Metro Industries, Inc. v. Sammi Corp.

• Decision Date: 29 April 1996
• Docket Number: No. 94-56180,94-56180
• Citation: 82 F.3d 839
• Parties: 1996-1 Trade Cases P 71,383, 96 Cal. Daily Op. Serv. 2946, 96 Daily Journal D.A.R. 4883 METRO INDUSTRIES, INC., Plaintiff-Appellant, v. SAMMI CORPORATION, Sammi (America) Corporation; Ken Carter Industries, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 839

82 F.3d 839

1996-1 Trade Cases P 71,383, 96 Cal. Daily

Op. Serv. 2946,

96 Daily Journal D.A.R. 4883

METRO INDUSTRIES, INC., Plaintiff-Appellant, v. SAMMI CORPORATION, Sammi (America) Corporation; Ken Carter Industries, Inc., Defendants-Appellees.

No. 94-56180.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 8, 1996.

Decided April 29, 1996.

William P. Tedards, Jr., Washington, D.C., for plaintiff-appellant.

Thomas G. Bailey, Jr., John E. Tardera, Whitman, Breed, Abbott & Morgan, New York City, for defendants-appellees.

Appeal from the United States District Court for the Central District of California; Mariana R. Pfaelzer, District Judge, Presiding. D.C. No. CV-83-07931-MRP.

Before: POOLE, WIGGINS, and RYMER, Circuit Judges.

WIGGINS, Circuit Judge:

Metro Industries, Inc. ("Metro"), an importer and wholesaler of kitchenware, sued Sammi Corp. ("Sammi"), a South Korean exporting company, and two of its American subsidiaries alleging, inter alia, that a Korean design registration system, which gives Korean holloware producers the exclusive right to export a particular holloware design for three years, constituted a market division that is a per se violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. Metro alleges that Sammi used this registration system in 1983 to prevent Metro and other kitchenware importers from acquiring Korean-made stainless steal steamers from any of Sammi's competitors in Korea.

Metro appeals the district court's grant of Sammi's motion for summary judgment on Metro's Sherman Act § 1 claim, which was based on the district court record from Vollrath Co. v. Sammi Corp., 9 F.3d 1455 (9th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2163, 128 L.Ed.2d 886 (1994), a case in which another importer of Korean kitchenware sued Sammi for alleged violations of §§ 1 and 2 of the Sherman Act. We have jurisdiction pursuant to 28 U.S.C. § 1291 and AFFIRM.

FACTS AND PROCEDURAL HISTORY

Metro is an importer and distributor of kitchenware products. Metro started a stainless steel kitchenware business in about 1977, importing mixing bowls from a Korean supplier called Haidong. In 1978 it began to purchase bowls from Sammi, and over the next few years, expanded its business to include other kitchenware. By 1981, importing and selling stainless steel kitchenware constituted Metro's principal business activity.

Sammi is a large Korean trading company that purchases a wide variety of finished products, including stainless steel steamers, for export to the United States and other countries. Sammi is a member of the Korea Holloware Association. See Vollrath, 9 F.3d at 1462. This association, through a thirteen-member design registration committee, grants pattern and design registration rights for particular products based on the shape, appearance, and color of the products. Id. The registration committee consists of members from manufacturing companies, trading companies, the Korea Association of patent attorneys, and three members of Korean government organizations. A trading company, such as Sammi, can only hold a pattern design right jointly with a manufacturer. Id. Registration gives the design holder the exclusive right to export a particular design for three years, and the rights can be extended for three additional years.

According to Metro, in late 1981, it raised the idea of a line of stainless steel steamers with Sammi, provided Sammi with models, and asked Sammi to develop samples and to prepare to supply the steamers. Sammi registered the steamer design and began to supply Metro with steamers. Metro experienced a disruption of steamer deliveries from Sammi at some time during 1983. Metro In December 1983, Metro filed a complaint in the United States District Court for the Central District of California against Sammi and two of its American subsidiaries alleging violations of §§ 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 and 2) and §§ 2, 3, and 7 of the Clayton Act (15 U.S.C. §§ 13, 14, and 18), and various violations of California law. In June 1984, the claims against Sammi were dismissed for lack of personal jurisdiction.

                alleges that its attempts to order the steamers from another company were blocked by Sammi.   Eventually, in late 1983, Metro was able to secure a source of steamers from a Korean company called Sambo and apparently had no further disruptions in its steamer shipments
                

In June 1986, the district court commenced a bench trial on Metro's claims against the two American subsidiaries. The essence of Metro's case against the subsidiaries was that they had engaged in predatory pricing with the intent of monopolizing the stainless steel steamer and mixing bowl markets. After several days of trial on certain issues of the predatory pricing case, the two subsidiaries filed a motion for involuntary dismissal, pursuant to Rule 41(b) of the Federal Rules of Civil Procedure, on the grounds that Metro had not presented a prima facie case and could not present such a case with its remaining witnesses. The district court took the Rule 41(b) motion and an earlier motion for summary judgment under advisement and postponed the remainder of Metro's trial pending the court's decisions on Sammi's motions.

Meanwhile, a second importer of Korean kitchenware, the Vollrath Company, filed a similar action in the same district court against Sammi and its two U.S. subsidiaries. As in Metro's case, the district court granted Sammi's motion to dismiss for lack of personal jurisdiction. However, in February 1988, the district court granted Vollrath's motion to reconsider the court's jurisdiction over Sammi, and Sammi was reinstated as a defendant in both Vollrath's and Metro's cases. Defendants' 1986 motion for involuntary dismissal was denied without prejudice in May 1988.

The trial on Vollrath's claims against Sammi and its subsidiaries for violation of §§ 1 and 2 of the Sherman Act and the California Unfair Trade Practices Act, based on accusations of predatory pricing and output restriction, was conducted during March and April of 1989. On April 11, 1989, the jury returned a verdict in favor of Vollrath, awarding $9,478,676 in damages on the federal claims and $711,803 in damages on state law claims, for a total of over $29 million in damages after trebling the award on the federal claims. On December 27, 1989, however, the district court granted judgment notwithstanding the verdict ("JNOV") in favor of all defendants on all claims.

On appeal, we affirmed the district court's JNOV on all of Vollrath's theories. First, we held that the evidence presented could not support Vollrath's claims of attempted monopolization based on a predatory pricing theory. Vollrath, 9 F.3d at 1460-62. Second, we held that Vollrath could not sustain a Sherman Act § 2 attempted monopolization claim against Sammi for its temporary assertion of its rights to a particular rice steamer design, which prevented Vollrath from receiving steamers from another Korean exporter for a three-month period. We found that "[t]here was insufficient evidence concerning the relevant product and geographic market and Sammi's power in that market," making it impossible to find a dangerous probability that Sammi could gain monopoly power over any market in the United States. Id. at 1462. ¹ We did not consider Vollrath's claim that Sammi and other exporters in Korea engaged in a naked restraint of trade by establishing the export registration system, allegedly constituting a per se violation of § 1 of the Sherman Act, because Vollrath had not presented that theory to the district court. Id. at 1462 n. 4. The Supreme Court denied certiorari. See --- U.S. ----, 114 S.Ct. 2163, 128 L.Ed.2d 886 (1994).

Meanwhile, the defendants in the Metro case filed motions for summary judgment in 1990 after the district court's JNOV but before this court considered Vollrath's appeal.

                Both sides in the Metro case explicitly agreed that the issues in the Metro and Vollrath cases were essentially the same and that the district court should rely on the Vollrath record along with the limited Metro record in ruling on the motions for summary judgment.   The district court ordered the Metro case off calendar, pending our resolution of the Vollrath case
                

Immediately after our Vollrath decision, the district court scheduled a status conference for the Metro case, held on December 20, 1993. Subsequent to the district court's decision in the Vollrath case, Metro began arguing a new theory-that the Korean design registration system under which Sammi had the exclusive rights to manufacture a particular steamer design constituted a market division that was illegal per se under § 1 of the Sherman Act. ² In May 1994, Sammi filed a motion to dismiss all claims against Sammi and its subsidiaries pursuant to Rules 52(c) and 56(b) of the Federal Rules of Civil Procedure. Metro filed an opposition and cross-motion for partial summary judgment on the liability portion of the market division claim, relying entirely on the Vollrath record. The district court granted Sammi's motion for summary judgment and denied Metro's cross-motion, finding that Metro had failed to present sufficient evidence to carry its burden on any of its claims.

DISCUSSION

Metro appeals only the district court's grant of summary judgment in favor of Sammi on Metro's Sherman Act § 1 market division claim and the court's denial of Metro's cross-motion for summary judgment. We review a district court's grant of summary judgment de novo. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1261, 134 L.Ed.2d 209 (1996).

Section 1 of the Sherman Antitrust Act, as amended in 1990, reads, in relevant part:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.

15 U.S.C....