State v. Yazaki N. Am., Inc.

• Decision Date: 30 April 2020
• Docket Number: NO. 2019-CA-00094-SCT,2019-CA-00094-SCT
• Parties: The STATE of Mississippi, EX REL. Lynn FITCH, Attorney General v. YAZAKI NORTH AMERICA, INC., Leoni Wiring Systems, Inc., Leonische Holding, Inc., G.S.W. Manufacturing, Inc., G.S. Wiring Systems, Inc., Denso International America, Inc., and American Furukawa, Inc.
• Court: Mississippi Supreme Court

294 So.3d 1178

The STATE of Mississippi, EX REL. Lynn FITCH, Attorney General

v.YAZAKI NORTH AMERICA, INC., Leoni Wiring Systems, Inc., Leonische Holding, Inc., G.S.W. Manufacturing, Inc., G.S. Wiring Systems, Inc., Denso International America, Inc., and American Furukawa, Inc.

NO. 2019-CA-00094-SCT

Supreme Court of Mississippi.

April 30, 2020

ATTORNEYS FOR APPELLANT: OFFICE OF THE ATTORNEY GENERAL BY: JACQUELINE H. RAY, DONALD L. KILGORE, MARY JO WOODS, BRENT HAZZARD, RICHARD B. SCHWARTZ, STUART H. SINGER, ERIC R. G. BELIN, EDGAR D. GANKENDORFF, MATTHEW L. DAMERON, WILLIAM A. ISAACSON, STACY K. GRIGSBY

ATTORNEYS FOR APPELLEES: LA'TOYIA JENESSA SLAY, JOHN A. CRAWFORD, JR., CHARLES E. GRIFFIN, P. RYAN BECKETT, STEPHEN L. THOMAS, ALAN W. PERRY, SIMON TURNER, BAILEY FRED KRUTZ, III, DANIEL J. MULHOLLAND, MICHAEL B. WALLACE, CHARLES EDWIN ROSS, REBECCA L. HAWKINS, CHARLES EDWARD COWAN, WILLIAM N. REED, AMY CHAMPAGNE, JEREMY J. CALSYN, ALEXIS L. COLLINS, JOHN H. CHUNG, JACK E. PACE, III, DAVID H. SUGGS, DEMETRA V. FRAWLEY, MICHAEL F. TUBACH, MEGAN HAVSTAD, STEVEN FRANKLIN CHERRY, KEVIN MICHAEL GALLAGHER, PATRICK J. CAROME, SETH BASTIANELLI, DONALD M. BARNES, MOLLY CRABTREE

BEFORE KITCHENS, P.J., MAXWELL AND CHAMBERLIN, JJ.

MAXWELL, JUSTICE, FOR THE COURT:

¶1. In 2012, the executives of several Japanese auto-parts manufacturers pled guilty to federal crimes based on an international scheme to fix the price of Automotive Wire Harness Systems (AWHS). Three years later, the State of Mississippi sued the American subsidiaries of these federally prosecuted companies. The State alleged violations of the Mississippi Consumer Protection Act (MCPA) and the Mississippi Antitrust Act (MAA), as well as a civil conspiracy to violate the MCPA and MAA. The trial court dismissed the State's complaint for failure to state a claim on which relief can be granted. The State appealed.

¶2. After review, we affirm the trial court's finding that the alleged unfair trade practices were too remote in time to support the State's claim for injunctive relief under the MCPA. Also, the complaint alleges no "wholly intrastate" transactions that would make the alleged illegal cartel punishable under the MAA.¹ And because the State alleged no viable claim for a statutory violation, its civil-conspiracy claim—based solely on the alleged statutory violations—likewise fails. We affirm the judgment of dismissal.

Background Facts & Procedural History

I. The Attorney General's Complaint

¶3. On October 9, 2015, Attorney General Jim Hood,² on behalf of the State, sued nine³ automotive component-parts manufacturers in Hinds County Chancery Court. The State alleged these manufacturers—all manufacturing in the United States but not in Mississippi—had been part of an illegal cartel that fixed the prices of Automotive Wire Harness Systems (AWHS)—the electrical distribution system for motor vehicles.

¶4. According to the complaint, the defendants sold AWHS to motor vehicle original-equipment manufacturers (OEMs), suppliers to OEMs, and distributors. While the complaint explained that "OEMs include domestic OEMs such as the Big Three in Detroit (General Motors, Ford and Chrysler) and non-domestic OEMs who also operate manufacturing plants" such as "Nissan and Toyota manufactur[ing] cars in Mississippi," the complaint did not allege any defendant directly sold AWHS to the Nissan or Toyota plant in Mississippi during the relevant time period. Rather, the complaint alleged that "[s]uppliers purchased Automotive Wire Harness Systems directly from Defendants or their co-conspirators, which they then sold to OEMs or other suppliers to OEMs."

¶5. Ultimately, the AWHS were installed in vehicles manufactured and sold in the United States. The State alleged that Mississippians, by buying some of these vehicles, had indirectly purchased the defendants’ inflated AWHS. Mississippians had also indirectly purchased replacement AWHS from an auto-parts supplier.

¶6. The State based its illegal-cartel allegations specifically on the federal criminal prosecutions of several of the defendant manufacturers’ Japanese parent companies—prosecutions that ended three years earlier. In 2012, executives for the parent companies entered a series of guilty pleas, admitting to meeting with the executives of other companies to discuss bids, fix prices, and allocate supplies of AWHS sold to United States automobile manufacturers. The conspiracy began in early 2000 and lasted until January 2010. As part of their guilty pleas, two of the parent companies agreed respectively to pay $200 million and $470 million in fines

¶7. Citing the actions of defendants’ Japanese parent companies, the State alleged the defendant United States manufacturers were part of a conspiracy to restrain trade, increase the price, and hinder competition of AWHS in the United States generally and Mississippi specifically. The State claimed this supposed agreement violated the Mississippi Consumer Protection Act (MCPA). The State also alleged the defendants had violated the Mississippi Antitrust Act (MAA). Finally, the State alleged a civil conspiracy.

II. The Defendants’ Responses

¶8. All nine defendants responded to the complaint with motions to dismiss. Eight asserted lack of personal jurisdiction, improper venue, and failure to state a claim as grounds for dismissal. See M.R.C.P. 12(b)(2) (dismissal based on lack of personal jurisdiction), M.R.C.P. 12(b)(3) (dismissal based on improper venue), and M.R.C.P. 12(b)(6) (dismissal based on failure to state a claim). The ninth defendant, Yazaki North America, Inc., asserted only improper venue under Rule 12(b)(3) and failure to state a claim under Rule 12(b)(6). Because Michigan-based Yazaki had opened a four-person office near the Nissan plant in Canton, Mississippi, it did not challenge Mississippi's personal jurisdiction.

III. Venue Transfer

¶9. The Hinds County Chancery Court first considered the defendants’ motions to dismiss for improper venue. The defendants had argued the MCPA's venue statute, Mississippi Code Section 75-24-9 (Rev. 2016), controlled. And under this statute, they contended, Hinds County was not an available venue. Instead of dismissal, the Hinds County chancellor granted both the defendants’ and the State's alternative request to transfer the matter to chancery court in Madison County, where Yazaki's office was located. In the Hinds County chancellor's view, Madison County was "the only forum that could be even remotely consistent with the unambiguous and mandatory terms of Section 75-24-9."

IV. Limited Discovery

¶10. With the motions to dismiss for lack of personal jurisdiction and failure to state a claim still pending,⁴ the Madison County chancellor allowed the parties to engage in limited discovery aimed at the personal-jurisdiction question. See Long v. Vitkauskas , 287 So. 3d 171, 178 (Miss. 2019) (noting a trial court, when ruling on a motion to dismiss for lack of personal jurisdiction may "consider ‘affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery’ " (quoting Revell v. Lidov , 317 F.3d 467, 469 (5th Cir. 2002) )). The parties stipulated that this discovery would require the production of confidential material. On June 30, 2017, the chancellor entered a protective order allowing the parties to file this material under seal. Consequently, although this is not a confidential case but instead is a matter brought on the public's behalf, most documents in the record from this date forward—including the chancellor's final order and the briefs on appeal—were filed under seal.

V. Trial Court's Ruling

¶11. On January 5, 2017, the Madison County chancellor dismissed by agreement two of the defendant manufacturers—Fujikura America, Inc., and Leoni Wire, Inc.—for lack of personal jurisdiction. Two years later, the chancellor dismissed the remaining seven defendants: Yazaki; American Furukawa, Inc. (AFI); Denso International America, Inc. (DIAM); Leoni Wiring Systems, Inc. and Leonische Holding, Inc. (collectively, Leoni Defendants); G.S. Wiring Systems, Inc. (G.S. Wiring); and G.S.W. Manufacturing, Inc. (G.S.W.).

¶12. In a sealed order, the chancellor first determined Mississippi lacked general or specific personal jurisdiction over out-of-state defendants AFI, DIAM, the Leoni Defendants, G.S. Wiring, and G.S.W. Specifically, the chancellor found the State had failed to show these defendants had sufficient minimum contacts with Mississippi to satisfy due process.

¶13. Next, the chancellor found that, even if personal jurisdiction existed over all seven defendants, the complaint still failed to state a claim. Specifically, the chancellor held the State's MCPA claim failed because the alleged unfair trade practices were too remote to support the State's request for injunctive relief. The State's MAA claim failed because the State did not allege any "wholly intrastate conduct" as required by Standard Oil Co. of Kentucky v. State , 107 Miss. 377, 65 So. 468, 471 (1914), overruled in part on other grounds by Mladinich v. Kohn , 250 Miss. 138, 164 So. 2d 785 (1964). And the State's civil-conspiracy claim failed because it was based on alleged violations of the MCPA and MAA for which the State had no causes of action.

¶14. The chancellor gave the State thirty days to amend the complaint under Mississippi Rule of Civil Procedure 15. The attorney general declined to amend the State's claims. Instead, the State asked the chancellor to certify her order as final and appealable. The chancellor entered a final judgment on January 11, 2019. And the State appealed.

Discussion

¶15. The State asserts three errors on appeal—(1) the Hinds County Chancery Court misapplied the appropriate venue statute, (2) the Madison County Chancery Court failed to conduct a proper Rule 12(b)(2) personal-jurisdiction analysis, and (3) the Madison County Chancery Court failed to conduct a proper Rule 12(b)(6) analysis. Only the third issue need be...