In re Vitamins Antitrust Litigation

• Decision Date: 27 March 2000
• Docket Number: No. 99-197 TFH.,99-197 TFH.
• Citation: 94 F.Supp.2d 26
• Parties: In re VITAMINS ANTITRUST LITIGATION. This Document Relates To All Actions.
• Court: U.S. District Court — District of Columbia

94 F.Supp.2d 26

In re VITAMINS ANTITRUST LITIGATION This Document Relates To All Actions.

No. 99-197 TFH.

United States District Court, District of Columbia.

March 27, 2000.

MEMORANDUM OPINION — Re: Personal Jurisdiction

THOMAS F. HOGAN, District Judge.

Pending before the Court are the motions of defendants Rhone-Poulenc S.A. ("RPSA"), BASF Aktiengesellschaft ("BASF AG"), and F. Hoffman-La Roche Ltd. ("Roche Ltd")¹ to dismiss the Cargill, Inc., et al. v. F. Hoffman-La Roche, et al., action for lack of personal jurisdiction. Also pending are numerous motions by other defendants in the Vitamins Antitrust Litigation for determination of the governing law on the question of personal jurisdiction under the Clayton Act, i.e. whether the test is one of national or local contacts.² After careful consideration of all briefs filed with regard to this issue as well as the arguments presented at the March 16, 2000 hearing and the governing case-law on this issue, the Court finds that it is bound by the D.C. Circuit's ruling in GTE New Media Services, Inc. v. BellSouth Corp., et al., 199 F.3d 1343 (D.C.Cir.2000)³ . Due to this change in the governing law, the Court holds that plaintiffs are entitled to additional jurisdictional discovery aimed at addressing matters relating to the defendants' local contacts with the forum states.

I. BACKGROUND

The Vitamins Antitrust Litigation involves allegations of a worldwide conspiracy to fix prices and allocate market shares of vitamins, vitamin premixes, and other bulk vitamin products from 1989 to the present. Three alien defendants — RPSA, BASF AG, and Roche Ltd—seek dismissal of the Cargill action⁴ because of a claimed lack of jurisdiction over them. The Court finds this assertion of lack of personal jurisdiction highly suspect in light of the representations made by these defendants to the government. In May of 1999, Roche Ltd and BASF AG pled guilty in the United States District Court for the Northern District of Texas to criminal antitrust violations and expressly admitted participating (with RPSA and others) for the past decades in the very same conspiracy charged here. See Affidavit of John F. Kinney ¶¶ 22-27; Plaintiffs Exhibits R & V (Plea Agreements of Roche Ltd and BASF AG, respectively). Notably, the Roche Ltd and BASF AG Plea Agreements specifically refer to civil damage actions as the reason these defendants were not required to make restitution as part of their guilty pleas. See Kinney Aff. ¶ 24; Plaintiffs' Exhibits R & V. RPSA escaped criminal prosecution only by admitting its own participation and cooperating against the other two defendants. Similarly, providing restitution is one of the prerequisites for the immunity that RPSA sought and received under the Justice Department's corporate leniency program. See DOJ Corporate Leniency Policy ¶¶ A(5), B(6) (Aug. 10, 1993). Therefore, there is little question that these three defendants are subject to jurisdiction somewhere in the United States.⁵ Unfortunately, due to this Circuit's recent opinion in GTE and the defendants' insistence that they are not subject to personal jurisdiction in this Court, the Court is forced to subject the parties to more expense and delay in resolving the question of which forum has personal jurisdiction over these alien defendants.

II. DISCUSSION

Pursuant to Fed.R.Civ.P. 12(b)(2), defendants RPSA, BASF AG, and Roche Ltd. seek dismissal of the Cargill action for lack of personal jurisdiction. Plaintiffs offer three statutory bases for jurisdiction in this case: (1) Section 12 of the Clayton Act, (2) the Illinois long-arm statute, and (3) Fed.R.Civ.P. 4(k)(2).

A. Section 12 of the Clayton Act

The first issue which this Court must resolve is whether Section 12 of the Clayton Act supports a national or a local contacts test for establishing jurisdiction.⁶ 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." Plaintiffs argue that Section 12 authorizes worldwide service of process in all antitrust proceedings because the language authorizing worldwide service of process "in such cases" refers back to the earlier phrase "[a]ny suit, action, or proceeding under the antitrust laws." Defendants, on the other hand, contend that the language of Section 12 that allows worldwide service of process only "in such cases" means that the process provisions may be used only in those cases in which the entire initial venue provision has been satisfied.

On July 29, 1999, this Court issued an opinion, agreeing with the Ninth Circuit's opinion in Go-Video Inc. v. Akai Elec. Co., 885 F.2d 1406 (9th Cir.1989) (holding that Section 12 should be read to expand, rather than limit, the bounds of venue) and concluding that "pursuant to Section 12 of the Clayton Act, the relevant forum on which to analyze Defendants' contacts is the United States as a whole." In Re Vitamin Antitrust Litig., Misc. No. 99-197(TFH), MDL No. 1285, 1999 WL 728100, * 3 (D.D.C. July 29, 1999). However, the Court must now revisit this issue in light of the D.C. Circuit's recent opinion in GTE in which this Circuit explicitly rejected Go-Video and held that "invocation of the nationwide service clause [of Section 12] rests on satisfying the [Act's] venue provision." GTE, 199 F.3d at 1350.

Plaintiffs offer several arguments that attempt to distinguish this case from GTE. First, plaintiffs argue that GTE's local contacts test applies only to domestic corporations and is thus inapposite to this case. However, there is no language in GTE to support this distinction. In fact, the word "domestic" does not appear anywhere in the court's opinion. Moreover, the GTE court flatly rejected Go-Video, a case which did involve foreign defendants. If the D.C. Circuit did not intend to bind plaintiffs suing alien corporations, the Court could simply have distinguished Go-Video as inapposite since Go-Video involved foreign corporations and GTE involved only domestic defendants. Since GTE places no emphasis on the defendants' United States residence and since there is no language in the opinion which could be interpreted to carve out an exception for suits against foreign defendants, there is no basis for distinguishing GTE from the Vitamins Antitrust Litigation on this ground.

Second, plaintiffs argue that GTE is inapposite to the Vitamins Antitrust Litigation because GTE is an Internet case. The Court agrees with plaintiffs that the GTE court may have been influenced by the unique nature of the Internet and the special dangers posed by allowing plaintiffs to sue defendants anywhere based upon access to an Internet site. Unfortunately, however, the GTE court did not limit their opinion to the facts of that case. Since both the appellee's brief and the appellants' reply in GTE mention this Court's July 29, 1999 opinion in the Vitamins Antitrust Litigation⁷, the Court must assume that the D.C. Circuit was aware of this Court's decision on personal jurisdiction over alien defendants under the Clayton Act. Although this Court is greatly concerned with the effect of a local contacts test on the consolidation and management of multidistrict litigation, it is bound by this Circuit's statutory analysis of the Clayton Act and its clear rejection of the Go-Video approach in GTE.⁸

Plaintiffs further argue that the Clayton Act's venue provision is wholly inapplicable to aliens, because 28 U.S.C. § 1391(d) ("An alien may be sued in any district.") mandates that aliens cannot invoke any venue restrictions. Plaintiffs contend that GTE did not alter this presumption because GTE involved only domestic defendants and thus considered only 28 U.S.C. § 1391(b) and (c), not 28 U.S.C. § 1391(d). This Court disagrees. In GTE, the D.C. Circuit explicitly held that an antitrust plaintiff relying on the worldwide service of process provisions of Section 12 of the Clayton Act must also meet the venue provisions of that statute. GTE, 199 F.3d at 1351. This Circuit explicitly rejected the Ninth Circuit's holding in Go-Video that a plaintiff could rely on alternate bases for venue after resort to Section 12's authorization for extraterritorial service. Instead, the D.C. Circuit held that "[a] party seeking to take advantage of Section 12's liberalized service provisions must follow the dictates of both of its clauses." GTE, 199 F.3d at 1351. Therefore, the Court sees no merit in plaintiffs' argument that although an antitrust plaintiff cannot use the venue provisions of 28 U.S.C. § 1391(b) and (c) when relying on the Clayton Act's worldwide service of process provision, such a plaintiff could use the venue provision of 28 U.S.C. § 1391(d) when relying on that same service provision. Under GTE, the liberal service of process provision of the Clayton Act is applicable only to plaintiffs who also satisfy that statute's venue provision. GTE, 199 F.3d at 1351.

Plaintiffs' reliance on Brunette Machine Works, Ltd. v. Kockum Indus. Inc., 406 U.S. 706, 708, 92 S.Ct. 1936, 32 L.Ed.2d 428 (1972) is also misplaced. Brunette did not involve personal jurisdiction, but rather proper venue once valid service of process had been made. See Brunette, 406 U.S. at 708, 92 S.Ct. 1936 (noting that "subject only to the requirements of service of process," venue restrictions did not apply to foreign defendants and such defendants could be tried in any district) (emphasis added); Weinstein v. Norman M. Morris Corp., 432 F.Supp. 337, 339 (E.D.Mich.1977) ("the issue before the Court in Brunette was the propriety of venue in a suit involving an alien where valid service of process could be effected in the forum. The holding of the Court was not that Sec. 1391(d)...