Centerprise International v. Micron Technology, Inc. ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: DYNAMIC RANDOM ACCESS 
MEMORY (DRAM) ANTITRUST
LITIGATION.
CENTERPRISE INTERNATIONAL, LTD,
Plaintiff-Appellant,
v.
MICRON TECHNOLOGY, INC.; MICRON
SEMICONDUCTOR PRODUCTS INC.; No. 06-15636
CRUCIAL TECHNOLOGY, INC.; D.C. Nos.
SAMSUNG ELECTRONICS CO. LTD.; CV-02-01486-PJH
SAMSUNG SEMICONDUCTOR, INC.; CV-05-03026-PJH
MOSEL-VITELIC, INC.; MOSEL-
VITELIC CORPORATION (USA);
 ORDER
INFINEON TECHNOLOGIES, AG; AMENDING
INFINEON TECHNOLOGIES NORTH OPINION AND
AMERICA CORP.; HYNIX AMENDED
SEMICONDUCTOR AMERICA, INC.; OPINION
HYNIX SEMICONDUCTOR, INC.;
ELPIDA MEMORY, INC.; ELPIDA
MEMORY, (USA) INC.; NEC
ELECTRONICS AMERICA, INC.; NANYA
TECHNOLOGY CORP.; NANYA
TECHNOLOGY CORP. USA; WINBOND
ELECTRONICS CORP.; WINBOND
ELECTRONICS CORP. AMERICA,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, District Judge, Presiding
14341
14342 IN RE DYNAMIC RANDOM ACCESS MEMORY
Argued and Submitted
March 13, 2008—San Francisco, California
Filed August 14, 2008
Amended October 9, 2008
Before: John T. Noonan, Jr., M. Margaret McKeown and
Raymond C. Fisher, Circuit Judges.
Opinion by Judge Fisher;
Concurrence by Judge Noonan
IN RE DYNAMIC RANDOM ACCESS MEMORY 14345
COUNSEL
Henry H. Rossbacher, The Rossbacher Firm; Natalie Finkel-
man Bennett and James C. Shah (argued), Shepherd, Finkel-
man, Miller & Shah, LLC, for plaintiff-appellant Centerprise
International, Ltd.
14346 IN RE DYNAMIC RANDOM ACCESS MEMORY
Michael D. Blechman (argued), Aton Arbisser, Julian Brew
and Tanja Shipman, Kaye Scholer LLP for defendants-
appellees Infineon Technologies, AG and Infineon Technolo-
gies NA Corp.; Joel Sanders, Gibson Dunn & Crutcher LLP,
for defendants-appellees Crucial Technology Inc., Micron
Technology, Inc., Micron Semiconductor Products, Inc.; Wil-
liam Goodman, Topel & Goodman LLC for defendants-
appellees Mosel-Vitelic Inc., and Mosel-Vitelic Corp.; Paul
R. Griffin, Thelen Reid & Priest LLP, for defendant-appellee
NEC Electronics America, Inc.; Steven H. Morrissett, Finne-
gan, Henderson, Farabow, Garrett & Dunner LLP, for
defendants-appellees Winbond Electronics Corp. and Win-
bond Electronics Corp. America; Kenneth O’Rourke,
O’Melveny & Myers LLP, for defendants-appellees Hynix
Semiconductor Inc. and Hynix Semiconductor America, Inc.;
Robert E. Freitas, Orrick, Herrington & Sutcliffe LLP, for
defendants-appellees Nanya Technology Corp. and Nanya
Technology Corp. USA; Harrison J. Frahn, Simpson,
Thatcher & Bartlett LLP for defendants-appellees Elpida
Memory, Inc. and Elpida Memory (USA), Inc.; James L.
McGinnis, Sheppard Mullin Richter & Hampton LLP, for
defendants-appellees Samsung Electronics Co. Ltd. and Sam-
sung Semiconductor Inc.
ORDER
The opinion filed at 538 F.3d 1107, 1110 (9th Cir. Aug. 14,
2008) is amended as follows:
At pg. 1110, insert new footnote 3 after “B. Subject Mat-
ter Jurisdiction”3:
3
The district court granted defendants’ motion to
dismiss, which was premised solely on jurisdictional
grounds. It is unclear, however, whether the FTAIA
is more appropriately viewed as withdrawing juris-
IN RE DYNAMIC RANDOM ACCESS MEMORY 14347
diction from the federal courts when a plaintiff fails
to establish proximate cause or as simply establish-
ing a limited cause of action requiring plaintiffs to
prove proximate cause as an element of the claim.
Compare Empagran S.A. v. F. Hoffman-LaRoche,
Ltd., 417 F.3d 1267, 1268-69, 1271 (D.C. Cir. 2005)
(affirming dismissal under Rule 12(b)(1) for lack of
subject matter jurisdiction), with In re Elevator Anti-
trust Litigation, 502 F.3d 47, 49-50 (2d Cir. 2007)
(affirming dismissal on 12(b)(6) grounds). The
Supreme Court’s decision in Empagran I provides
little guidance because, although the district court
had dismissed under Rule 12(b)(1), the Court did not
explicitly address whether the issue was properly
viewed as one of federal question subject matter
jurisdiction or of a failure to state a claim under fed-
eral law. We decline to resolve the question, because
it was not argued by the parties and in this case the
result and analysis are the same. Accordingly, we
assume without deciding that the district court cor-
rectly dismissed under Rule 12(b)(1).
No petitions for panel rehearing or rehearing en banc will be
considered.
OPINION
FISHER, Circuit Judge:
Plaintiff-appellant Centerprise International, Ltd.
(“Centerprise”), a British computer manufacturer that pur-
chased dynamic random access memory (“DRAM”) outside
of the United States, appeals the district court’s dismissal of
its complaint for lack of subject matter jurisdiction under the
Foreign Trade Antitrust Improvement Act of 1982
(“FTAIA”), 15 U.S.C. § 6a, amending the Sherman Act, 15
14348 IN RE DYNAMIC RANDOM ACCESS MEMORY
U.S.C. § 1-7.1 Defendants-appellees are U.S. and foreign
manufacturers and sellers of DRAM, a type of high-density
memory used in personal computers and other electronic
devices. We affirm.
I. Background
Centerprise is a British corporation that uses DRAM in the
manufacture of its computers. DRAM is a common type of
memory chip that is sold around the world. According to Cen-
terprise, DRAM is “a readily transportable commodity prod-
uct with multiple firms offering essentially identical parts.”
Centerprise purchased DRAM outside of the United States
from the defendants, various memory companies.
Centerprise brought this antitrust class action in May 2005
on behalf of itself and all others similarly situated, pursuant
to §§ 4(a), 12 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 22
and 26, seeking injunctive relief and damages, premised on
defendants’ alleged violations of federal antitrust laws,
including § 1 of the Sherman Act.2 Centerprise alleged that
the defendants engaged in a global conspiracy to fix DRAM
prices, raising the price of DRAM to customers in both the
United States and foreign countries. Specifically, Centerprise
asserted that the domestic effect of the defendants’ anticom-
petitive conduct — higher DRAM prices in the United States
— gave rise to its foreign injury of having to pay higher
DRAM prices abroad because the defendants could not have
raised prices worldwide and maintained their global price-
fixing arrangement without fixing the DRAM prices in the
United States.
1
Hereinafter all statutory provisions cited, unless otherwise indicated,
refer to Title 15 of the United States Code.
2
Centerprise defined the class as “[a]ll individuals and entities located
outside of the United States who, during the period from approximately
July 1, 1999 through at least June 20, 2002 (the ‘Class Period’), purchased
DRAM directly from defendants, any subsidiaries or affiliates thereof.”
IN RE DYNAMIC RANDOM ACCESS MEMORY 14349
The district court dismissed the complaint with prejudice
for lack of subject matter jurisdiction under the FTAIA. Rely-
ing on the Supreme Court’s decision in F. Hoffmann-La
Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004)
(“Empagran I”), and the D.C. Circuit’s decision in that case
on remand, the district court held that Centerprise had not met
the jurisdictional prerequisites under the FTAIA because it
had not sufficiently alleged that its foreign injury was directly
linked to the domestic effect of higher U.S. prices for DRAM.
The district court also denied Centerprise leave to amend its
complaint as futile because its proposed amendments did not
substantively change its theory of recovery. Centerprise
timely appealed.
II. Discussion
A. Legal Standards
We review de novo the district court’s dismissal for lack of
subject matter jurisdiction. See United States v. LSL Biotech-
nologies, 379 F.3d 672, 677 (9th Cir. 2004). The party assert-
ing jurisdiction bears the burden of establishing subject matter
jurisdiction on a motion to dismiss for lack of subject matter
jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994); see also Stock W., Inc. v. Confeder-
ated Tribes of the Colville Reservation, 873 F.2d 1221, 1225
(9th Cir. 1989). Dismissal for lack of subject matter jurisdic-
tion is appropriate if the complaint, considered in its entirety,
on its face fails to allege facts sufficient to establish subject
matter jurisdiction. See Love v. United States, 915 F.2d 1242,
1245 (9th Cir. 1990).
B. Subject Matter Jurisdiction3
3
The district court granted defendants’ motion to dismiss, which was
premised solely on jurisdictional grounds. It is unclear, however, whether
the FTAIA is more appropriately viewed as withdrawing jurisdiction from
the federal courts when a plaintiff fails to establish proximate cause or as
14350 IN RE DYNAMIC RANDOM ACCESS MEMORY
[1] In 1982, Congress responded to concerns regarding the
scope of the broad jurisdictional language in the Sherman Act
by enacting the FTAIA.4 See Phillip E. Areeda & Herbert
Hovenkamp, Antitrust Law ¶ 272i, pp. 286-87 (3d ed. 2006)
(hereinafter “Areeda & Hovenkamp”). The FTAIA amends
the Sherman Act and “excludes from [its] reach much anti-
competitive conduct that causes only foreign injury.” Empa-
gran I, 542 U.S. at 158. It does this by establishing a general
rule that the Sherman Act “shall not apply to conduct involv-
ing trade or commerce . . . with foreign nations.” § 6a. It then
provides an exception to this general rule, making the Sher-
man Act applicable if foreign conduct “(1) has a ‘direct, sub-
stantial, and reasonably foreseeable effect’ on domestic
commerce, and (2) ‘such effect gives rise to a [Sherman Act]
claim.’ ” Empagran I, 542 U.S. at 159 (quoting § 6a) (alter-
ation in Empagran I).5 This exception is known as the “do-
simply establishing a limited cause of action requiring plaintiffs to prove
proximate cause as an element of the claim. Compare Empagran S.A. v.
F. Hoffman-LaRoche, Ltd., 417 F.3d 1267, 1268-69, 1271 (D.C. Cir.
2005) (affirming dismissal under Rule 12(b)(1) for lack of subject matter
jurisdiction), with In re Elevator Antitrust Litigation, 502 F.3d 47, 49-50
(2d Cir. 2007) (affirming dismissal on 12(b)(6) grounds). The Supreme
Court’s decision in Empagran I provides little guidance because, although
the district court had dismissed under Rule 12(b)(1), the Court did not
explicitly address whether the issue was properly viewed as one of federal
question subject matter jurisdiction or of a failure to state a claim under
federal law. We decline to resolve the question, because it was not argued
by the parties and in this case the result and analysis are the same. Accord-
ingly, we assume without deciding that the district court correctly dis-
missed under Rule 12(b)(1).
4
Section 1 of the Sherman Act prohibits “[e]very contract, combination
in the form of trust or otherwise, or conspiracy, in restraint of trade or
commerce among the several States, or with foreign nations . . .” 15
U.S.C. § 1.
5
The FTAIA states:
Sections 1 to 7 of [the Sherman Act] shall not apply to conduct
involving trade or commerce (other than import trade or import
commerce) with foreign nations unless —
IN RE DYNAMIC RANDOM ACCESS MEMORY 14351
mestic injury exception” of the FTAIA. The Supreme Court
has described the FTAIA’s language as:
initially lay[ing] down a general rule placing all
(nonimport) activity involving foreign commerce
outside the Sherman Act’s reach. It then brings such
conduct back within the Sherman Act’s reach pro-
vided that the conduct both (1) sufficiently affects
American commerce, i.e., it has a “direct, substan-
tial, and reasonably foreseeable effect” on American
domestic, import or (certain) export commerce, and
(2) has an effect of a kind that antitrust law considers
harmful, i.e., the “effect” must “giv[e] rise to a
[Sherman Act] claim.”
Id. at 162.
[2] The FTAIA thus clarifies that U.S. antitrust laws con-
cern the protection of “American consumers and American
exporters, not foreign consumers or producers.” Areeda &
Hovenkamp at ¶ 272i, pp. 287. For the Sherman Act to apply,
the effect on U.S. commerce or American interests engaged
in foreign commerce must be direct, substantial and reason-
ably foreseeable — not minor impacts — and it must “giv[e]
rise” to the antitrust claim. See id.
(1) such conduct has a direct, substantial, and reasonably fore-
seeable effect —
(A) on trade or commerce which is not trade or commerce
with foreign nations, or on import trade or import commerce
with foreign nations; or
(B) on export trade or export commerce with foreign nations,
of a person engaged in such trade or commerce in the United
States; and
(2) such effect gives rise to a claim under the provisions of sec-
tions 1 to 7 of this title, other than this section. § 6a.
14352 IN RE DYNAMIC RANDOM ACCESS MEMORY
[3] In dismissing Centerprise’s action, the district court
concluded that Centerprise had sufficiently alleged that defen-
dants’ conduct had a “direct, substantial, and reasonably fore-
seeable” effect on U.S. domestic commerce, the first prong of
the domestic injury exception, but did not sufficiently allege
the second prong, that such U.S. domestic effect “g[ave] rise
to” Centerprise’s foreign injury under § 6a of the FTAIA.
Only the district court’s conclusion with respect to the second
prong of the domestic injury exception is at issue in this appeal.6
[4] The controlling precedent on the FTAIA domestic
injury exception is the Supreme Court’s opinion in Empagran
I. There the Supreme Court addressed the exception in the
context of an antitrust class action brought by foreign pur-
chasers of vitamins who alleged a global price-fixing conspir-
acy that led to increased prices in the United States, and
independently led to increased prices for vitamins in other
countries. 542 U.S. 155. The Court stated the issue as whether
the Sherman Act reaches “anti-competitive price-fixing activ-
ity that is in significant part foreign, that causes some domes-
tic antitrust injury, and that independently causes separate
foreign injury.” Id. at 158.
[5] After considering principles of comity and the history
of the Sherman Act and the FTAIA, the Court concluded that
“Congress would not have intended the FTAIA’s exception to
bring independently caused foreign injury within the Sherman
Act’s reach.” See id. at 173. Thus the foreign purchasers who
bought vitamins outside of the United States could not bring
a claim under the Sherman Act “where [their] claim rests
solely on the independent foreign harm.” Id. at 159. The
Court remanded the case to the D.C. Circuit to consider the
plaintiffs’ alternative argument that the foreign injury was
6
We focus on whether the exception to the FTAIA’s general rule
excluding application of the Sherman Act is available because it is undis-
puted that the alleged price-fixing conduct falls within the FTAIA’s gen-
eral rule because the price-fixing activity constitutes “conduct involving
trade or commerce . . . with foreign nations.” § 6a.
IN RE DYNAMIC RANDOM ACCESS MEMORY 14353
linked to the domestic effects, and not independent of them.
Id. at 175. The Court left open the question of the standard to
apply in determining whether the plaintiffs alleged a sufficient
link between the U.S. effect and their foreign injury so as to
establish subject matter jurisdiction under the Sherman Act.7
[6] On remand, the D.C. Circuit held that the “gives rise to”
language of § 6a of the FTAIA domestic injury exception
requires a direct or proximate causal relationship between the
domestic effect and the foreign injury, not merely a “but for”
relationship. See Empagran S.A. v. F. Hoffmann-Laroche,
Ltd., 417 F.3d 1267, 1271 (D.C. Cir. 2005) (“Empagran II”).
The plaintiffs’ asserted theory on remand was that the domes-
tic effect of the anticompetitive conduct — higher U.S. vita-
min prices — gave rise to their foreign injury of higher
vitamin prices abroad because the defendants could not have
maintained their global price-fixing arrangement without fix-
ing the prices in the United States as well. The court con-
cluded that under this theory the domestic effect of the
conspiracy was only a “but for” cause of the plaintiffs’ inju-
ries, so the requirements of the FTAIA exception were not
met and the Sherman Act was therefore inapplicable. The
7
The Areeda & Hovenkamp treatise comments on this open question as
follows:
Clearly [the Supreme Court] could not have meant that the
mere fact that this was a conspiracy involving both sellers and
buyers all over the world was sufficient. To be sure, in such a
conspiracy the injury to any particular buyer is linked to the
injury suffered by other buyers or else the conspiracy would not
work. . . .
But the forbearance of one cartel member from cutting price or
shipping into another cartel member’s territory is necessary to the
functioning of every cartel. To interpret “linkage” of foreign and
domestic injury this broadly would have undermined the entirety
of the Court’s opinion, which unambiguously held that foreign
plaintiffs injured by a conspiracy that also injured American pur-
chasers could not sue under the Sherman Act.
Areeda & Hovenkamp ¶ 272i5, pp. 317-18.
14354 IN RE DYNAMIC RANDOM ACCESS MEMORY
Eighth Circuit recently joined the D.C. Circuit in interpreting
the FTAIA’s domestic injury exception to require proximate
cause. See In re Monosodium Glutamate Antitrust Litig., 477
F.3d 535, 539 (8th Cir. 2007).
We have not had occasion since Empagran I to illuminate
the standard that applies in determining whether a domestic
effect “gives rise to” a foreign injury, where the plaintiff
alleges its foreign injury was linked to the domestic effect of
the defendants’ anticompetitive conduct. Like the plaintiffs in
Empagran II, Centerprise contends the FTAIA’s domestic
injury exception requires only “but for” causation and that its
claim meets this standard. Alternatively, Centerprise contends
that its claim satisfies even a proximate cause standard.
[7] Like the D.C. Circuit and the Eighth Circuit, we con-
clude that “but for” causation cannot suffice for the FTAIA
domestic injury exception to apply and therefore adopt a
proximate causation standard. As our sister circuits have
explained, a proximate cause standard is consistent with prin-
ciples of comity — “the respect sovereign nations afford each
other by limiting the reach of their laws.” Empagran II, 417
F.3d at 1271 (internal quotations omitted). The Supreme
Court counseled in Empagran I that the principles of comity
require us to “ordinarily construe[ ] ambiguous statutes to
avoid unreasonable interference with the sovereign authority
of other nations.” 542 U.S. at 164; see In re Monosodium Glu-
tamate, 477 F.3d at 538; Empagran II, 417 F.3d at 1271. To
interpret the FTAIA broadly as requiring only “but for” cau-
sation would risk the very sort of interference that we ordinar-
ily seek to avoid. See Empagran I, 542 U.S. at 165 (“Why
should American law supplant, for example, Canada’s or
Great Britain’s or Japan’s own determination about how best
to protect Canadian or British or Japanese customers from
anticompetitive conduct engaged in significant part by Cana-
dian or British or Japanese or other foreign companies?”).8
8
The case before us illustrates this point well. At oral argument, Center-
prise acknowledged “[it] could” bring suit in the United Kingdom against
IN RE DYNAMIC RANDOM ACCESS MEMORY 14355
[8] Further, the Supreme Court said that “the FTAIA’s lan-
guage and history suggest that Congress designed the FTAIA
to clarify, perhaps to limit, but not to expand in any signifi-
cant way, the Sherman Act’s scope as applied to foreign com-
merce.” Empagran I, 542 U.S. at 169 (emphasis in original).
If we were to adopt a “but for” standard, we would indeed be
expanding the Sherman Act’s scope as applied to foreign
commerce, notwithstanding Centerprise’s contention to the
contrary.
None of the cases predating the FTAIA interpret the reach
of the Sherman Act as expansively as Centerprise urges we
should do here. The pre-FTAIA cases that Centerprise relies
upon, Pfizer, Inc. v. Government of India, 434 U.S. 308
(1978), and Industria Siciliana Asfalti, Bitumi, S.p.A. v. Exxon
Research & Engineering Co., No. 75 Civ. 5828-CSH, 1977
WL 1353 (S.D.N.Y. Jan. 18, 1977), certainly do not reflect a
“but for” standard. In Pfizer, although saying that Congress
did not intend to make remedies under U.S. antitrust laws
available only to U.S. consumers, the Supreme Court was
speaking only to the issue of whether a foreign nation could
be a “person” under antitrust laws. See Pfizer, 434 U.S. at
312, 314. It did not address the requisite causal relationship
between the domestic effect and the foreign injury. If any-
thing, the Court wrote in terms suggesting that the foreign
sovereigns were directly injured by the defendants’ antitrust
violations. See, e.g., id. at 314-15 (“To deny a foreign plaintiff
injured by an antitrust violation the right to sue would . . . per-
mit a price fixer or monopolist to escape full liability for his
illegal actions and would deny compensation to certain of his
victims, merely because he happens to deal with foreign cus-
the defendants for their anticompetitive conduct. We recognize that some
of the defendants here are American corporations, but many are not, and
Centerprise does not dispute that all of its purchases were made outside
U.S. commerce, making real the risk of interference with a foreign
nation’s ability to regulate its commercial affairs.
14356 IN RE DYNAMIC RANDOM ACCESS MEMORY
tomers.” (emphasis added)). In Industria Siciliana, the domes-
tic effect at issue was plainly the direct cause of the plaintiff’s
injury. There, a U.S. company was party to a reciprocal agree-
ment that coerced the foreign consumer to forgo a more
advantageous bid for design and engineering services from
another U.S. company, a violation whose domestic effect
directly and proximately caused the foreign plaintiff having to
pay higher, super-competitive prices for the U.S. services. See
Industria Siciliana, 1977 WL 1353, at *2, 11.
[9] Finally, the proximate cause standard is consistent with
general antitrust principles, which typically require a direct
causal link between the anticompetitive practice and plain-
tiff’s damages. See Holmes v. Sec. Investor Prot. Corp., 503
U.S. 258, 267-68 (1992); Associated Gen. Contractors of
Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519,
533-35 (1983); see also In re Monosodium Glutamate, 477
F.3d at 538-39. Accordingly, we hold that the “gives rise to”
language of the domestic injury exception requires a direct or
proximate causal relationship.
[10] Applying the proximate cause standard to Center-
prise’s stated claim, we conclude that the domestic effect of
the defendants’ alleged price-fixing conspiracy did not give
rise to Centerprise’s alleged foreign injury so as to satisfy the
second prong of the FTAIA domestic injury exception. The
defendants’ conspiracy may have fixed prices in the United
States and abroad, and maintaining higher U.S. prices might
have been necessary to sustain the higher prices globally, but
Centerprise has not shown that the higher U.S. prices proxi-
mately caused its foreign injury of having to pay higher prices
abroad. Other actors or forces may have affected the foreign
prices. In particular, that the conspiracy had effects in the
United States and abroad does not show that the effect in the
United States, rather than the overall price-fixing conspiracy
itself, proximately caused the effect abroad. See In re Mono-
sodium Glutamate, 477 F.3d at 539-40 (“The domestic effects
of the price fixing scheme (increased U.S. prices) were not the
IN RE DYNAMIC RANDOM ACCESS MEMORY 14357
direct cause of the appellants’ injuries. Rather, it was the for-
eign effects of the price fixing scheme (increased prices
abroad).” (emphasis added)).
[11] Notably, Centerprise is a foreign consumer that made
its purchases entirely outside of the United States. It has
recourse under its own country’s antitrust laws. See supra
note 7. Centerprise’s indirectly linked foreign injury is not of
the type that Congress intended to bring within the Sherman
Act’s reach when it enacted the FTAIA, as evidenced by the
domestic injury exception’s narrow phrasing. Centerprise’s
causation theory directly parallels the “but for” or indirect
causation theories rejected in Empagran II and In re Mono-
sodium Glutamate.9 See Empagran II, 417 F.3d at 1270
(rejecting as insufficient the plaintiffs’ theory that “[b]ecause
the . . . product (vitamins) was fungible and globally mar-
keted, [the defendants] were able to sustain super-competitive
prices abroad only by maintaining super-competitive prices in
9
Centerprise’s argument that its case is similar to Caribbean Broadcast-
ing Systems, Ltd. v. Cable and Wireless PLC, 148 F.3d 1080 (D.C. Cir.
1998), and MM Global Services v. Dow Chemical Co., 329 F. Supp. 2d
337 (D. Conn. 2004), also fails. First, it is questionable whether Caribbean
Broadcasting has any relevance, because it pre-dates Empagran I and does
not interpret the provision of the FTAIA at issue here. See Caribbean
Broad., 148 F.3d at 1087. Second, the case is factually distinguishable.
There, the plaintiff alleged the defendants violated the Sherman Act in
maintaining a broadcast monopoly in the eastern Caribbean by misrepre-
senting to its advertising customers the breadth of the station’s broadcast-
ing reach, an effect of which was that U.S. advertisers paid excessive
prices for advertising. This effect in the United States directly caused the
plaintiff to lose revenue because it could not sell advertising to the same
U.S. businesses. Centerprise alleges no such foreclosure of the market by
rivals. MM Global Services is also inapposite because the plaintiffs there
pled direct participation in domestic commerce, unlike Centerprise whose
complaint concerns only wholly foreign transactions. The plaintiffs argued
that the defendants fixed minimum resale prices and other terms for sell-
ing and reselling products in and from the United States, and compelled
plaintiffs to agree to engage in a price maintenance conspiracy, thereby
injuring the plaintiffs by precluding them from fully competing in the
sales of their products. See MM Global Services, 329 F. Supp. 2d at 342.
14358 IN RE DYNAMIC RANDOM ACCESS MEMORY
the United States as well.”); In re Monosodium Glutamate,
477 F.3d at 539-40. Likewise, Centerprise’s statement that
“[t]he United States prices were the source of, and substan-
tially affected the worldwide DRAM prices” alleges no more
than the “but for” causation that we hold does not suffice. In
sum, Centerprise’s complaint suggests that super-competitive
DRAM prices in the United States may have facilitated the
defendants’ scheme to charge super-competitive prices
abroad, but it does not sufficiently allege a theory that the
higher U.S. prices proximately caused Centerprise’s foreign
injury of having to pay higher prices outside the United
States.
[12] Centerprise argues, however, that beyond alleging a
theory similar to that rejected by our sister circuits, it is alleg-
ing “a direct correlation between the U.S. price and the prices
abroad” and “that the Defendants’ activities resulted in the
U.S. prices directly setting the worldwide price.” At oral argu-
ment, Centerprise was unable to explain how these additional
allegations change its causation theory or how they make its
claim distinguishable from those in Empagran II or In re
Monosodium Glutamate. First, a direct correlation between
prices does not establish a sufficient causal relationship. Simi-
lar arguments were made and rejected in Empagran II and In
re Monosodium Glutamate — that there was a single global
price kept in equipoise by the maintenance of super-
competitive prices in the U.S. market. See Empagran II, 417
F.3d at 1271, n.5; In re Monosodium Glutamate, 477 F.3d at
539-40. As to Centerprise’s assertion that the defendants’
activities resulted in the U.S. prices setting the worldwide
price, Centerprise has taken liberties in characterizing the lan-
guage of its complaint and, moreover, has not set forth a the-
ory with any specificity of how this price-setting occurred or
how it shows a direct causal relationship.10 See Kendall v.
10
Most notably, paragraph 75 of its complaint alleges:
Memory purchases are a 24 hour global business, dependent in
large part on United States events. For example, Plaintiff and
IN RE DYNAMIC RANDOM ACCESS MEMORY 14359
Visa U.S.A., Inc., 518 F.3d 1042, 1046-47 (9th Cir. 2008)
(faulting antitrust complaint for failing to plead necessary evi-
dentiary facts). We therefore hold that Centerprise has not
sufficiently alleged that the domestic effect gave rise to its
foreign injury so as to bring its claim within the FTAIA
exception.
The district court properly concluded that Centerprise’s
failure to provide any comprehensible theory alleging a direct
causal link between the domestic effects and the foreign
injury warranted dismissal.
III. Leave to Amend
We review a district court’s denial of leave to amend a
complaint for abuse of discretion. See McGlinchy v. Shell
Chem. Co., 845 F.2d 802, 818 (9th Cir. 1988). A court prop-
erly exercises its discretion in denying leave to amend if the
proposed amendment would be futile. See Gabrielson v.
Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir. 1986).
At oral argument before the district court, Centerprise pro-
posed amending its complaint to include an allegation about
the correlation between “U.S. prices during the conspiracy
many Class members start their days with communications to
Defendants in Taiwan and Korea to understand what pricing is
available for DRAM, and as the day goes on follow sales in the
United States. Plaintiff and Class members were required to track
the DRAM prices in dollars, which was the only available mea-
sure due to Defendants’ sales and distribution practices, then
work on dollar exchange rates in order to buy the DRAM at the
best available price worldwide. The United States prices were the
source of, and substantially affected the worldwide DRAM
prices.
The significance of these assertions, however, is not self-evident and
Centerprise has not elaborated on how any of its asserted facts show that
the higher U.S. DRAM prices proximately caused the excessive DRAM
prices that Centerprise paid.
14360 IN RE DYNAMIC RANDOM ACCESS MEMORY
and those in Europe and Asia-Pacific.” Centerprise argued
that this would show that the defendants’ “pricing of DRAM
in the U.S. market, . . . with the knowledge that based on the
way the market worked and the sales and distribution prac-
tices, . . . was going to result in a direct correlation.” Center-
prise argued this correlation was reflected in charts it
submitted to the district court. The district court noted that an
additional allegation about the correlation or interdependence
of markets would not suffice to show that the effect in the
United States actually “g[ave] rise to” the plaintiff’s claim;
Centerprise could not escape a finding of no subject matter
jurisdiction unless it came up with a different theory of recov-
ery altogether.
[13] We agree that the additional allegation Centerprise
proposed was similar to those it already made and alleged too
indirect a link to support subject matter jurisdiction under the
FTAIA. Centerprise’s assertion that the domestic and foreign
prices were directly correlated, without more, did not warrant
granting leave to amend. Therefore, we hold the district court
did not abuse its discretion in denying leave to amend as futile.11
The judgment of the district court is affirmed.
AFFIRMED.12
NOONAN, Circuit Judge, concurring:
There is such a thing as “cause in fact,” that is, an event
that, not necessarily alone, brings about a given result. A “but
11
In light of our decision on FTAIA subject matter jurisdiction and the
district court’s refusal of leave to amend the complaint, we do not reach
defendants’ contention that Centerprise lacks antitrust standing.
12
Appellees’ Request for Judicial Notice filed September 20, 2006 is
denied as unnecessary.
IN RE DYNAMIC RANDOM ACCESS MEMORY 14361
for” cause is cause in fact. A “legal cause” is a cause in fact
that is recognized in law as creating liability. A “proximate
cause” is a legal cause. What turns cause in fact into a legal
cause is a value judgment that the cause in fact creates an
unacceptable risk of injury to a protected interest. What is an
unacceptable risk and what is to be protected depend on the
values of the society.
As Cardozo’s famous opinion in Palsgraf makes clear, that
is how causation is often considered in the law of negligence.
Antitrust law, apparently, still offers “proximate” as if it pro-
vided something more than a label for a judgment that the
conduct in question is foreseeably harmful to a social interest
worthy of protection.
In the instant case, it would seem that reasonably prudent
persons in the position of the defendants would see that their
actions setting prices in the United States would negatively
affect customers in the United States and elsewhere. But it has
been the judgment of Congress and the Supreme Court that
the economic interests of consumers outside the United States
are normally not something that American law is intended to
protect. Hence it is difficult to persuade a court that injury to
foreign consumers has been “caused” by price-fixing in the
United States. It’s so difficult that amendment of the com-
plaint becomes futile and jurisdiction itself is found not to
exist. We reach this vanishing point not from guidance in
words like “proximate” or “direct” but from a strong sense
that the protection of consumers in another country is nor-
mally the business of that country. Location, not logic, keeps
Centerprise’s claim out of court.