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Emerson Electric Co. v. Le Carbone Lorraine

October 7, 2008

EMERSON ELECTRIC COMPANY, ET AL., PLAINTIFFS,
v.
LE CARBONE LORRAINE, S.A., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Simandle, District Judge

OPINION

I. INTRODUCTION

Defendants Le Carbone Lorraine, S.A., Carbone Lorraine North America Corporation, and Carbone of America Industries Corporation (collectively, "Carbone" or "Defendants") seek partial summary judgment against Plaintiffs Valeo, S.A. and Valeo, Inc. (collectively, "Valeo" or "Plaintiffs Valeo"), and summary judgment against Visteon Corporation ("Visteon" or "Plaintiff Visteon"). Plaintiffs Valeo and Visteon are among those companies that opted out of a larger electrical carbon antitrust class action, which has settled. See In re: Elec. Carbon Prods. Antitrust Litig., 447 F. Supp. 2d 389 (D.N.J. 2006). Defendants, accused by Plaintiffs of engaging in a conspiracy to fix the price of electrical carbon products, argue that both Plaintiffs Valeo and Plaintiff Visteon lack standing to bring certain antitrust claims. For the reasons set forth below, this Court will grant Defendants' motion for summary judgment as to Visteon [Docket Item 89], but deny Defendants' motion for partial summary judgment as to Valeo [Docket Item 88].

II. BACKGROUND

Plaintiffs bring this action pursuant to the Sherman Act, 15 U.S.C. § 1 and the Clayton Act, 15 U.S.C. §§ 15 and 26. As set out in detail in Emerson Elec. Co. v. Le Carbone Lorraine, S.A., 500 F. Supp. 2d 437, 441-42 (D.N.J. 2007), Plaintiffs allege that from October 1988 through September 2001 Defendants engaged in a conspiracy to artificially regulate the price of electrical carbon products, which Plaintiffs both directly and indirectly purchased at inflated prices. (Am. Compl. ¶ 2.)

Valeo, in addition to its own purchase, bases its claim on purchases of electrical carbon products made by ITT Automotive Electrical Systems, Inc. ("ITT Automotive"), a subsidiary of ITT Industries, Inc., ("ITTI"). (Valeo Br. Opp'n at 1; Defs. Br. Valeo, Ex. A at 15.) In June, 1998, Valeo entered into a Stock and Asset Purchase Agreement ("Purchase Agreement") with ITTI, in which it acquired certain assets owned by the conglomerate as well as 100% of ITT Automotive stock, along with the stock of several other ITTI subsidiaries. (Defs. Br. Valeo, Ex. B.)

Visteon's claims arise from two Visteon-owned plants, the Rawsonville and Yspilanti plants in Michigan, both of which bought the allegedly fixed product. (Valeo Br. Opp'n at 2.) On September 30, 2005, Visteon completed the transfer of certain assets, including assets associated with the Rawsonville and Ypsilanti plants, to VFH Holdings, Inc.*fn1 ("VFH"), a wholly-owned subsidiary, through a Contribution Agreement ("the Agreement") dated September 12, 2005. (Defs. Br. Valeo, Ex. A, Ex. B § 1.01.) On October 1, 2005, Ford Motor Company ("Ford") purchased VFH from Visteon, thereby acquiring all of the transferred assets. (Defs. Br. Valeo, Ex. A.)

On September 23, 2005, the original Complaint was filed in this action in the Eastern District of Michigan. In December 2005, the Judicial Panel on Multidistrict Litigation transferred the case to this Court and in June 2006 Plaintiffs, including Valeo and Visteon, filed an Amended Complaint. On August 9, 2007, this Court granted Defendants' motions to dismiss those antitrust claims based on injuries arising from foreign purchases and those under the Michigan Antitrust Reform Act, leaving only Plaintiffs' claims under the Sherman Act and the Clayton Act based on domestic injuries. Emerson Electric, 500 F. Supp. 2d at 457. After almost a year of discovery, on June 9, 2008, Defendants filed motions for partial summary judgment against the Valeo Plantiffs and summary judgment against Visteon Plaintiff. On September 3, 2008, the Court heard oral argument from all parties and reserved decision.

III. DISCUSSION

A. Standard of Review

Summary judgment is appropriate when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" only if it might affect the outcome of the suit under the applicable rule of law. Id. In deciding whether there is a disputed issue of material fact, the court must view the evidence in favor of the non-moving party by extending any reasonable favorable inference to that party; in other words, "the nonmoving party's evidence 'is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie, 526 U.S. 541, 552 (1999) (quoting Liberty Lobby, 477 U.S. at 255).

B. Antitrust Standing: Assignment of Antitrust Claims

Defendants argue that both Plaintiffs Valeo and Plaintiff Visteon do not have standing to assert certain antitrust claims. (Defs. Br. Valeo at 1; Defs. Br. Visteon at 1.) Defendants assert that Plaintiffs Valeo did not acquire from ITT Automotive the right to bring this antitrust claim and that Plaintiff Visteon assigned all its antitrust claims to Ford. (Defs. Br. Valeo at 1; Defs. Br. Visteon at 1.) A discussion, therefore, of the law of antitrust standing is warranted.

Plaintiff's standing, for the purposes of antitrust claims, requires more than that needed for Article III standing. As the Supreme Court has explained, "Harm to the antitrust plaintiff is sufficient to satisfy the constitutional standing requirement of injury in fact, but the court must make a further determination whether the plaintiff is a proper party to bring a private antitrust action." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 535 n.31 (1983). "Whether a plaintiff is the 'proper party' involves considerations of 'doctrines such as foreseeability and proximate cause, directness of injury, certainty of damages and privity of contract.'"*fn2 Gulfstream III Assocs., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993)*fn3 (quoting Associated Gen. Contractors, 459 U.S. at 532-33).

It is well-established that an antitrust claim can be assigned. Gulfstream, 995 F.2d at 437. In Gulfstream, the Third Circuit determined that validity of such assignment is governed by federal common law and that the assignment itself must be "express." Id. at 437-40. The assignment at issue in Gulfstream was a purchase agreement of the aircraft that plaintiffs alleged was the subject of price fixing, which included language of general assignment. Id. at 437. The agreement gave "all of [plaintiffs'] rights, title and interest in" the aircraft to the purchaser, without reference to antitrust claims. Id. Noting that "many routine transfers of ownership may involve a general assignment of rights," the court concluded that to find that such broad language was sufficient to assign antitrust claims would be contrary to the "direct purchaser" rule. Id. at 439-40. The "direct purchaser" rule limits antitrust plaintiffs to only those who directly purchase the products subjected to price fixing. Id. at 439. This rule, and thus ultimately the court's requirement of express ...


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