In re Dynamic Random Access Memory, No. 06-15636.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtFisher
Citation538 F.3d 1107
Docket NumberNo. 06-15636.
Decision Date14 August 2008
PartiesIn 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.
538 F.3d 1107
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.

[538 F.3d 1108]

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

[538 F.3d 1109]

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 and Ian Simmons, 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.

Opinion by Judge FISHER; Concurrence by Judge NOONAN.

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

538 F.3d 1110

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 Jurisdiction

In 1982, Congress responded to concerns regarding the scope of the broad jurisdictional language in the Sherman Act by enacting the FTAIA.3 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).4 This exception is known

538 F.3d 1111

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 allege the second prong, that such U.S. domestic effect "g[ave] rise to" Centerprise's foreign injury under § 6a of the FTAIA. Only the district court's conclusion with respect to the second prong of the domestic injury exception is at issue in this appeal.5

The controlling precedent on the FTAIA domestic injury exception is the Supreme Court's opinion in Empagran I. There the Supreme Court addressed the exception in the context of an antitrust class action brought by foreign purchasers of vitamins who alleged a global price-fixing conspiracy that led to increased prices in the United States, and independently led to increased prices for vitamins in other countries. 542 U.S. 155, 124 S.Ct. 2359, 159 L.Ed.2d 226. The Court stated the issue as whether the Sherman Act reaches "anti-competitive price-fixing activity that is in significant part foreign, that causes some domestic antitrust injury, and that independently causes separate foreign injury." Id. at 158, 124 S.Ct. 2359.

After considering principles of comity and the history of the Sherman Act and the FTAIA, the Court concluded that "Congress would not have intended the FTAIA's exception to bring independently caused foreign injury within the Sherman Act's reach." See id. at 173, 124 S.Ct. 2359. Thus the foreign purchasers who bought vitamins outside of the United States could not bring a claim under the Sherman Act "where [their] claim...

To continue reading

Request your trial
6 practice notes
  • In re Packaged Seafood Prods. Antitrust Litig., Case No.: 15-MD-2670 JLS (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • September 5, 2018
    ...Life Ins. Co. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 ; In re Dynamic Random Access Memory (DRAM) Antitrust Litig. , 538 F.3d 1107, 1110 (9th Cir. 2008). Rule 12(b)(1) motions may challenge jurisdiction facially or factually. Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039......
  • Med-Sys. Inc. v. Masterson Mktg. Inc., CASE NO. 11CV695 JLS (BLM)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 23, 2011
    ...jurisdiction. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 538 F.3d 1107, 1110 (9th Cir. 2008). The Court must first determine whether it has jurisdiction, and must not reach the merits where jurisdiction is lackin......
  • Smith v. Greystone Alliance LLC., No. 09 C 5585
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • March 29, 2011
    ...and (2) the debt collector must have policies in place to prevent the error. Kort, 394 F.3d at 537-38; see also Seeger v. AFNI, Inc., 538 F.3d 1107, 1114 (7th Cir. 2008) (observing in dicta that bona fide error defense applies to factual, not legal errors). Greystone's argument merits littl......
  • In re Dynamic Random Access Memory (Dram), No. 06-15636.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 14, 2008
    ...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 At pg. 1110, insert new footnote 3 after "B. Subject Matter Jurisdiction" 3: 3 The district court gra......
  • Request a trial to view additional results
6 cases
  • In re Packaged Seafood Prods. Antitrust Litig., Case No.: 15-MD-2670 JLS (MDD)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • September 5, 2018
    ...Life Ins. Co. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 ; In re Dynamic Random Access Memory (DRAM) Antitrust Litig. , 538 F.3d 1107, 1110 (9th Cir. 2008). Rule 12(b)(1) motions may challenge jurisdiction facially or factually. Safe Air for Everyone v. Meyer , 373 F.3d 1035, 1039......
  • Med-Sys. Inc. v. Masterson Mktg. Inc., CASE NO. 11CV695 JLS (BLM)
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 23, 2011
    ...jurisdiction. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 538 F.3d 1107, 1110 (9th Cir. 2008). The Court must first determine whether it has jurisdiction, and must not reach the merits where jurisdiction is lackin......
  • Smith v. Greystone Alliance LLC., No. 09 C 5585
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • March 29, 2011
    ...and (2) the debt collector must have policies in place to prevent the error. Kort, 394 F.3d at 537-38; see also Seeger v. AFNI, Inc., 538 F.3d 1107, 1114 (7th Cir. 2008) (observing in dicta that bona fide error defense applies to factual, not legal errors). Greystone's argument merits littl......
  • In re Dynamic Random Access Memory (Dram), No. 06-15636.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • August 14, 2008
    ...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 At pg. 1110, insert new footnote 3 after "B. Subject Matter Jurisdiction" 3: 3 The district court gra......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT