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 ferroalloys. (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 Commerce
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 Plaintiff's claims are untimely; and third, that Plaintiff's 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
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 silicones. (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 curiam), 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.)
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.)
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.)
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,
Globe filed an Amended Complaint in this matter on April 21, 2015. (See Am. Compl.) It contains nine claims, including four counts under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968, two counts of tortious interference under common law, one count of civil conspiracy, and one count of unjust enrichment. (See id. at 20-39.) As for the requested relief, Globe is seeking a declaratory judgment; a permanent injunction against the operation of the Mississippi plant; payment of all the profits that Rima made from U.S. sales of silicon metal after the revocation of the antidumping order; compensatory, actual, and punitive damages; and attorney's fees. (See id. at 39-40.)
Defendants filed the instant motion to dismiss on May 5, 2015. (See Defs.' Mot. to Dismiss, ECF No. 17.) They contend that Globe's complaint must be dismissed for three separate reasons. First, they argue that this Court lacks personal jurisdiction over the defendants because Rima's communications with the Commerce Department are the sole contacts that any of the defendants has had with the District of Columbia, and under the "government contacts" doctrine, those contacts cannot be the basis for asserting personal jurisdiction. (See id. at 17-25.) Second, Defendants claim that the applicable statute of limitations bars Globe's claims, because Globe knew or should have known about its alleged injuries well before the 2014 news reports. (See id. at 25-29.) Third, and finally, Defendants argue that the complaint fails to state a claim as to each of its asserted causes of action. (See id. at 29-49.)
The Court held a hearing on Defendants' motion on February 25, 2016, and took the motion under advisement.
Personal jurisdiction over a non-resident defendant "may take the form of general or specific jurisdiction." App Dynamic ehf v. Vignisson, 87 F.Supp.3d 322, 326 (D.D.C.2015). General personal jurisdiction requires the non-resident defendant to maintain "continuous and systematic contacts within the District of Columbia," Forras v. Rauf, 812 F.3d 1102, 1106 n.5 (D.C.Cir.2016), and it permits a plaintiff to bring any and all legal claims against the defendant in the District of Columbia courts, see Williams v. Romarm, SA, 756 F.3d 777, 783 n.3 (D.C.Cir.2014). By contrast, specific personal jurisdiction "exists where [the particular] claim arises out of the non-resident defendant's contacts with the forum," as specified in the District of Columbia's long-arm statute, App Dynamic, 87 F.Supp.3d at 326, and only to the extent that the exercise of such jurisdiction would not offend due process, Forras, 812 F.3d at 1106. The D.C. long-arm statute provides, in relevant part:
D.C. Code § 13-423(a).
Federal Rule of Civil Procedure 12(b)(2) authorizes a defendant to move to dismiss a lawsuit filed against him in federal court if the court lacks personal jurisdiction over him. App Dynamic, 87 F.Supp.3d at 326. In response to such a motion, Plaintiff bears the burden of establishing a factual basis for the court's exercise of personal jurisdiction over each defendant, see Crane v. New York Zoological Soc., 894 F.2d 454, 456 (D.C.Cir.1990), which is usually accomplished by alleging specific acts that connect each defendant with the forum, see Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001). The general rule is that a plaintiff must make a prima facie showing of pertinent jurisdictional facts; bare allegations are insufficient. See Second Amendment Found., 274 F.3d at 524. And the court "has considerable procedural leeway in choosing a methodology for deciding [such a] motion," App Dynamic, 87 F.Supp.3d at 326 (quoting Charles A. Wright & Arthur R. Miller et al., Federal Practice and Procedure § 1351 (3d ed. 2004) (internal quotation marks omitted)); it "may rest on the allegations in the pleadings, collect affidavits and other evidence, or even hold a hearing," id. However, any discrepancies regarding such facts must be resolved in favor of the plaintiff. See Crane, 894 F.2d at 456.
For a court to exercise personal jurisdiction over non-resident co-conspirators under the so-called "conspiracy theory" of jurisdiction, the plaintiff must allege "(1) the existence of a civil conspiracy ..., (2) the defendant's participation in the conspiracy, and (3) an overt act by a co-conspirator within the forum, subject to the long-arm statute, and in furtherance of the conspiracy." FC Inv. Grp. LC v. IFX Markets, Ltd., 529 F.3d 1087, 1096 (D.C.Cir.2008) (quoting Kopff v. Battaglia, 425 F.Supp.2d 76, 81 n. 4 (D.D.C.2006)) (internal quotation marks omitted).
Defendants have put forward three alternative grounds for dismissal, but this Court's analysis begins and ends with the jurisdictional objection. See Forras, 812 F.3d at 1105 ("Ordinarily, determining jurisdiction is a federal court's first order of business," because "[w]ithout jurisdiction, the court cannot proceed at all in any cause."). Defendants maintain that personal jurisdiction is lacking with respect to Rima and all of the co-defendants, but Globe argues that this Court has personal jurisdiction over Rima because of its "purposeful transaction of business" in the District; namely, its contacts with the Commerce Department to seek reconsideration of the 1991 antidumping order. (Am. Compl. ¶ 11; see also id. (asserting that Rima's "multiple fraudulent requests submitted to the U.S. Department of Commerce in this District seeking review and revocation of the 1991 antidumping order" provide a basis for this Court's exercise of personal jurisdiction over that defendant in this case).) Furthermore, Globe insists that this Court has personal jurisdiction over Polymet, Vicintin, Lage, Rima Holding, and MS Silicon because they are alleged co-conspirators with respect to Rima's fraudulent inducement of the revocation of the antidumping order, as well as its subsequent diversion of the ill-gotten gains into the construction and operation
In response to Defendants' argument that the Court must apply the "government contacts" doctrine and thereby decline to exercise personal jurisdiction on the basis of Rima's contacts with the government, Globe points out that the D.C. courts have also recognized a narrow exception to the government contacts doctrine, which applies where the plaintiff alleges that the defendant fraudulently petitioned the government and induced unwarranted government action against the plaintiff. See Companhia Brasileira Carbureto De Calcio v. Applied Indus. Materials Corp. (Companhia III), 35 A.3d 1127, 1130 (D.C.2012). Thus, the key issue for this Court to decide for the purpose of resolving the personal jurisdiction challenge is the scope of Companhia's "fraud exception," and whether or not it embraces Globe's claims. For the reasons explained below, this Court concludes that the "fraud exception" is not currently as broad as Globe would like it to be, and that there is no other basis in law or fact for this Court to assert personal jurisdiction over any of the defendants in this action. Consequently, because this Court lacks personal jurisdiction over these defendants, Defendants' motion must be granted, and Globe's complaint must be dismissed.
The District of Columbia Court of Appeals has long interpreted the provision of the D.C. long-arm statute that authorizes jurisdiction over out-of-state defendants who "transact[] any business in the District of Columbia" or "caus[e] tortious injury in the District of Columbia," D.C. Code § 13-423(a), to pertain to acts that occur in this forum other than those arising out of a defendant's interactions with the federal government. See Envtl. Research Int'l, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 813 (D.C.1976) (explaining that, under the "government contacts" doctrine, "entry into the District of Columbia by nonresidents for the purpose of contacting federal government agencies is not a basis for the assertion of in personam jurisdiction"). This exception serves at least two purposes: to avoid "convert[ing] the District of Columbia into a national judicial forum," and to safeguard "free public participation in government." Id. Thus, it is clear that based on the traditional application of this doctrine, Rima's communication with the Commerce Department — which is the only alleged business or tort that Rima or any of its alleged co-conspirators has engaged in within the District of Columbia — would be categorically "excluded from the jurisdictional calculus." Alkanani v. Aegis Def. Servs., LLC, 976 F.Supp.2d 13, 25 (D.D.C.2014) (internal quotation marks and citation omitted). However, the D.C. courts have declined to apply the government contacts doctrine where the plaintiff alleges that the defendant fraudulently petitioned the government and induced unwarranted government action against the plaintiff. See Companhia III, 35 A.3d at 1130. And the Companhia case not only featured some of the same parties who are before the Court at present, it also arose in factual circumstances that are in some ways similar to those presented in the instant matter.
In Companhia, certain Brazilian producers of ferrosilicon (including, initially,
Id.
The D.C. Court of Appeals responded, `yes.' See Companhia III, 35 A.3d at 1130. That court reaffirmed that "the unique concerns underlying the government contacts principle are as compelling today as they were" when the doctrine was first announced. Id. at 1132. However, it noted that "individuals who enter the District of Columbia to fraudulently induce unwarranted government action against others" should not be able "to avoid defending their actions in this jurisdiction by cloaking themselves in the government contacts doctrine." Id. at 1133. The court also cautioned that courts applying this fraud exception must "strict[ly] adhere[] to the standards of pleading" in order to prevent opening the D.C. courts to "an unrelenting wave of litigation." See id. at 1134 (internal quotation marks and citation omitted). It concluded by emphasizing the narrow scope of its ruling: it explained that the opinion "addressed only the [certified] legal question" of "whether, under District of Columbia law, a petition submitted by a nonresident to a federal government agency in the District provides a basis for establishing personal jurisdiction over the petitioner when the plaintiff has alleged that the petition fraudulently induced unwarranted
On remand, the federal district court determined that it had personal jurisdiction over the defendants, relying on the fact that, when the ITC reversed its original decision to impose tariffs on the plaintiffs, the agency itself had stated that the defendants' petition to the agency was fraudulent, and it was also material to the agency's decision to take action against the plaintiffs. See Companhia Brasileira Carbureto de Calcio-CBCC v. Applied Indus. Materials Corp. (Companhia IV), 887 F.Supp.2d 9, 16-17 (D.D.C.2012) ("Under the unique circumstances of this case where the ITC has determined that it had been defrauded, this Court can rely on the ITC's findings as a basis for exercising personal jurisdiction.").
Thus, the Companhia cases for the first time established a limited exception to the government contacts doctrine: when a plaintiff alleges that a defendant's petition to a federal agency in the District of Columbia fraudulently induced unwarranted government action against the plaintiff, that petition provides a basis for personal jurisdiction in a District of Columbia court. See Companhia IV, 887 F.Supp.2d at 14-15.
The question before this Court is whether Rima's allegedly fraudulent representations to the Commerce Department at various times between 1993 and 2002 fall within the Companhia fraud exception. If so, then they can form the basis for this Court's exercise of personal jurisdiction over Rima; if not, then Plaintiff must allege some other jurisdictional hook. As explained below, this Court concludes that Defendants' contacts fall outside the narrow fraud exception for two related reasons: first, because under the fraud exception, the defendant's alleged fraudulent contact must have induced unwarranted government action against the plaintiff, and second, because Globe has not made a persuasive argument that any such government action occurred against it under the circumstances presented here.
On the first point, the D.C. Court of Appeals in Companhia emphasized that "the mere filing of a fraudulent petition" was not enough to create jurisdiction; the petition must provoke government action against the plaintiff. App Dynamic, 87 F.Supp.3d at 328; see Companhia III, 35 A.3d at 1134 ("[W]e hold that a person who uses the government as an instrumentality of fraud, and thereby causes unwarranted government action against another, forfeits the protection of the government contacts exception." (citation omitted) (emphasis added)). Other District of Columbia courts, too, have recognized that government action against the plaintiff is necessary to trigger the exception that Companhia establishes; to hold otherwise would impermissibly expand the fraud exception and threaten to undermine the longstanding government contacts doctrine. See App Dynamic, 87 F.Supp.3d at 328.
Globe acknowledges this limitation, but claims that its factual situation is nevertheless on all fours with the Companhia case. This is because, according to Globe, it suffered collateral damage (lost sales and customers) from the government's action taken toward Rima as a result of the alleged fraud (i.e., the Commerce Department's fraudulently induced revocation of the antidumping order). As Globe sees it, there have, in fact, been four different impacts on Globe arising from the alleged fraud that should be deemed to qualify as "unwarranted
In this Court's view, none of these examples of how the Commerce Department's revocation of the antidumping order might be construed as an action against Globe is persuasive. First of all, neither the complaint nor the record establishes that Globe was a party to the administrative review of Rima's antidumping order in any meaningful sense or that the Commerce Department's reconsideration of an antidumping order is tantamount to an adversarial proceeding in which there are necessarily `winners' and `losers.'
Second, while it may be tempting to perceive the highly competitive silicon metal industry as a zero-sum game, in this Court's view, a government decision to provide a refund to one competitor, or to rescind an order that previously required that competitor to pay duties, is simply and solely government action toward that competitor (here, Rima) and cannot be fairly characterized as an action "against" another, despite the fact that the indirect effect will be to benefit one competitor at the theoretical expense of the others. Put another way, a refund of duties or a rescission of the antidumping order that favors Rima might well have bolstered that company's market position, thereby indirectly harming Globe's business interests, but that does not transform government actions that are clearly aimed at Rima into actions against Globe for present purposes. Third, and finally, while the loss of hypothetical duties could potentially qualify as a direct harm (see Pl.'s Opp'n at 27), it is not a government action; it is, if anything, the absence of government action — i.e., the government's failure to collect and redistribute duties — and, in any event, the impact of this inaction cannot reasonably be viewed as "against" Globe in particular, since that same harm would occur with respect to all domestic silicon metal producers.
Notably, this Court is not the only one to express reluctance about interpreting the fraud exception that broadly. In App Dynamic ehf v. Vignisson, an Icelandic company (App Dynamic) brought suit in the District of Columbia against a former employee and Icelandic citizen (Vignisson), who was living in Sweden. See 87 F.Supp.3d at 324. App Dynamic argued that Vignisson had filed a fraudulent copyright registration with the U.S. Copyright Office, then attempted to enforce that copyright against App Dynamic in a Swedish court. See id. at 325. App Dynamic claimed that the U.S. District Court for the District of Columbia had personal jurisdiction over Vignisson on the basis of the Companhia fraud exception, because Vignisson "made multiple misrepresentations to the Copyright Office with the goal of ensuring that the Copyright Office issued a copyright registration to Defendant in a form that Defendant could use against Plaintiff." Id. at 328 (internal quotation marks and citation omitted). But the court concluded that this was "not enough" to bypass the government contacts limitation because the plaintiff had made no allegation "that the U.S. Copyright Office took any unwarranted action against Plaintiff." Id. at 329 (emphasis in original). This was the "fatal flaw" in the plaintiff's argument for personal jurisdiction, the court explained, because "[t]he fraud exception is limited to petitions to a federal government agency that fraudulently induce unwarranted government action against the plaintiff[,]" id. at 328-29 (emphasis omitted) (internal quotation marks and citation omitted); if the plaintiff had instead asserted that the Copyright Office had imposed a duty on Plaintiff's product or forced it to
It is clear to this Court that the instant case is much closer to the facts of App Dynamic than to those in Companhia. That is, in Companhia, the ITC imposed tariffs directly on the plaintiff's products — a clear government action against the plaintiffs — whereas, in the instant case, the Commerce Department took no direct action against Globe. Instead, just as in App Dynamic, the Commerce Department has merely conferred a benefit on the defendant that has had negative consequences for the plaintiff as a result of subsequent activities (in this case, business competition). In this Court's view, that is not enough.
Globe's fallback argument is that, even if Rima is not subject to personal jurisdiction under the long-arm statute, two other theories of jurisdiction can bring Defendants within the Court's reach. (See Pl.'s Opp'n at 28-31.) First, Globe contends that Rima is "subject to jurisdiction under RICO's personal jurisdiction provision," 18 U.S.C. § 1965(a), which provides that any civil RICO action "may be instituted in the district court of the United States for any district in which such person resides, is found, has an agent, or transacts his affairs." (See Pl.'s Opp'n at 28.) But the D.C. Circuit has explained that § 1965(a) does not obviate the need to establish that at least one defendant has the requisite minimum contacts with the forum. See FC Inv. Grp., 529 F.3d at 1099 ("[A] civil RICO action can only be brought in a district court where personal jurisdiction based on minimum contacts is established as to at least one defendant." (emphasis in original) (quoting PT United Can Co. Ltd. v. Crown Cork & Seal Co., 138 F.3d 65, 71 (2d Cir.1998) (internal quotation marks omitted)). In this case, Globe concedes that the only contact Rima has had with the district is its interactions
Globe's second contention is similarly unavailing. Globe argues that this Court has personal jurisdiction over the remaining defendants (Polymet, Vicintin, Lage, Rima Holding, and MS Silicon) because they are Rima's co-conspirators. (See Pl.'s Opp'n at 28-29.) Under the so-called "conspiracy theory" of jurisdiction, "[s]o long as any one co-conspirator commits at least one overt act in furtherance of the conspiracy in the forum jurisdiction, there is personal jurisdiction over all members of the conspiracy." Jung v. Ass'n of Am. Med. Colls., 300 F.Supp.2d 119, 141 (D.D.C.2004) (citation omitted). However, it is well established that, to prevail on such a theory of personal jurisdiction, the plaintiff must allege "(1) the existence of a civil conspiracy ..., (2) the defendant's participation in the conspiracy, and (3) an overt act by a co-conspirator within the forum, subject to the long-arm statute, and in furtherance of the conspiracy." FC Inv. Grp., 529 F.3d at 1096 (emphasis added) (internal quotation marks and citations omitted). Here again, the only alleged overt act that was committed by any of the co-conspirators in the District of Columbia was Rima's petition to the Commerce Department, which is not subject to the long-arm statute for the reasons discussed above. Cf. Companhia II, 640 F.3d at 372-73 (refusing to accept defendants' petitions to the ITC as overt acts supporting a conspiracy theory of personal jurisdiction without first evaluating those petitions under the government contacts doctrine). Thus, Rima's interactions with the Commerce Department cannot serve as a jurisdictional anchor that permits this Court to exercise jurisdiction over the co-conspirators.
If Companhia's requirement that there must be government action "against the plaintiff" is to have any meaning, it cannot reasonably be read to include government action against another entity that happens to impact the plaintiff's relative market position, and that is the only circumstance that has been presented here. The Court is mindful that the D.C. Court of Appeals limited itself to addressing only the specific legal question certified by the D.C. Circuit when it articulated the fraud exception in Companhia. See Companhia III, 35 A.3d at 1135. But its answer stressed the fact that the plaintiff in that case was the target of the fraudulently induced government action, see id. at 1134-35, which makes eminent sense given that the government contacts doctrine is designed to prevent the District of Columbia courts from being flooded by cases with only tangential connections to the District, and the fraud exception is the one conceivable circumstance in which an aggrieved plaintiff should arguably be permitted to haul an out-of-state defendant into the District of Columbia's courts to complain that the defendant fraudulently utilized its contacts