CARPET GROUP INTERNATIONAL; Emmеrt Elsea, v. ORIENTAL RUG IMPORTERS ASSOCIATION, INC.; Bashian Bros., Inc.; Alfandari and Etessami Oriental Rug Co., Inc.; Moussa Etessami & Sons Corp.; Noonoo Rug Co.; Pande Cameron & Co. of New York; Kelaty Rugs International; Daniel Hodges; George Newman; Isaac Etessami. Carpet Group International Corporation and Emmert Elsea, Appellants.
No. 99-5931
United States Court of Appeals, Third Circuit
Argued July 21, 2000. Filed Sept. 8, 2000.
Christopher Sprigman (Argued), Robert B. Nicholson, United States Department of Justice Antitrust Division, Washington, DC, Counsel for Amicus-Appellant.
William J. O‘Shaughnessy (Argued), McCarter & English, Newark, NJ, Howard M. Nashel, Nashel, Kates, Nussman, Rapone, Ellis & Traum, Hackensack, NJ, Arthur M. Lieberman, Lieberman & Nowak, New York, NY, Stuart Reiser Shapiro & Croland, Hackensack, NJ, Counsel for Appellees.
Coram: RENDELL, ROSENN, Circuit Judges, and O‘NEILL,* District Judge.
ROSENN, Circuit Judge.
This appeal arises out of an action under the
In the District Court and on appeal, the defendants object to the Court‘s subject matter jurisdiction primarily on the ground that the plaintiffs’ claims were barred by the FTAIA. They assert that the plaintiffs failed to establish jurisdiction under the Act because they have not proven that the defendants’ actions did not involve or otherwise substantially affect United States commerce.2 The United States District Court for the District of New Jersey, acting on the report and recommendation of a Magistrate Judge, granted the motion of the defendants for dismissal of the action, and the plaintiffs timely appealed. We reverse.
Firms involved in the oriental rug trade in the United States have traditionally utilized a narrow chain of distribution. In this carefully constricted chain, foreign rug manufacturers sell their goods to wholesalers in the United States, who import the rugs and then sell them to U.S. retailers. The retailers in turn resell the rugs to consumers. In the early 1990s, plaintiff Emmert Elsea conceived a plan by which retailers and consumers in this country could purchase oriental rugs more cheaply. He theorized that if U.S. retailers were to purchase rugs directly from foreign manufacturers, bypassing the wholesaler link in the chain of distribution, they could reduce the costs to themselves and, consequently, to consumers. Elsea founded CGI in order to facilitate his vision of a new chain of rug distribution.
In 1993 and 1994, CGI sponsored two trade shows in the United States at which foreign rug manufacturers were invited to display rugs and sell directly to American retailers. CGI expected to earn fees paid by the manufacturers for space at the trade show. In addition, Elsea, and later CGI, took U.S. retailers on buying trips to rug-producing countries in exchange for fees. On these trips, the plaintiffs arranged for the retailers to purchase rugs directly from foreign rug manufacturers. CGI‘s trade shows and buying trips were the mechanisms through which the plaintiffs attempted to effectuate their plan to assist American retailers in purchasing oriental rugs directly from the foreign manufacturer.
The plaintiffs claim that the defendants conspired to sabotage their efforts to facilitate direct sales between foreign manufacturers and United States retailers and, more specifically, conspired to wreck plaintiffs’ trade shows. Plaintiffs’ amended complaint alleges that the defendants used the following tactics:
- threatening not to purchase rugs from any manufacturer who participated in the trade shows;
- threatening not to purchase rugs from any manufacturer who sells rugs to any retailer on a buying trip;
- threatening and retaliating, including expulsion from the association, against any ORIA member that participated in the plaintiffs’ trade shows;
- inducing the Carpet Export Promotion Council of India, the Export Promotion Board of Pakistan, and the Pakistan Carpet Manufacturers and Exporters Association not to subsidize the participation of manufacturers from those countries in the plaintiffs’ trade shows;
- threatening not to sell rugs to retailers who participatе in the buying trips sponsored by plaintiffs.
The defendants moved to dismiss the action for lack of subject matter jurisdiction. The defendants argued that the Foreign Trade Antitrust Improvements Act (“FTAIA“),
Sections 1 to 7 of this title[, which include the Sherman Act,] shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless—
- such conduct has a direct, substantial, and reasonably foreseeable effect—
- on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations....
A. The Jurisdictional Evidence.
The plaintiffs offered documentary еvidence before the Magistrate Judge dealing with activity by ORIA and its members to convince foreign governments, foreign rug trade associations, and one domestic rug retailers’ association not to provide financial assistance to the CGI trade shows. For example, ORIA wrote to the secretary of the Carpet Export Promotion Council of India (“CEPC“) that in deciding whether or not to co-sponsor CGI‘s November 1993 Chicago trade show, the CEPC should consider that doing so would “possibly jeopardize a very friendly and prosperous relationship” between Indian rug manufacturers and American importers. (JA.92). In addition, defendant Hodges (the president of defendant Pande Cameron & Co. of New York, an importer/wholesaler) wrote to the chairman of the CEPC, expressing his opinion that the CGI 1993 show was “destined for failure,” asking for the chairman‘s “comments and observations in lending CEPC support to this show,” and requesting “the names of those exporters from India who plan on exhibiting.” With respect to this last request, Hodges wrote: “These would be exporters, I can assure you we would avoid in any future business disсussions.” (JA.93). There is no evidence in this record that CEPC furnished Hodges with these names.
CGI planned another trade show in Washington, DC in August 1994. In March of that year, defendant Newman (the president of defendant Noonoo Rug Co.) wrote to the vice-chairman of the Export Promotion Bureau of Pakistan (“EPB“) and the Pakistan Carpet Manufacturers and Exporters Association (“PCMEA“) regarding this trade show, urging the PCMEA and the EPB “not to encourage nor support the ‘renegade’ activities and selfish motives of a few Pakistani trader/exporters and their American retail counterparts.” Newman also noted that “[t]o do so would be to continue on the road leading to ill will and chaos.” (JA.94-95). The PCMEA subsequently made efforts toward conciliation with ORIA. Its vice chairman wrote to ORIA informing it of PCMEA‘s decision not to officially participate in the Washington Fair being held in August that year, and of its request that the EPB not “give any facility to” the participants. He reiterated that “no manner of encouragement or patronage” would be provided by the Association to any firm desiring to participate in the fair. (JA.96).
Rumor has it that the ORRA has been approached by CGI to cosponsor this function. I think you are well aware of our sentiments regarding the purpose of this trade fair in undermining existing channels of distribution which have proven to be successful to all of us over the years. We would naturally hope that the ORRA would not entertain any thoughts whatsoever in being involved and therefore lending credence to [CGI].
(JA.106). Hodges further noted his belief that politicians directly involved with a child labor bill sponsored by Senator Harkin, a subject high on ORIA‘s lobbying agenda, would be invited to attend the CGI trade show. Hodges expressed fear that “all of our efforts in dealing with the Harkin Bill and responsibly trying to address child labor could be undone by any loose cannons’ developing their own game plan.” He concluded with the request that “through your leadership, ... the ORRA take a long and very close look at the negative ramifications in lending your name to this very damaging endeavor.” Apparently after interim contact with ORRA, Hodges again wrote ORRA‘s president on March 28, 1995, expressing his sentiments “that Emmert Elsea‘s attitudes toward wholesalers [are] ... both incorrect and unhealthy,” and of his concern with Elsea‘s approach toward eradicating child labor.
Significantly, the minutes of an April 1994 ORIA membership meeting show that “Dan and Gene,” presumably a reference to Dan Hodges and Eugene Newman, had contacted the ORRA and obtained its promise not to endorse the August trade show as a group. The minutes also reflect that “Gene” “urged the [ORIA] members who import from Pakistan, India and other countries to write the proper Export Promotion authorities in those countries and advise them not to participate in this show.” The minutes of an August 1994 ORIA meeting reflect that this statement was amended to read “Gene Newman suggested that the individual members and not the organization” engage in this letter writing campaign.
In addition, the plaintiffs also offered one piece of documentary evidence intended to show that the defendants were boycotting domestic retailers and foreign manufacturers who supported the trade shows. These were handwritten notes dated May 25, 1994, taken by an unidentified rug retailer in Virginia, of a telephone conversation between the retailer and a representative of defendant Kelaty Rugs International. The notes describe the importer‘s representative as “irate,” and record the retailers’ fear that because of his cooperation with Elsea, “we will not be able to get rugs from anyone.” Most significantly, the unidentified retailer stated “We are being dealt with from both ends. i.e., cannot get supplied in U.S.[,] also those who supply us from overseas will be boycotted by importers.” The Magistrate Judge did not credit this evidence because it was unclear who wrote these notes. When the plaintiffs later objected to the Magistrate Judge‘s R & R before the District Court, they offered the declaration of someone named William Hirsch, in which Hirsch purported to authenticate these notes as his own. Although the defendants contend that this declaration was not submitted before the magistratе, plaintiffs claim it was submitted and the magistrate simply disregarded it. (Appellants’ Reply Br. at 3-4).
Finally, CGI offered a declaration of Emmert Elsea dated July 17, 1997. Elsea made the following pertinent representations:
4. Joseph Zarnigin of Zarnigin Rugs, an ORIA member located in New York, informed me and Anne Williams that he would participate in the 1993 trade show except that doing so would jeopardize his membership in and benefits from ORIA.
5. DCC, Inc., an ORIA member located in New York, said he would purchase space in the 1993 trade show, but later refused to do so because ORIA strongly opposed the trade show.
6. Rug News[, a trade magazine intended for retail readership,] refused to accept advertising for the 1993 trade show.
7. Decorative Rug[, a similar magazine,] withdrew its acceptance of CGI‘s advertising on the grounds that it would lose its ORIA customers if it allowed CGI to advertise. The publisher of Decorative Rug also stated that he was being pressured by ORIA to run unfavorable editorials concerning CGI.
8. Anadol Rugs, an ORIA member located in New York, executed a contract and paid a deposit for space in the 1994 trade show. The contract was not forged. Anadol cancelled [sic] its contract after its anticipated participation was revealed to ORIA, and, according to the president of Anadol, ORIA pressured it.
B. Additional Jurisdictional Evidence Offered To the District Court.
The plaintiffs subsequently filed objections to the Magistrate Judge‘s report and recommendation with the District Court. In so doing, both they and the defendants submitted additional evidence to that Court for its consideration. For example the plaintiffs offered additional evidence intended to show that ORIA and the individual rug importers had pressured independent trade publications to reject advertising for the trade show. They offered Elsea‘s contemporaneously written notes of a September 1993 telephone conversation with Ron O‘Callaghan of Decorative Rugs magazine, an independent trade publication, in which he recorded that O‘Callaghan “rejected his acceptance of” CGI‘s advertisements for the 1993 trade show. Elsea reported that O‘Callaghan stated that if he printed the ads, ORIA and other importers would quit advertising, and that ORIA opposed the show and had pressured Decorative Rug magazine to run editorials against it. In response, the defendants offered a certification from O‘Callaghan in which he denied that he made such statements, and specifically stated that none of the importers ever contacted him and threatened to quit advertising in his magazine if it accepted advertisements from Elsea for his Chicago trade show.
The plaintiffs also offered a letter from an advertising consultant reporting that when the consultant tried to place an advertisement in Rug News, another independent trade publication, she was told by Rug News official Les Stroh that the advertisement would not be accepted because the trade show would “damage the oriental rug importers.” (JA.127). In response, the defendants offered excerpts from a deposition of Stroh, in which he testified that he never received any recommendation from ORIA not to accept ads from manufacturers. Stroh also denied ever having any conversations with anyone from ORIA pertaining to the acceptance or rejection of advertisements from manufacturers. (JA.178-81).
The plaintiffs also offered the minutes of a December 1993 ORIA executive board meeting, at which the board discussed CGI‘s November 1993 Chicago trade show. The minutes report a discussion concerning a memorandum that would be sent to all members about the operations of CGI, “which held a trade fair in Chicago last November where they had cut out the role of the importer in the chain of distribution.” Lee Harounian, an ORIA board member, suggested that ORIA members “boycott” the manufacturers participating in the show. The executive board ultimately decided that this memorandum should not go to all members but to the board members only.
The plaintiffs also offered evidence of ORIA‘s historical efforts to prevent foreign manufacturers from selling directly to U.S. retailers. In 1992, Pakistani rug manufacturers sold some rugs directly to Bloomingdale‘s department store, an American retailer. In September of that year, following this sale, then-ORIA president (and defendant) Isaac Etessami wrote to the Pakistani Minister of Commerce complaining of this practice, with emphasis on EPB‘s subsidization of Bloomingdales’ promotion. The letter reminded the Pakistani minister of the “traditional, established and respected chain of distribution” in the United States, to wit, “MANUFACTURER/EXPORTER - IMPORTER/WHOLESALER - RETAILER - CONSUMER.” The letter also admonished Pakistani exporters to concentrate their promotion sales efforts on American importers “and not attempt to involve themselves with retailers, who are the importers’ customers.” (Emphasis in original). The lengthy letter concluded with the exhortation: “Work with the American importer in promoting your rugs and not around him.”
Finally, the plaintiffs offered a memorandum from the president of ORRA addressed to the ORRA board, written shortly after the president received the March 23, 1994 letter from then-ORIA president Hodges regarding potential ORRA sponsorship оf CGI‘s 1994 trade fair. The memo read in part:
Over the past year ORRA has made significant progress in mending fences with its sister organization ORIA.... Last year a letter went out under my signature that effectively distanced ORRA from [CGI].... The building process is slow..... and it will come to a grinding halt, in my opinion, if we even entertain the notion of joining forces with [CGI]. Both Dan Hodges and Gene Newman have gone on record requesting that ORRA continue to disassociate itself from Mr. Elsea‘s efforts.
In response, the defendants offered excerpts from the deposition of the ORRA president, in which she testified that nobody “at ORIA [told her] ... that moving away from an affiliation with another trade fair would improve relations.”
C. Subsequent Proceedings.
The District Court, “having conducted de novo review of” the Magistrate Judge‘s recommended disposition, the parties’ subsequent submissions, and the underlying record, but not of the additional evidence submitted to the District Court after the issuance of the Magistrate Judge‘s initial report and recommendation, remanded the matter to the Magistrate Judge, so that the arguments raised in plaintiffs’ objections could be adequately evaluatеd.
II.
Subject matter jurisdiction in this case rests, if at all, on
A.
We first turn to the relevant provisions of the “inelegantly phrased” FTAIA.4 This statute, when parsed, states two requirements about when the
Here, the defendants attack subject matter jurisdiction “in fact,” meaning they dispute the existence of certain jurisdictional facts alleged by the plaintiffs. Whеn a defendant attacks subject matter jurisdiction “in fact,” as opposed to an attack on the allegations on the face of the complaint, the Court is free to weigh the evidence and satisfy itself whether it has power to hear the case. Mortensen v. First Fed. Sav. & Loan Ass‘n, 549 F.2d 884, 891 (3d Cir. 1977). In such a situation, “no presumptive truthfulness attaches to plaintiff‘s allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Id. In addition, the burden of proving the existence of subject matter jurisdiction lies with the plaintiff. Id. The parties appear to agree that under the Mortensen framework for analyzing factual challenges to subject matter jurisdiction, this Court reviews the District Court‘s and Magistrate Judge‘s findings of jurisdictional facts for clear error.
Addressing the impact of the FTAIA to this case, the Magistrate Judge first determined that the plaintiffs were themselves not importers and, therefore, were not eligible for the “import trade” exception. The Magistrate Judge then addressed whether the evidence in the record supported a finding of subject matter jurisdiction under the statute.
The Magistrate Judge apparently found that the evidence plaintiffs introduced to back up their allegations was credible only with respect to the charge that they “attempt[ed] to induce or induc[ed] the Carpet Export Promotion Council of India, the Export Promotion Board of Pakistan, and the Pakistan Carpet Manufacturers and Exporters Association not to subsidize the participation of manufacturers from those countries in the plaintiffs’ trade fairs.” The Magistrate Judge held that this did not describe conduct having a “direct” and “substantial” effect on import trade or commerce.5 Accordingly, the Magistrate Judge and, subsequently, the District Court, held that this case fell under the FTAIA‘s exemption from the antitrust laws, and that subject matter jurisdiction was therefore lacking.
The District Court and Magistrate Judge both ignored significant additional evidence offered by the plaintiffs to back up their other allegations. Under
The Magistrate Judge held that this case did not fall into the FTAIA‘s parenthetical exclusion, i.e., did not “involve” import trade or commerce, because the plaintiffs in this casе were not importers, but merely brokers. As plaintiffs observe, this is plainly an inaccurate reading of the FTAIA. It is an incorrect focus on the plaintiffs’ function rather than the defendants’ conduct. The FTAIA‘s exemption from the
Congress enacted the FTAIA for the purpose of facilitating the export of domestic goods by exempting export transactions that did not injure the United States economy from the
Even if this Court considered only the evidence presented before the Magistrate Judge, the latter erred in ruling that the defendants’ conduct did not “involve import trade or commerce.” The defendant association identifies itself as an organization of “rug importers“; the individual defendants are its officers and directors. Admittedly, the FTAIA differentiates between conduct that “involves” such commerce, and conduct that “directly, substantially, and foreseeably” affects such commerce. To give the latter provision meaning, the former must be given a relatively strict construction. The evidence before the Magistrate Judge dealt largely with efforts to prevent Indian and Pakistani export boards from giving finanсial assistance to CGI or to manufacturers who wanted to participate in CGI‘s trade shows. It also dealt with efforts to convince ORRA, the trade association of United States rug retailers, from sponsoring the shows. These are activities that arguably did not, standing alone, “involve” import trade or commerce, but that did relate directly to them.
Elsea‘s declaration, however, makes allegations that ORIA pressured Zarnigan Rugs, DCC, Inc., and Anadol Rugs, Inc., themselves ORIA members who were involved both in importing and foreign manufacturing, to refrain from participating in CGI‘s trade shows. This evidence was uncontested before the Magistrate Judge. These allegations directly involved both import and domestic commerce.7
Significantly, Mortensen makes clear that because, in the
Finally, the evidence offered by plaintiffs (including the evidence offered after the Magistrate Judge‘s initial report issued) reveals that the defendants’ alleged conduct had its intended negative effect on CGI‘s trade shows and, consequently, had the effect of protecting the defendants’ import and wholesale business. Accordingly, the evidence, taken as a whole, is sufficient to support the plaintiffs’ allegations that the challenged conduct “involved” import trade or commerce. The crux of their case involves conduct in the United States, not conduct abroad. We hold that these activities are not the type of conduct Congress intended to remove from our antitrust jurisdiction when it enacted the FTAIA. The FTAIA therefore does did not divest the District Court of subject matter jurisdiction over the plaintiffs’ claims.
B.
The defendants next argue that even assuming the FTAIA does not divest the federal courts of subject matter jurisdiction over the plaintiffs’ claims, the District Court nevertheless lacked jurisdiction under the
The defendants contend that the plaintiffs must demonstrate a “substantial” effect on our domestic commerce to support the exercise of jurisdiction under the
The plaintiffs pose a different argument in support of
Similarly, this Court has stated,
per se boycott cases usually contain three elements: “denial of something a competitor needs to compete effectively, defendants with a dominant position in the relevant market, and the absence of any plausible contention that the challenged behavior would ‘enhance overall efficiency and make markets more competitive.‘”
Rossi v. Standard Roofing, Inc., 156 F.3d 452, 463 (3d Cir. 1998) (quoting P. AREEDA & H. HOVENKAMP, ANTITRUST LAW ¶ 1510 (Supp.1997) (quoting and interpreting Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284, 294-95 (1985))). The defendants’ conduct complained of fits this description. It can be characterized as having a “pernicious effect on competition” and lacks any redeeming virtue. See Rossi, 156 F.3d at 461 (quoting Northern Pac. Ry. v. United States, 356 U.S. 1, 5 (1958)).
Although “[t]he mere allegation of a concerted refusal to deal does not suffice because not all concerted refusals to deal are intentionally anticompetitive,” id. at 463 (quoting Northwest Wholesale Stationers, 472 U.S. at 295), it appears that the refusal to deal here at issue is predominantly anticompetitive. If the plaintiffs can prove at trial that the alleged conspiracy actually exists, the anticompetitive effect of such a conspiracy would be “immediately obvious.” FTC v. Indiana Federation of Dentists, 476 U.S. 447, 458 (1986). There appears to be no reason for the defendants’ action other than to protect the wholesaler/importer‘s role in the chain of distribution.
The defendants correctly observe that under Supreme Court precedent, “the per se approach has generally been limited to cases in which firms with market power boycott suppliers or customers in order to discourage them from doing business with a competitor.” Indiana Federation of Dentists, 476 U.S. at 458. Market power is the power to control prices and exclude competition. See American Tobacco Co. v. United States, 328 U.S. 781, 789 (1946). However, “when the defendants are not engaged in any significant integration of production or distribution, and the only rationale for the restraint is the elimination of additional, lower-cost, higher quality, or more innоvative output from the market,” this rationale “implies the existence of market power.” ANTITRUST LAW ¶ 2203a. Plaintiffs have not offered specific evidence to show what portion of the United States market for the importation and wholesale distribution of oriental rugs was affected by defendants’ actions or the potential market impact of their lost trade show sales. The District Court and Magistrate Judge relied heavily on this absence of evidence in dismissing their claims. Nevertheless, because the evidence offered by the plaintiffs indicates that the defendants’ conduct had its intended effect of undermining the trade shows, and that its only purpose was to eliminate competition in the United States, this raises a strong inference that ORIA and its member rug importer/wholesalers possessed some degree of market power. Accordingly, per se treatment appears appropriate here.9
No one claims that the conduct here at issue is “local in nature,” and therefore no “effects” test even comes into play. Instead, we focus on whether the plaintiffs have proffered evidence that the defendants’ anticompetitive activity is itself in interstate commerce. It is clear from the uncontradicted evidence presented that requisite nexus to interstate commerce exists here. ORIA is headquartered in New Jersey; several of the defendant wholesalers/importers are located in New York; the defendants wrote to the Rhode Island-based president of ORRA to dissuade that organization from co-sponsoring the trade shows; at least one retailer who was pressured not to associate with CGI is based in Virginia; Elsea and CGI are based in Virginia; and the trade shows took place in Chicago, Illinois and Washington, DC. In these circumstances, the plaintiffs therefore need not quantify the actual effect defendants’ conduct had on interstate commerce to support federal jurisdiction. See McLain, 444 U.S. at 243; Fuentes v. South Hills Cardiology, 946 F.2d 196, 199-200 (3d Cir. 1991); see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 331 (1991).
Thus, because the plaintiffs have introduced evidence sufficient to show that the challenged conduct actually occurred in interstate commerce, we conclude that subject matter jurisdiction exists over plaintiffs’
C.
Finally, the defendants contend that even if subject matter jurisdiction over the plaintiffs’ claims exists, this Court should nevertheless affirm the dismissal of those сlaims because the plaintiffs lack antitrust standing to bring an action under the
The Court dismissed the case, holding that B&P lacked antitrust standing to sue under the
The defendants claim that the plaintiffs’ trade shows are no different from B&P‘s role as a marketer and solicitor of orders. We disagree. First, as the plaintiffs explain quite thoroughly in their reply brief to this Court, Barton & Pittinos arguably rests on an overstated premise. The Court‘s сonclusion in Barton that in order to suffer antitrust injury, one must be either in competition with the defendant or a consumer of its goods or services, if construed as an absolute (which arguably it need not be), may in some circumstances lead to results that conflict with Supreme Court and other precedent.12 Indeed, this Court recently acknowledged that although generally only competitors and consumers will suffer antitrust injury (an essential component of antitrust standing), such injury may in some circumstances inhere where the harm is “‘inextricably intertwined’ with the defendant‘s wrongdoing.” Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912, 926 & n. 8 (3d Cir. 1999) (quoting Gulfstream III Assoc., Inc. v. Gulfstream Aerospace Corp., 995 F.2d 425, 429 (3d Cir. 1993)).
Indeed, as the plaintiffs explain, the instant case bears a striking similarity to the facts in Crimpers Promotions Inc. v. Home Box Office, 724 F.2d 290 (2d Cir. 1983). In Crimpers, the plaintiff organized a trade show at which television programming producers could sell programs directly to television stations, instead of having to sell through distributors first. The plaintiff charged that then distributors conspired to sabotage the trade show by boycotting potential participants. The Court of Appeals for the Second Circuit, in an opinion written by Judge Friendly, held that the plaintiff trade show organizer had standing to bring a
We find Crimpers persuasive. Instead of facilitating the sale of television programming between producers and television stations, Elsea and CGI “endeavor[ed] to forge a link in a chain of the sale” of oriental rugs between foreign rug manufacturers and domestic rug retailers. That link competed directly with the traditional middlemen—the rug importer/wholesalers. Moreover, the alleged injury to the plaintiffs was not merely an indirect or remote consequence of the defendants’ actions, as might have been the case if the defendants’ actions had put a rug manufacturer out of business, аnd someone who supplied materials to that manufacturer sued under the antitrust laws. See id. Rather, “injury to [the plaintiffs] was the precisely intended consequence of defendants’ boycott,” id., and is “‘inextricably intertwined’ with the defendant‘s wrongdoing,” Steamfitters, 171 F.3d at 926 & n. 8.
III.
In summary, we conclude that the FTAIA is inapplicable and that the District Court erred in dismissing this case. Further, the plaintiffs have offered sufficient evidence to demonstrate that the activities of the wholesale importers were intended to and adversely did impact on domestic commerce by engaging in a course of anticompetitive conduct to ensure that only they, the importers, could bring oriental rugs manufactured abroad into the United States for distribution. We further hold that subject matter jurisdiction exists under the
Costs will be taxed against the appellee.
Notes
shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate. The judge may also receive further evidence or recommit the matter to the magistrate with instructions.Similarly, Rule 72(b) states, in relevant part, that upon receiving written objections to a Magistrate Judge‘s report, the District Court:
shall make a de novo determination on the record, or after additional evidence, of any portion of the magistrate judge‘s disposition.... The district judge may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate judge with instruсtions.
the causal connection between the antitrust violation and the harm to the plaintiff and the intent by the defendant to cause that harm, with neither factor alone conferring standing; ... the directness of the injury, which addresses the concerns that liberal application of standing principles might produce speculative claims; ... the existence of more direct victims of the alleged antitrust violations; and ... the potential for duрlicative recovery or complex apportionment of damages.Id. at 181.
- the causal connection between the antitrust violation and the harm to the plaintiff and the intent by the defendant to cause harm, with neither factor alone conferring standing;
- whether the plaintiff‘s alleged injury is of the type for which the antitrust laws were intended to provide redress;
- the directness of the injury, which addresses the concerns that liberal application of standing principles might produce speculative claims;
- the existence of more direct victims of the alleged antitrust violations; and
- the potential for duplicative recovery or complex apportionment of damages.