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RAUBAL v. ENGELHARD MINERALS & CHEMS. CORP.

September 25, 1973

Emil D. Raubal, Individually and as Liquidator of Sociedad Minera Aconcagua Ltda., a partnership, and Ilia Petrof, Plaintiffs,
v.
Engelhard Minerals & Chemicals Corp., Derby & Co., Inc., and La Corporacion del Cobre


Bonsal, D.J.


The opinion of the court was delivered by: BONSAL

BONSAL, D.J.

This is a motion for summary judgment by the defendants in a private antitrust action brought by plaintiffs under Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2) and Sections 73, 74, 75 and 76 of the Wilson Tariff Act (15 U.S.C. §§ 8-11), which extend the antitrust laws to the importation of goods. Plaintiffs seek treble damages and an injunction under Sections 4 and 16 of the Clayton Act (15 U.S.C. §§ 15, 26). Jurisdiction is asserted under 28 U.S.C. § 1337. Plaintiffs also allege common law claims under the doctrine of pendent jurisdiction. Defendants' motion for summary judgment is based on the ground that plaintiffs lack standing to sue.

 Plaintiff Raubal is a citizen and resident of Austria. Plaintiff Petrof is a citizen of Chile and a resident of Austria. For several years prior to October 1, 1971, plaintiffs, as the partners in Sociedad Minera Aconcagua Ltda. ("Sominac"), a Chilean partnership, were engaged in the business of mining copper in Chile and selling and exporting copper materials. *fn1" Plaintiffs dissolved Sominac in October, 1971 and appointed Raubal as Liquidator.

 Defendant Engelhard Minerals & Chemicals Corporation ("Engelhard"), is a Delaware corporation with its principal place of business in New York City. During the years relevant to this litigation, 1969 to 1971, it was engaged in the exportation of copper from Chile. Defendant Derby & Co., Inc. ("Derby") is a New York corporation wholly owned by Engelhard, with its principal place of business in New York City. *fn2" Defendant La Corporacion del Cobre ("Codelco") is a body corporate organized under the laws of the Republic of Chile and has its principal place of business in Chile, with an office in New York City. Codelco is engaged in the mining and exportation of Chilean copper.

 In 1966, Sominac commenced the operation of a copper mine and beneficiation plant in Chile. On December 18, 1969, Sominac entered into a written agreement with the Philipp Brothers Division ("Phibro") of Engelhard, pursuant to which Phibro undertook to act as Sominac's exclusive agent for a period of three years for the sale and export of all of the copper produced by Sominac. On April 15, 1971, while the prior agreement was still in effect and pursuant thereto, Phibro agreed with Sominac to purchase, as principal, all of Sominac's copper production for the months beginning in February, 1971, and continuing to December, 1971. This second agreement called for delivery of copper materials f.o.b. at the port of Caldera, Chile. Phibro agreed to pay 90% of the price of each shipment within forty days following the bill of lading date, and to pay the remaining 10% upon completion of weighing and assaying. Under the 1971 agreement, Phibro made seven shipments from Chile to Liverpool, England between April 24, 1971 and September 1, 1971, and paid the 90% called for by the agreement. Plaintiffs contend that the 10% payments with respect to these shipments have not been made, and that with respect to an eighth shipment from Chile to Liverpool (80 tons) on October 14, 1971, Phibro has made no payment as required by the agreement.

 On July 17, 1971, the Republic of Chile nationalized the major copper mines in Chile, which were owned by Anaconda Copper Company and Kennecott Copper Company. On October 1, 1971, plaintiffs dissolved Sominac, as of October 10, 1971, and appointed Mr. Raubal Liquidator by a "notarial act" executed on October 11 in Kitzbuhel, Austria. On October 28, 1971, the Republic of Chile by decree appointed an "interventor," an official of Empresa Nacional de Mineria, to manage the Sominac properties. The Court is informed that the interventor has continued to operate the Sominac properties pending a final disposition of ownership rights.

 On July 7, 1972, by "Decree-with-Force-of-Law," the Chilean government designated defendant Codelco as the sole agent of the nationalized copper companies for the sale and exportation of copper. On October 9, 1972, the Republic of Chile decreed a commercial monopoly of the exportation of all Chilean copper, to be administered by Codelco.

 Plaintiff Raubal instituted this action on December 27, 1971, with the filing of a complaint against Engelhard and Derby. The complaint alleged that the sum of $158,000 (representing the amounts allegedly due on the eight shipments of copper materials from Chile to Liverpool under the 1971 contract), plus interest, was owed him by the defendants pursuant to the 1969 and 1971 agreements. Engelhard moved to stay the action pending arbitration, on the ground that both the 1969 and 1971 agreements contained arbitration clauses. While the motion for a stay was pending, the plaintiffs filed an amended complaint on March 31, 1972, naming as defendants Engelhard, Derby, and Codelco.

 The amended complaint re-alleges the contract claims and, in addition, seeks treble damages in the amount of $6,000,000 for alleged violation of the United States antitrust laws.

 In answer to defendants' interrogatory for an itemization of plaintiffs' damages, plaintiff Raubal stated:

 
"Mine -- at least $2 million; plant and equipment -- $2 million; monies due for copper delivered -- approximately $158,000."

 It appears from this that plaintiffs' asserted antitrust damages of $6,000,000 were arrived at by trebling Raubal's estimate of the value of Sominac's mine of $2,000,000.

 In 1972, defendants Engelhard and Derby moved to dismiss the amended complaint pursuant to Rule 12(b) (6) of the Federal Rules of Civil Procedure or for summary judgment. Defendants contended that plaintiffs' antitrust claims were premised upon the acts of the Chilean government and therefore were barred by the "Act of State" doctrine. See American Banana Co. v. United Fruit Co., 213 U.S. 347, 53 L. Ed. 826, 29 S. Ct. 511 (1909); Occidental Petroleum Corp. v. Buttes Gas & Oil Co., 331 F. Supp. 92 (C.D. Cal. 1971), aff'd, 461 F.2d 1261 (9th Cir. 1972). Plaintiffs argued that the amended complaint did not challenge the public acts of Chile but only the unlawful commercial activities of the defendants and that the affidavit submitted by the plaintiff Raubal raised factual issues precluding summary judgment. On November 13, 1972, after argument, the Court denied Engelhard and Derby's motions "without prejudice to renewal after discovery is completed."

 Thereafter, both sides embarked on discovery. On January 2, 1973, plaintiffs served interrogatories and requests for the production of documents on all defendants. Derby produced no documents and answered no interrogatories, responding that it had never engaged in business with plaintiffs and ...


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