Geo Specialty Chemicals, Incorporated v. Husisian
2013 U.S. Dist. LEXIS 90009
D.D.C.2013Background
- GEO Specialty Chemicals, the largest U.S. glycine producer, alleges former outside counsel Gregory Husisian (now at Foley & Lardner) learned GEO confidential information while representing GEO in 2007–08 antidumping proceedings and is now representing two Chinese producers (the Hebei Companies) in a 2012 new-shipper review.
- GEO claims Husisian’s new representation violates D.C. Rule of Professional Conduct 1.9 and constitutes a breach of fiduciary duty, seeking injunctive relief and compensatory damages.
- Defendants moved to dismiss for lack of subject-matter jurisdiction, arguing the Court of International Trade (CIT) has exclusive jurisdiction and GEO failed to exhaust administrative remedies; they also disputed diversity amount.
- The district court held it had diversity jurisdiction under 28 U.S.C. § 1332 (parties are diverse and the value of injunctive relief or confidential information plausibly exceeds $75,000) and denied defendants’ jurisdictional dismissal.
- The court nevertheless dismissed GEO’s complaint sua sponte under Rule 12(b)(6) for failure to state a claim: GEO did not plausibly allege (1) that the new shipper review was the same or substantially related matter under Rule 1.9, nor (2) that any breach proximately caused actual injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CIT has exclusive jurisdiction | GEO implicitly argued district court may hear private tort claims | Defendants: CIT (§1581) has exclusive jurisdiction over matters arising from trade/ITA actions | Court: CIT lacks exclusive jurisdiction over private fiduciary claims; district court has jurisdiction under §1332 |
| Whether amount-in-controversy met for diversity | GEO: injunctive relief and value of confidential info plausibly exceed $75,000 | Defendants: damages speculative and below threshold | Court: amount plausibly exceeds $75,000; diversity jurisdiction exists |
| Whether Rule 1.9 disqualification/conflict claim pleaded | GEO: Husisian’s past representation was substantially related and adverse, giving rise to Rule 1.9 violation | Defendants: matters are distinct and no substantial relation or confidential-use risk | Court: dismissed — GEO failed to plead facts showing same or substantially related matters or how old information would be useful |
| Whether breach of fiduciary duty pleaded with causation and damages | GEO: representation risks misuse of confidential info that would harm GEO | Defendants: no actual disclosure or injury alleged; speculative harm | Court: dismissed — plaintiff did not allege actual disclosure or proximate injury necessary for damages |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (standard for pleading plausible claims)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must show more than speculative relief)
- Makita Corp. v. United States, 819 F. Supp. 1099 (Ct. Int'l Trade) (CIT enjoined agency access but relief limited to action against United States)
- Shakeproof Indus. Prods. Div. v. ITW, 104 F.3d 1309 (Fed. Cir. 1997) (addressed conflicts in antidumping proceedings; did not expand CIT authority over private parties)
- Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041 (Fed. Cir. 2012) (CIT lacks jurisdiction over private-party claims outside specified trade actions)
- Timken Co. v. Simon, 539 F.2d 221 (D.C. Cir. 1976) (district courts may hear customs-related matters when CIT remedy is inadequate)
- Brown v. District of Columbia Board of Zoning Adjustment, 486 A.2d 37 (D.C. 1984) (substantial-relationship test for conflicts of interest)