Companhia Brasileira Carbureto De Calicio v. Applied Industrial Materials Corp.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 25, 2011 Decided April 15, 2011

No. 10-7051

COMPANHIA BRASILEIRA CARBURETO DE CALICIO, ET AL.,
APPELLANTS

v.

APPLIED INDUSTRIAL MATERIALS CORPORATION, ET AL.,
APPELLEES

Appeal from the United States District Court
for the District of Columbia
(No. 1:01-cv-00646)

Bruce K. Cohen argued the cause for appellants. With
him on the briefs were Daniel B. Allanoff and Michael R.
Lazerwitz.

Dale Hershey argued the cause for appellees. With him
on the brief were Michael R. Borasky, Audrey K. Kwak,
James H. Hulme, Matthew M. Wright, Alan Kanzer, Amber
Wessels, Edward J. Longosz, II, and Charles R. Claxton.
Marianne R. Casserly entered an appearance.

Before: ROGERS, TATEL, and KAVANAUGH, Circuit
Judges.
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Opinion for the Court filed by Circuit Judge
KAVANAUGH.

KAVANAUGH, Circuit Judge: Three Brazilian
corporations brought suit against four American corporations
and two of the American corporations’ parent companies.
The Brazilian plaintiffs alleged that defendants submitted
fraudulent petitions to the U.S. International Trade
Commission and thereby induced the ITC to impose
unwarranted duties on plaintiffs’ products.

The District Court dismissed plaintiffs’ complaint for
lack of personal jurisdiction. Because none of the defendants
is located or incorporated in the District of Columbia,
plaintiffs primarily relied on defendants’ petitions to the ITC
(a government agency located in Washington, D.C.) to
establish personal jurisdiction over the defendants. The
District Court held that the petitions to the ITC were not a
basis for personal jurisdiction because, under the District of
Columbia’s “government contacts” exception to D.C.’s
personal jurisdiction statute, “entry into the District of
Columbia by nonresidents for the purpose of contacting
federal governmental agencies is not a basis for the assertion
of in personam jurisdiction.” Environmental Research Int’l,
Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 813
(D.C. 1976) (en banc). The District Court also rejected
plaintiffs’ alternative argument that jurisdiction was proper
because defendants had conspired with a trade association that
was located within the District of Columbia.

We agree with the District Court that plaintiffs’
allegation that defendants conspired with a trade association is
insufficient to support personal jurisdiction.
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The government contacts issue is more difficult.
Plaintiffs argue that the government contacts exception does
not apply because defendants’ petitions to the ITC were
fraudulent. Therefore, according to plaintiffs, defendants’
petitions to the ITC provide a basis for personal jurisdiction
over defendants. The scope of the government contacts
exception is unsettled, however, under the D.C. Court of
Appeals’ precedents. The D.C. Court of Appeals is of course
the controlling authority for interpretation of D.C. law, and
that court promulgated the government contacts exception.
We therefore deem it appropriate to certify to the D.C. Court
of Appeals a question necessary to the resolution of this case:

Under District of Columbia law, does a petition sent to a
federal government agency in the District provide a basis
for establishing personal jurisdiction over the petitioner
when the plaintiff has alleged that the petition
fraudulently induced unwarranted government action
against the plaintiff?

I

In 1994, the U.S. International Trade Commission
imposed duties on imports of ferrosilicon from Brazil.
Ferrosilicon is an alloy used in manufacturing. In 1999, the
ITC removed those duties after discovering that much of the
information on which the ITC had relied in imposing the
duties was false. The ITC determined that domestic
producers of ferrosilicon had submitted that false information
to the ITC in two petitions (one filed in 1992 and a second
filed in 1993), as part of a conspiracy to fix the price of
ferrosilicon in the United States. See Ferrosilicon From
Brazil, China, Kazakhstan, Russia, Ukraine and Venezuela,
Inv. Nos. 303-TA-23, 731-TA-566-570, 731-TA-641, 751-
TA-21-27, USITC Pub. 3218 (Aug. 1999).
 4

In 2001, three Brazilian ferrosilicon manufacturers
brought suit in the U.S. District Court for the District of
Columbia against four domestic producers of ferrosilicon and
two of the domestic producers’ foreign-owned parent
companies. Plaintiffs sought damages resulting from the
duties imposed on their products by the ITC, alleging that
those damages were caused by defendants’ submission of the
fraudulent petitions to the ITC.

The District Court stayed plaintiffs’ suit pending
defendants’ appeal of the ITC’s decision. The Court of
International Trade affirmed the ITC’s decision in 2008, and
the Court of International Trade’s judgment was in turn
affirmed by the Federal Circuit in 2009. See Elkem Metals
Co. v. United States, 30 I.T.R.D 2076 (Ct. Int’l Trade 2008),
aff’d, 324 F. App’x 923 (Fed. Cir. 2009).

In 2010, the District Court dismissed plaintiffs’
complaint for lack of personal jurisdiction over defendants.
We review that decision de novo. See FC Inv. Group LC v.
IFX Markets, Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008).

II

Plaintiffs argue that defendants’ relationship with The
Ferroalloys Association, a trade association that was located
within the District of Columbia, establishes personal
jurisdiction over the defendants because defendants conspired
with that association in submitting (and later defending) the
fraudulent petitions to the ITC. See Second Amendment
 5
Found. v. U.S. Conference of Mayors, 274 F.3d 521, 523-24
(D.C. Cir. 2001).1 We disagree.

To establish jurisdiction based on defendants’ conspiracy
with the association, plaintiffs “must plead with particularity
the conspiracy as well as the overt acts within the forum taken
in furtherance of the conspiracy.” Jungquist v. Sheikh Sultan
Bin Khalifa Al Nahyan, 115 F.3d 1020, 1031 (D.C. Cir. 1997)
(emphasis added) (internal quotation marks omitted). We
agree with the District Court that plaintiffs failed to do so.
With respect to overt acts in the forum, plaintiffs’ complaint
claims that defendants coordinated their efforts to deceive the
ITC “through a series of meetings, telephone calls and
mailings” that were “under the aegis of the” association.
Complaint at 10-11, J.A. 60-61. Those claims do not allege
any overt act within the District (other than contacts with the
ITC, which we discuss below), much less do they allege an
overt act with particularity. Plaintiffs’ complaint does allege
that one specific event – a February 12, 1991, meeting
between several defendants – transpired within the District of
Columbia. But plaintiffs made no effort to controvert an
affidavit submitted by defendants stating that this meeting in
fact took place in Virginia. “Thus, [plaintiffs] failed to plead
with sufficient particularity any overt acts within the District
of Columbia in furtherance of the conspiracy, and personal
jurisdiction over [defendants] is unavailable under a
conspiracy theory.” Jungquist, 115 F.3d at 1031.

1
The Ferroalloys Association was named as a defendant in
plaintiffs’ complaint, but the association has since gone bankrupt
and is no longer a party to this litigation.
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III

Plaintiffs alternatively contend that the District Court had
personal jurisdiction over the defendants because of
defendants’ allegedly fraudulent petitions to the U.S.
International Trade Commission, a government agency
located in Washington, D.C. The District of Columbia’s
jurisdictional statute allows personal jurisdiction over a
company “transacting any business in the District of
Columbia,” provided that the claim against that company
arises from business transacted in the District. D.C. Code
§ 13-423. Defendants do not dispute that petitioning the ITC
to impose duties on one’s competitors is “transacting
business.” Nor do defendants dispute that plaintiffs’ claim
arose from the filing of the petitions.

Rather, defendants assert that, under the government
contacts exception to the District of Columbia’s personal
jurisdiction statute, petitioning the ITC cannot establish
jurisdiction over the petitioner. The en banc D.C. Court of
Appeals has explained the government contacts exception as
meaning “that entry into the District of Columbia by
nonresidents for the purpose of contacting federal
governmental agencies is not a basis for the assertion of in
personam jurisdiction.” Environmental Research Int’l, Inc. v.
Lockwood Greene Engineers, Inc., 355 A.2d 808, 813 (D.C.
1976).

If that were the end of the case law, we would apply the
government contacts exception articulated in Environmental
Research and affirm the District Court’s ruling that there was
no jurisdiction in this case. However, a subsequent decision
of a D.C. Court of Appeals panel may have limited the
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government contacts exception to cases in which the contacts
with the federal government were an exercise of First
Amendment rights. See Rose v. Silver, 394 A.2d 1368, 1372-
74 (D.C. 1978); see also Lex Tex Ltd. v. Skillman, 579 A.2d
244 (D.C. 1990); Naartex Consulting Corp. v. Watt, 722 F.2d
779, 786 (D.C. Cir. 1983). The Rose case arguably means
that fraudulent petitions to government agencies do not fall
within the government contacts exception. Cf. Cal. Motor
Transport Co. v. Trucking Unlimited, 404 U.S. 508, 511-15
(1972) (fraudulent petition not protected by Petition Clause).
Relatedly, this Court has suggested in dicta that the
government contacts exception might not apply where a
plaintiff “made credible and specific allegations . . . that the
companies had used [government] proceedings as an
instrumentality of [an] alleged fraud.” Naartex, 722 F.2d at
787. Of course, such a rule could largely negate the
government contacts exception because it might be easy to
sufficiently plead fraud in many cases that otherwise might be
dismissed because of the government contacts exception.
Thus, it is not clear whether the D.C. Court of Appeals would
hold that the government contacts exception applies in cases
of an allegedly fraudulent petition to a government agency.

The D.C. Court of Appeals may answer certified
questions from this Court that “may be determinative of the
cause pending in [the] certifying court and as to which it
appears to the certifying court there is no controlling
precedent in the decisions of the District of Columbia Court
of Appeals.” D.C. Code § 11-723(a). This Court has certified
questions to the D.C. Court of Appeals when “District of
Columbia law is genuinely uncertain” and the question is of
“extreme public importance.” Sturdza v. United Arab
Emirates, 281 F.3d 1287, 1303 (D.C. Cir. 2002) (internal
quotation marks omitted). As discussed above, the scope of
the government contacts exception is genuinely uncertain.
 8
This case presents a question of sufficient public importance
because its resolution could affect numerous individuals and
corporations that petition the federal government. Cf. id.
(question is of “extreme public importance” because it affects
“architects throughout the country (perhaps even around the
world)” who “often submit bids to perform architectural
services in this city”).

We therefore certify the following question to the D.C.
Court of Appeals:

Under District of Columbia law, does a petition sent to a
federal government agency in the District provide a basis
for establishing personal jurisdiction over the petitioner
when the plaintiff has alleged that the petition
fraudulently induced unwarranted government action
against the plaintiff?

So ordered.