United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 5, 1997 Decided July 17, 1998
No. 96-7246
Caribbean Broadcasting System, Ltd. and
Alvin L. Korngold,
Appellants
v.
Cable & Wireless PLC, et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 93cv02050)
Whitney L. Ellenby argued the cause for appellants, with
whom Robert A. Skitol and Philip J. Mause were on the
briefs.
Theodore Case Whitehouse argued the cause for appellees
and filed the brief for Cable & Wireless PLC, and Cable &
Wireless (West Indies) Ltd.
Terrence J. Leahy filed the brief for appellee Caribbean
Communications Company Limited.
Before: Williams, Ginsburg, and Henderson, Circuit
Judges.
Opinion for the court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge: Caribbean Broadcasting System
appeals the judgment of the district court dismissing its
antitrust complaint against Cable & Wireless, Cable & Wire-
less (West Indies), and Caribbean Communications Company.
We reverse in part and affirm in part.
I. Background
Plaintiff CBS and defendant CCC own competing FM radio
stations located in the Eastern Caribbean, which includes
Puerto Rico and the Virgin Islands. Defendant C&W and its
subsidiary C&W (West Indies), hereinafter jointly C&W,
operate a worldwide telecommunications system and publish
the local telephone directory in the Caribbean. During the
mid-1980s C&W and CCC entered into a joint venture in
which CCC was to develop a Caribbean-wide FM broadcast-
ing system that C&W would then use to offer an FM paging
service.
Beginning in 1984 CBS tried without success to sell adver-
tising on its nascent FM broadcast station based in the
British Virgin Islands. Attributing its failure to deception
practiced by CCC and C&W as part of an attempt to gain and
keep a monopoly for CCC's "Radio GEM," CBS sued them
both in Florida state court. The defendants removed the
case to a federal court, which dismissed it without prejudice;
CBS appealed to the Eleventh Circuit, but later voluntarily
dismissed the appeal and refiled its complaint in the United
States District Court for the District of Columbia. CBS later
sought and was granted leave to file a First Amended Com-
plaint in order to correct a technical error in its description of
the ownership of CBS.
The eleven counts of CBS's complaint fall into three basic
categories. First, it charged that CCC, by falsely claiming
that Radio GEM's signal reached the entire Eastern Caribbe-
an, had led advertisers to believe they could fulfill their
advertising needs by dealing only with Radio GEM, in viola-
tion of the prohibition of attempted and actual monopolization
in the Sherman Act, see 15 U.S.C. ss 1-2, and the prohibition
of false representations in the Lanham Act, see 15 U.S.C.
s 1125(a). Second, CBS charged that CCC had conspired
with C&W to maintain CCC's monopoly over radio broadcast
in the Eastern Caribbean, in violation of the Sherman Act. In
furtherance of the conspiracy (still according to CBS), C&W
had filed sham objections to CBS's application for a broadcast
license, thereby delaying CBS's entry into broadcasting for
more than two years. Third, CBS charged that C&W had
violated the Sherman Act by denying it access to essential
facilities; specifically, CBS alleged that C&W had persistent-
ly published an incorrect telephone listing for CBS and
denied CBS access to its microwave transmitters in order to
prevent CBS from reaching the entire Eastern Caribbean.
The district court dismissed the complaint in two stages.
In its first opinion, dealing only with the claims against C&W,
the court held that (1) it lacked subject matter jurisdiction
over the claims of monopolization (in counts II-X) because
"plaintiffs [did] not allege[ ] necessary facts to substantiate a
claim of adverse effect on U.S. commerce arising out of
Defendants' alleged misconduct"; and (2) CBS failed (in
Count XI) to state a claim upon which relief could be granted
because it did not "allege sufficient facts to establish that
Defendants denied [CBS] use of an essential facility." See
Caribbean Broadcast System Ltd. v. Cable & Wireless Plc,
1995 WL 767164 (D.D.C. 1995). The court explained that the
complaint "never identifies any facility to which CBS was
denied access nor a single instance in which access to a
facility was actually requested or denied," and fails to estab-
lish that C&W had ever been a competitor of CBS. CBS
sought reconsideration or, in the alternative, leave to file a
second amended complaint. The district court denied recon-
sideration, clarified that its dismissal of Counts II-XI was
with prejudice, and denied as both "untimely" and "futile"
CBS's request to file a second amended complaint.
In its second opinion the district court dismissed the Lan-
ham Act claim (in Count I) for lack of personal jurisdiction
over CCC. The court stated that because CBS
fails to allege any connection whatsoever between CCC
and the District of Columbia.... [it appears that] CCC
does not possess sufficient, minimum contacts with [the
District] to satisfy the due process requirements of the
Constitution and comport with 'traditional notions of fair
play and substantial justice.'
Caribbean Broadcast System v. Cable and Wireless PLC,
C.A. No. 93-2050, slip op. at 4-5 (D.D.C. Oct. 17, 1996). The
district court also denied CBS's request for jurisdictional
discovery, for three reasons: CBS had "not offered a scintilla
of evidence to suggest that CCC has even the slightest
connection with the District of Columbia"; CBS "well kn[ew]
that CCC has contacts with, and therefore could appropriate-
ly be sued in ... Wisconsin or the Virgin Islands"; and "it is
simply too late ... in the history of th[is] litigation ... to
now allow Plaintiff to conduct the investigation."
CBS now argues that the district court erred in dismissing
its complaint for lack of subject matter jurisdiction and
failure to state a claim, in denying jurisdictional discovery
against CCC, and in dismissing its Lanham Act claim against
CCC with, rather than without, prejudice.
II. Discussion
We hold first that the district court erred in denying CBS
leave to file its proposed Second Amended Complaint, which
properly alleged subject matter jurisdiction over the claims of
monopolization. We agree with the district court, however,
that CBS's complaint failed to allege that CCC and C&W had
denied CBS the use of an essential facility. Finally, we hold
that the district court did not abuse its discretion in denying
jurisdictional discovery and did not dismiss the complaint
against CCC with prejudice.
A. Denial of Leave to Amend the Complaint
As noted, the district court early on granted CBS leave to
file a First Amended Complaint correcting the description of
CBS's ownership. After the district court dismissed Counts
II-XI for lack of subject matter jurisdiction, CBS sought to
make a second amendment--in order to clarify the jurisdic-
tional allegations in its complaint--but the district court
denied leave to amend on the grounds that such an amend-
ment would be both untimely and futile. CBS contests both
points. For its part, C&W argues that the district court
ruled correctly because CBS had already failed "in five
attempts encompassing this case and others" to file a proper
complaint.
Federal Rule of Civil Procedure 15(a) provides that a party
may amend its pleading once as a matter of course and
thereafter by leave of court, which "leave shall be freely given
when justice so requires." We have recently had occasion to
point out that "it is an abuse of discretion to deny leave to
amend [without giving a] sufficient reason." Firestone v.
Firestone, 76 F.3d 1205, 1208 (1996) (citing Foman v. Davis,
371 U.S. 178, 182 (1962)); see also Bank v. Pitt, 928 F.2d
1108, 1112 (11th Cir. 1991) (noting that district court's discre-
tion to dismiss without leave to amend is "severely restricted"
by command of Rule 15(a) that such leave be "freely given").
In this case we conclude that neither of the reasons given by
the district court is sufficient.
First, the amendment would not have been "futile" because,
as explained below, the allegations of the second amended
complaint support subject matter jurisdiction. Second, there
is no indication that the amendment was in any cognizable
way "untimely." The statute of limitations had not run, nor
was there any prejudice to the defendants by reason of the
timing. See, e.g., Confederate Memorial Ass'n v. Hines, 995
F.2d 295, 299 (D.C. Cir. 1993) (noting that Fed.R.Civ.P. 15(a)
gives court power to grant leave to amend complaint even
after case is dismissed); Wright & Miller, Federal Practice &
Procedure: Civil 2d s 1488, at 652, 659, 662-69 (1990 & Supp.
1997) ("Rule 15(a) does not prescribe any time limit within
which a party may apply to the court for leave to amend....
In most cases delay alone is not a sufficient reason for
denying leave.... If no prejudice [to the non-moving party]
is found, the amendment will be allowed").
C&W makes much of the district court's statement that it
was denying CBS leave to amend in view of the "entire
lengthy record herein," but C&W's argument is not entirely
clear. C&W could be arguing that the district court's men-
tion of having considered the "entire lengthy record" indi-
cates that the court, in concluding that amendment would be
both untimely and futile, relied in part upon the overall
history of the dispute, including the case CBS had previously
initiated in Florida. Whether the court meant to encompass
that history within the reason for its decision is not clear,
however; the "lengthy record" in question may well refer
only to the present litigation, which alone had been going on
for more than three years at the time. In either event, the
district court erred; the prolonged nature of a case does not
itself affect whether the plaintiff may amend its complaint.
See, e.g., Security Ins. Co. of Hartford v. Kevin Tucker &
Assoc., Inc., 64 F.3d 1001 (6th Cir. 1995) (holding district
court abused discretion in denying leave to amend complaint
to add claim when party opposing motion made no showing of
prejudice from delay); Buder v. Merrill Lynch, Pierce, Fen-
ner & Smith, Inc., 644 F.2d 690 (8th Cir. 1981) (holding
district court abused discretion in denying leave to amend
complaint to add count when no prejudice resulted from two
and one-half year delay and facts underlying new and old
counts were similar). The length of a litigation is relevant
only insofar as it suggests either bad faith on the part of the
moving party or potential prejudice to the non-moving party
should an amendment be allowed, see Wright & Miller,
s 1487 (1990 & Supp. 1997); here the district court never
intimated a concern either with bad faith or with prejudice.
Alternatively, C&W might be arguing that the district
court's reference to the "entire lengthy record" is an allusion
to our suggestion in Firestone, following Foman, 371 U.S. at
182, that a plaintiff's failure to cure a defect in its complaint
after repeated amendments is at some point sufficient to
warrant denying it leave to amend yet again. But we will not
infer such an acute point from such an oblique reference--if it
is a reference at all--particularly in light of the policy in favor
of hearing cases on their merits. See, e.g., Poloron Prods.,
Inc. v. Lybrand Ross Bros. & Montgomery, 72 F.R.D. 556,
561 (S.D.N.Y. 1976) (holding plaintiff's five previous attempts
to state cognizable claim did not preclude amendment, be-
cause Federal Rules suggest "artless drafting of a complaint
should not allow for the artful dodging of a claim"); Rosen v.
TRW, Inc., 979 F.2d 191, 194 (11th Cir. 1992) (citing doctrine
that "leave to amend is particularly appropriate following
dismissal of a complaint for failure to state a claim"); see also
Conley v. Gibson, 355 U.S. 41, 48 (1957) ("The Federal Rules
... accept the principle that the purpose of pleading is to
facilitate a proper decision on the merits").
Because the reasons given by the district court did not
justify denying the plaintiff leave to amend its complaint, we
reverse the district court. To remand this case for the
district court to consider the Second Amended Complaint
would be a waste of judicial resources, however. In deciding
that to amend the complaint would be futile, the district court
acted in the belief that the fault it found with the First
Amended Complaint--namely, that it did not allege an ad-
verse effect upon the commerce of the United States suffi-
cient to support subject matter jurisdiction over Counts II-XI
[see JA at 129-131]--was not addressed by anything in the
Second Amended Complaint, which more clearly alleged an
effect upon U.S. commerce. In effect, then, the district court
has already expressed its view that the Second Amended
Complaint fails to show that it has subject matter jurisdiction
(although it erred in so doing, as the next section explains).
B. Subject Matter Jurisdiction over Counts II-XI
With the Second Amended Complaint before us, then, we
turn to CBS's argument that it made allegations sufficient to
support subject matter jurisdiction. C&W argues in re-
sponse that the complaint does not adequately allege either a
harmful effect upon U.S. commerce or a relevant market, and
that in any event it does not provide facts to support the
allegations made. In our review of the complaint, which is de
novo, we assume the truth of the allegations made and
construe them favorably to the plaintiff. See Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974).
CBS asserts that the district court has jurisdiction under
the Sherman Act, see 15 U.S.C. s 1-2, and the Foreign Trade
Antitrust Improvements Act of 1982, see 15 U.S.C. s 6a.
Although the Sherman Act prohibits monopolization and at-
tempted monopolization of any line of interstate or foreign
commerce, section 1 of the FTAIA makes the Sherman Act
inapplicable to
conduct involving trade or commerce (other than import
trade or import commerce) with foreign nations unless--
(1) such conduct has a direct, substantial, and reasonably
foreseeable effect--
(A) on trade or commerce which is not trade or com-
merce with foreign nations, or on import trade or
import commerce with foreign nations; or
(B) on export trade or export commerce with foreign
nations, of a person engaged in such trade or com-
merce in the United States.
15 U.S.C. s 6a. A proviso establishes that if the FTAIA
applies to conduct involving foreign trade based solely upon
clause (B) quoted above, then the offender is subject to the
Sherman Act "only for injury to export business in the United
States." Id.
When a plaintiff brings a claim of attempted monopolization
or conspiracy to monopolize in a market involving foreign
trade, therefore, a court has subject matter jurisdiction only
to the extent that the complaint alleges that the challenged
conduct had a " 'direct, substantial, and reasonably foresee-
able effect' on domestic or import commerce, or the export
opportunities of a domestic person" (as required by the
FTAIA). H.R. Rep. No. 97-686, at 3 (1982). The precise
effect of the FTAIA is yet to be determined. See Hartford
Fire Insurance Co. v. California, 509 U.S. 764, 797 & n.23
(1993) (It is "unclear ... whether the [FTAIA's] 'direct,
substantial, and reasonably foreseeable effect' standard
amends ... or merely codifies ... [caselaw holding that the
Sherman Act] applies to foreign conduct that was meant to
produce and did in fact produce some substantial effect in the
Unted States"). It does seem clear, however, that we should
use the standard set forth in the FTAIA to analyze whether
conduct related to international trade has had an effect of the
nature and magnitude necessary to provide us with subject
matter jurisdiction. See H.R. Rep. No. 97-686, at 5. The
complaint meets this standard.
For convenience we discuss first C&W's argument that
CBS failed to allege specific facts to support the court's
jurisdiction over CBS's claims. In the notice pleading system
established by Federal Rule of Civil Procedure 8, all that is
required is a " 'short and plain statement of the claim' that
will give the defendant fair notice of the plaintiff's claim and
the grounds upon which it rests." Sinclair v. Kleindienst,
711 F.2d 291, 293 (D.C. Cir. 1983). A complaint satisfies this
criterion if it is not "so vague or ambiguous that a party
cannot reasonably be expected to frame a responsive plead-
ing." F.R.Civ.P. 12(e). In other words, a plaintiff need not
allege all the facts necessary to prove its claim so long as it
provides enough factual information to make clear the sub-
stance of that claim. See Atchinson v. District of Columbia,
73 F.3d 418, 421-22 (1996).
Because a plaintiff is not required to plead facts sufficient
to prove its allegations, a federal court should not dismiss a
complaint either for lack of subject matter jurisdiction or for
failure to state a claim "unless it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim
which would entitle him to relief." Kleindienst, 711 F.2d at
293 (quoting Conley v. Gibson, 355 U.S. at 45-46). After all,
the issue presented by a motion to dismiss is "not whether a
plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims." Scheuer v.
Rhodes, 416 U.S. at 236.
The complaint filed by CBS is sufficient to survive a motion
to dismiss, therefore, so long as it makes allegations that, if
proven, would show that the challenged conduct had a "direct,
substantial, and reasonably foreseeable effect" upon an aspect
of commerce to which the Sherman Act, as qualified by the
FTAIA, applies. The complaint does make such allegations.
First, CBS alleges (pp 9-14) that there is a significant market
for the sale of English-language radio advertising in the
Eastern Caribbean, which includes Puerto Rico and the U.S.
Virgin Islands. CBS also alleges (pp 9, 15-19, 48A) that
many companies based in the United States are customers,
and that CCC and CBS are competing sellers, in that market.
Finally, CBS alleges (pp 20-26) that there are substantial
barriers to entry into the market: both a broadcast license
and a large capital investment are necessary; in addition,
CCC has "locked up" the available advertising contracts.
Under the circumstances it is quite plausible that the plain-
tiffs' alleged conduct would have a significant effect upon U.S.
commerce.
CCC argues that because CBS is "merely [a] foreign
supplier[ ]" it cannot establish the court's jurisdiction by
" 'piggy-back[ing]' on the alleged injury to U.S. purchasers of
media advertising." CCC relies upon a district court holding
that a foreign company had to show injury within the United
States before the court would have subject matter jurisdiction
under the Sherman Act, and that such a company could not
do so merely by showing injury to an unrelated American
firm. See The 'In' Porters, S.A. v. Hanes Printables, Inc.,
663 F. Supp. 494 (M.D.N.C. 1987). Even if we were bound by
that court's holding, we would not think the case pertinent
here because the foreign firm in that case did not sell to
American consumers; rather, it attempted to show that the
injury it incurred abroad ultimately injured American export-
ers, from which it purchased fewer goods for resale overseas.
The district court held that, because the plaintiff's claimed
injury was not an "injury to export business in the United
States" within the meaning of the proviso to the FTAIA, the
foreign firm did not have standing. Here, however, the
alleged injury is to advertisers in the United States. Conse-
quently, clause 1(A) rather than clause 1(B) of the FTAIA
governs, and the location of the suppliers is not relevant to
whether the plaintiff has alleged an effect upon U.S. domestic
or import commerce. See Hartford, 509 U.S. at 796 (holding
court had subject matter jurisdiction where plaintiff alleged
conspiracy among foreign reinsurance companies had affected
U.S. purchasers of reinsurance).
We now turn to C&W's primary argument, namely, that
the complaint fails to allege either harm to U.S. commerce or
a relevant market. We find neither part of this argument
persuasive. The complaint both describes a relevant mar-
ket--the market for English-language radio broadcast adver-
tising in the Eastern Caribbean--and alleges that CCC and
C&W engaged in intentional conduct that gave them "monop-
oly power" and injured consumers in this market. (pp 12-14)
According to CBS, CCC and C&W misrepresented to adver-
tisers that they could reach the "entire Caribbean" over
CCC's station--which in fact reached only a fraction of that
area--and therefore that they did not need to advertise with
CBS as well. (pp 30-34) The complaint also alleges that CCC
and C&W made sham technical objections to CBS's applica-
tion for a broadcast license for the purpose of defeating that
application and thereby ensuring that CCC would continue to
enjoy a monopoly. (pp 35-40)
Contrary to the arguments of C&W, such allegations do
support the district court's subject matter jurisdiction. A
would-be monopolist or member of a conspiracy to monopolize
comes within the condemnation of the Sherman Act when it
engages in "anticompetitive conduct." See, e.g., Spectrum
Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993) (holding
elements of attempted monopolization claim under s 2 of
Sherman Act are intent, anticompetitive conduct, and danger-
ous probability of success in a relevant market). "Anticom-
petitive conduct" can come in too many different forms, and is
too dependent upon context, for any court or commentator
ever to have enumerated all the varieties. It is a fair
inference from the case law, however, that the allegations
made here--namely, that the defendants made fraudulent
misrepresentations to advertisers and sham objections to a
government licensing agency in order to protect their monop-
oly--bring the defendants' conduct well within that concept.
See, e.g., California Motor Transport Co. v. Trucking Unlim-
ited, 404 U.S. 508 (1972) (holding that complaint alleging
conspiracy to misuse state legal and regulatory processes in
order to deprive competitors of meaningful access stated
claim under Clayton Act); Walker Process Equipment, Inc. v.
Food Machinery & Chemical Corp., 382 U.S. 172, (1965)
(holding that complaint alleging defendant attempted to mo-
nopolize by threatening to and pursuing legal enforcement of
patent procured by fraud on Patent Office stated claim under
s 2 of Sherman Act).
Moreover, the complaint alleges specifically that U.S. cus-
tomers in the relevant market suffered antitrust injury, to
wit, they paid excessive prices for advertising because of the
unlawful actions of CCC and C&W. (p 48A) It also alleges
that CBS was and remains foreclosed from selling advertising
to many of those U.S. companies that had purchased advertis-
ing time from CCC. (p 47)
Paying higher prices is certainly a direct harm to custom-
ers. The allegations that CBS was delayed in obtaining its
broadcast license and was foreclosed from soliciting many
potential advertisers also describe actual, albeit indirect,
harms to customers. In this context it appears that antitrust
injury to CBS is ultimately a harm to U.S. purchasers of
radio advertising. By keeping CBS out of the market, CCC
and C&W denied such purchasers the benefit of competition.
Construing the complaint liberally, then, we understand it
to say that CCC and C&W intentionally and successfully, by
means of fraud and deceit, secured monopoly power in the
relevant market, used this power to raise prices, and thereby
hurt U.S. advertisers. Indeed, C&W virtually admits that
CBS's complaint alleges antitrust injury when it argues that
"CBS described markets so narrowly configured that any
commercial harm to CBS [is], ipso facto, harm to competi-
tion" in those markets and hence has a substantial effect upon
U.S. commerce. Be that as it may, we hold that CBS made
sufficient allegations to support the subject matter jurisdic-
tion of the district court.
C. The Essential Facilities Claim: Count XI
C&W owned microwave facilities described by CBS as
"unique" in the Eastern Caribbean (p 42) and published the
only telephone directory in the British Virgin Islands. (p 41)
C&W also owned a 27% stake in CCC's radio station and was
planning a joint venture with CCC to provide paging services.
CBS alleged that C & W denied CBS access to its microwave
facilities and directory, and that both such facilities were
essential for it to compete with CCC's Radio GEM.
A monopolist has no general duty to share his essential
facility, although there are certain circumstances in which he
must do so. See Philip E. Areeda & Herbert Hovenkamp,
Antitrust Law 815-864 (1992 Supp.) (proposing narrow inter-
pretation of essential facilities doctrine). In the special cir-
cumstances where there may be such an obligation, the
elements of an antitrust claim for denial of access to an
essential facility are (1) a monopolist who competes with the
plaintiff controls an essential facility, (2) the plaintiff cannot
duplicate that facility, (3) the monopolist denied the plaintiffs
use of the facility, and (4) the monopolist could feasibly have
granted the plaintiff use of the facility. See MCI Communi-
cations Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th Cir.
1983); Philip Areeda, Essential Facilities: An Epithet in
Need of Limiting Principles, 58 Antitrust L.J. 841, 853 n.21
(1989) (noting that "MCI Communications ... is probably
correct [in holding that] a monopolist must, when feasible,
make its essential facility available to a competitor who is
unable to duplicate it"). Because the appellees have not
argued to the contrary, we assume that the essential facilities
doctrine is applicable to their circumstances.
The district court held that CBS had failed adequately to
allege an essential facilities claim for two reasons: first, CBS
did not allege that it competed with C&W, and second, CBS
did not allege any specific instance in which C&W had denied
CBS access to a particular facility. We uphold the district
court on the former ground and therefore do not reach the
latter.
CCC does not dispute that it competed with CBS, but
because--as the district court held and we affirm--the court
does not have personal jurisdiction over CCC, see Part II.D
below, the allegations against that company cannot support
the essential facilities claim. As for C&W, the district court
held that its 27% ownership interest in CCC did not make
C&W itself a competitor of CBS. CBS argues that whether
the parties are "in fact" competitors should not have been
resolved on a motion to dismiss the complaint, which "alleged
that C&W acted for the benefit of CCC in denying plaintiffs
access to their microwave and long-distance facilities." Ac-
cording to CBS, "C&W's equity interest in CCC and its
corresponding financial stake in the exclusive provision of
broadcasting services by CCC .... raise a factual issue as to
whether C&W and plaintiffs [are] competitors." C&W coun-
ters that CBS alleges no facts even hinting that C&W might
itself be a competitor of CBS except for C&W's 27% invest-
ment in CCC, and that as a matter of law such an investment
alone cannot vicariously make C&W a competitor of CBS's.
As the district court recognized, one company's minority
ownership interest in another company is not sufficient by
itself to make the owner a competitor, for purposes of the
antitrust laws, of the subsidiary's rivals. To be a competitor
at the level of the subsidiary, the parent must have substan-
tial control over the affairs and policies of the subsidiary.
See, e.g., Kennecott Copper Corp. v. Curtiss-Wright Corp.,
584 F.2d 1195, 1205 (2d Cir. 1978) (finding no violation of s 8
of Clayton Act where interlocked parent corporations had
competing subsidiaries, but reserving issue whether statute
would cover "parent corporation that closely controls and
dictates the policies of its subsidiary"); Phoenix Canada Oil
Co. Ltd. v. Texaco, Inc., 658 F. Supp. 1061, 1084-85 (D.Del.
1987) (holding that parent is liable for acts of subsidiary
under agency theory only if parent "dominates" subsidiary;
parent of wholly-owned subsidiary that had seats on board,
took part in financing, and approved major policy decisions
was not liable because parent did not have day-to-day con-
trol); J.E. Rhoads & Sons, Inc. v. Ammeraal, Inc., 1988 WL
32012 (Del. Super. 1988) (citing cases holding day-to-day
control required before court will pierce corporate veil or find
parent liable); Outokumpu Engineering Enterprises, Inc. v.
Kvaerner Enviropower, Inc., 685 A.2d 724, 729 n.21 (Del.
Super. 1996) (noting test for parent's liability for act of
subsidiary is whether parent had "exclusive domination and
control to the point that the subsidiary no longer has legal or
independent significance of its own"); cf. Tiger Trash v.
Browning Ferris Indus., Inc., 560 F.2d 818 (7th Cir. 1977)
(holding that in order to prevent parent from carrying out
anticompetitive activity through subsidiary, test for venue is
whether parent's control over subsidiary caused parent to
"transact business" in state within venue provision of Clayton
Act); Phone Directories Co. v. Contel Corp., 786 F. Supp. 930
(D.Utah 1992) (test for venue under Clayton Act is whether
parent had sufficient control to influence and control acts of
subsidiary of type that might violate antitrust laws); cf. also
United States v. USX Corp., 68 F.3d 811, 823 n.23 (3d Cir.
1995) (citing cases holding, variously, that parent is liable
under CERCLA for actions of a subsidiary or controlled
company when parent has actual and pervasive control or, at
least, authority to control subsidiary's decisions leading to
CERCLA violation.)
CBS does not allege that C&W had such control. The
complaint states only that C&W and CCC were involved in a
"joint project"; they had "engaged in discussions and negotia-
tions regarding their planned relationship"; and "a C&W
representative was a member of CCC's Board of Directors."
(p 44) Only the last point indicates that C&W had any influ-
ence in the affairs of CCC, and even it does not suggest the
type of day-to-day control we think necessary to identify an
investor so closely with the company in which it has invested
as to make it a competitor of that company's rivals.
In sum, CBS does not allege that C&W had substantial
control over CCC. Therefore, Count XI of the complaint fails
to state a claim against C&W for denial of access to an
essential facility.
D. Jurisdictional Discovery and Dismissal with Prejudice
CBS's last two points on appeal go to rulings of the district
court relevant only to CBS's action against CCC. CBS
asserts that the district court erroneously denied CBS's re-
quest for jurisdictional discovery and dismissed its claim with
rather than without prejudice.
1. Jurisdictional discovery
CBS argues that the district court abused its discretion in
dismissing its case against CCC for lack of personal jurisdic-
tion without giving CBS an opportunity to discover evidence
that would support such jurisdiction. See, e.g., El-Fadl v.
Central Bank of Jordan, 75 F.3d 668, 675-76 (D.C. Cir. 1996).
CCC defends the district court's denial of discovery on the
ground that CBS had failed to dispute CCC's affidavit that it
did not solicit business in the District of Columbia and had
never made any telephone calls into the District. Because
there was no indication before the court that CCC had any
contacts at all with the District of Columbia, let alone the
minimum contacts necessary for the court, consonant with
due process, to exercise personal jurisdiction over it, CCC
argues that any discovery would have been inappropriate.
We hold that the district court did not abuse its discretion
in denying CBS jurisdictional discovery. The District's long-
arm statute is as far-reaching as due process allows, see
Hummel v. Koehler, 458 A.2d 1187, 1190 (D.C. App. 1983),
meaning that only minimum contacts with the District are
necessary to sustain jurisdiction here. See International
Shoe Co. v. State of Washington, 326 U.S. 310 (1945); Wright
& Miller, s 1067-1067.1 (1988 & Supp. 1997). CBS, however,
has alleged absolutely nothing, upon either information or
belief, to indicate that a court in the District of Columbia
might constitutionally assert jurisdiction over CCC, which is
incorporated in Montserrat, British West Indies, and has its
U.S. operations in Wisconsin. The closest the complaint
comes is to say that "CCC sells ... advertising time, primari-
ly to U.S. companies," and that CCC "made sales calls to U.S.
companies nationally" and "disseminated ... brochures by
hand and by the U.S. mail." (pp 8, 33) At the oral argument of
this appeal counsel for CBS represented that CCC sold
advertising to more than 500 companies and argued that the
odds were therefore good that it had solicited at least one
company located in the District; but CBS did not make even
this cursory (and by no means self-evident) allegation before
the district court. These statements are too bare to support
even the inference that CCC solicited any companies located
in the District of Columbia, much less that it actually
did any business in the District--and minimal solicitation
does not generally support jurisdiction anyway. See
Volkswagen de Mexico v. Germanischer Lloyd, 768
F. Supp. 1023 (S.D.N.Y. 1991) (solicitation of business
through advertisements in publications distributed in district
does not support jurisdiction under N.Y. long-arm statute);
see also Gatewood v. Fiat, S.p.A., 617 F.2d 820 (D.C. Cir.
1980) (solicitation of business must be "regular" in order to
support jurisdiction); McFarlane v. Esquire Magazine, 74
F.3d 1296 (D.C. Cir. 1996) (writing article for national publi-
cation obtainable in D.C. did not subject writer to personal
jurisdiction in District). But see United States Golf Ass'n v.
U.S. Amateur Golf Ass'n, 690 F. Supp. 317 (D.C.N.J. 1988)
(direct mail solicitation in New Jersey confers personal juris-
diction). In light of CCC's uncontested affidavit, therefore,
the court was justified in denying further discovery.
CBS argues that it could not have made more specific
allegations without jurisdictional discovery and that it never
had the opportunity to take such discovery. Further, CBS
points to cases in this circuit suggesting that a district court
abuses its discretion when it dismisses a case for lack of
personal jurisdiction before the plaintiff has had an opportu-
nity for jurisdictional discovery. See, e.g., Edmond v. United
States Postal Serv. Gen. Counsel, 949 F.2d 415 (D.C. Cir.
1991). As CCC rejoins, however, in order to get jurisdiction-
al discovery a plaintiff must have at least a good faith belief
that such discovery will enable it to show that the court has
personal jurisdiction over the defendant. See, e.g., Hansen v.
Neumueller GmbH, 163 F.R.D. 471, 476 (D.Del. 1995) (con-
cluding, after analysis of Rules 26 and 8, that plaintiff who
responded to defendant's affidavit with "a complete absence
of jurisdictional facts" had not made threshold showing neces-
sary to get jurisdictional discovery); Poe v. Babcock Int'l, plc,
662 F. Supp. 4, 7 (M.D. Pa. 1985) (holding that because
"plaintiff has met defendants' affidavit evidence with mere
speculation, plaintiff's request for ... [jurisdictional] discov-
ery ... must be denied"); see also Ellis v. Fortune Seas, Ltd,
175 F.R.D. 308, 312 (S.D. Ind. 1997) (citing cases and holding
"it is reasonable for a court ... to expect the plaintiff to show
a colorable basis for jurisdiction before subjecting the defen-
dant to intrusive and burdensome discovery"); International
Terminal Operating Co., Inc., v. Skibs A/S Hidlefjord, 63
F.R.D. 85 (S.D.N.Y. 1973) (holding jurisdictional discovery
not appropriate when plaintiff merely hopes to find state-
ments in defendant's affidavit not accurate but has not made
counter-allegations in its own affidavit).
To be sure, CBS had no obligation to make specific allega-
tions relevant to personal jurisdiction in its complaint because
lack of personal jurisdiction is an affirmative defense and so
must be raised by the defendant. See Insurance Corp. of
Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S.
694, 704 (1982); Fed. R. Civ. P. 12(b)(2). CBS's obligation to
make some allegations relating to personal jurisdiction arose,
therefore, only after CCC had filed its motion to dismiss and
supporting affidavit. Even in its response to that motion,
however, CBS did not allege any facts remotely suggesting
that CCC had any connection to the District of Columbia.
On appeal CBS belatedly offers two facts that it claims
support the inference that the district court has personal
jurisdiction over the defendant: CCC advertises in Caribbean
Week, "a publication which has Washington, D.C. subscrib-
ers," and maintains a Web site accessible to residents of the
District (as well as the rest of the world, we assume).
Although these facts were not timely pled, CBS argues that
the court should take cognizance of them precisely because
CBS did not have the benefit of jurisdictional discovery. To
do so, however, would be to retry the case upon appeal and
then to fault the district court for reaching a different result
based upon the different allegations before it. Good order
and common sense protest. Therefore, without intimating
anything about the legal significance, if any, of CBS's belated
factual proffer, we conclude that the district court did not
abuse its discretion when it dismissed CBS's claim against
CCC without first granting CBS's request for jurisdictional
discovery.
2.Dismissal of Count I with prejudice
Although the district court did not state whether its dis-
missal of Count I (for lack of personal jurisdiction over CCC)
was with or without prejudice, both parties assume on appeal
that, like the court's earlier dismissal of Counts II-XI, it was
with prejudice. CBS sees this as an abuse of discretion;
CCC denies the same. Neither party is correct because their
shared assumption is mistaken.
While an involuntary dismissal ordinarily "operates as an
adjudication upon the merits" unless the court "otherwise
specifies," a dismissal for lack of jurisdiction is specifically
exempted from this general rule. Fed.R.Civ.P. 41(b); see
also Wright & Miller, s 2373 at 406 (1995) (noting that
"dismissals that do not reach the merits because of a lack of
jurisdiction ... must be considered to be without prejudice");
Costello v. United States, 365 U.S. 265, 285 (1961) (noting that
Rule 41(b) provides that dismissal is adjudication on merits
unless for lack of personal jurisdiction, among other reasons).
In rare circumstances, a district court may use its inherent
power to dismiss with prejudice (as a sanction for misconduct)
even a case over which it lacks jurisdiction, and its decision to
do so is reviewed for abuse of discretion. See Wright &
Miller, s 2369 (1995 & Supp. 1997). We cannot infer from
the district court's mere silence, however, that it intended to
impose such a drastic sanction; nor did the district court
advert to any misconduct for which it might have intended
such a sanction. We therefore conclude that dismissal of
Count I of the complaint was without prejudice.
III. Conclusion
The district court erred in dismissing Counts II-XI (the
attempted monopolization claims) for lack of subject matter
jurisdiction, but correctly dismissed Count XI (the essential
facilities claim) for failure to state a claim and Count I (the
Lanham Act claim) for lack of personal jurisdiction over CCC.
The district court did not abuse its discretion in denying
jurisdictional discovery before dismissing Count I, which it
did without prejudice. The case is remanded to the district
court for further proceedings consistent with this opinion.
So ordered.