LC. W. IX/31 8-7- A 87-441A a¢w@fim&@Wt”“ C R S RE PO RT F0 R CON GRE S S G0Vernment‘ PUb"CafiQn3‘ Unit AUG 7 7 1994 Wasmngton Umver‘ ~ 3‘ Louis. Mcilteisiéizmfles STATUTE OF LIMITATIONS FOR PRIVATE RIGHT OF ACTION UNDER THE ANTIDUMPTING ACT OF 1916 F%'§T | , ,§ K. .. ,_ ., ,, .. ‘_ '3»: 5?. ;' -2 “-5 .\ v‘ ? . ‘:. vs :2‘ 3-: v_ - ' ' . A ‘. "3 .g,~'r ;;,z’ :. 1‘ , Iri- "‘ «.2-.... 3;; A-~ 1 3, xii ‘ ._ , ‘f , M I ' 1' 2.‘. , _. .__ , xvgsu. ‘ Kenneth R. Thomas Legislative Attorney American Law Division May 22, 1987 ‘so ’ 0 A ' :>: A ' Universit souri u a IWS mmmi HM} um - -V 010- 03940461 The Congressional Research Service works exclusively for the Congress, conducting research, analyzing legislation, and providing information at the request of committees, Mem- bers, and their,,st.affs. The Serviéelmakes such research available, without parti- ,, .S&m bias‘, in ‘many forms including studies, reports, compila- tions, digests.‘aI1d background briefings. Upon request, CRS assists Coinmittpeges in analyzing legislative proposals and issues, and in assessing the possible effects of these proposals and their alternatives. The Service’s senior specialists and subject analysts are also available for personal consultations in their respective fields of expertise. ABSTRACT As there is no explicit statute of limitations in the Antidumping Act of 1916, 15 U.S.C. §72 (1982), there would appear to be three candidates for determining limitation of actions for suits seeking treble damages: 1) 15 U.S.C. §15b (1982)(1imitation of actions brought under antitrust laws); 2) 28 U.S.C. §2462 (1982)(limitation of actions for enforcement of civil fine, penalty, or forfeiture), or 3) 28 U.S.C. §1652 (1982) (applicable state limitation of actions to apply). The present state of the law would appear to require a federal court to apply the relevant state law. STATUTE OF LIMITATIONS FOR PRIVATE RIGHT OF ACTION UNDER THE ANTIDUMPING ACT OF 1916 The Antidumping Act of 1916 (hereinafter "Antidumping Act") provides that a party whose business or property is injured by an act of "dumping" (selling imported goods in the U.S. for substantially less than actual market value or wholesale price) may sue the importer in U.S. District Court and recover treble damages, costs, and attorney's fees.l/ The Act does not specify a time limitation, however, within which the injured party must exercise his private right of action. In the event that a defendant importer asserts as a defense that it had ceased activities which could/ constitute dumping a substantial time before the filing of a law suit;g a district court would appear to have to look outside of the Act to determine the applicable the statute of limitations. Although the Antidumping Act has been in force for almost 71 years, it has rarely been invoked and its provisions have rarely been construed.§/ There appears to be no reported federal case which deals squarely with the issue of the applicable statute of limitations; moreover, a review of the fact patterns of selected Antidumping Act cases fails to yield instances where illegal activities were clearly committed several years prior to 1/ "15 U.S.C. §72 (1982). 3/ It should be noted that for a violation to exist, there must be a "common and systematic” importation of dumped goods. 15 U.S.C. §72 (1982). Thus, it would appear that the relevant date for purposes of a statute of limitations would be the last in the series of transactions which were alleged to violate the Antidumping Act. See generally In Re Japanese Electronic Products Antitrust Lit., 732 F.2d 319 (3rd Cir. 1983) (first complaint filed in 1970 alleging dumping activity as early as 1960). 3/ ” Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 494 F. Supp. 1190, 1196 (E.D. Pa. 1980), review denied, 55 U.S.L.W. 3724 (U.S. April 28, 1987) (intervening decisions omitted). CRS-2 4/ suit being filed. As there is no explicit statute of limitation in the Antidumping Act, a court would appear to have three candidates for the applicable statute of limitations: 1) 15 U.S.C. §15b (1982) (limitation of actions brought under antitrust laws), 2) 28 U.S.C. §2462 (1982) (limitation of actions for enforcement of civil fine, penalty, or forfeiture), or 3) 28 U.S.C. §1652 (1982) (applicable state limitation of actions law to apply). While existing case law supports the proposition that the Antidumping Act is an antitrust law, and despite the fact that the purposes of 15 U.S.C. §15b would appear to be served by extending the application of the four year statute of limitations to the treble damages provision of 15 U.S.C. §72 (1982), a federal court would seem to be obliged, pursuant to 28 U.S.C. §1652 (1982), to apply the relevant state law statute of limitations to private suits brought under the Antidumping Act. 1. Limitation of Actions Under Antitrust Laws 15 U.S.C. §15 (1982), as enacted in 1914, specifies that any person who is injured in his property or business by reason of anything forbidden in the federal "antitrust laws" may bring suit in federal District Court in the state in which the violation occurred. The term "antitrust laws" is defined in 15 U.S.C. §12 (1982), and includes the Sherman Act, the Wilson Tariff Act, as amended, and the Clayton Act, but does not include the 4/ _-See, e.g., Jewel Foliage Co. v. Uniflora Overseas Florida, 497 F. Supp. 513 (fiTD._§la.)(fi1ed April 29, 1980 alleging dumping beginning in 1979); Outboard Marine Corp. v. Pezetel, 474 F. Supp. 168 (D. Del. 1979) (case filed in 1977 for dumping beginning 1973 and continuing through to at least 1975). CRS-3 Antidumping Act of 1916. 15 U.S.C. §15b, which was added in 1955, specifies that actions brought under 15 U.S.C. §15 are barred unless brought within four years of the alleged violation;2/ The apparent purpose behind legis- lating §15b was to create a uniform time period nationwide within which a complainant may bring an antitrust action, and consequently to prevent forum shopping.§/ An argument can be made that as recent case law has held that the Antidumping Act is an antitrust law, then the legislative intent of the Congress in enacting §15b, which was to develop uniform time limitations for antitrust actions, would be served by the extension of §15b to the Antidumping Act. This argument would be bolstered by noting that when §15b was enacted, the Congress was relying on a definition of antitrust which was created before the passage of the Antidumping Act of 1916. In Zenith Radio Corp. V. Matsushita Elec. Indus. Co., 494 F. Supp. 1190 5/ —“Any action to enforce any cause of action under sections 15, 15a, or 15c of this title shall be forever barred unless commenced within four years after the cause of action accrued. . . ." 15 U.S.C.§15b (1982). 6/ .— State Corp. V. Sealy, Inc., 263 F.Supp. 845, 850 (N.D. Ill. 1967). Prior to the enactment of §15b, it was held by the federal courts that antitrust cases were to be brought within the time limits specified by the state in which the suit was brought. Englander Motor, Inc. v. Ford Motor Co., 293 F.2d 802, 804 (6th Cir. 1961); North Carolina Theatres, Inc. V. Thompson, 277 F.2d 673, 674 (4th Cir. 1960). A strong argument can thus be made that as §15b does not specifically apply to the Antidumping Act of 1916, then the applicable statute of limitations should be derived from the state in which the suit was filed. This argument will be particularly effective if the federal statute is shorter than the state statute of limitations, as the legislative intent of §15b was not to expunge long-standing claims, but to ensure uniformity. Schenley Industries, Inc. V. N.J. Wine & Spirit Wholesalers Ass'n, 272 F. Supp. 872, 887 (D.N.J. 1967). See discussion page 7, infra. CRS-4 7/ (E.D.Pa. 1980),— the District Court of the Eastern District of Pennsylvania, after an extensive analysis of the similarities between the Antidumping Act and the various antitrust acts, concluded that the Antidumping Act was an antitrust statute,§/and should be intepreted whenever possible to be consistent with legal principles developed under the antitrust laws. 494 F.Supp at 1214-15, 1223. Thus, the argument can be made that the 4 year statute of limitations should be applied to the Antidumping Act. The Zenith case may be distinguished, however, as the court was examining case law regarding a provision of the antitrust statute in order to guide the court's interpretation of a parallel provision of the antidumping statute; specifically, whether goods which have been dumped are “identical” to the goods sold in the home market. As the Antidumping Act contains no statute of limitations to parallel the antitrust laws, Zenith would not seem to support the extension of a statutory provision which specifically enumerates the laws to which it applies so as to include the Antidumping Act. 9/ The legislative history of §15b_ indicates an intention to bring 7/ —-In denying review of a further appeal of this case from the Third Circuit Court of Appeals, the Supreme Court recently let stand the dismissal of one of the largest antitrust/antitrust cases litigated. 55 U.S.L.W. 3724 (U.S. April 28, 1987). §gg_Pattison, Antidumping and Countervailing Duty Laws § 15.05, n.3 (1984) for partial list of intervening decisions. 8/ _-But see Neville, The Anti—dumping Act of 1916: A War-time Legacy, 26 N.Y.L. Sch. L. Rev. 535, 548 (1981). 9/ "It is one of the primary purposes of this bill to put an end to the confusion and discrimination present under existing law where local statutes of limitations are made applicable to rights granted under our Federal laws. This will be accomplished by establishing a uniform statute of limitations applicable to all private treble damage actions - and Govern- ment damages actions as well - of 4 years." H.R. Rep. No. 422, 84th Cong., lst Sess. 7 (1955). CRS-5 all private antitrust actions for treble damages under a uniform system of federal law. However, the explicit language adopted by the Congress was that the statute of limitations would apply to the cases brought under §l5 (the enforcement provision), which as defined in §12, does not include the Antidumping Act. There appears to be no indication in the legislative history of §15b that the Congress addressed the issue of whether the Antidumping Act should have been included in the statutory scheme. The original definitions included in §12 were formulated in 1914 as part of the Clayton Act, as was §15, and both preceded the enactment of the Antidumping Act in 1916. An argument might be made that the Congress intended that all antitrust laws be included in its definition, and that the enumeration in §12 was merely a reflection of the antitrust laws which were in effect at that time. However, in the Supreme Court case of Nashville Milk Co. v. Carnation Co., the Court held that the enumeration of the particular statutes which constitute "antitrust laws" under the 12/ Clayton Act should be construed to be the exclusive list of such laws. Further, as the Antidumping Act was legislated before §15b, Congress arguably was aware that the use of §12 (through §15) as the parameter of the new 11/ statute of limitations under §l5b would exclude the Antidumping Act. 10/ 355 U.S. 373, reh'g denied, 355 U.S. 967 (1958). See also New Jersey Wood Finishing Co. v. Minnesota Min. & Mfg Co., 332 F.2d 346, 350, aff'd, 381 U.S. 311 (1964). A compilation of 71 antitrust statutes, most of which are not included under §12, may be found in a book prepared by the Superintendent of the Document Room, House of Representatives, titled Antitrust Laws with Amendments, 1890-1951 (1951). This book, which was referred to by the Supreme Court in Nashville Milk Co., 355 U.S. at 376, n.4, does not include the Antidumping Act. 11/ Recent legislative intiatives to amend the Antidumping Act have moved to amend the Act to contain a 4 year statute of limitation. See, e.g., 8. Rep. No. 295, 99th Cong., 2d Sess. 2, 26 (1986). It appears to have been assumed that the Clayton Act statute of limitations does not presently apply to the Antidumping Act. Ed, at 26. CRS-6 II. Limitation of Actions for Civil Fine, Penalties of Forfeiture Federal law provides that absent an explicit statute of limitation, any action for a civil fine, penalty, or forfeiture must be commenced within five years from the date when the first claim accrued. 28 U.S.C. §2462 (1982). The argument has been made that a fine, penalty or forfeiture is a punitive judgment imposed for an infraction of public law. If treble damages were held to include a "punitive" component, it could then be argued that treble damage awards sought under the antitrust/antidumping laws would fall under the statutory provisions of §2462, and thus treble damage suits could be commenced up to five years after the violation.lZ/ Although the "punitive" nature of treble damages has been a disputed topic in a number of areas, the Federal courts have uniformly rejected this argument in applying the statute of limitations specified in 28 U.S.C. §2462 (1982) to antitrust cases. It has been consistently held that treble damages for an alleged violation of the antitrust laws are not in the nature of a penalty, but are compensatory, and thus are not governed by 28 U.S.C. §2462 (l982).l§/ Thus, the treble damages provisions of the Antidumping Act would not appear to be subject to this provision, and a complainant could not lay claim to the five year statute of limitations. 12/ Accord, North Carolina Theatres, Inc. v. Thompson, 277 F.2d 673, 674 (4th Cir. 1960)(noting that a number of state courts have held treble damages to be penalties when applying analagous state laws). 13/ Greene V. Lam Amusement Company, 145 F.Supp. 346, 348 (N.D.Ga. 1956). See also City of Chattanooga Foundry & Pipe Works, 127 F. 23 (6th Cir. 1903), aff'd, 203 U.S. 390 (l906)(award under predecessor to §l5 was compensatory, and excess over was exemplary, and such exemplary award did not change the compensatory nature of the action). Cf, Wright, Miller & Cooper, Federal Practice and Procedure, Jursidiction 2d § 3578 (1984). CRS-7 III. Limitation of Actions Under Applicable State Law Where Congress has not designated a time period in which a federal cause of action must be brought, a federal court must look to state law _1_‘:/ to determine the timeliness of the action. 28 U.S.C. §1652 (1982) states that applicable state law shall be used as rules of decision in civil actions brought in state courts, and a variety of state codes have been the basis for federal courts decisions in determining the statute of limitations _1_5__/ in antitrust cases. It should also be noted that prior to the enactment of a statute of limitations for treble damage suits under the specified antitrust laws listed in §l5b (dicussed previously in section I), the federal courts held that antitrust cases must be brought within the time limits set by &/ state statutes. Most often, the relevant state law to be applied would be the law of the state in which the action was filed, which under §15 is the state where the defendant resides or has an agent. The applicable statute of limitations law in each state would vary based on both the state statutory scheme, and on the state court's own interpretation of the applicability of its statute of limitations laws. Kenneth R. Thomas Legislative Attorney American Law Division 14/ Payne v. Fidelity Homes of America, Inc., 437 F. Supp. 656 (W.D.Ky. l977)(securities law). $2] See Greene v. Lam Amusement Co., 145 F.Supp. 346 (N.D. Ga. 1956); Col- umbia Pictures Corp. v. Charles Rubenstein, Inc., 289 F.2d 418 (8th Cir. 1961). 12/ See note 6, supra. 71 ‘VV - LH.~3Ri'.RY or WASHINGTON umvensmr sr. LOUIS - MO.