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Animal Science Products, Inc. v. China Minmetals Corp.

United States District Court, D. New Jersey

July 24, 2014

ANIMAL SCIENCE PRODUCTS, INC., and RESCO PRODUCTS, INC., Plaintiffs,
v.
CHINA MINMETALS CORP., et al., Defendants

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For KRAMER LEVIN NAFTALIS & FRANKEL LLP, Movant: LEDA DUNN WETTRE, ROBINSON, WETTRE & MILLER LLC, NEWARK, NJ.

For ANIMAL SCIENCE PRODUCTS, INC., RESCO PRODUCTS, INC., Plaintiffs: AMY WALKER WAGNER, DAVID S. STONE, ROBERT A. MAGNANINI, LEAD ATTORNEYS, Stone & Magnanini LLP, SHORT HILLS, NJ; RICHARD E. DONOVAN, KELLEY DRYE & WARREN LLP, PARSIPPANY, NJ.

For CHINA NATIONAL METALS & MINERALS IMPORT & EXPORT CORPORATION, CHINA NATIONAL MINERALS IMPORT & EXPORT CORPORATION, CHINA MINMETALS CORPORATION, CHINA NATIONAL MINERALS CO., LTD., Defendants: ROBERT J. DEL TUFO, SHEPARD GOLDFEIN, LEAD ATTORNEYS, SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP, NEW YORK, NY.

For SINOSTEEL CORPORATION, SINOSTEEL TRADING COMPANY, LIAONING JIAYI METALS & MINERALS CO., LTD., HAICHENG HOUYING CORP. LTD., HAICHENG HUAYU GROUP IMPORT & EXPORT CO. LTD. (HUAZIYU), Defendants: LEDA DUNN WETTRE, LEAD ATTORNEY, ROBINSON, WETTRE & MILLER LLC, NEWARK, NJ.

OPINION

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Kevin McNulty, United States District Judge.

TABLE OF CONTENTS

TABLES OF PARTIES, CLAIMS AND MOTIONS

INTRODUCTION

I. Procedural History

II. Factual Background

A. Plaintiffs

B. Defendants

C. Summary of the Claims

III. Legal Standards

A. Sherman Act

B. Clayton Act

C. Motion to Dismiss

1. Rule 12(b)(6) standards in general

2. Dismissal based on lack of antitrust standing

3. Dismissal based on Foreign Trade Antitrust Improvements Act (" FTAIA" )

D. Motion to Compel Arbitration

IV. Discussion

A. Failure to State a Claim -- Injury, Antitrust Standing and the Direct Purchaser Rule

1. Antitrust standing in general

2. Antitrust injury and causation

3. Antitrust purchaser standing

a. Statutory standing and the appropriate plaintiff

b. The direct purchaser requirement as a bright-line standing rule

4. Analysis of Resco's direct purchaser standing

a. Class members' standing not attributable to Resco

b. Direct purchases from Defendants

c. Direct purchases from Chinese " co-conspirators"

d. Resco's acquisition of Worldwide Refractories

e. Assignment of claims from Possehl to Resco

i. The face of the complaint and the assignment

ii. Allegations in other pleadings

5. Dismissal with or without prejudice

B. Motion to Compel Arbitration

C. Motions to Dismiss under the FTAIA

CONCLUSION

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TABLES OF PARTIES, CLAIMS AND MOTIONS

Claim/Statute

Brought by

Against

Clayton Antitrust Act, 15 U.S.C. § 4 (for treble damages) seeking, inter alia, a decree that Defendants have entered into an " unlawful combination and conspiracy [that is] an unreasonable restraint of trade or commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1" AC ¶ ¶ 1, 6, Prayer for Relief

Resco on behalf of itself and the direct purchasers class (" all persons or entities who have directly purchased magnesite or magnesite products manufactured by any Defendant or their co-conspirators from September 2001 to the date of the cartel is ended by injunction or otherwise" ). AC ¶ 32.

Defendants moving to dismiss (ECF 98, 99) and to compel arbitration (ECF 37):

1. China Minmetals Corporation

2. China National Minerals Co., Ltd. (the " Minmetals Defendants" )

3. Sinosteel Corporation,

4. Sinosteel Trading Company,

5. Liaoning Jiayi Metals & Minerals Co, Ltd. (the " Sinosteel Defendants" )

Defendants moving to compel arbitration (ECF 37):

6. Haicheng Houying Corp, Ltd.

7. Haicheng Huayu Group Import & Export Co. Ltd. (the " Haicheng Defendants" )

Inactive Defendants:

Xiyang Group, Xiyang (Pacific) Import & Export Ltd. Company, Xiyang Refractory Materials Ltd. Company, Xiyang Fireproof Material Co. Ltd., Liaoning Foreign Trade General Corporation, Liaoning Jinding Magnesite Group, Dalian Golden Sun Import & Export Corp., Haicheng Pailou Magnesite Or. Co. Ltd., Yingkou Huachen (Group) Co. Ltd.

Clayton Antitrust Act, 15 U.S.C. § 16 (for injunctive relief)

Animal Science on behalf of itself and indirect purchasers (" all persons or entities who have purchased magnesite or magnesite products manufactured by any Defendant for delivery in the United States" ) AC ¶ 31.

All Defendants

(same as above)

Motions

Brought on behalf of

Motion to Dismiss (Docket No. 98)

The Sinosteel Defendants:

Sinosteel Corporation, Sinosteel Trading Company, and Liaoning Jiayi Metals & Minerals Co, Ltd.

Motion to Dismiss (Docket No. 99)

The Minmetals Defendants:

China Minmetals Corp. and China National Minerals Import and Export Corp.

Motion to Compel Arbitration (Docket No. 37)

The Minmetals, Sinosteel, and Haicheng Defendants (collectively, the " Seven Defendants" ):

China Minmetals Corp., China National Minerals Import and Export Corp., Sinosteel Corporation, Sinosteel Trading Company, Liaoning Jiayi Metals & Minerals Co, Ltd., Haicheng Houying Corp, Ltd., and Haicheng Huayu Group Import & Export Co. Ltd.

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INTRODUCTION

Plaintiffs seek to represent a putative class of U.S. purchasers of magnesite. They allege that sixteen Chinese corporations have conspired to fix prices and control the supply of magnesite and magnesite products exported to the United States. As a result, they say, magnesite prices have remained above market levels since at least April 2000. Defendants' cartel is alleged to constitute a per se violation of § 1 of the Sherman Act. Plaintiff Resco Products, Inc., contends that it and similarly situated direct purchasers suffered damages amounting to $58.9 million, trebled pursuant to § 4 of the Clayton Act. Plaintiff Animal Science Products, Inc., on behalf of indirect purchasers, seeks injunctive relief pursuant to § 16 of the Clayton Act.

This matter had a protracted history in this Court, interrupted by a reversal and remand by the Court of Appeals, before it was reassigned to me in August 2012. Currently before me are (1) two motions to dismiss the amended complaint for failure to state a claim, and (2) a motion to compel arbitration. I here find that Plaintiff Resco has not plausibly pleaded facts sufficient to establish its antitrust standing as a direct purchaser. Consequently, I will

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grant the motions to dismiss the Amended Complaint, without prejudice.

In light of that dismissal, I will not now determine whether the U.S. antitrust laws apply to Defendants' alleged foreign anti-competitive activity under the Foreign Trade Antitrust Improvements Act. I do briefly discuss that issue to provide guidance in the event that Plaintiffs file a Second Amended Complaint. Likewise, on the current state of the record, I cannot find that Plaintiffs must arbitrate their claims against Defendants, but again I discuss the issue briefly, in anticipation of a possible amended pleading.

Many of the defects in the Amended Complaint trace back to the antitrust standing requirement that the plaintiff (or the entity from which plaintiff obtained its claims by assignment) be a direct purchaser. The Complaint alleges direct purchases by an assignor, Possehl (U.S.), but it does so in self-contradictory terms, and without supporting facts (such as, for example, the identification of even a single concrete purchase). It should be possible in a subsequent amended pleading to identify such purchase/sale transactions, and the agreements under which they were made. If that is done, the Court may determine whether Possehl (U.S.) was a direct purchaser. The Court may also then ascertain whether such agreements contained arbitration clauses. (Defendants have made a suggestive demonstration that certain related agreements did contain such clauses.) Any subsequent pleading should also furnish a specific factual basis to assess the applicability of the " import exception" or the " effects exception" of the FTAIA. The relevant facts are, or should be, available to Plaintiffs, and they must be pleaded before I will permit this complex and expensive litigation to proceed.

I. Procedural History

The original complaint, filed on September 7, 2005, see ECF No. 1, named as Defendants sixteen Chinese entities. It also named one U.S. subsidiary, Minmetals, Inc. (" Minmetals USA" ), alleged to be a New Jersey corporation with its principal place of business in Bergen County. Id. ¶ 10. After Defendants failed to answer the complaint or move to dismiss, in May 2007 the Clerk of Court began making entries of default for failure to appear against the Chinese Defendants. On December 14, 2007, Plaintiffs moved for Default Judgment. See Motion for Default Judgment as to Defaulting Defendants, Dec. 14, 2007, ECF No. 28 (MDJ, 28). Also on December 14, 2007, Defendant Minmetals USA moved to dismiss the Complaint. See ECF No. 27. Several of the defaulting Chinese Defendants responded to Plaintiffs' Motion for Default Judgment. Relying on facts presented in Plaintiffs' moving papers, seven of the Chinese Defendants (collectively, the " Seven Defendants" ) filed a Motion to Compel Arbitration. See Motion of Seven Defendants to Compel Arbitration, Feb. 5, 2008, ECF No. 37 (" MTCA, 37" ). Those Seven Defendants comprise the following: China Minmetals Corp., China Nat'l Minerals Co., (together the " Minmetals Defendants" ),[1] Sinosteel Corp., China Metallurgical Import & Export Corp. (subsequently renamed Sinosteel Trading Company), Liaoning Jiayi Metals & Minerals Co., Ltd, (together, the " Sinosteel Defendants" ), Haicheng Houying Corp., Ltd., and Haicheng Huayu Group Import & Export

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Co. Ltd. (Huaziyu), (together, the " Haicheng Defendants" ).

In September 2008, the case was reassigned to Chief Judge Garrett E. Brown, Jr. In October 2008, Judge Brown heard oral argument on the three pending motions (Minmetals' Motion to Dismiss, Plaintiffs' Motion for Default Judgment and the Seven Defendants' Motion to Compel Arbitration). See ECF No. 72; docket entry dated October 6, 2008. In December 2008, Judge Brown terminated without prejudice the three pending motions and dismissed the original complaint. ECF No. 74. The grounds for dismissal, raised sua sponte by the Court, were that the Court lacked subject matter jurisdiction to adjudicate the dispute pursuant to the Foreign Trade Antitrust Improvements Act. See Animal Science Prods., Inc. v. China Nat'l Metals & Minerals Imp. & Exp. Corp., 596 F.Supp.2d 842 (D.N.J. 2008).

On March 30, 2009, Plaintiffs filed an Amended Complaint, ECF No. 77 (cited as " AC." Herein, " Amended Complaint" and " Complaint," unless specified otherwise, are used interchangeably to refer to the amended complaint.) That Amended Complaint included more specific allegations and proofs to support the antitrust allegations, as instructed by the District Court. See Animal Science Prods., Inc., 596 F.Supp.2d at 881. A motion to dismiss the Amended Complaint was then filed by two groups of Defendants, the Minmetals Defendants and the Sinosteel Defendants. See Motion to Dismiss by Sinosteel Defendants, June 26, 2009, ECF No. 98 (" Sinosteel MTD, 98" ); Motion to Dismiss by Minmetals Defendants, June 26, 2009, ECF No. 99 (" Minmetals MTD, 99" ).

In a 220-page opinion issued in April 2010, the district court engaged in comprehensive fact-finding, determined that the FTAIA deprived it of subject matter jurisdiction, and dismissed the Amended Complaint. See Animal Science Prods. Inc., v. China Nat'l Metals & Minerals Imp. & Exp. Corp., 702 F.Supp.2d 320 (D.N.J. 2010); ECF Nos. 112, 113. Plaintiffs appealed.

Noting that it was overturning existing precedent, the United States Court of Appeals for the Third Circuit held that the FTAIA imposed substantive limits on antitrust claims, but did not raise a jurisdictional bar. It vacated Judge Brown's decision and remanded the case. See Animal Science Prods, Inc. v. China Minmetals Corp., 654 F.3d 462, 467-68 (3d Cir. 2011); ECF Nos. 118-119. In December 2011 the case was reinstated and assigned to Judge Salas. In January 2012, Judge Salas administratively terminated the case pending the outcome of Defendants' petitions to the Supreme Court for a writ of certiorari. ECF No. 127. The cert petitions of the Minmetals Defendants and the Sinosteel Defendants were denied in 2012. See China Minmetals Corp. v. Animal Sci. Products, Inc., 132 S.Ct. 1744, 182 L.Ed.2d 530 and Sinosteel Corp. v. Animal Sci. Products, Inc., 132 S.Ct. 1744, 182 L.Ed.2d 5304.

In April 2012, Judge Salas reopened the case. She stated that she would consider first the Seven Defendants' Motion to Compel Arbitration. ECF No. 131. On that Motion Judge Salas permitted supplemental briefing, which proceeded through the summer. See ECF Nos. 133 - 142.

Meanwhile, on August 1, 2012, the case was reassigned to me. ECF No. 144. Currently before me are the Motions of the Sinosteel Defendants and the Minmetals Defendants to Dismiss the Amended Complaint, on remand from the Court of Appeals, as well as the 2008 Motion of Seven Defendants to Compel Arbitration,

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as supplemented on remand.[2] Because it is inextricably intertwined with the merits of those motions, I am raising and considering sua sponte the issue of Plaintiffs' statutory standing to bring this antitrust action. Plaintiffs' antitrust standing was raised and addressed in the Parties' briefs in connection with the Motion to Compel Arbitration.

In fairness to the parties, who may have limited the scope of their briefing in response to Judge Salas's limitation of the issues, I sua sponte invited supplemental briefing on that antitrust standing issue. On September 9, 2013, both sides filed supplemental briefs on antitrust standing. ECF Nos. 155, 156.

II. Factual Background

A. Plaintiffs

Plaintiffs' pleadings provide little information about the putative class representatives. Plaintiff Animal Science Products (" ASP" ), said to represent " indirect purchasers," is a " Texas corporation with its principal place of business in Nacogdoches, Texas." AC ¶ 10. The Declaration of Animal Science Products submitted in Support of its Motion for Default Judgment, December 14, 2007, ECF No. 28-3 (" ASP Decl. MDJ, 28-3" ) states that " Animal Science Products manufactures and distributes feed additives and packaged goods. We serve all facets of the feed industry with feed additives, micro ingredients, and premixes, as well as the poultry and swine packaged goods markets. Since 2000, we have purchased magnesite in the form of magnesium oxide produced and sold by defendants, which we use in several of our products." Id. ¶ ¶ 5-6.

Plaintiff Resco Products, Inc. (" Resco" ), the putative class representative for " direct purchasers," is a " Pennsylvania corporation with its principal place of business in Pittsburgh, Pennsylvania." AC ¶ 11. In a certification, Resco provides the only description of its business: " In March 2006, Resco purchased Worldwide Refractories, Inc. . . . [which] manufactures refractory materials. It offers basic products for the steel and cement industries. The company manufactures both dolomite and magnesite-enriched dolomitic bricks, rams, and mixes." Certification of Resco Products, Inc. in Support of its Motion for Default Judgment, Class Damages, and Injunctive Relief, December 14, 2007, ECF No. 28-4 (" Resco Cert. MDJ, 28-4" ).

Resco's Certification also explains that it " purchases magnesite from China principally through brokers," and names one such broker as Possehl, Inc. (" Possehl (U.S.)" ) Id. ¶ ¶ 7-8. The Complaint, too, refers to Possehl, Inc., which allegedly " has assigned to Resco its rights, title, and interest in and to all causes of action it may have relating to magnesite products brokered by Possehl, Inc. and subsequently

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delivered to Resco during the relevant period. Possehl, Inc. purchased magnesite and magnesite products directly from defendants during the class period and shipped those products to Resco." AC ¶ 11. Thus, Resco's rights apparently are alleged to arise by virtue of an assignment from Possehl (U.S.). Possehl (U.S.), however, is not a party to the action and Plaintiffs' pleadings provide no further information about Possehl (U.S.).

B. Defendants

As noted above, the Amended Complaint names sixteen Chinese entities as Defendants, but only the " Seven Defendants" (comprising the Minmetals Defendants, the Sinosteel Defendants, and the Haicheng Defendants), have responded to the Complaint. I therefore focus on them.

Plaintiffs allege that the Minmetals Defendants are Chinese state-owned trading companies based in Bejing. AC ¶ 12. China Minmetals is alleged to be " a conglomerate that includes the trading of metals and minerals" and " conducts business with and through its wholly owned subsidiary and North American Headquarters, China Minmetals U.S.A., Inc., which maintains its principal place of business in Leonia, Bergen County, New Jersey." [3] China National Minerals Import and Export Co. is alleged to be " a subsidiary and affiliate of China Minmetals." Id. ¶ 13. The Minmetals Defendants are movants in the Motion to Compel Arbitration, see MTCA, 37, and have moved to dismiss the Amended Complaint, see Minmetals MTD, 99.

Plaintiffs allege that Sinosteel Corp. " is a direct or indirectly state-owned multinational conglomerate that includes metals and minerals production and trading." AC ¶ 18. Sinosteel Trading Company (" Sinosteel Trading" ) (f/k/a China Metallurgical Import & Export Corp.), is alleged to be a " wholly-owned subsidiary of Sinosteel Corp," id. ¶ 19, while Liaoning Jiayi Metals & Minerals Co., Ltd, (" Liaoning Jiayi" ) is alleged to be " not state-owned." Id. ¶ 20. The Sinosteel Defendants are movants in the Motion to Compel Arbitration, see MTCA, 37, and have moved to dismiss Plaintiffs' Complaint, see Sinosteel MTD, 98.

The Complaint alleges that both of the Haicheng Defendants, Haicheng Houying Corp., Ltd., (" Haicheng Houying" ) and Haicheng Huayu Group Import & Export Co. Ltd. (Huaziyu) (" Haicheng Huayu" ) are " not state-owned" and are producers and exporters of magnesite. See AC ¶ ¶ 24-25. The Haicheng Defendants are movants in the Motion to Compel Arbitration. See MTCA, 37.

The Defendants who have not answered or moved are (1) Xiyang Group, (2) Xiyang (Pacific) Import & Export Ltd. Company (" Xiyang Pacific" ), (3) Xiyang Refractory Materials Ltd. Company (" Xiyang Refractory" ), (4) Xiyang Fireproof Material Co. Ltd. (" Xiyang Fireproof" ), (5) Liaoning Foreign Trade General Corporation (" Liaoning Trade" ), (6) Liaoning Jinding Magnesite Group (" Liaoning Jinding" ), (7) Dalian Golden Sun Import & Export Corp. (" Dalian Golden Sun" ), (8) Haicheng Pailou Magnesite Or. Co. Ltd. (" Haicheng Pailou" ), and (9) Yingkou Huachen (Group) Co. Ltd. (" Yingkou Huachen" ). (Collectively, they are referred to as the " Inactive Defendants" ).

The Complaint alleges that Defendants' " co-conspirators include [1] Rongyuan Magnesite Corporation of China, subsequently renamed Shangawa Rongyuan Refractories Co., Ltd., [2] Yingkou Sanhua Refractory Materials Co., Ltd., subsequently

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renamed Yingkou Wonjin Refractory Material Co., Ltd., [3] Shenyang Metals and Minerals, and [4] CITIC Trading." Id. ¶ 28. The " co-conspirators," however, are not named as defendants, and there are no specific allegations as to their acts.

C. Summary of the Claims

Plaintiffs allege that " [e]ach of these Defendants and its co-conspirators has colluded with each other to restrain competition by, among other things, setting artificial prices pursuant to illegal agreements among these competitors. These horizontal practices were designed to, and in fact did, have a substantial and adverse impact in the United States." AC ¶ 29. Specifically, according to Plaintiffs, Defendants conspired to form two Chinese Magnesite [4] price-fixing groups in 2000. The first, " Jiayun Magnesite Export Group" (" Jiayun EG" ) allegedly included inactive defendants Xiyang Refractory Material, Yingkou Hachen, Dalian Golden Sun and Liaoning Foreign Trade. Id. ¶ 52. The second group, " Huaxia Magnesia Products Export Group (" Huaxia EG" ) included active Defendants Liaoning Jiayi (" Jiayi" ) and Haicheng Huayu (" Huayu" ) and " co-conspirators" Shenyang Metals & Minerals (" Shenyang" ) and CITIC Trading (" CITIC" ). According to Plaintiffs, Jiayun EG and Huaxia EG " collectively represented more than 70% of the export volume of magnesite in China." Id. ¶ 54. In 2001, these two Export Groups formed " a single, unified group under the name 'Chinese Magnesite Export Association" ' (" CMEA" ). Id. ¶ 57. Plaintiffs' allege that CMEA " aimed to provide strict management control of all sales, production schedules of individual producers and export prices for Chinese magnesite, including exports to the United States." Id.

The Amended Complaint then alleges that in 2003 the original CMEA Cartel conducted several meetings with the Defendants and other exporters during which the Cartel agreed that it should be established " under the name 'China Magnesite Forum' and established goals of restraining competition and establishing limits on export supply in order to maintain and increase prices." Id. ¶ 59. Thereafter, between 2003 and 2007, various members of the Cartel held meetings to discuss and determine price increases " including [on] exports to the United States." See AC ¶ ¶ 58-64. Specifically, Plaintiffs allege that

During the period of the charged combination and conspiracy, Defendants and their co-conspirators have participated in meetings and conversations . . . in which the export prices, production, and foreign markets for magnesite and magnesite products were discussed and agreed upon. At their meetings, Defendants and others agreed to and did eliminate, suppress, and limit competition by, among other things:
(a) discussing the production schedules and export prices of magnesite and magnesite products including for the U.S.;
(b) agreeing to control the supply of magnesite and magnesite products for export to the U.S. and elsewhere;
(c) agreeing to increase and maintain export prices of magnesite and magnesite products to the U.S. and elsewhere[.]

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AC ¶ 67. As a result of Defendants' conspiratorial activities, Plaintiffs allege, " (a) [t]he price of magnesite and magnesite products purchased by Plaintiffs (and the plaintiff classes) has been fixed, raised, maintained and stabilized at artificial and non-competitive levels; " and " (b) Competition in the sale of magnesite and magnesite products has been restrained." Id. ¶ 75.

Plaintiffs maintain that the Defendants have been able to achieve these price increases despite the fact that they do not control 100 percent of the magnesite market " because the Defendant producers have the competitive advantage of lower costs than their competitors" and " because China has employed a fixed currency exchange rate which undervalues the Yuan, making Chinese exports of magnesite and magnesite products to the United States relatively less expensive" than other nations' magnesite exports. Id. ¶ 69.

III. Legal Standards

A. Sherman Act

The Sherman Anti-Trust Act declares " every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations . . . to be illegal." 15 U.S.C. § 1.

The Sherman Act was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade. It rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conductive to the preservation of our democratic political and social institutions. But even were that premise open to question, the policy unequivocally laid down by the Act is competition. And to this end it prohibits 'Every contract, combination or conspiracy, in restraint of trade or commerce among the several States.' Although this prohibition is literally all-encompassing, the courts have construed it as precluding only those contracts or combinations which 'unreasonably' restrain competition.

Northern Pacific. Ry. Co. v. United States, 356 U.S. 1, 4-5, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958) (citations omitted).

" In order to sustain a cause of action under § 1 of the Sherman Act, the plaintiff must prove: (1) that the defendants contracted, combined, or conspired among each other; (2) that the combination or conspiracy produced adverse, anti-competitive effects within relevant product and geographic markets; (3) that the objects of and the conduct pursuant to that contract or conspiracy were illegal; and (4) that the plaintiff was injured as a proximate result of that conspiracy." Martin B. Glauser Dodge Co. v. Chrysler Corp., 570 F.2d 72, 81-82 (3d Cir. 1977). Accord Howard Hess Dental Laboratories Inc. v. Dentsply Int'l, Inc., 602 F.3d 237, 253 (3d Cir. 2010) (" A plaintiff asserting a Section 1 claim . . . must allege four elements: " (1) concerted action by the defendants; that produced anti-competitive effects within the relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that it was injured as a proximate result of the concerted action." ) (citing Gordon v. Lewistown Hosp., 423 F.3d 184, 207 (3d Cir. 2005)); cf Franco v. Connecticut Gen. Life Ins. Co., 818 F.Supp.2d 792, 829 (D.N.J. 2011) (" Pleading a colorable Sherman Act section 1 claim requires a plaintiff to allege (1) an agreement (2) imposing an unreasonable restraint of trade within a relevant

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product market and (3) resulting in antitrust injury, that is " injury of the type the antitrust laws were intended to prevent and ... that flows from that which make defendants' acts unlawful." ).

" The existence of an agreement is the hallmark of a Section 1 claim. Liability is necessarily based on some form of concerted action. . . . The agreement, of course, must pertain to some unlawful conduct within the meaning of the antitrust laws. To establish liability under section 1, a plaintiff must demonstrate that the challenged practice imposed an unreasonable restraint on trade. The illegality of the restraint may be demonstrated in one of two ways: under the per se standard or under a rule of reason analysis." Franco, 818 F.Supp.2d at 829-30 (D.N.J. 2011) (internal citations and quotations omitted). " While the rule of reason typically mandates an elaborate inquiry into the reasonableness of a challenged business practice, there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable. Such plainly anticompetitive agreements or practices are deemed to be illegal per se." United States v. Brown Univ. in Providence in State of R.I., 5 F.3d 658, 669 (3d Cir. 1993) (internal quotations and citations omitted). Accord In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 316 (3d Cir. 2010) ( " Judicial experience has shown that some classes of restraints have redeeming competitive benefits so rarely that their condemnation does not require application of the full-fledged rule of reason. . . . Once a practice has been found to fall into one of these classes, it is subject to a 'per se' standard." ) The types of " agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use . . . are price fixing, division of markets, group boycotts, and tying arrangements." N. Pac. Ry. Co., 356 U.S. at 5 (1958). Accord Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 345, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982); Deutscher Tennis Bund v. ATP Tour, Inc., 610 F.3d 820, 830 (3d Cir. 2010) (" Some categories of restraints, such as horizontal price-fixing and market allocation agreements among competitors, 'because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable.'" ) (quoting Brown Univ. in Providence in State of R.I., 5 F.3d at 669)); In re Ins. Brokerage, 618 F.3d at 316 (" Paradigmatic examples [of per se illegal restraints] are 'horizontal agreements among competitors to fix prices or to divide markets.'" ) (quoting Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877, 886, 127 S.Ct. 2705, 168 L.Ed.2d 623 (2007)).

B. Clayton Act

Section 4 of the Clayton Act, 15 U.S.C. § 15, provides " any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee." Thus, § 4 broadly defines " the class of persons who may maintain a private damage action under the antitrust laws," and " a literal reading of the statute is broad enough to encompass every harm that can be attributed directly or indirectly to the consequences of an antitrust violation." Associated General

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Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 529, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (" AGC" ). Accord Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 80 (3d Cir. 2011) (" Section 4 of the Clayton Act . . . provides a private right of action for 'any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws." ) (quoting 15 U.S.C § 15(a)).

Federal courts have long recognized that, despite its expansive language, the Clayton Act's damages remedy is not limitless. As the Supreme Court observed:

the lower federal courts have been virtually unanimous in concluding that Congress did not intend the antitrust laws to provide a remedy in damages for all injuries that might conceivably be traced to an antitrust violation. . . . An antitrust violation may be expected to cause ripples of harm to flow through the Nation's economy; but despite the broad wording of § 4 there is a point beyond which the wrongdoer should not be held liable. It is reasonable to assume that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action to recover threefold damages for the injury to his business or property.

AGC, 459 U.S. at 534-535 (internal quotations and citations omitted). Cf Blue Shield of Virginia v. McCready, 457 U.S. 465, 477, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982) ( " the unrestrictive language of the section, and the avowed breadth of the congressional purpose, cautions us not to cabin § 4 in ways that will defeat its broad remedial objective. But the potency of the remedy implies the need for some care in its application." ).

As discussed in detail below, see infra § IV.A, there is no precise formula for triggering the Clayton Act's treble damages remedy. In general, however, an antitrust plaintiff must establish that its injuries are not " too remote from the violation and the purposes of the antitrust laws to form the predicate for a suit under § 4." McCready, 457 U.S. at 477. See also Alberta Gas Chemicals Ltd. v. E.I. Du Pont De nemours & Co., 826 F.2d 1235, 1240 (3d Cir. 1987) (" Clayton Act deterrence through compensatory provisions is aimed toward the directly harmful effects of an antitrust transgression. The statutory sanctions do not constitute a broad restitutionary scheme for injuries not closely related to the violation but caused by other effects, desirable or not, of the illegal conduct." ).

The Clayton Act also grants private plaintiffs a cause of action for injunctive relief against anti-competitive activity. " Under § 16 of the Clayton Act, 38 Stat. 737, as amended, 15 U.S.C. § 26,[5] private

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parties 'threatened [with] loss or damage by a violation of the antitrust laws' may seek injunctive relief." Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 105, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986). Plaintiffs seeking injunctive relief face a lower burden than those seeking treble damages pursuant to § 4.

[Section] 4 requires a plaintiff to show actual injury, but § 16 requires a showing only of " threatened" loss or damage; similarly, § 4 requires a showing of injury to " business or property," . . . while § 16 contains no such limitation. Although these differences do affect the nature of the injury cognizable under each section, the lower courts, including the courts below, have found that under both § 16 and § 4 the plaintiff must still allege an injury of the type the antitrust laws were designed to prevent.

Id. at 111 (internal citation omitted).

C. Motion to Dismiss

1. Rule 12(b)(6) standards in general

On a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the court is required to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and to view them in the light most favorable to the nonmoving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). The question is whether the claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).

" While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell A. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations and quotations omitted). Accord In re K-Dur Antitrust Litig., 338 F.Supp.2d 517, 528-29 (D.N.J. 2004) (" While a court will accept well-pleaded allegations as true for the purposes of the motion, it will not accept unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations." ) (citing Miree v. DeKalb County. Ga., 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557, (1977)). In order to raise a right to relief above a speculative level, " a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Accord Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (internal citations and quotations omitted) (" stating ... a claim requires a complaint with enough factual matter (taken as true) to suggest the required element. This does not impose a probability requirement

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at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." ).

This now familiar standard, enunciated in Twombly (itself an antitrust case) and developed by Iqbal, has long been required of antitrust pleadings. While " there is no heightened pleading standard in antitrust cases, and the general principles governing Rule 12(b)(6) motions apply," an antitrust plaintiff must " plead his complaint with particularity; a complaint, or counterclaim containing only conclusory recitations of law is insufficient to survive a motion to dismiss." In re K-Dur Antitrust Litig., 338 F.Supp.2d 517, 529 (D.N.J. 2004) (emphasis, internal quotations, and citations omitted). Accord AGC, 459 U.S. at 526 (" As the case comes to us, we must assume that the [plaintiff] can prove the facts alleged in its amended complaint. It is not, however, proper to assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged." ).

The Third Circuit has given full scope to the Twombly standard:

We must accept all factual allegations in the complaint as true, construe the complaint in the light favorable to the plaintiff, and ultimately determine whether plaintiff may be entitled to relief under any reasonable reading of the complaint. In order to withstand a motion to dismiss, a complaint's factual allegations must be enough to raise a right to relief above the speculative level. This requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. On the contrary, a court is not required to accept legal conclusions alleged in the complaint. The pleading must contain sufficient factual allegations so as to state a facially plausible claim for relief. A claim possesses such plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.

Mayer v. Belichick, 605 F.3d 223, 229-30 (3d Cir. 2010) (internal citations, quotations, and punctuation omitted).

The Third Circuit has usefully distilled the Rule 12(b)(6) analysis to three steps:

To determine whether a complaint meets the pleading standard, our analysis unfolds in three steps. First, we outline the elements a plaintiff must plead to a state a claim for relief. See [Iqbal, 556 U.S.] at 675; Argueta [ v U.S. Immigration and Customs Enforcement], 643 F.3d [60,] 73 [3d Cir. 2011]. Next, we peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth. See Iqbal, 556 U.S. at 679; Argueta, 643 F.3d at 73. Finally, we look for well-pled factual allegations, assume their veracity, and then " determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679; Argueta, 643 F.3d at 73. This last step is " a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).

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2. Dismissal based on lack of antitrust standing

" Statutory [antitrust] standing is distinct from jurisdictional standing in that Article III standing is required to establish a justiciable case or controversy within the jurisdiction of the federal courts, whereas lack of antitrust standing affects a plaintiffs ability to recover, but does not implicate the subject matter jurisdiction of the court. Accordingly, statutory standing is simply another element of proof for an antitrust claim, rather than a predicate for asserting a claim in the first place." Sullivan v. DB Investments, Inc., 667 F.3d 273, 307 (3d Cir. 2011) (internal citations and quotations omitted). Accord Ethypharm S.A. France v. Abbott Laboratories, 707 F.3d 223, 232 n.15 (3d Cir. 2013) (" failure to establish antitrust standing is a merits issue" ). Still, statutory standing is a threshold issue:

[B]ecause the remoteness doctrine is not jurisdictional in the sense that Article III standing is-if there is no Article III standing, the court is obliged to dismiss the suit even if the standing issue has not been raised-it may seem that it can be waived or forfeited just like any other nonjurisdictional defense to a suit. But nonconstitutional lack of standing belongs to an intermediate class of cases in which a court can notice an error and reverse on the basis of it even though no party has noticed it and the error is not jurisdictional, at least in the conventional sense.

MainStreet Org. of Realtors v. Calumet City, Ill., 505 F.3d 742, 747 (7th Cir. 2007)

" Because the court (and not a jury) decides standing, the district court must decide issues of fact necessary to make the standing determination." In re ATM Fee Antitrust Litig., 686 F.3d 741, 747 (9th Cir. 2012) (citing Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 72, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978)). We are, however, at the pleading stage. At this stage, questions of statutory standing, like other factual issues, are considered under the same pleading requirements as a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). See Baldwin v. Univ. of Pittsburgh Med. Ctr., 636 F.3d 69, 73 (3d Cir. 2011) (" A dismissal for lack of statutory standing is effectively the same as a dismissal for failure to state a claim." ); NicSand, Inc. v. 3M Co., 507 F.3d 442, 449 (6th Cir. 2007) (" antitrust standing and Article III standing are not one and the same, and we not only may--but we must--reject claims under Rule 12(b)(6) when antitrust standing is missing." ).

3. Dismissal based on Foreign Trade Antitrust Improvements Act (" FTAIA" )

The Foreign Trade Antitrust Improvements Act, 15 U.S.C. § 6(a), addresses " conduct involving trade or commerce with foreign nations" by limiting the applicability of the Sherman Act (sections 1-7) only to alleged foreign antitrust conduct involving (1) import trade or import commerce, or (2) conduct having a " direct, substantial, and reasonably foreseeable effect" on domestic commerce. Animal Sci. Products, Inc. v. China Minmetals Corp., 654 F.3d 462, 467-68 (3d Cir. 2011) (as amended Oct. 7, 2011), cert. denied, 132 S.Ct. 1744, 182 L.Ed.2d 530 (2012) (" ASP v. CMC " ).

The pertinent portion of the FTAIA provides:

Sections 1 to 7 of this title shall not apply to conduct involving trade or commerce (other than import trade or import ...

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