HEXCEL CORPORATION, Plaintiff-Appellant, v. INEOS POLYMERS, INC., f/k/a BP Amoco Polymers, Inc., Defendant-Appellee.
No. 10-56765
United States Court of Appeals, Ninth Circuit
Argued and Submitted April 12, 2012. Decided June 1, 2012.
681 F.3d 1055
Before: BETTY B. FLETCHER, ANDREW J. KLEINFELD, and MILAN D. SMITH, JR., Circuit Judges.
How could the ALJ give some weight to the FBI agent‘s communication, but not a “significant” enough amount to affect the outcome? Any judge with an adequate amount of humility makes many decisions about which he has varying degrees of confidence in his own judgment. Learning after a firm conviction has been formed that one‘s conviction is supported by additional evidence can affect the judge‘s level of confidence in his decision, without affecting the outcome of the decision. The ALJ‘s decision, and the record of Ludwig‘s contradictions, make it plain that the ALJ would have reached the same conclusion—that Ludwig was fit to resume work like his last job as a cook—had the FBI agent not spoken to him about his observations of Ludwig.
An ex parte contact can be quite egregious without being prejudicial.28 In the absence of actual prejudice from the error, we are required, under Sanders and McLeod, to conclude that the ex parte communication does not entitle Ludwig to a reversal.29
Ludwig makes two other arguments: that consideration of the ex parte evidence denied his right to petition for redress of grievances, and that it violated the ALJ‘s duty to develop the record.30 Both arguments appear to be rephrasings of the ex parte evidence argument discussed above. They fail for the same reasons.
AFFIRMED.
Corey C. Watson, Los Angeles, Scott W. Fowkes (argued), Kathleen Ehrhart, Russell King, Chicago, IL, for defendant-appellee Ineos Polymers, Inc.
OPINION
M. SMITH, Circuit Judge:
Plaintiff-Appellant Hexcel Corporation (Hexcel) sued Defendant-Appellee Ineos Polymers, Inc., formerly known as BP Amoco Polymers, Inc. (BP Amoco) on November 26, 2008 for antitrust injuries it allegedly suffered as the result of a carbon fiber price-fixing scheme, beginning in 1992. To avoid the effect of the applicable four-year statute of limitations,
Hexcel was aware of, and likely even participated in the alleged carbon fiber price-fixing scheme, throughout the 1990s. Hexcel‘s involvement in this scheme led to its being subpoenaed in January 1999, along with other carbon fiber producers BP Amoco, Toray, and Toho, by a federal grand jury that was investigating a possible industry-wide price-fixing conspiracy. Hexcel confirmed its knowledge of widespread anticompetitive practices in its annual Form 10-K disclosures in March 1999. Based upon the overwhelming evidence of Hexcel‘s knowledge in the record, we hold that Hexcel‘s claims are time-barred, and we affirm.
Hexcel manufactures prepreg, a product made from carbon fiber. Prepreg is sold to customers who convert it into various composites for use in a wide variety of end products, including commercial aerospace and military applications. Following an acquisition in 1996, Hexcel also became a producer of carbon fiber. Both before and after Hexcel‘s acquisition, Hexcel was the largest purchaser of carbon fiber in the United States.
On January 29, 1999, Hexcel received a grand jury subpoena from the Antitrust Division of the United States Department of Justice (DOJ). No later than the date of the receipt of that subpoena, Hexcel learned that the DOJ was investigating an alleged industry-wide antitrust conspiracy in the carbon fiber and prepreg industries, and that the targets of the investigation included Hexcel, BP Amoco, Toray, and Toho. Hexcel retained Skadden, Arps, Slate, Meagher & Flom LLP (Skadden) to represent it in the government‘s investigation. On March 30, 1999, Hexcel filed a Form 10-K with the United States Securities and Exchange Commission, in which it publicly disclosed that it was the “subject” of a federal grand jury investigation into “the pricing of all manufacturers of carbon fiber and carbon fiber prepreg.”1
On July 29, 1999, direct purchasers of carbon fiber class action plaintiffs filed the first of several federal class action lawsuits in the Central District of California against Hexcel, BP Amoco, Toray, Toho, and others, alleging price-fixing and unlawful market allocation under the
On January 24, 2003, Hexcel, BP Amoco, and the other defendants amended a joint defense agreement (JDA) originally executed on April 29, 1999. The amended JDA included a tolling provision of potential claims against each other for the duration of the JDA, terminable upon 30 days written notice. On August 13, 2008, BP Amoco terminated the tolling provision as to any claims against it, effective September 12, 2008.
On November 26, 2008, Hexcel filed suit against BP Amoco alleging violations of
Hexcel responded by claiming that it did not become aware of its potential claims until after its own diligent inquiry produced enough evidence to support the filing of a lawsuit under
The parties engaged in limited discovery regarding the statute of limitations issue. BP Amoco filed a Motion for Summary Judgment on August 31, 2010. Therein, BP Amoco presented evidence that Hexcel had actual or constructive knowledge of its claims prior to April 11, 1999, the date which BP Amoco contended was the earliest possible date Hexcel‘s claims could have accrued. BP Amoco argued that if Hexcel had acquired actual or constructive notice of its claims between April 11, 1999 and the present, then the claims would not be time-barred. However, BP Amoco claimed, if Hexcel had actual or constructive notice of the relevant facts showing antitrust violations before April 11, 1999, then the statute of limitations had lapsed, and the claims were time-barred.
Hexcel countered that its claims were not time-barred because the receipt of the DOJ subpoena came as a complete surprise, and that it had no reason to suspect price-fixing in the carbon fiber industry. The district court rejected this argument on the ground that “BP Amoco [] presented enough evidence to persuade the Court to the contrary. Hexcel employees undisputedly knew or had reason to suspect that price-fixing might be occurring in the carbon fiber market before Hexcel received the DOJ subpoena on January 29, 1999.” After having received the subpoena and having been alerted to the government‘s investigation into the carbon fiber market, the district court reasoned, Hexcel immediately began investigating its own conduct
On October 13, 2010, the district court entered summary judgment for BP Amoco on the ground that Hexcel had actual or constructive notice of its claims on or before April 10, 19992 and, therefore, that the statute of limitations for the filing of Hexcel‘s alleged antitrust claims had run. Hexcel timely appealed.
II. JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction pursuant to
Where the moving party has identified the portions of the record that it claims show the absence of any genuine issue of fact, the nonmoving party must set forth by affidavit or otherwise specific facts demonstrating that there is a genuine issue for trial. T.W. Elec. Serv., 809 F.2d at 630. The evidence must be viewed, and inferences from the evidence must be drawn, in the light most favorable to the nonmoving party. Id. at 630-31.
III. DISCUSSION
A. Fraudulent Concealment
Antitrust actions must be commenced within four years from the date when the causes of action accrue.
A statute of limitations may be tolled if the defendant fraudulently concealed the existence of a cause of action in such a way that the plaintiff, acting as a reasonable person, did not know of its existence. Hennegan v. Pacifico Creative Serv., Inc., 787 F.2d 1299, 1302 (9th Cir. 1986). “[The plaintiff] carries the burden of pleading and proving fraudulent concealment; it must plead facts showing that [the defendant] affirmatively misled it, and that [the plaintiff] had neither actual nor constructive knowledge of the facts giving rise to its claim despite its diligence in trying to uncover those facts.” Conmar, 858 F.2d at 502 (citing Rutledge v. Boston Woven Hose & Rubber Co., 576 F.2d 248, 249-50 (9th Cir.1978)) (emphasis added). “A fraudulent concealment defense requires a showing both that the defendant used fraudulent means to keep the plaintiff unaware of his cause of action, and also that the plaintiff was, in fact, ignorant of the existence of his cause of action.” Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1521 (9th Cir. 1983).
If a defendant proves that the plaintiff had actual or constructive knowledge of the facts giving rise to the claim, the doctrine of fraudulent concealment does not apply. Id. “The plaintiff is deemed to have had constructive knowledge if it had enough information to warrant an investigation which, if reasonably diligent, would have led to the discovery of the fraud.” Beneficial Standard Life Ins., 851 F.2d at 275. It is enough that the plaintiff “should have been alerted to facts that, following duly diligent inquiry, could have advised it of its claim.” Conmar, 858 F.2d at 502; see also GO Computer, Inc. v. Microsoft Corp., 508 F.3d 170, 178 (4th Cir.2007) (“Full knowledge often awaits discovery, and the very notion of ‘inquiry notice’ implies something less than that“).
The district court here determined the earliest date Hexcel‘s causes of action could have accrued as follows:
- Hexcel filed suit on November 26, 2008, 75 days after the effective date (September 12, 2008) of BP Amoco‘s termination of the tolling agreement in the JDA.
- The tolling agreement tolled the running of the statute of limitations for the period between January 24, 2003 and September 12, 2008.
- Subtracting the 75 days that expired between the date when BP Amoco‘s termination of the tolling agreement became effective, and Hexcel‘s filing of the complaint, the district court found that a period of three years and 290 days remained within the original four-year statute of limitations.
- The district court then subtracted the remaining three years and 290 days from January 24, 2003, the date the tolling agreement was executed, establishing the earliest date for the accrual of the statute of limitations as April 10, 1999.
If we use this date as a benchmark, and if Hexcel acquired actual or constructive notice of its claims against BP Amoco during the three years and 290 days before January 24, 2003, its claims against BP Amoco would not be time-barred. However, if Hexcel had actual or constructive knowledge of facts giving rise to the claims before April 10, 1999, then the statute of limitations would have lapsed and Hexcel‘s claims would be time-barred.3
Moreover, undisputed evidence shows that Hexcel was aware of industry-wide anticompetitive practices throughout the 1990s. Hexcel knew that the executives from BP Amoco, Toray and Toho met once a month in Tokyo to discuss carbon fiber
Accordingly, Hexcel‘s intimate knowledge of the carbon fiber price-fixing conspiracy, coupled with the grand jury subpoena and the Form 10-K disclosures, proves that Hexcel had constructive, if not actual, knowledge of its claims well before April 10, 1999.
Hexcel argues that Conmar compels us to reverse the district court‘s judgment because there we held that summary judgment is only appropriate “if uncontroverted evidence irrefutably demonstrates that a plaintiff discovered or should have discovered the cause of action but failed to file a timely complaint.” Conmar, 858 F.2d at 502 (internal quotation marks and alterations omitted). In Conmar, we reversed on the ground that a genuine issue of material fact existed as to whether the plaintiff, Conmar, had constructive notice of its claim sufficient to trigger the running of the statute of limitations. However, Hexcel‘s attempted analogy to the plaintiff in Conmar overlooks critical distinctions between the two cases. In Conmar, the only evidence proffered to defeat Conmar‘s defense of fraudulent concealment consisted of a tangentially related guilty plea, an earlier filed indictment, and minimal press coverage. Id. at 503-04. There was no evidence, as there is here, that Conmar had earlier knowledge or suspicion of anticompetitive practices from its suppliers, or that Conmar had been subpoenaed to appear before a grand jury investigating the very conduct it alleged against the defendant. Where-
Hexcel‘s reliance on Merck & Co. Inc. v. Reynolds, 559 U.S. 633, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010) is equally unpersuasive. Merck involved the impact of inquiry notice on the statutory “discovery rule” in federal securities law. Merck, 130 S.Ct. at 1797-98. As a preliminary matter, the accrual doctrine for a discovery rule is conceptually distinct from the equitable tolling doctrine in fraudulent concealment cases. Compare TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir.1999) (stating that under the federal common law discovery rule, “a claim accrues when the plaintiff knows or has reason to know of the injury which is the basis of the action“), with Johnson v. Henderson, 314 F.3d 409, 414 (9th Cir.2002) (stating that fraudulent concealment focuses on the actions of the defendant that are calculated to prevent the plaintiff from filing suit within the limitations period). Moreover, to the extent that the general principles of Merck do apply, Merck is consistent with our rule under Conmar, that the statute of limitations begins to run when a reasonably diligent plaintiff “would have discovered the necessary facts.” Merck, 130 S.Ct. at 1798.
We find Hexcel‘s position to be more like that of the plaintiff in Rutledge v. Boston Woven Hose & Rubber Co., 576 F.2d 248 (9th Cir.1978). In Rutledge, the plaintiff first sued five hydraulic hose manufacturers and producers for price-fixing and price discrimination, in 1969. Id. at 249. The 1969 suit was subsequently dismissed, and the dismissal was affirmed on appeal. In 1975, Rutledge sued again, this time naming Boston Woven Hose & Rubber Co. as a defendant. Id. The suit was virtually identical to the original suit filed in 1969. In addition to finding that the suit was barred by the doctrine of collateral estoppel, we held that Rutledge‘s claim was time-barred under the four-year statute of limitations because Rutledge had suspected a price-fixing conspiracy as early as 1965, and further, could have easily discovered its claim through the course of diligent discovery in the 1969 suit. Id. at 250. Similarly, Hexcel was named in multiple previous lawsuits as a co-defendant with BP Amoco. Moreover, long predating those suits, Hexcel knew of, and allegedly even participated in, the very price-fixing conspiracy for which it later sued BP Amoco. Given Hexcel‘s direct involvement as co-defendant with BP Amoco in multiple previous lawsuits for the same conduct of which it now complains, just as in Rutledge, no reasonable juror could find that Hexcel lacked sufficient notice of the facts giving rise to its claims. 576 F.2d at 249.
Moreover, as we held in Volk v. D.A. Davidson Co., 816 F.2d 1406, 1416 (9th Cir.1987), the doctrine of fraudulent concealment may not be used to toll the statute of limitations where a plaintiff has received an annual report providing constructive notice of its claims. Here, Hexcel not only received, but authored on March 30, 1999 its Form 10-K detailing its involvement, along with the other major carbon fiber and prepreg manufacturers, as a subject of a federal price-fixing investigation. The mere receipt of such annual reports in Volk was sufficient to show that several plaintiffs had “constructive notice” of their claims. Id. at 1416. Here, Hexcel authored the Form 10-K report detailing its involvement in a price-fixing investiga-
The district court correctly applied the controlling law under Conmar in holding that Hexcel had “actual or constructive knowledge” of its claims on or before April 10, 1999.
The undisputed facts show that Hexcel had constructive notice of its claims by April 10, 1999. Hexcel‘s receipt of the DOJ subpoena was preceded by a decade of “red flags[,“] which should have excited its suspicion. By the time Hexcel received the grand jury subpoena on January 29, 1999, there were enough red flags to put Hexcel on notice of its claims. See GO Computer, Inc., 508 F.3d at 172 (affirming grant of summary judgment on statute of limitations grounds where plaintiff had “enough red flags,” including an ongoing government investigation, statements from customers, and industry rumors “that a reasonably diligent person would have investigated and acted“). In fact, Hexcel‘s own antitrust lawyer opined that receipt of the DOJ subpoena was sufficient to put Hexcel on notice of its claims and trigger the running of the statute of limitations.
The record contains uncontroverted evidence that Hexcel possessed constructive knowledge of its claims before April 10, 1999 because, long before then, it “should have been alerted to facts that, following duly diligent inquiry, could have advised it of its claim.” Conmar, 858 F.2d at 502; see GO Computer, Inc., 508 F.3d at 179 (“[I]t bears emphasis that the date of inquiry notice is not a filing deadline. It is only the date which a cause of action accrues and the four year period allotted by Congress for plaintiff to investigate begins.“).
B. Summary Judgment
To put at issue a defendant‘s evidence of a plaintiff‘s knowledge sufficient to trigger the running of the statute of limitations, the plaintiff must produce “at least some ‘significant, probative evidence tending to support the complaint, ’ ” to create a genuine issue of material fact. T.W. Elec. Serv., 809 F.2d at 630 (quoting First Nat‘l Bank v. Cities Serv. Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). “[C]onclusory, self-serving affidavit[s], lacking detailed facts and any supporting evidence,” are insufficient to create a genuine issue of material fact. FTC v. Publ‘g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir.1997). Declarations must be made with personal knowledge; declarations not based on personal knowledge are inadmissible and cannot raise a genuine issue of material fact. See Skillsky v. Lucky Stores, Inc., 893 F.2d 1088, 1091 (9th Cir.1990); see also
To refute BP Amoco‘s proof of Hexcel‘s constructive knowledge, Hexcel proffered eight declarations of current and former employees containing virtually identical boiler-plate general denials of Hexcel‘s knowledge of its claim prior to 2001. We hold that the district court did not usurp the role of the jury in considering these declarations because it held, without rejecting or treating them as sham affidavits, that Hexcel‘s “self-serving, boilerplate declarations” were narrow, conclusory denials, insufficient to create a
To further refute BP Amoco‘s evidence of Hexcel‘s knowledge specifically based on the January 1999 subpoena, Hexcel proffered a declaration from its lead antitrust counsel in which he declared that his previous advice to Hexcel, that the statute of limitations on its claim likely began to run on January 29, 1999, did not consider the possibility of a fraudulent concealment defense. Such contradictory, self-serving testimony likewise fails to create a genuine issue of material fact. Publ‘g Clearing House, 104 F.3d at 1171. Indeed, Hexcel‘s other declarations, such as the Mettenet declaration, regarding whether Hexcel employee, Mike Mettenet, actually knew of the price-fixing rumors, were equally unhelpful concerning the question of whether he subjectively suspected a price-fixing conspiracy. Ultimately, however, we agree with the district court that whether a single executive actually knew about the price-fixing conspiracy fails to counterbalance BP Amoco‘s substantial evidence that a reasonable plaintiff “should have been alerted to facts that, following duly diligent inquiry, could have advised it of” the price-fixing conspiracy. Conmar, 858 F.2d at 502.
Hexcel‘s argument that the district court drew various inferences in BP Amoco‘s favor is also unavailing; the district court dealt only with the objective standard of actual or constructive notice, based upon the record evidence before it. Accordingly, the district court did not err in concluding that Hexcel‘s claims were time-barred and entering summary judgment for BP Amoco because Hexcel failed to proffer evidence sufficient to create any genuine issues of material fact.
CONCLUSION
For the foregoing reasons, we AFFIRM the decision of the district court holding Hexcel‘s claims are time-barred under the applicable four-year statute of limitations.
MILAN D. SMITH, JR.
UNITED STATES CIRCUIT JUDGE