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January 25, 1995


The opinion of the court was delivered by: EDWARD R. KORMAN


 Korman, J.

 This motion to dismiss and for summary judgment revolves around a trade dispute between two manufacturers of pads for the keys of woodwind instruments. Plaintiffs are an Italian manufacturer, Music Center S.N.C. Di Luciano Pisoni & C., and a New York importer of these products, Enzo Pizzi, Inc. Defendants are Prestini Musical Instruments Corporation ("PMI"), an Arizona corporation also making keypads, its principal, Giuseppe Prestini, and its counsel, Miller, Canfield Paddock and Stone and William E. Perry, a member of that firm. Plaintiffs allege violations of Section 2 of the Sherman Act, as well as state-law unfair trade practices, theft of trade secrets, abuse of process, wrongful institution of civil proceedings and prima facie tort.

 The antitrust cause of action alleges a course of anticompetitive conduct arising out of the filing of baseless or "sham" antidumping petitions and other actions before the International Trade Commission ("ITC") and International Trade Administration ("ITA") of the Department of Commerce ("Commerce"). During antidumping and countervailing duty proceedings, Commerce determines whether the pricing of goods by an importer is lower than fair value ("LTFV"), and whether the import and pricing of such goods is injuring a domestic industry in competition with the importer--a practice commonly known as "dumping." See Pierre F. De Ravel Esclapon, Non-Price Predation and The Improper Use of U.S. Unfair Trade Laws, 56 Antitrust L.J. 543 (1987) (hereinafter "Non-Price Predation").

 These proceedings may pose a substantial burden on their target. The foreign companies who are the subject of an antidumping investigation are presented with questionnaires seeking information about their selling practices, and, in many cases, their cost of production as well. See Non Price Predation, at 549. After submission of questionnaire responses, these responses are verified by Commerce officials. The verification process sometimes involves up to five investigators reviewing source documents at the respondents' corporate offices and factories for periods ranging between three days and three weeks. Id. There also appears to be no limit on the number of complaints a domestic industry may file, although the ITA has the discretion to terminate the investigation at any time after it determines that a petition lacks merit. See Gilmore Steel Corp. v. United States, 7 C.I.T. 219, 585 F. Supp. 670, 674 (CIT 1984).

 Plaintiffs allege here that three sets of filings before Commerce by PMI, in 1983, 1991 and 1992, each charging plaintiffs with dumping, were without factual basis. Plaintiffs claim that the filings were designed solely to injure them competitively by forcing them to incur the cost of defending the baseless antidumping proceedings. In pertinent part, the amended complaint charges that:

20. Despite numerous blatant and prima facie defects, deficiencies and false statements in PMI's petitions, including the attachment of materially incorrect and false price lists, newspaper articles and other data, the ITC and [Commerce] nevertheless commenced countervailing duty and antidumping investigations. PMI and [Giuseppe Prestini] induced the initiation of these proceedings through the submission of false information.
22. The 1983 countervailing duty investigation ended with a de minimis negative finding and the antidumping investigation resulted in the imposition [of] an antidumping duty of 1.16%. This finding was subsequently overturned on appeal by the United States Court of International Trade...which ordered the U.S. government to revoke the antidumping order imposed on Pisoni's exports to the United States...
24. Upon information and belief, shortly after joining [Miller Canfield], Perry, having become thoroughly familiar with the Pads antidumping case while employed by the ITC, encouraged [Miller Canfield] to represent PMI and encouraged [Giuseppe Prestini] to hire [Miller Canfield].
25. In the Fall of 1991, [Miller Canfield], including Perry, entered a Notice of Appearance before [Commerce] and intervened on behalf of PMI in the administrative review of the antidumping order, forcing Pisoni to defend itself even though the U.S. Court of International Trade and ordered the exclusion of Pisoni from the antidumping order, and [Commerce] had so complied.
26. On or about August 31, 1992, and prior thereto, Defendant [Prestini] communicated with [Enzo Pizzi] and Pisoni to propose fixing prices of woodwind pads and dividing the woodwind pad markets.
27. On October 21, 1992, after plaintiffs refused to engage in the proposed unlawful anticompetitive practices of price fixing and market division, PMI, with the assistance of [Miller Canfield] and Perry, filed a new antidumpting petition against Plaintiffs...which against contained material false information about Plaintiffs' sales and other misinformation.
28. In the course of this new investigation, Perry had access to and used confidential business information relating to Pisoni and revealed such information to PMI [...] in violation of Commerce's rules and regulations. The release of this confidential information to Pisoni' s principal competitor has caused Plaintiffs substantial competitive harm, especially since the confidential information concerned Pisoni's customers and sales, among other confidential matters.

 Defendants argue that the Commerce filings at issue cannot provide a factual basis for an antitrust cause of action because such filings are subject to antitrust immunity under Eastern Railways Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 5 L. Ed. 2d 464, 81 S. Ct. 523 (1961), United Mine Workers of America v. Pennington, 381 U.S. 657, 669, 14 L. Ed. 2d 626, 85 S. Ct. 1585 (1965), California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 30 L. Ed. 2d 642, 92 S. Ct. 609 (1972), and Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., U.S. , 113 S. Ct. 1920 (May 3, 1993) ("PRE"). Accordingly, they move to dismiss the antitrust cause of action pursuant to Rule 12(b)(6).

 The parties have submitted extensive materials and affidavits, including a full record of the results of the proceedings before the ITC and ITA relating to the allegations and findings there. Accordingly, to the extent the parties agreed at oral argument that discovery and further presentations are unnecessary as to what allegations the petitions before Commerce contained and the outcome of the Commerce proceedings, and to the extent that the motion turns on these factual issues, the motion to dismiss will be treated as one for summary judgment. Fed. R. Civ. P. 12(c).


 Those who petition for governmental redress are generally immune from antitrust liability unless the petitioning activities are "sham"--intended only to conceal an "attempt to interfere directly with business relationships of a competitor." Noerr, 365 U.S. at 144. Recently, in PRE, the Supreme Court established a two part definition for "sham" litigation:

First, the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits. If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized under Noerr, and an antitrust claim premised on the sham exception must fail. Only if the challenged litigation is objectively meritless may a court examine the litigant's subjective motivation...

 113 S. Ct. at 1928. Under this "two-tiered process," an antitrust plaintiff must "disprove the challenged lawsuit's legal viability before the court will entertain evidence of the suit's economic viability." Id.

 Plaintiffs urge that the broad and indistinct allegations of the complaint are sufficient to allow them to proceed to discovery as to the truth of the allegations in the petition. This position, which may have had some merit before PRE1 and its requirement of a colorable claim of "objectively baseless" litigation, is now no longer tenable.

 A rule permitting discovery, based solely on allegations of misrepresentation in a petition, would fail to recognize that an inaccurate petition, even one containing deliberate misstatements, might nonethless not be so lacking in merit as to be objectively baseless. See PRE, 113 S. Ct. at 1928 n.5 (where proceeding terminates successfully, it cannot be sham); Luciano Pisoni Fabbrica Accessori Instrument Musicali v. United States, 10 C.I.T. 424, 640 F. Supp. 255, 257 (CIT 1988) (ITC is under no duty to terminate proceedings, even where it finds misstatements in petition, where there is still evidence of sale at LTFV); Citrosuco Paulista v. United States, 12 C.I.T. 1196, 704 F. Supp. 1075 (CIT 1988) (where ITC petition was flawed because petitioner lacked standing, proceeding could nonetheless go forward where Commerce had cured flaws in petition). Cf. Franks v. Delaware, 438 U.S. 154, 171, 57 L. Ed. 2d 667, 98 S. Ct. 2674 (1978) (under Fourth Amendment, validity of a warrant is not affected by intentional misstatements of fact in supporting affidavit if probable cause exists even without considering such statements).

 To allow antitrust claims based solely on broad and indistinct allegations of misrepresentation and "sham litigation" to reach discovery, regardless of the role the claimed misrepresentations played, or could have played, in the prior proceeding, would predicate the viability of an antitrust complaint on a petitioner's subjective intent, and not the objective merit of its petition, and thus directly contravene the Supreme Court's holding in PRE. 113 S. Ct at 1928. Moreover, such discovery would have the effect of encouraging antitrust "strike suits", and effectively chill the First Amendment rights which Noerr immunity was intended to protect. See PRE, 113 S. Ct. at 1926.

 Thus, before reaching the question of subjective intent, which discovery relating to the broad allegations of misrepresentation at issue here could evidence, it is necessary to determine whether the filing of the antidumping petitions and requests for administrative review may be viewed as objectively baseless. Such a determination requires consideration, inter alia, of the outcome of the proceedings, including the findings made by the relevant administrative tribunals, the nature of the particular allegations of the petition or actions before the administrative agency claimed to be fraudulent or improper, and whether these claimed misrepresentations or improper actions would have been significant to the ultimate outcome or continuation of the proceeding.

 The Proceedings at Issue

 The 1983 Petition

 On April 25, 1984, the ITA issued a Preliminary Determination finding that there was reasonable basis to believe or suspect that pads for woodwind instrument keys from Italy were being dumped, or sold at less than fair value. The ITA also found a "weighted-average margin," that is, a percentage by which the foreign market value of the merchandise exceeded the price of United States sale for Pisoni. 49 Fed. Reg. 17791. On July 11, 1984, the ITA issued its Final Determination that woodwind key pads from Italy were being sold at less than fair value. 49 Fed. Reg. 28295. In August, the ITC issued its Final Determination that a U.S. industry was being materially injured. 49 Fed. Reg. 34313. On September 21, 1984, the ITA issued an Antidumping Duty Order, finding sales that took place at a weighted-average margin of approximately 1% for both Pisoni and Pads Manufacture. 49 Fed. Reg. 37137.

 The Court of International Trade reversed this decision. Luciano Pisoni, 10 C.I.T. 424, 640 F. Supp. 255 (CIT 1986). In its appeal, Pisoni made two arguments in favor of reversal that are relevant here. The first was that certain inaccuracies and misrepresentations in the petition meant that the ITA should have terminated the proceeding and investigation as soon as the inaccuracies were discovered. Plaintiff alleged that the discovery of the mislabelling of the price list effective from 1976-1980 as being effective January 1, 1982 (leading to the initial use of an unjustifiably low U.S. market price, and thus a higher weighted average margin) and the incorrect denomination of the prices in dollars and lira meant that the entire investigation should have been terminated. The Court of International Trade rejected this argument, stating that although the price lists were "suspect," the decision to continue was reasonable, because the ITA must make its investigation on the best evidence available, and must verify all data, and that "corrections to petitioner's data are the very point of ...

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