Miami Products & Chemical Co. v. Olin Corporation

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

_____________________________________

MIAMI PRODUCTS & CHEMICAL CO.,

On Behalf of Itself and All Others Similarly

Situated, et al.,

DECISION AND ORDER

Plaintiffs,

1:19-CV-00385 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

AMREX CHEMICAL CO., INC.,

On Behalf of Itself and All Others Similarly

Situated,

Plaintiff,

1:19-CV-00386 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

MIDWEST RENEWABLE ENERGY,

LLC, On Behalf of Itself and All Others

Similarly Situated,

Plaintiff,

1:19-CV-00392 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

_____________________________________

MAIN POOL AND CHEMICAL CO.,

INC., On Behalf of Itself and All Others

Similarly Situated,

Plaintiff,

1:19-CV-00393 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

PERRY’S ICE CREAM COMPANY, INC.,

On Behalf of Itself and All Others Similarly

Situated,

Plaintiff,

1:19-CV-00403 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

FINCH PAPER, LLC, On Behalf of Itself

and All Others Similarly Situated,

Plaintiff,

1:19-CV-00480 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

_____________________________________

THE TRIPP PLATING WORKS, INC., On

Behalf of Itself and All Others Similarly

Situated, et al.,

Plaintiffs,

1:19-CV-00975 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

PRECIOUS PLATE, INC., On Behalf of

Itself and All Others Similarly Situated, et

al.,

Plaintiffs,

1:19-CV-00990 EAW

v.

OLIN CORPORATION, et al.,

Defendants.

_____________________________________

INTRODUCTION

Plaintiffs Miami Products & Chemical Co., Amrex Chemical Co., Inc., Finch Paper,

LLC, Main Pool and Chemical Co., Inc., Midwest Renewable Energy, LLC, Perry’s Ice

Cream Company, Inc., VanDeMark Chemical, Inc., The Tripp Plating Works, Inc., and

Precious Plate, Inc. (collectively “Plaintiffs”) bring these putative class actions against

defendants Olin Corporation, K.A. Steel Chemicals, Inc., Occidental Chemical

Corporation, Westlake Chemical Corporation, Shin-Etsu Chemical Co. Ltd. (“Shin-Etsu”),

Shintech Incorporated (“Shintech”), Formosa Plastics Corporation (“Formosa”), and

Formosa Plastics Corporation, U.S.A. (“Formosa USA”) (collectively “Defendants”),

alleging an anticompetitive conspiracy to fix the price of caustic soda within the United

States. (Dkt. 51; Dkt. 129) 1.

Presently before the Court are: (1) a renewed motion to dismiss for lack of personal

jurisdiction filed by Shin-Etsu (Dkt. 230); and (2) a renewed motion to dismiss for lack of

personal jurisdiction or, in the alternative, for failure to state a claim filed by Formosa (Dkt.

288). For the reasons discussed below, the Court grants Shin-Etsu’s and Formosa’s

motions to dismiss, finding that the Court lacks personal jurisdiction over either of these

corporations.

BACKGROUND

I. Factual Background

As noted above, the instant actions relate to a purported anticompetitive conspiracy

by Defendants to fix the price of caustic soda in the United States. (Dkt. 51; Dkt. 129).

The details of the alleged conspiracy are set forth at length in this Court’s Decision and

Order dated March 27, 2020, resolving several prior motions to dismiss (Dkt. 119) (the

“March 27th Decision”), familiarity with which is assumed for purposes of this Decision

and Order.

1 Unless otherwise noted, all docket references herein refer to Civil Action No. 19-

cv-00385 (the “Lead Action”).

II. Procedural Background

The procedural background of these matters is also set forth in detail in the March

27th Decision. The Court sets forth the salient and subsequent procedural developments

below. It is necessary to note as an initial matter that there are two operative complaints

in this matter—a consolidated class action complaint filed by Amrex Chemical Co., Inc.,

Finch Paper, LLC, Main Pool & Chemical Company, Inc., Miami Products & Chemical

Company, Midwest Renewable Energy LLC, Perry’s Ice Cream Company, Inc., and

VanDeMark Chemical, Inc. (collectively the “Direct Purchaser Plaintiffs”) (Dkt. 51 (the

“direct purchaser complaint”)) and a consolidated class action complaint filed by The Tripp

Plating Works, Inc. and Precious Plate, Inc. (collectively the “Indirect Purchaser

Plaintiffs”) (Dkt. 129 (the “indirect purchaser complaint”)).

Shin-Etsu and Formosa previously filed motions to dismiss the claims set forth in

the direct purchaser complaint for lack of personal jurisdiction. (Dkt. 86; Dkt. 103). In its

Match 27th Decision, the Court denied Shin-Etsu’s and Formosa’s motions without

prejudice to renewal after completion of jurisdictional discovery. (Dkt. 119).

Shin-Etsu filed its renewed motion to dismiss on November 30, 2020, seeking

dismissal of all claims asserted against it in both the direct purchaser complaint and the

indirect purchaser complaint. (Dkt. 230). The Direct Purchaser Plaintiffs filed opposition

papers on December 10, 2020, and indicated therein that “The Indirect Purchaser Plaintiffs

join this opposition to Shin-Etsu’s motion.” (Dkt. 239 at 6 n.1). Shin-Etsu filed its reply

on December 31, 2020. (Dkt. 242).

Formosa filed its renewed motion to dismiss on February 8, 2021, also seeking

dismissal of all claims asserted against it in both the direct purchaser complaint and the

indirect purchaser complaint. (Dkt. 288). The Direct Purchaser Plaintiffs filed opposition

papers on March 1, 2021, again noting that “The Indirect Purchaser Plaintiffs join this

opposition to [Formosa’s] motion.” (Dkt. 294-1 at 6 n.1). Formosa filed its reply on March

22, 2021. (Dkt. 297).

DISCUSSION

I. Legal Standard on Motions to Dismiss for Lack of Personal Jurisdiction

“On a Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction,

[the] plaintiff bears the burden of showing that the court has jurisdiction over the

defendant.” In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003).

“The requirement that a court have personal jurisdiction flows not from Art. III, but from

the Due Process Clause. . . . It represents a restriction on judicial power not as a matter of

sovereignty, but as a matter of individual liberty.” Ins. Corp. of Ir., Ltd. v. Compagnie des

Bauxites de Guinee, 456 U.S. 694, 702 (1982). “Federal courts must satisfy three

requirements in order to exercise personal jurisdiction over an entity: (1) the entity must

have been properly served, (2) the court must have a statutory basis for exercising personal

jurisdiction, and (3) the exercise of personal jurisdiction must comport with constitutional

due process.” FrontPoint Asian Event Driven Fund, L.P. v. Citibank, N.A., No. 16 CIV.

5263 (AKH), 2018 WL 4830087, at *6 (S.D.N.Y. Oct. 4, 2018). Here, the Court has

already determined in the March 27th Decision that the first two prongs of this standard

are satisfied; accordingly, the issue before the Court is whether constitutional due process

permits it to exercise personal jurisdiction over Shin-Etsu or Formosa.

“Due process permits a court to exercise personal jurisdiction over a non-resident

where the maintenance of the suit would not ‘offend traditional notions of fair play and

substantial justice.’” Porina v. Marward Shipping Co., 521 F.3d 122, 127 (2d Cir. 2008)

(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation

omitted)). To determine whether exercising personal jurisdiction comports with due

process, “we ask whether the defendant has sufficient minimum contacts with the forum to

justify the court’s exercise of personal jurisdiction.” Id. “The constitutional minimum

contacts inquiry for personal jurisdiction requires us to distinguish between two forms of

jurisdiction.” Id. “Specific jurisdiction is available when the cause of action sued upon

arises out of the defendant’s activities in a state. General jurisdiction, in contrast, permits

a court to adjudicate any cause of action against the . . . defendant, wherever arising, and

whoever the plaintiff.” Brown v. Lockheed Martin Corp., 814 F.3d 619, 624 (2d Cir. 2016).

Here, as explained in the March 27th Decision, Plaintiffs do not contend that general

jurisdiction exists, and so the Court’s inquiry is direct to the issue of specific jurisdiction.

“If the defendant has sufficient minimum contacts, we proceed to the second stage of the

due process inquiry, and consider whether the assertion of personal jurisdiction is

reasonable under the circumstances of the particular case.” Porina, 521 F.3d at 127

(quotation omitted).

Where, as here, a Rule 12(b)(2) motion is made after jurisdictional discovery has

been conducted, a plaintiff must make a “factually supported” prima facie showing of

personal jurisdiction. Vasquez v. Hong Kong & Shanghai Banking Corp., Ltd., 477 F.

Supp. 3d 241, 250 (S.D.N.Y. 2020). More specifically, the plaintiff must make “an

averment of facts that, if credited by the ultimate trier of fact, would suffice to establish

jurisdiction over the defendant.” Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d

560, 567 (2d Cir. 1996) (citation and alteration omitted). “[T]he standard is akin to that on

a motion for summary judgment. The pleadings, documents, and other evidentiary

materials must be construed in the light most favorable to plaintiff and all doubts are

resolved in its favor.” Melnick v. Adelson-Melnick, 346 F. Supp. 2d 499, 503 (S.D.N.Y.

2004) (quotations omitted).

A. Shin-Etsu

Shin-Etsu is a Japanese corporation with its principal place of business in Tokyo,

and Shintech, which is based in the United States, is one of its wholly-owned subsidiaries.

(Dkt. 119 at 66). Plaintiffs argue that the Court can exercise personal jurisdiction over

Shin-Etsu because: (1) Shin-Etsu directly participated in conduct related to the instant

lawsuit; (2) Shin-Etsu exercised “some control” over Shintech’s caustic soda business; and

(3) Shin-Etsu is an alter-ego of Shintech. (Dkt. 239). These contentions cannot bear

scrutiny.

Before delving into the specifics of Plaintiffs’ arguments as to Shin-Etsu, the Court

addresses first an issue that permeates Plaintiffs’ opposition. It is undisputed that Yasuhiko

Saitoh (“Saitoh”) is president of both Shin-Etsu and Shintech. (See Dkt. 231 at ¶ 4).

Plaintiffs’ personal jurisdiction arguments as to Shin-Etsu rely almost entirely on this fact,

inasmuch as Plaintiffs contend that Saitoh’s actions, even when taken in his capacity as

president of Shintech, are attributable to Shin-Etsu. However, this contention runs afoul

of well-established caselaw and accordingly cannot be sustained.

As the Supreme Court explained in United States v. Bestfoods, 524 U.S. 51 (1998),

“it is entirely appropriate for directors of a parent corporation to serve as directors of its

subsidiary, and that fact alone may not serve to expose the parent corporation to liability

for its subsidiary’s acts.” Id. at 69 (quotation omitted). Moreover, there is a presumption

that overlapping officers “are wearing their ‘subsidiary hats’ and not their ‘parent hats’

when acting for the subsidiary,” and “it cannot be enough to establish liability . . . that dual

officers and directors made policy decisions and supervised activities” for the subsidiary.

Id. at 69-70 (citation omitted). It is Plaintiffs’ obligation to come forward with evidence

that “rebuts the presumption that dual officers and directors can faithfully serve both parent

and subsidiary.” Consol. Edison Co. of N.Y. v. UGI Utilities, Inc., 153 F. App’x 749, 752

(2d Cir. 2005). Otherwise, the Court cannot attribute to the parent the actions of a dual

officer taken with respect to the subsidiary’s business.

Here, Plaintiffs have not addressed Bestfoods and its progeny and have not come

forward with or pointed to any evidence from which the Court could conclude that Saitoh

was wearing his “parent hat” when taking actions on behalf of Shintech. Accordingly, they

have not rebutted the presumption that Saitoh’s actions taken while acting as president of

Shintech are not attributable to Shin-Etsu.

1. Direct Contacts

With that baseline issue resolved, the Court turns to Plaintiffs’ assertion that Shin-

Etsu directly participated in conduct aimed at the United States and related to this lawsuit.

As the Court explained in the March 27th Decision, in order to establish specific

jurisdiction based on Shin-Etsu’s direct contacts with the United States, Plaintiffs must

show that such contacts (1) connect Shin-Etsu to the claimed price-fixing scheme and (2)

are, at a minimum, a “but-for” cause of Plaintiffs’ claimed injuries. (Dkt. 119 at 67-68);

see SPV Osus Ltd. v. UniCredit Bank Austria, No. 18-CV-3497(AJN), 2019 WL 1438163,

at *6 (S.D.N.Y. Mar. 30, 2019) (explaining that to support an exercise of personal

jurisdiction, “the defendant’s suit-related conduct must create a substantial connection with

the forum” and “[c]ourts require either proximate or but-for causation depending on the

extent of a defendant’s contacts with the forum.”). These requirements are not satisfied

here.

Setting aside the actions that Saitoh took on behalf of Shintech, which—as discussed

above—cannot support the Court’s exercise of personal jurisdiction over Shin-Etsu, the

contacts alleged by Plaintiffs are as follows: (1) Saitoh “exploited” his position as president

of Shin-Etsu to sell caustic soda on behalf of Shintech; (2) Shin-Etsu executives “monitored

the other Defendants’ public statements about the U.S. caustic soda market”; and (3) Shin-

Etsu “appears to have at least considered engaging in a caustic soda transaction outside of

the United States . . . at a time when it was concerned that weakness in the price of caustic

soda in Asia could lead to a decline in U.S. caustic soda market prices.” (Dkt. 239 at 16-

18). These “contacts” identified by Plaintiffs simply are not enough to demonstrate that

Shin-Etsu “purposefully availed itself of the forum by deliberately directing its conduct”

at the United States and that “the matter at issue . . . arose out of, or is sufficiently related

to, [Shin-Etsu’s] in-forum conduct.” Nike, Inc. v. Wu, 349 F. Supp. 3d 310, 330 (S.D.N.Y.

2018).

As to the first of the claimed contacts, Plaintiffs have submitted to the Court

evidence that (1) Saitoh was identified as the president of Shin-Etsu on a list of planned

attendees at a Shintech meeting with a caustic soda customer and (2) that Toshiaki Ansai

(“Ansai”), Shintech’s vice-president, identified Saitoh as the “President of Shin-

Etsu/Shintech” in an email thread discussing a letter that Ansai sent to a third-party

complaining about its reporting of caustic soda export prices in the United States. (See

Dkt. 239 at 16-17). The first of these actions is completely untethered to the price-fixing

conspiracy alleged by Plaintiffs; there is no evidence that any sales of caustic soda were

made or even discussed at the meeting in question. As such, even assuming the Saitoh was

wearing his “parent hat” at this meeting, that does not implicate Shin-Etsu in the conduct

at issue in this lawsuit.

With respect to the email from Ansai, the fact that Ansai correctly described Saitoh

as president of both Shin-Etsu and Shintech does not indicate that Saitoh was wearing his

“parent hat” when communicating regarding the price of United States caustic soda pricing.

Ansai has explained that the letter discussed in the email was sent by Shintech and not

Shin-Etsu and that the response letter was not forwarded to Shin-Etsu. (Dkt. 243 at ¶¶ 4-

5). Again, the mere fact of Saitoh’s dual roles does not allow this Court to transform his

actions taken on behalf of Shintech into conduct by Shin-Etsu.

As to the second and third “contacts” identified by Plaintiffs, they are not contacts

with the United States at all. Neither reading reports produced by a company from the

United States nor merely thinking about engaging in a commercial transaction in Asia that

could have some impacts in the United States but not ultimately doing so constitutes

conduct that was “deliberately directed” at this forum. Gucci Am., Inc. v. Weixing Li, 135

F. Supp. 3d 87, 97 (S.D.N.Y. 2015). As Shin-Etsu aptly notes, if merely considering taking

action that could impact markets in the United States was sufficient to support an exercise

of personal jurisdiction, there would be no real “minimum” to the “minimum contacts”

test. (See Dkt. 242 at 12 (“If thoughts and ruminations alone can suffice to establish

personal jurisdiction, then there is no ‘minimum’ to minimum contacts.”)).

In sum, Plaintiffs have not come forward with evidence from which a reasonable

factfinder could conclude that Shin-Etsu had sufficient direct contacts with the United

States related to the alleged price-fixing conspiracy at issue in this lawsuit to support an

exercise of personal jurisdiction.

2. Agency

Plaintiffs next contend that Shin-Etsu is “subject to [personal] jurisdiction under an

agency theory” because it engaged in a “common business enterprise” related to caustic

soda with Shintech while exercising “some control” over Shintech’s caustic soda

operations. (Dkt. 239 at 22-23). The Court considered this argument in the March 27th

Decision and concluded that, at that point in time, Plaintiffs had “failed to make the

showing necessary to establish specific jurisdiction pursuant to an agency theory” because

they had “not demonstrated that Shin-Etsu is dependent on Shintech’s caustic soda

business.” (Dkt. 119 at 75-76). Plaintiffs have not, after completion of jurisdictional

discovery, come forward with evidence that would warrant changing that conclusion.

Plaintiffs’ argument again hinges almost entirely on their erroneous attribution of

actions taken by Saitoh, in his role as president of Shintech, to Shin-Etsu. (See Dkt. 239 at

27-36). As the Court discussed at length above, there is no basis for the conclusion that

Saitoh was actually acting on behalf of Shin-Etsu when functioning as Shintech’s president.

Accordingly, Plaintiffs’ assertions regarding Saitoh’s involvement in the management and

supervision of Shintech’s caustic soda operations, including his communications with

Ansai regarding a caustic soda price index, cannot establish personal jurisdiction over Shin-

Etsu.

Viewing the evidence regarding actions taken by Saitoh in the appropriate context,

Plaintiffs have not identified evidence from which a reasonable factfinder could conclude

that Shin-Etsu and Shintech were involved in a “common business enterprise” related to

caustic soda. In this regard, “the essential question is whether the services that [Shintech]

provided to [Shin-Etsu] were essential to [Shin-Etsu], such that the corporation itself would

perform equivalent services if no agent were available.” Yousef v. Al Jazeera Media

Network, No. 16-CV-6416 (CM), 2018 WL 1665239, at *9 (S.D.N.Y. Mar. 22, 2018)

(quotation omitted). A rational factfinder could not answer that question in the affirmative.

There is no evidence that Shintech imports or distributes caustic soda on behalf of Shin-

Etsu, nor that Shin-Etsu directed Shintech’s actions with regard to its sales of caustic

soda—instead, Shintech’s production of caustic soda is tied to its forecast of the demand

for PVC, which it determines independently of Shin-Etsu. (See Dkt. 234 at ¶¶ 37-50).

Moreover, as Shin-Etsu has demonstrated in its reply, the financial calculations relied upon

by Plaintiffs in contending that Shin-Etsu is somehow dependent on Shintech’s caustic

soda profits, thus implying an agency relationship, are faulty. In particular, Plaintiffs have

improperly compared Shin-Etsu’s operating income to Shintech’s gross profits in making

their comparisons, leading Plaintiffs to grossly overstate the significance of Shintech’s

caustic soda sales to Shin-Etsu’s overall business. (See Dkt. 242 at 17-18). On this record,

the Court cannot exercise personal jurisdiction over Shin-Etsu on an agency theory.

3. Alter-Ego

Plaintiffs’ final argument as to Shin-Etsu is that Shintech can be considered Shin-

Etsu’s alter-ego for purposes of personal jurisdiction. This argument warrants little

discussion, as it is wholly contradicted by the evidence of record.

In considering whether a subsidiary is the parent corporation’s alter-ego for

jurisdictional purposes, the Court considers “the failure to observe corporate formality;

inadequate capitalization; intermingling of personal and corporate funds; the sharing of

common office space, address and telephone numbers of the alleged dominating entity and

the subject corporation; an overlap of ownership, directors, officers or personnel; the use

of the corporation as a means to perpetrate the wrongful act against the plaintiff; as well as

any other evidence tending to show that the company is being used as a mere shell.”

Miramax Film Corp. v. Abraham, No. 01 CV 5202 (GBD), 2003 WL 22832384, at *8

(S.D.N.Y. Nov. 25, 2003). Of course, “[t]hese factors are not exhaustive, nor is proof of

any one factor or a combination of factors necessarily determinative.” Id. However, in

this case, the relevant considerations overwhelmingly demonstrate that Shintech is not a

mere shell.

It is undisputed that “Shintech is robustly capitalized” (Dkt. 239 at 37), and

Plaintiffs similarly concede that “Shin-Etsu and Shintech have many separate employees

and offices worldwide, and have generally respected corporate formalities. . .” (id. at 36).

On this record, a rational factfinder could not find that Shintech is Shin-Etsu’s alter-ego.

For all these reasons, the Court finds that Shin-Etsu has demonstrated its entitlement

to dismissal of the claims against it for lack of personal jurisdiction.

B. Formosa

The Court turns next to Formosa’s assertion that the Court lacks personal

jurisdiction over it. As the Court explained in the March 27th Decision, Formosa is a

Taiwanese parent corporation to Formosa USA. (Dkt. 119 at 52, 54). Plaintiffs contend

that the Court can exercise personal jurisdiction over Formosa based on: (1) Formosa’s

direct influence and participation in the United States caustic soda market; and (2) an

agency relationship between Formosa and Formosa USA. The Court considers these

arguments below.

As an initial matter, the Court notes that in its reply papers, Formosa asks the Court

to strike portions of the attorney declaration of C. Andrew Dirksen (Dkt. 294 (the “Dirksen

Declaration”)) on the basis that they contain inadmissible hearsay and irrelevant attorney

commentary. (See Dkt. 297 at 5-8). The Court declines to strike any portion of the Dirksen

Declaration, inasmuch as Formosa has failed to make any legal argument as to the propriety

of that remedy. See Bass v. Miss Porter’s Sch., No. CIV 3:08CV1807 JBA, 2010 WL

122602, at *1 (D. Conn. Jan. 5, 2010) (denying motion to strike portions of affidavits that

the plaintiff argued, among other things, constituted inadmissible hearsay and unsupported

legal conclusions, because striking is a “drastic remedy” and the plaintiff had “neither

argued nor shown that she . . . suffered any prejudice by these assertions’ inclusion in the

record, or that the challenged matter has no bearing on the subject matter of the litigation,”

but the court would consider the plaintiff’s “objections when considering the pending

motion for summary judgment”). However, as discussed more fully below, the Court

agrees with Formosa that much of the Dirksen Declaration is not admissible evidence and

thus cannot be relied upon to provide the necessary support for an exercise of personal

jurisdiction.

1. Direct Contacts

Plaintiffs’ arguments regarding Formosa’s purported direct contacts with the United

States’ caustic soda market rely largely on their position that Formosa made sales of caustic

soda to three customers in the United States, using Formosa USA as a mere nominal

middleman. (See Dkt. 294-1 at 13). Formosa strongly disputes this characterization of its

conduct, contending that it sold caustic soda to Formosa USA in Taiwan, and Formosa

USA then resold the materials to its own customers without any involvement on Formosa’s

part other than delivering the material as directed by its customer, Formosa USA. Formosa

further argues that no reasonable factfinder could resolve this dispute in Plaintiffs’ favor,

because Plaintiffs’ argument is based on attorney speculation and inadmissible hearsay,

whereas Formosa has submitted sworn declarations from individuals with personal

knowledge of the facts. (See Dkt. 297 at 8-13).

The Court agrees with Formosa. “A court, in resolving a Rule 12(b)(2) motion

made after jurisdictional discovery, may consider only admissible evidence. Accordingly,

affidavits or declarations in support of personal jurisdiction must be made on personal

knowledge, set out facts that would be admissible in evidence, and show that the affiant or

declarant is competent to testify on the matters stated.” Vasquez v. Hong Kong & Shanghai

Banking Corp., Ltd., 477 F. Supp. 3d 241, 251 (S.D.N.Y. 2020) (citations and quotations

omitted). Formosa has satisfied this burden and has submitted to the Court sworn

declarations by individuals with personal knowledge confirming that the United States-

based corporations at issue were not, as Plaintiffs claim, de facto customers of Formosa.

(See, e.g., Dkt. 290 at ¶ 7; Dkt. 298 at ¶¶ 2-5).

In opposition to Formosa’s motion, Plaintiffs rely on the Dirksen Declaration. In

the Dirksen Declaration, counsel makes numerous assertions about Formosa’s and

Formosa USA’s sales to the three United States customers at issue, based on “an analysis

and comparison of [Formosa’s] and [Formosa USA’s] transactional sales date by Plaintiffs’

economic consultants[.]” (Id. at ¶ 13). Counsel’s secondhand summary of an analysis

performed by unnamed economic experts whose credentials have not even been provided

to the Court is not admissible evidence. See Hollander v. Am. Cyanamid Co., 172 F.3d

192, 202 (2d Cir. 1999) (“[A] district court must act as a gatekeeper to exclude invalid and

unreliable expert testimony.”).2

2 The importance of the Court’s gatekeeping function is amply illustrated by the fact

that Plaintiffs’ unnamed “economic experts” apparently made a rudimentary mistake in

analyzing the documents produced by Formosa, and incorrectly assumed that Formosa had

recorded shipment dates in terms of the Gregorian calendar when they had instead recorded

them in terms of the Taiwanese calendar. (See Dkt. 297 at 10; Dkt. 298 at ¶¶ 7-8).

Further, counsel’s assertion, without citation to any authority, that “in a contract of

carriage, a ‘consignee’ is typically the buyer of an exported or imported commodity

product, who assumes financial responsibility for receipt of the shipment and who pays

any duties and taxes” (Dkt. 294 at ¶ 12) is not admissible evidence. See Jamaica Ash &

Rubbish Removal Co. v. Ferguson, 85 F. Supp. 2d 174, 182 (E.D.N.Y. 2000) (“An

attorney’s statement or argument is not evidence.”). Formosa has provided information

from a source with personal knowledge that the term consignee, in the documents at issue,

“identifies the entity to whom [Formosa] shipped the caustic soda” at Formosa USA’s

direction and that Formosa would not “invoice or collect payment from the consignee,

because the consignee is not [Formosa’s] customer.” (Dkt. 298 at ¶ 5). Plaintiffs cannot

overcome this admissible evidence with unsupported attorney commentary on the general

meaning of consignee.

Finally, counsel’s recitation of information purportedly provided to him by

attorneys for non-party American Fuel and Petrochemical Manufacturers (“AFPM”) (see

Dkt. 294 at ¶ 17) is inadmissible hearsay and cannot be considered by the Court in resolving

the jurisdictional dispute. “While it is proper for a court to rely on affidavits to establish

jurisdictional facts, hearsay evidence submitted by a plaintiff is not sufficient to defeat a

motion to dismiss for lack of personal jurisdiction.” Gosain v. State Bank of India, 689 F.

Supp. 2d 571, 582 (S.D.N.Y. 2010), vacated in part on other grounds, 414 F. App’x 311

(2d Cir. 2011); see also J.S. v. Attica Central Schools, 386 F.3d 107, 110 (2d Cir. 2004)

(“We may consider affidavits and other materials beyond the pleadings to resolve the

jurisdictional issue, but we may not rely on conclusory or hearsay statements contained in

the affidavits.”).

Considering only the admissible evidence, no reasonable factfinder could conclude

that Formosa made direct sales to the three United States-based companies identified by

Plaintiffs, nor that it attended multiple trade conferences in the United States, as Plaintiffs

contend. Instead, the record before the Court demonstrates that the only contact with the

United States that Formosa had during the relevant time period, is a single trip to Texas,

around the time of the 2017 International Petrochemical Conference hosted by AFPM, at

which Formosa representatives discussed the sale of caustic soda with employees of

Formosa USA.3 (See Dkt. 298 at ¶¶ 10-11). Plaintiffs have failed to connect this single

trip to the United States to the unlawful conduct alleged in this lawsuit, much less to show

that it was a but-for cause of Plaintiffs’ claimed injuries.

Plaintiffs also make a somewhat convoluted argument that Formosa engaged in

conduct aimed at the United States by withholding caustic soda from the United States’

market. (See Dkt. 297 at 16). However, Formosa has presented unrebutted evidence that

its sales of caustic soda to Formosa USA actually increased from 2016 to 2018. (Dkt. 298

at ¶¶ 8-9).

3 Representatives of Formosa also attended trade conferences abroad during the

relevant time period. (See Dkt. 294-1 at 22-23). However Plaintiffs have failed to point to

evidence tying these international conferences to the price-fixing schemed alleged in this

lawsuit, or otherwise establishing that Formosa’s attendance thereat constitutes conduct

aimed at the United States.

For all these reasons, the Court finds that it cannot exercise personal jurisdiction

over Formosa based on its own direct contacts with the United States.

2. Agency

The Court further concludes that no reasonable factfinder could determine that

Formosa USA was acting as Formosa’s agent with respect to its caustic soda operations in

the United States. As an initial matter, the Court notes that in making many of their

arguments regarding agency, Plaintiffs have erroneously conflated Walter Chen, the former

executive vice-president of Formosa USA, with Shao-Ter Chen, the current vice-president

of Formosa. (See Dkt. 301 at ¶¶ 1-2). Formosa has established that Walter Chen and Shao-

Ter Chen are two different people, and so Plaintiffs’ arguments that rely on the assumption

that Walter Chen was an executive at both Formosa and Formosa USA are without merit

and are accordingly disregarded by the Court.

Plaintiffs’ remaining arguments, in essence, are that Formosa provided Formosa

USA with “guidance” regarding “U.S. caustic soda market sales.” (Dkt. 294-1 at 31).

However, providing advice and guidance is very different than exercising control, as is

required for a finding of agency. It is undisputed that Formosa had no control over the

terms of Formosa USA’s sales of caustic to its customers in the United States. (See id.).

Plaintiffs have cited no cases in which a court exercised personal jurisdiction based on a

parent corporation’s provision of guidance to its subsidiary. To the contrary, as the

Supreme Court noted in Bestfoods, “monitoring of the subsidiary’s performance,

supervision of the subsidiary’s finance and capital budget decisions, and articulation of

general policies and procedures” are all normal parent corporation behaviors that do not

render such parent corporation liable for the actions of its subsidiary. 524 U.S. at 72.

In sum, no rational factfinder could conclude, based on the evidence before the

Court, that Formosa USA was acting as Formosa’s agent with respect to the conduct at

issue in this lawsuit. Formosa has demonstrated its entitlement to dismissal for lack of

personal jurisdiction. Having reached this conclusion, the Court need not and does not

reach Formosa’s alternative request for dismissal for failure to state a claim.

CONCLUSION

For the reasons set forth above, the Court grants Shin-Etsu Chemical Co. Ltd.’s and

Formosa Plastics Corporation’s respective motions to dismiss for lack of personal

jurisdiction. (Dkt. 230; Dkt. 288). The Direct Purchaser Plaintiffs’ and the Indirect

Purchaser Plaintiffs’ claims against these defendants are dismissed without prejudice. See

Smith v. United States, 554 F. App’x 30, 32 n.2 (2d Cir. 2013) (“[A] dismissal for want of

personal jurisdiction is without prejudice.”). The Clerk of Court is direct to terminate Shin-

Etsu Chemical Co. Ltd. and Formosa Plastics Corporation as defendants in these actions.

SO ORDERED.

________________________________

ELIZABETH A. WOLFORD

United States District Judge

Dated: June 24, 2021

Rochester, New York