Vanadium Corp. of America v. Susquehanna Corporation
| Decision Date | 26 February 1962 |
| Docket Number | Civ. A. No. 2412. |
| Citation | 203 F. Supp. 686 |
| Parties | VANADIUM CORPORATION OF AMERICA, Plaintiff, v. The SUSQUEHANNA CORPORATION and H. M. Byllesby & Company, Defendants. |
| Court | U.S. District Court — District of Delaware |
COPYRIGHT MATERIAL OMITTED
Aaron Finger, Richards, Layton & Finger, Wilmington, Del., and Charles Pickett, Lee B. Morey, Edward R. Neaher, and Chadbourne, Parke, Whiteside & Wolff, New York City, for plaintiff.
Arthur G. Logan, Logan, Marvel, Duffy & Boggs, Wilmington, Del., Emil N. Levin, Friedlund, Lavin & Friedlund, Chicago, Ill., and Edward Tait, William W. Rayner and Gravelle, Whitlock, Markey & Tait, Washington, D. C., for defendants.
Plaintiff seeks an injunction pendente lite.1 This memorandum is filed in compliance with F.R.Civ.P. 52(a), 28 U.S. C. The action arises under Sections 4, 7, and 16 of the Clayton Act and 28 U. S.C. § 1337 to enjoin alleged violations of § 7 of the Clayton Act and § 1 of the Sherman Act.2
Plaintiff, Vanadium Corporation of America, and defendants, The Susquehanna Corporation and H. M. Byllesby & Company, are Delaware corporations.3 Plaintiff is engaged in mining and purchasing ores containing vanadium and uranium and in producing and selling such products.4
The principal use of vanadium is in the steel and iron industry. In various forms, vanadium is added to steel, cast iron and other metallic products where special qualities, such as high strength and good resistance to fatigue, are desired. Certain vanadium products are also used in preparing chemical compounds and catalysts.5 Uranium is another rare metallic element, which is vital to national defense.6 Both vanadium and uranium are found in ores. Foreign ores were formerly an important source of the vanadium consumed in the United States. For many years, however, imports of vanadium ores or vanadium products into the United States have been minor.7
For many years, the principal United States source of vanadium has been the carnotite and roscoelite ores found in the Colorado Plateau area, which comprises chiefly southwestern Colorado and southeastern Utah, but also extends into Arizona and New Mexico. The vanadium-bearing ores found in that area are also a principal source of uranium. To a lesser extent, vanadium is found in the United States in other minerals, such as phosphate rock.8 In 1939, plaintiff began vanadium mining and milling operations in the United States. Previously, it had been engaged abroad in such operations since 1919. Since 1955, plaintiff's vanadium mining and milling operations have been confined to the United States.9 Plaintiff owns or leases a number of vanadium-uranium mines and properties in and around the Colorado Plateau area. Most of the vanadium ores used by plaintiff have been obtained from those properties. In addition, plaintiff has purchased vanadium ore from other ore miners.10
In the United States, vanadium-bearing and uranium-bearing ores contain small percentages of the elements. To obtain marketable products, the vanadium and uranium must be extracted from the ores. The ores are taken to mills where concentrates of vanadium and uranium are produced.11 For several years, plaintiff has been producing its vanadium concentrates and uranium concentrates at its mill at Durango, Colorado. The plant has a practical production capacity of 4,700,000 pounds of vanadium oxide a year. In addition, plaintiff owns and operates a beneficiating plant at Naturita, Colorado, to treat vanadium-uranium ores prior to concentration at the Durango mill.12
Vanadium concentrates are often called vanadium pentoxide (V2O5) or vanadium oxide. Uranium concentrates are often called uranium oxide (U3O8).13 Both vanadium concentrates are marketable commodities. Almost all the uranium concentrates produced in the United States are sold, without further processing, to the Atomic Energy Commission.14 A considerable part of the vanadium concentrates or pentoxide produced in the United States has been sold without further processing. Foreign steel and iron producers often use vanadium oxide directly. Substantial quantities of vanadium pentoxide are exported from the United States for use in steel making or for conversion into other vanadium products.15
Most American steel and iron producers prefer not to use vanadium concentrates or pentoxide, but a form of vanadium that has been processed further, called ferrovanadium. The principal use of vanadium pentoxide in the United States is to produce ferrovanadium. Vanadium concentrates or pentoxide are converted into ferrovanadium by various thermic processes. Vanadium is used in the United States principally in the form of ferrovanadium.16 For several years, plaintiff has been producing Ferrovanadium at its plant at Cambridge, Ohio, and it has been made in part from vanadium concentrates shipped from plaintiff's mill at Durango, Colorado, and in part from vanadium pentoxide produced by other concerns and purchased by plaintiff.17
Plaintiff is and for many years has been a substantial purchaser of vanadium pentoxide produced by others. In the five year period from 1956 through 1960, plaintiff bought about 5,187,000 pounds of vanadium pentoxide, an average of 1,037,000 pounds a year. The bulk was purchased from another producer and 1,581,000 pounds were purchased from the Atomic Energy Commission. During 1961, plaintiff bought about 948,000 pounds of vanadium pentoxide to supplement its own production of about 3,200,000 pounds. None of the vanadium pentoxide bought by plaintiff was purchased from Susquehanna or any subsidiary of Susquehanna.18
The ferrovanadium produced by plaintiff is sold largely to steel and iron producers located in various places in the United States. Plaintiff maintains offices in Wilmington, Delaware, and New York City, and district offices in several other cities, including Chicago, Cleveland, Detroit, and Pittsburgh.19 In addition to producing ferrovanadium at its plant at Cambridge, Ohio, plaintiff has also produced there another processed vanadium product called ammonium metavanadate. It is used principally in the manufacture of catalysts to produce synthetic fibers and sulphuric acid.20
Plaintiff for many years has been either the largest or second largest producer of vanadium products in the United States. It is the largest producer of vanadium products for consumption in the United States.21 During the five year period from 1956 through 1960, plaintiff supplied 52.95% of the total vanadium consumed in the United States. Of the vanadium products consumed in the United States in that period, plaintiff sold about 77.45% of the vanadium oxide and 55.8% of the ferrovanadium.22 Of the vanadium products consumed in the United States in 1960, plaintiff sold about 46% of the total consumption, 83% of the vanadium pentoxide and 48% of the ferrovanadium. Of the vanadium products consumed in the United States in the first eleven months of 1961, plaintiff sold about 46% of the total consumption, about 53% of the vanadium pentoxide and about 51% of the ferrovanadium.23
Most of plaintiff's vanadium products have been sold in the United States but its export business has also been substantial. During the five year period from 1956 through 1960, plaintiff's exports of vanadium in all forms amounted to 21.01% of the total vanadium ore, concentrates, pentoxide and other vanadium products exported from the United States.24
The vanadium industry in the United States is, and for decades has been, highly concentrated. There are very few producers of vanadium products in the United States.25 There are only two producers in the United States of a full line of vanadium products. Plaintiff is and for many years has been one of those producers, which are sometimes called "fully integrated" producers.26
Since about 1927, when the corporation presently called Union Carbide Corporation ("Union Carbide") entered the vanadium industry, that corporation and plaintiff have been (except for a few years) the only United States producers of a full line of vanadium products.27 Just prior to and during World War II, concerns other than plaintiff and Union Carbide established vanadium oxide mills in the United States. Those mills closed after the Government's wartime vanadium procurement program ended.28 About 1947, the Atomic Energy Commission began a program to increase domestic uranium output. As a result of that program, many concerns went into the production of uranium concentrates, particularly on or near the Colorado Plateau where vanadium-uranium ores are found.29 As of December 31, 1959, there were 25 uranium processing plants in this country, with a total capacity of 22,500 tons of ore per day. Plaintiff's Durango plant has a capacity of 750 tons of uranium ore per day.30 Of the new uranium producers, only two went into the production of vanadium concentrates as well as uranium concentrates prior to Susquehanna's entry into the vanadium and uranium industries. One mill producing both vanadium oxide and uranium oxide was built by Climax Uranium Company, now a division of American Metal Climax, Inc., and another by Kerr-McGee Oil Industries, Inc. Both companies have produced vanadium oxide, but neither has processed it into ferrovanadium.31
Until defendant Susquehanna entered the vanadium industry, plaintiff and Union Carbide produced and sold most of the vanadium consumed in the United States and, together with Climax Uranium Company and Kerr-McGee Oil Industries, Inc., produced practically all the vanadium oxide made in the United States. No steel company has undertaken to manufacture vanadium products.32
Defendant Susquehanna is a holding company. Its vanadium and uranium operations have been conducted through wholly-owned subsidiary corporations.33 For several years, Susquehanna has been expanding its activities. It has a strong financial position and substantial cash resources with which to expand its...
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