NEW YORK--(BUSINESS WIRE)--In a lengthy 222-page watershed opinion, Chief Judge Garrett Brown of the United States District Court for the District of New Jersey has granted Kramer Levin clients Sinosteel Corporation, Sinosteel Trading Co. and Liaoning Jiayi Metals & Minerals Co., Ltd. dismissal with prejudice of Plaintiffs’ Amended Complaint in Animal Science Prods., Inc. v. China National Metals & Minerals Import & Export Corp., et al. This is the second significant win for the Kramer Levin clients as Judge Brown, following extensive motion practice, previously dismissed the original Complaint on numerous grounds in December 2008. After the Court afforded Plaintiffs months of additional time to prepare and file an Amended Complaint, the Kramer Levin team persuaded the Court that the Amended Complaint remained deficient and should be dismissed. The court’s decision was made available on April 5, 2010.

The case is a class action-styled antitrust lawsuit asserted against Chinese companies involved in China’s magnesite industry. The putative class plaintiffs alleged that Kramer Levin clients, along with other named and unnamed defendants, conspired to fix prices to illegally inflate prices of magnesite in the United States. In the first round of motion practice, the Court denied Plaintiffs’ motion for entry of default judgment, and instead dismissed the Complaint (with leave to replead) for lack of subject matter jurisdiction and for failing to adequately allege a claim for conspiracy to fix prices under Section 1 of the Sherman Act. Chief Judge Brown’s opinion made clear that any amended pleading would have to allege concrete facts to satisfy a significantly enhanced pleading burden (i) to overcome the jurisdictional bar of the Foreign Trade Antitrust Improvements Act (the “FTAIA") and (ii) satisfying the threshold pleading requirements of Rules 8 and 9(b) of the Federal Rules of Civil Procedure.

In the second round of motion practice (after Plaintiffs filed the Amended Complaint), the Court accepted and agreed with Kramer Levin’s analyses under the FTAIA and disregarded virtually all of the facts alleged in the Amended Complaint and ruled that that there was no subject matter jurisdiction under the FTAIA based on the exporter exception. Accordingly, the Court dismissed those claims with prejudice. Chief Judge Brown also recognized the merit in the Sovereign Compulsion argument advanced by the Defendants and found that strong government directives existed in connection with China’s magnesite industry, as Defendants have argued throughout the lawsuit. At the same time, the Court provided some narrow grounds for Plaintiffs to once again amend their pleadings within 180 days.

The Kramer Levin team included Jonathan S. Caplan, Nicholas L. Coch, Timothy J. Helwick and Mark A. Baghdassarian.

Kramer Levin Naftalis & Frankel LLP
Jody Maier, 212-715-7612
jmaier@kramerlevin.com