In re California Gasoline Spot Market Antitrust Litigation

Background

This consolidated proposed class action concerns allegations that SK Trading International Co., Ltd. (SK Trading), SK Energy Americas, Inc. (SK Energy), Vitol Inc. (Vitol), Brad Lucas, and David Niemann agreed to restrain competition in the market for gasoline and gasoline-blending components formulated for use in California. The plaintiffs assert federal and state antitrust claims, California unfair-competition claims, and unjust-enrichment claims. They allege that the conduct followed an explosion at a refinery in Torrance, California, that impaired refining capacity from February 2015 through at least June 2016.

SK Trading is described as a South Korean corporation headquartered in Seoul, South Korea, and as the indirect parent of SK Energy. The plaintiffs alleged that SK Trading controlled and supervised SK Energy, directed or approved the trading conduct at issue, and was responsible for SK Energy’s actions under alter-ego and agency theories.

Personal Jurisdiction

SK Trading moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. The court explained that the Clayton Act potentially provides a statutory basis for jurisdiction over SK Trading and that, under Ninth Circuit precedent, the relevant forum for this antitrust case is the United States as a whole rather than only California.

The court held that the plaintiffs had not made a prima facie showing of specific personal jurisdiction. Although the allegations suggested that SK Energy directed alleged anticompetitive activity toward the relevant market, they did not sufficiently connect that specific conduct to SK Trading. The court also concluded that the plaintiffs had not shown personal jurisdiction under either an alter-ego theory or an agency theory. For the alter-ego theory, the plaintiffs had not alleged facts suggesting fraud or an inequitable result from recognizing the companies as separate entities. For the agency theory, the allegations did not sufficiently show that SK Trading controlled SK Energy’s activities.

The court nevertheless found that limited jurisdictional discovery was warranted. It permitted discovery into whether SK Trading itself directed or oversaw the alleged anticompetitive trading and into the agency theory, including information about the relationship between SK Trading and SK Energy, SK Trading executives’ meeting with Vitol representatives, the hiring and management of Niemann, and alleged supervision or approval of trading activity. The court did not permit discovery directed at the alter-ego theory because the plaintiffs had not alleged facts suggesting that discovery could establish the required fraud or inequitable result.

Venue

SK Trading separately moved to dismiss under Rule 12(b)(3) for improper venue. The court rejected the argument that the plaintiffs needed to establish sufficient contacts with California for venue. It stated that venue in a federal antitrust case may be proper under either Section 12 of the Clayton Act or 28 U.S.C. § 1391. Under Section 1391(c)(3), a defendant that does not reside in the United States may be sued in any federal judicial district. The court therefore denied the motion to dismiss for improper venue.

Disposition

The court DENIED SK Trading’s motion to dismiss for improper venue under Rule 12(b)(3). It DEFERRED ruling on SK Trading’s motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) until the parties completed limited jurisdictional discovery regarding the relationship between SK Trading and SK Energy. The parties were ordered to submit a discovery plan by January 15, 2021, for review at the previously scheduled January 28, 2021 hearing. Judge Jacqueline Scott Corley signed the order as a United States Magistrate Judge.