David S. Stone Robert A. Magnanini STONE & MAGNANINI LLP 150 JFK Parkway, 4Th Floor Short Hills, New Jersey 07078 (973) 218-1111 Attorneys for Plaintiffs
Total Page：16
File Type：pdf, Size：1020Kb
Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 1 of 27 PageID: 5528 David S. Stone Robert A. Magnanini STONE & MAGNANINI LLP 150 JFK Parkway, 4th Floor Short Hills, New Jersey 07078 (973) 218-1111 Attorneys for Plaintiffs IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY ANIMAL SCIENCE PRODUCTS, INC., 2864 FM 1275 Nacogdoches, TX 75961 RESCO PRODUCTS, INC., Case No. 05-4376 (KM)(MAH) 2 Penn Center West Pittsburgh, PA 15276 SECOND AMENDED CLASS ACTION COMPLAINT S & S REFRACTORIES 946 Route 228 Mars, PA 16046 Plaintiffs, JURY TRIAL DEMAND CHINA MINMETALS CORPORATION, 5 Sanlihe Road, Haidian, Beijing, China 100101 CHINA NATIONAL MINERALS CO, LTD., Bldg 15 Block 4 Anhui Li, Chaoyang, Beijing, China 100101 XIYANG GROUP, Xiyang Mansion, Yingluo Town, Liaoning, Haicheng, China 114200 XIYANG (PACIFIC) IMPORT & EXPORT LTD. COMPANY, Bin Guan, Xiyang Steel & Iron Headquarters Haicheng, Liaoning, China 114200 XIYANG REFRACTORY MATERIALS LTD. COMPANY, 10F Sinochem Tower, Office A-2, Fuxingmenwai Street, Beijing 114213 Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 2 of 27 PageID: 5529 XIYANG FIREPROOF MATERIAL CO. LTD., Yinglou Town, Liaoning, Haicheng, China 114213 SINOSTEEL CORPORATION, 17B Xichang’an Street, West District Beijing, China 100031 SINOSTEEL TRADING COMPANY, 17B Xichang’an Street, West District Beijing, China 100031 LIAONING JIAYI METALS & MINERALS CO., LTD., 1 Gangwan Plaza, Zhongshan 18/F NO.15 Renmin Road Dalian, China 116001 LIAONING FOREIGN TRADE GENERAL CORPORATION, 2 Hongyan Street, Xigang District Dalian, China 116001 LIAONING JINDING MAGNESITE GROUP, Nanlou Economic Development District, Liaoning, Dashigiao, China 11503 DALIAN GOLDEN SUN IMPORT & EXPORT CORP., 11F Fortune Mansion, 18 Shiji Street, Liaoning, Dalian, China 116001 HAICHENG HOUYING CORP. LTD., Wanke Dongyuan Building No. 2015 Liaoning, Anshan, China 114002 HAICHENG HUAYU GROUP IMPORT & EXPORT CO. LTD. (HUAZIYU), Hua Zi Yu Village, Bali Town, Liaoning Haicheng, China 2 Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 3 of 27 PageID: 5530 HAICHENG PAILOU MAGNESITE ORE CO. LTD., Pailou Town, Haicheng, Anshan, China 114207 YINGKOU HUACHEN (GROUP) CO. LTD., Fenshui, Dashigiao, Liaoning, China 115100 Defendants. Plaintiffs, by and through their undersigned attorneys, bring this action on their own behalf and on behalf of all others similarly situated for treble damages and injunctive relief under the antitrust laws of the United States against the above-named Defendants, demanding a trial by jury. Plaintiffs file this Second Amended Complaint in accordance with this Court’s Order of July 23, 2014, dismissing their First Amended Complaint without prejudice. I. NATURE OF THE ACTION 1. This case arises out of a conspiracy among all Defendants and their co- conspirators that has the purpose and effect of fixing prices of magnesite and magnesite products exported to and purchased in the United States. Defendants have also committed other unlawful practices designed to inflate the prices of magnesite and magnesite products sold to Plaintiffs and other purchasers in the United States and elsewhere. This action seeks no damages or relief with respect to non-import foreign commerce or products sold outside of U.S. commerce. 2. Defendants have directly sold and delivered magnesite and magnesite products to customers in the United States at prices inflated, fixed, and maintained by the conspirators pursuant to horizontal agreements to restrain trade. The allegations of this Complaint of a conspiracy are not inferred from evidence of parallel pricing; instead, Defendants have expressly agreed and conspired to fix prices and limit competition. Defendants also engaged in communications and meetings. This is confirmed by documentary evidence from a 3 Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 4 of 27 PageID: 5531 nongovernmental association of which Defendants are members. These acts constitute per se violations of Section 1 of the Sherman Act, 15 U.S.C. § 1. 3. The conspiracy has existed from at least April 2000 to date, and increased its effectiveness through new agreements to fix prices and limit supply entered in 2003. Defendants’ illegal cartel has deliberately targeted and severely burdened consumers in the United States. The cartel has affected hundreds of millions of dollars of commerce in products that are used in American manufacturing facilities and households. 4. China’s economy has gone through a transition where decisions on pricing by companies such as Defendants are the result of their own decision-making and not the result of a government mandate. China has repeatedly represented to the World Trade Organization that this transition has occurred. With respect to the decisions about pricing of magnesite in particular, Defendants’ association, the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (“CCCMC”), has represented to the U.S. Department of Commerce that It is well known China has established a market economy system over the past 20 years. The government, at both national and local levels, has faded out from direct involvement in the management of enterprises and become a macro regulator. It has no right to fix the prices for these enterprises, whether they are state-owned or privately owned, nor does it have the ability to influence prices by interfering in the purchase of raw materials, the channels of distribution, or company business practices. Additionally, a basic legal system for the market economy has been established in China. This system protects the independence and autonomy of enterprises, and ensures that the nature and quantity of the goods to be produced are decided by the producer at his own will, according to the demand in the market. Even state-owned enterprises are operated under the rules of market economics. Therefore, domestic prices of Chinese products as a whole are not interfered with, and they are reliable. All Chinese enterprises operate in a competitive 4 Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 5 of 27 PageID: 5532 and fully open market that relies on supply and demand for price determination.1 5. The U.S. Supreme Court has observed that cartels such as are at issue in this case are the “supreme evil of antitrust.” Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004). For decades, the Antitrust Division of the U.S. Department of Justice and civil Plaintiffs have asserted subject matter jurisdiction in criminal and civil actions relating to the sales of products in U.S. commerce by members of international cartels such as at issue here. As a result, the United States has a long track record of pursuing civil and criminal prosecution of cartels that affect U.S. commerce. So long as the products and services were sold in the U.S., including products and services imported from foreign nationals, U.S. antitrust enforcement against cartels reaches defendants all over the world. For example, recent antitrust prosecutions of foreign companies include: Vitamin and citric acid producers from France, Switzerland, Germany, Japan, Canada and the Netherlands; Dynamic random access memory (DRAM) manufacturers from Taiwan, Korea, Germany and Japan; Sorbate manufacturers from Japan and Germany; Marine transportation companies from Norway, Belgium and the Netherlands; Lysine producers from Korea and Japan; and 2 Sodium gluconate producers from France, Japan and the Netherlands. This action is thus brought as a traditional action to enforce the antitrust laws of the United States against companies selling products in U.S. commerce, actions from which companies based in China (or any other nation) are not exempt. 1 Comments of the China Chamber of Metals, Minerals, Chemical, Importers & Exporters on Market Oriented Enterprise available at ia.ita.doc.govidownload/nme-moe/comments-20071210/eccmc-nme-moe-cmt- 20071210.pdf (hereinafter “CCCMC Comments”) (attached hereto as Exhibit 1). 2 U.S. Dep’t of Justice, Antitrust Division, “Selected Criminal Cases April 1, 1996 through September 30, 1999,” available at http://www.usdoj.gov/atr/public/4523d.htm; “Sherman Act Violations Yielding a Corporate Fine of $10 Million or More,” available at http://www. usdoj. goy/att./public/criminal/212091.htm. 5 Case 2:05-cv-04376-KM-MAH Document 167 Filed 11/03/14 Page 6 of 27 PageID: 5533 II. JURISDICTION AND VENUE 6. Plaintiffs bring this action under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, to obtain injunctive relief and to recover treble damages and the costs of suit, including reasonable attorneys’ fees, for the injuries sustained by Plaintiffs by reason of Defendants’ violations of the Sherman Act. 7. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1337 and 15 U.S.C. §§ 15, 22, and 26. This Court has jurisdiction over this action against Defendants China Minmetals Corporation and any other directly-owned state enterprises pursuant to 28 U.S.C. § 1605. 8. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b), (c) and (d) and 15 U.S.C. §§ 15, 22, and 26. 9. Jurisdiction over all Defendants comports with the United States Constitution 15 U.S.C. §§ 15, 22, and 26, and the New Jersey long-arm statute. Jurisdiction over any state-owned Defendant is based on 28 U.S.C. § 1608. III. PARTIES 10. Plaintiff Animal Science Products, Inc. (“Animal Science”) is a Texas corporation with its principal place of business in Nacogdoches, Texas. Animal Science manufactures and distributes feed additives and packaged goods. Since 2000, Animal Science has purchased magnesite in the form of magnesium oxide for use in several of its products. Animal Science has suffered antitrust injury, and will continue to suffer future antitrust injury, in that Defendants, co- conspirators and other Chinese magnesite exporters continue to charge artificially inflated prices, Animal Science has continued to purchase magnesite from China, and thus has been required and will be required to pay these supra-competitive prices for magnesite.