Rotec Indus. v. Mitsubishi Corp.

• Decision Date: 10 November 2003
• Docket Number: No. 02-35268,02-35268
• Citation: 348 F.3d 1116
• Parties: ROTEC INDUSTRIES, INC., an Illinois corporation, Plaintiff-Appellant, v. MITSUBISHI CORPORATION, a corporation organized under the laws of Japan; Tucker Associates, Inc., an Oregon corporation; Garry Tucker, an individual, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

348 F.3d 1116

ROTEC INDUSTRIES, INC., an Illinois corporation, Plaintiff-Appellant, v. MITSUBISHI CORPORATION, a corporation organized under the laws of Japan; Tucker Associates, Inc., an Oregon corporation; Garry Tucker, an individual, Defendants-Appellees.

No. 02-35268

United States Court of Appeals, Ninth Circuit.

Argued and Submitted September 11, 2003 — Portland, Oregon.

Filed November 10, 2003.

COPYRIGHT MATERIAL OMITTED

George P. McAndrews and Gerald C. Willis, McAndrews, Held & Malloy, Ltd., Chicago, Illinois, for the plaintiff-appellant.

Michael O. Warnecke, Mayer, Brown, Rowe & Maw, Chicago, Illinois, for the defendants-appellees.

Appeal from the United States District Court for the District of Oregon; Garr M. King, District Judge, Presiding. D.C. No. CV-00-01394-KI.

Before: Otto R. Skopil, Jr., Cynthia Holcomb Hall, and Susan P. Graber, Circuit Judges.

OPINION

HALL, Circuit Judge:

This controversy arises out of the construction of a massive dam on the Yangtze River by the government of the People's Republic of China. The parties competed for contracts to sell construction equipment to the Chinese government. Rotec Industries, Inc., appeals the district court's order granting summary judgment to defendants on Rotec's claim of violation of section 2(c) of the Robinson-Patman Act and on its Oregon state law claim of intentional interference with economic advantage. Rotec argues that the district court erred by holding that it lacked subject matter jurisdiction over the Robinson-Patman claim. Rotec also assigns error to the district court's ruling that Rotec did not introduce sufficient evidence to create an issue of fact regarding the causation element of Rotec's intentional interference claim.

We have jurisdiction under 28 U.S.C. § 1291. Finding no error in the district court's grant of summary judgment, we AFFIRM.

FACTS

Almost two millennia after Chinese emperors began construction on what would one day be the Great Wall, China's government began construction on another ambitious public works project. Upon completion, the Three Gorges Dam on the Yangtze River will be an extraordinary accomplishment of modern engineering. The project began in 1993 and is being conducted in three phases. When construction ends in 2009, the dam is expected to be the largest hydroelectric dam in the world.

Rotec is a manufacturer of concrete placement equipment. During Stage I of the dam project, the China Yangtze Three Gorges Project Development Corporation ("Three Gorges Corp."), a corporation owned by the Chinese government, bought Rotec equipment for use in the construction of the dam. In 1995, Three Gorges Corp. announced that it would seek bids for contracts to buy concrete placement equipment during Phase II of the project. Rotec sought to win these contracts. In December 1995, Mitsubishi, a Japanese corporation, Potain, a French corporation, and C.S. Johnson, an Illinois corporation (collectively, "the defendants"), agreed they would work together to place a bid to compete with Rotec for these contracts.

On January 15, 1996, seven companies placed bids to win the contracts to provide equipment for the dam. A Bid Evaluation Committee, consisting of approximately sixty members, evaluated the bids and recommended both Rotec and the defendants to Three Gorges Corp. Negotiations then were conducted for several months. In November 1996, Rotec secured a contract to sell three pieces of concrete placement equipment. The buyer was listed as the Chinese Resources National Corporation ("CRNC"). Three Gorges Corp. was listed as the "owner." CRNC contracted to buy the equipment for $30,515,319.

CRNC also received an option to purchase two more pieces of equipment from Rotec for $15,859,000. Instead of exercising this option, however, CRNC bought the other two pieces of equipment from Mitsubishi for $17,825,190 on December 16, 1996. CRNC was named as the buyer and Three Gorges Corp. as the "owner" of this additional equipment. Also on December 16, 1996, Mitsubishi signed an addendum to its contract with CRNC, agreeing to pay CRNC a 0.5 percent "commission" on the contract to be delivered to a CRNC account in Hong Kong. At some point during the negotiating process, one of the parties involved with Mitsubishi recommended a Bid Evaluation Committee member for a quality control job.

Rotec sued defendants for patent infringement in the Central District of Illinois. The claim was dismissed. Rotec subsequently filed another suit against the defendants in the Central District of Illinois, alleging a variety of claims. Approximately five months after the deadline to amend its pleadings, Rotec sought leave to amend to add the claims that are now before us. The district court in Illinois denied Rotec leave to amend but granted a motion for relief from a protective order so that Rotec could bring claims based on certain documents in a different district. In so doing, the district court expressed "no opinion" on the propriety of bringing such claims in any district.

Rotec then filed suit in the District of Oregon, alleging violations of the Robinson-Patman Act, RICO, and Oregon state law prohibiting intentional interference with economic relations. In two separate published orders, the district court granted summary judgment in favor of Mitsubishi on all claims. 181 F.Supp.2d 1173 (D.Or.2002); 163 F.Supp.2d 1268 (D.Or. 2001). This appeal followed.

DISCUSSION

A. Claim Preclusion

Defendants argue that the claims brought by Rotec could have been brought in the federal action in Illinois and are therefore barred by the doctrine of res judicata or, more specifically, claim preclusion. We do not consider the argument because it is waived.

"Claim preclusion is an affirmative defense which may be deemed waived if not raised in the pleadings. Moreover, the failure of the defendant to object to the prosecution of dual proceedings while both proceedings are pending also constitutes waiver." Clements v. Airport Auth. of Washoe County, 69 F.3d 321, 328 (9th Cir.1995) (citation omitted). In district court, the defendants did not object to Rotec's prosecution of the two proceedings that appear to arise out of the same set of operative facts.

Since the defense is not one of jurisdiction, it generally cannot be raised for the first time on appeal. Extraordinary circumstances may justify raising claim preclusion for the first time on appeal. Cf. Clements, 69 F.3d at 327-31 (applying issue preclusion for first time on appeal); Chew v. Gates, 27 F.3d 1432, 1437 n. 2 (9th Cir.1994) (same). In this case, we see no reason to depart from our general rule that claim preclusion is waived if not raised in district court. There is no reason to allow litigants to delay objecting to dual proceedings until they receive a favorable judgment in one proceeding. We believe that permitting such conduct could only encourage mischief.

We therefore do not consider defendants' argument that Rotec's claims are barred by claim preclusion.

B. Jurisdiction Under Section 2(c) of the Robinson-Patman Act

Section 2(c) of the Robinson-Patman Act¹ states:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

15 U.S.C. § 13(c).

The district court held that the conduct at issue did not meet the jurisdictional requirements of section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c). The court declined to rely on our decision in Rangen, Inc. v. Sterling Nelson & Sons, 351 F.2d 851 (9th Cir.1965), concluding that Rangen was no longer good law in light of Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 186, 95 S.Ct. 392, 42 L.Ed.2d 378 (1974).

Rangen held that a very incidental effect on interstate or foreign commerce was enough to satisfy the jurisdictional requirement of section 2(c). See Rangen, 351 F.2d at 861 (stating that payments "were made in the course of interstate commerce because they created influences intrastate which injured the free competitive interstate commerce in fish food outside Idaho"). In Gulf Oil, the Supreme Court interpreted the jurisdictional portion of section 2(a) of the Robinson-Patman Act more narrowly:

[T]he distinct "in commerce" language of the ... Robinson-Patman Act provisions with which we are concerned here appears to denote only persons or activities within the flow of interstate commerce — the practical, economic continuity in the generation of goods and services for interstate markets and their transport and distribution to the consumer. If this is so, the jurisdictional requirements of these provisions cannot be satisfied merely by showing that allegedly anticompetitive acquisitions and activities affect commerce.

Gulf Oil, 419 U.S. at 195, 95 S.Ct. 392.

In Gulf Oil, the Supreme Court interpreted section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a), not the section applicable to this case, section 2(c), 15 U.S.C. § 13(c). Section 2(a) forbids "any person engaged in commerce, in the course of such commerce" to discriminate in price "where either or any of the purchases involved in such discrimination are in commerce" and where the discrimination has substantial anti-competitive effects "in any line of commerce." 15 U.S.C. § 13(a); see also Gulf Oil, 419 U.S. at 193-94, 95 S.Ct. 392. Rotec argues that, because Gulf Oil involved section 2(a) while Rangen involved section 2(c), the district court should have...