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

United States District Court, District of Columbia

March 31, 2016

RIMA INDUSTRIAL S.A., et al., Defendants.


KETANJI BROWN JACKSON, United States District Judge

Plaintiff Globe M lurgical Inc. (“Globe”), a corporation based in Beverly, Ohio, is the leading domestic manufacturer of silicon m and silicon-based ferroalloys. (See Am. Compl., ECF No. 16, ¶ 14.) Defendant Rima Industrial S.A. (“Rima”) is a rival silicon m 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 Department in order to get certain duties on imported silicon m 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 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 GRANTED.


Silicon m 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 m 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 m, and domestic producers have often faced “dumping” by foreign producers-a practice in which those producers sell silicon m 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 (2007) (per curiam), the U.S. Commerce Department determined in 1990 and 1991 that various Brazilian silicon m producers, including Defendant Rima, had been engaged in dumping silicon m 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 m 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] The 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 m 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 Polymet incurred in selling Rima’s silicon m were improperly excluded from the agency’s analysis during its review of the antidumping order, and the Commerce Department ultimately (mistakenly) revoked the antidumping order with respect to Rima on December 17, 2002. (See id.; see also Silicon M 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 m into the U.S. market was bad news for Globe, which was one of only three domestic producers of silicon m 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 m 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, when news reports about the new Mississippi plant were published, identifying both Rima and Polymet personnel as the project’s leaders. (See Id. ¶ 57.) According to Globe, Rima’s actions have done “significant harm” to Globe’s business interests, insofar as they have resulted in lost sales, lost revenue, and lost disbursements of antidumping duties. (See Id. ¶ 58.)[4]

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 m 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 ...

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