Globe Metallurgical, Inc. v. Rima Industrial S.A.

177 F. Supp. 3d 317, 38 I.T.R.D. (BNA) 1066, 2016 U.S. Dist. LEXIS 43506, 2016 WL 1301045
CourtDistrict Court, District of Columbia
DecidedMarch 31, 2016
DocketNo. 14-cv-1252 (KBJ)
StatusPublished
Cited by8 cases

This text of 177 F. Supp. 3d 317 (Globe Metallurgical, Inc. v. Rima Industrial S.A.) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Globe Metallurgical, Inc. v. Rima Industrial S.A., 177 F. Supp. 3d 317, 38 I.T.R.D. (BNA) 1066, 2016 U.S. Dist. LEXIS 43506, 2016 WL 1301045 (D.D.C. 2016).

Opinion

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

Plaintiff Globe Metallurgical- Inc. (“Globe”), a corporation- based in Beverly, Ohio, is the leading domestic manufacturer of silicon metal and silicon-based ferroal-loys. (See Am. Compl., ECF No. 16, ¶ 14.) Defendant Rima Industrial S.A. (“Rima”) is a rival silicon metal manufacturer based in Brazil. (See id. ¶3.) Neither party is based in the District of Columbia or conducts any business here. Nevertheless, Globe has brought the instant action against Rima and its purported co-conspirators, claiming that these out-of-state defendants have committed RICO violations, tortious interference, civil conspiracy, ■ and unjust enrichment. The crux of Globe’s complaint is the contention that, approximately 15 years ago, Rima acted in concert with its co-defendants to lie to the Com[320]*320merce Department in order to get certain duties on imported silicon metal revoked, which allowed Rima to export its product to the U.S. market without the burden of the previous tariffs, thereby costing Globe both sales and customers.

Before this Court at present is Defendants’ motion to dismiss. (See Defs.’ Mot. to Dismiss, ECF No. 17.) Defendants make three arguments for dismissal: first, that this Court lacks personal jurisdiction over the Defendants; second, that Plaintiffs claims are untimely; and third, that Plaintiffs complaint fails to state a claim upon which relief can be granted. For the reasons explained below, this Court finds that it need go no further than Defendants’ first contention. It is undisputed that the sole contact that Defendants have had with the District of Columbia is Rima’s interaction with the Commerce Department regarding the antidumping order, and under D.C. law, the assertion of personal jurisdiction cannot be based on such contacts. Furthermore, although D.C. courts have recognized a narrow “fraud exception” to this government contacts doctrine, that exception does not apply here because Globe does not allege that Defendants fraudulently induced unwarranted government action against it, and Globe’s other arguments for personal jurisdiction are unavailing. Consequently, and as set forth in .the accompanying order, Defendant’s motion will be GRANTED.

I. BACKGROUND

Silicon metal is produced by combining quartzite, carbon, and a bulking agent such as woodchips, and the resulting solid is used both to create aluminum and to create the organic chemicals known as sil-icones. (Am. Compl. ¶¶ 16-17.) Because silicon metal is an interchangeable commodity product, competition among its suppliers is intense and price-sensitive. (See id, ¶¶ 17, 18, 20.) The United States is one of the largest markets for silicon metal, and domestic producers have often faced “dumping” by foreign producers — a practice in which those producers sell silicon metal in the domestic market at “unfairly low prices.” (See id. ¶¶ 22.)

According to the allegations in Globe’s Amended Complaint, which the Court must accept as true at this stage, see Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per cu-riam), the U.S. Commerce Department determined in 1990 and 1991 that various Brazilian silicon metal producers, including Defendant Rima, had been engaged in dumping silicon metal in the United States. (See Am. Compl. ¶ 27.) As a result, the Commerce Department issued an order in 1991 that imposed antidumping duties on imports from various Brazilian silicon metal producers, including Rima. (See id.) Under Commerce Department regulations, an affected entity can request that the Commerce Department reconsider an antidumping order that it has issued, and between 1993 and 2002, Rima repeatedly requested administrative review of the antidumping order that had been issued against it, seeking to have the order lifted (see id. ¶ 30).

According to Globe, the Commerce Department’s review of a request that it lift an antidumping order involves, among other things, consideration of any costs incurred by a U.S. affiliate of the company that is subject to the order. (See id. ¶ 32.)1 [321]*321The Department’s review turns in part on the difference between the price the company charges for its product in its home market and the price it charges as an export in the United States. In calculating that price differential (also known as the “dumping margin”), .the Department subtracts from the export price any costs that a U.S.-based affiliate incurred in selling the company’s product in the U.S. market; thus, if undisclosed affiliate costs go unconsidered, the dumping margin will be inaccurately small, which could affect the outcome of the Department’s review. (See id. ¶ 33)

In the instant complaint, Globe alleges that Rima hatched a scheme to lie to the Commerce Department as part of its effort to persuade the agency to lift the 1991 antidumping order: Rima planned to conceal its affiliation with U.S.-based silicon metal distributor Defendant Polymet Alloys, Inc., an Alabama company, and thereby to mislead the Commerce Department into miscalculating the applicable dumping margin. (See id. ¶ 33.)2 Rima allegedly carried out this scheme over a period of years in conjunction with its repeated requests for the Commerce Department to reconsider the 1991 antidumping order; according to the complaint, Rima falsely told the Commerce Department that it had no U.S. affiliate relationships on multiple occasions. (See Am. Compl. ¶ 36 (alleging that Rima repeatedly stated: “RIMA INDUSTRIAL S/A does not have affiliated companies in the United States[.]”).) Globe maintains that, as a result of this intentional misrepresentation, the costs that Polym-et incurred in selling Rima’s silicon metal were improperly excluded from the agency’s analysis during its review of the anti-dumping order, and the Commerce Department ultimately (mistakenly) revoked the antidumping order with respect to Rima on December 17, 2002. (See id; see also Silicon Metal from Brazil: Final Results of Antidumping Duty Administrative Review and Revocation of Order in Part, 67 Fed. Reg. 77,225 (December 17, 2002).)

Rima’s return to unfettered exporting of silicon metal into the U.S. market was-bad news for Globe, which was one of only three domestic producers of silicon metal in 2002 (and has been the sole such producer since 2005). (See Am. Compl. ¶ 33.) What is more, according to the complaint, Rima has allegedly used the ill-gotten profits that it reaped after the lifting of the antidumping order to fund the construction of a silicon metal production facility in Mississippi, for which Polymet will be the exclusive distributor. (See id. ¶ 46.)3 And in securing construction permits for the new plant, Defendants allegedly lied to the Mississippi Department of Environmental Quality about the project’s production limits and impact on air quality. (See id.)

Globe asserts that the creation of this facility and the deception of the Mississippi state agency were parts of the same wide-ranging scheme among the defendants. (See id. ¶¶ 46, 49.) Globe also alleges that it only learned of this scheme in 2014, [322]*322when news reports about, the new Mississippi plant were published, identifying both Rima and Polymet personnel as the project’s leaders. (See id.

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177 F. Supp. 3d 317, 38 I.T.R.D. (BNA) 1066, 2016 U.S. Dist. LEXIS 43506, 2016 WL 1301045, Counsel Stack Legal Research, https://law.counselstack.com/opinion/globe-metallurgical-inc-v-rima-industrial-sa-dcd-2016.