Electronics Corp. and Winbond Electronics Corp. America; Kenneth O'Rourke, O'Melveny & Myers LLP, for defendants-appellees Hynix Semiconductor Inc. and Hynix Semiconductor America, Inc.; Robert E. Freitas, Orrick, Herrington & Sutcliffe LLP, for defendants-appellees Nanya Technology Corp. and Nanya Technology Corp. USA; Harrison J. Frahn, Simpson, Thatcher & Bartlett LLP for defendants-appellees Elpida Memory, Inc. and Elpida Memory (USA), Inc.; James L. McGinnis, Sheppard Mullin Richter & Hampton LLP, for defendants-appellees Samsung Electronics Co. Ltd. and Samsung Semiconductor Inc.

Appeal from the United States District Court for the Northern District of California; Phyllis J. Hamilton, District Judge, Presiding. D.C. Nos. CV-02-01486-PJH, CV-05-03026-PJH.

Before: JOHN T. NOONAN, JR., M. MARGARET McKEOWN and RAYMOND C. FISHER, Circuit Judges.

ORDER

The opinion filed at 538 F.3d 1107, 1110 (9th Cir. Aug.14, 2008) is amended as follows:

At pg. 1110, insert new footnote 3 after

"B. Subject Matter Jurisdiction" 3:

3

The district court granted defendants' motion to dismiss, which was premised solely on jurisdictional grounds. It is unclear, however, whether the FTAIA is more appropriately viewed as withdrawing jurisdiction from the federal courts when a plaintiff fails to establish proximate cause or as simply establishing a limited cause of action requiring plaintiffs to prove proximate cause as an element of the claim. Compare Empagran S.A. v. F. Hoffmann-LaRoche, Ltd., 417 F.3d 1267, 1268-69, 1271 (D.C.Cir.2005) (affirming dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction), with In re Elevator Antitrust Litigation, 502 F.3d 47, 49-50 (2d Cir.2007) (affirming dismissal on 12(b)(6) grounds). The Supreme Court's decision in Empagran I provides little guidance because, although the district court had dismissed under Rule 12(b)(1), the Court did not explicitly address whether the issue was properly viewed as one of federal question subject matter jurisdiction or of a failure to state a claim under federal law. We decline to resolve the question, because it was not argued by the parties and in this case the result and analysis are the same. Accordingly, we assume without deciding that the district court correctly dismissed under Rule 12(b)(1).

No petitions for panel rehearing or rehearing en banc will be considered.

OPINION

FISHER, Circuit Judge:

Plaintiff-appellant Centerprise International, Ltd. ("Centerprise"), a British computer manufacturer that purchased dynamic random access memory ("DRAM") outside of the United States, appeals the district court's dismissal of its complaint for lack of subject matter jurisdiction under the Foreign Trade Antitrust Improvement Act of 1982 ("FTAIA"), 15 U.S.C. § 6a, amending the Sherman Act, 15 U.S.C. § 1-7.¹ Defendants-appellees are U.S. and foreign manufacturers and sellers of DRAM, a type of high-density memory used in personal computers and other electronic devices. We affirm.

I. Background

Centerprise is a British corporation that uses DRAM in the manufacture of its computers. DRAM is a common type of memory chip that is sold around the world. According to Centerprise, DRAM is "a readily transportable commodity product with multiple firms offering essentially identical parts." Centerprise purchased DRAM outside of the United States from the defendants, various memory companies.

Centerprise brought this antitrust class action in May 2005 on behalf of itself and all others similarly situated, pursuant to §§ 4(a), 12 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 22 and 26, seeking injunctive relief and damages, premised on defendants' alleged violations of federal antitrust laws, including § 1 of the Sherman Act.² Centerprise alleged that the defendants engaged in a global conspiracy to fix DRAM prices, raising the price of DRAM to customers in both the United States and foreign countries. Specifically, Centerprise asserted that the domestic effect of the defendants' anticompetitive conduct — higher DRAM prices in the United States — gave rise to its foreign injury of having to pay higher DRAM prices abroad because the defendants could not have raised prices worldwide and maintained their global price-fixing arrangement without fixing the DRAM prices in the United States.

The district court dismissed the complaint with prejudice for lack of subject matter jurisdiction under the FTAIA. Relying on the Supreme Court's decision in F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 124 S.Ct. 2359, 159 L.Ed.2d 226 (2004) ("Empagran I"), and the D.C. Circuit's decision in that case on remand, the district court held that Centerprise had not met the jurisdictional prerequisites under the FTAIA because it had not sufficiently alleged that its foreign injury was directly linked to the domestic effect of higher U.S. prices for DRAM. The district court also denied Centerprise leave to amend its complaint as futile because its proposed amendments did not substantively change its theory of recovery. Centerprise timely appealed.

II. Discussion

A. Legal Standards

We review de novo the district court's dismissal for lack of subject matter jurisdiction. See United States v. LSL Biotechnologies, 379 F.3d 672, 677 (9th Cir.2004). The party asserting jurisdiction bears the burden of establishing subject matter jurisdiction on a motion to dismiss for lack of subject matter jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); see also Stock W., Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989). Dismissal for lack of subject matter jurisdiction is appropriate if the complaint considered in its entirety, on its face fails to allege facts sufficient to establish subject matter jurisdiction. See Love v. United States, 915 F.2d 1242, 1245 (9th Cir.1990).

B. Subject Matter Jurisdiction³

In 1982, Congress responded to concerns regarding the scope of the broad jurisdictional language in the Sherman Act by enacting the FTAIA.⁴ See Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 272i, pp. 286-87 (3d ed.2006) (hereinafter "Areeda & Hovenkamp"). The FTAIA amends the Sherman Act and "excludes from [its] reach much anti-competitive conduct that causes only foreign injury." Empagran I, 542 U.S. at 158, 124 S.Ct. 2359. It does this by establishing a general rule that the Sherman Act "shall not apply to conduct involving trade or commerce ... with foreign nations." § 6a. It then provides an exception to this general rule, making the Sherman Act applicable if foreign conduct "(1) has a `direct, substantial, and reasonably foreseeable effect' on domestic commerce, and (2) `such effect gives rise to a[Sherman Act] claim.'" Empagran I, 542 U.S. at 159, 124 S.Ct. 2359 (quoting § 6a) (alteration in Empagran I).⁵ This exception is known as the "domestic injury exception" of the FTAIA. The Supreme Court has described the FTAIA's language as:

initially lay[ing] down a general rule placing all (nonimport) activity involving foreign commerce outside the Sherman Act's reach. It then brings such conduct back within the Sherman Act's reach provided that the conduct both (1) sufficiently affects American commerce, i.e., it has a "direct, substantial, and reasonably foreseeable effect" on American domestic, import or (certain) export commerce, and (2) has an effect of a kind that antitrust law considers harmful i.e., the "effect" must "giv[e] rise to a [Sherman Act] claim."

Id. at 162, 124 S.Ct. 2359.

The FTAIA thus clarifies that U.S. antitrust laws concern the protection of "American consumers and American exporters, not foreign consumers or producers." Areeda & Hovenkamp at ¶ 272i, pp. 287. For the Sherman Act to apply, the effect on U.S. commerce or American interests engaged in foreign commerce must be direct, substantial and reasonably foreseeable — not minor impacts — and it must "giv[e] rise" to the antitrust claim. See id.

In dismissing Centerprise's action, the district court concluded that Centerprise had sufficiently alleged that defendants' conduct had a "direct, substantial, and reasonably foreseeable" effect on U.S. domestic commerce, the first prong of the domestic injury exception, but did not sufficiently...