## Facts

- Two U.S. companies that used extruded rubber thread as an input bought thread for use in manufactured products, including bungee cords.
- They sued multiple foreign manufacturers and U.S. distributors, alleging an international agreement to fix prices and restrain trade in extruded rubber thread sold in the United States.
- The complaint alleged that the conspiracy caused purchasers in the United States to pay supracompetitive prices.
- An Indonesian manufacturer argued it was not subject to U.S. personal jurisdiction because it consummated its sales abroad.
- Plaintiffs alleged that foreign manufacturers used U.S.-directed distribution arrangements, including exclusive U.S. sales agents, and tailored products for the U.S. market.
- Defendants moved to dismiss on several threshold grounds, including lack of personal jurisdiction, improper venue, insufficient conspiracy allegations, the direct-purchaser rule, and lack of antitrust injury based on U.S. trade findings that prices were “below fair value.”

## Issues

1. Whether a federal court may exercise personal jurisdiction under Fed. R. Civ. P. 4(k)(2) over a foreign manufacturer that consummated sales abroad but intentionally served the U.S. market.
2. Whether venue in the Eastern District of Virginia is proper as to alien corporate defendants under the federal venue statute.
3. Whether the complaint alleged sufficient facts to plausibly support an inference of an antitrust conspiracy among distributor-defendants under Fourth Circuit pleading standards.
4. Whether the direct-purchaser rule of *Illinois Brick* barred plaintiffs’ damages claims.
5. Whether plaintiffs plausibly alleged antitrust injury despite a Department of Commerce “below fair value” (dumping) determination.

## Decision

- The court denied the motions to dismiss.
- It held personal jurisdiction over the Indonesian manufacturer was proper under Rule 4(k)(2) because the defendant’s U.S.-directed conduct satisfied due process based on nationwide contacts.
- It held venue was proper because alien corporations may be sued in any federal district once personal jurisdiction exists.
- It held the complaint contained enough factual matter to support an inference of conspiracy at the pleading stage.
- It held *Illinois Brick* did not bar the claims where plaintiffs alleged they purchased directly from defendants or their exclusive U.S. sales agents.
- It held plaintiffs adequately alleged antitrust injury; a dumping finding did not negate a claim that a price-fixing scheme caused overcharges.

## Legal Principles

- Under Fed. R. Civ. P. 4(k)(2), for federal claims a defendant not subject to jurisdiction in any one state may be subject to federal personal jurisdiction if nationwide contacts satisfy due process.
- Purposeful U.S.-market targeting—such as appointing exclusive U.S. sales agents and customizing products for U.S. customers—can support minimum contacts and satisfy “fair play and substantial justice.”
- Alien corporate defendants may be sued in any federal judicial district when personal jurisdiction is established.
- At the pleading stage, antitrust conspiracy allegations must include factual matter permitting an inference of agreement, not merely conclusory assertions.
- *Illinois Brick* generally limits damages claims to direct purchasers; purchasers alleging direct buying from conspirators or their agents are not barred on an indirect-purchaser theory at the pleading stage.
- A trade-remedy finding that import prices are “below fair value” does not, by itself, defeat antitrust injury; antitrust injury turns on whether the plaintiff plausibly paid more than the competitive but-for price due to challenged conduct.

## Conclusion

The court allowed the antitrust case to proceed, concluding that nationwide contacts supported Rule 4(k)(2) jurisdiction over a foreign manufacturer, venue was proper for alien defendants, and plaintiffs plausibly alleged a price-fixing conspiracy, direct-purchaser standing, and antitrust injury notwithstanding “below fair value” import findings.


Dee-K Enters., Inc. v. Heveafil Sdn. Bhd., 982 F. Supp. 1138 (E.D. Va. 1997)