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WT/DS162/R/Add.1 Page 86

has repeatedly explained, the legal standards for recovery under the 1916 Act are more stringent than, or at least as stringent, as those applicable under the RobinsonPatman Act.  And those standards would be applicable in every factual scenario.  Indeed, that is why there have been no recoveries under the 1916 Act.    

3. Element-by-element comparison of the 1916 Act and the Robinson-Patman Act

(a) The pleading requirements


Japan asserts that an easier pleading burden is imposed on a 1916 Act plaintiff than on a Robinson-Patman Act plaintiff.  This translates to a greater burden on a 1916 Act defendant.  For example, as reflected in the Geneva Steel and Wheeling-Pittsburgh cases, a typical plaintiff alleging predatory pricing under the Robinson-Patman Act must satisfy special, more particularized pleading and proof requirements.  These requirements address whether, through below-cost pricing, a defendant could reasonably expect to gain market dominance to the point that it could later raise prices and recoup its earlier losses.  Under the 1916 Act, in contrast, a plaintiff need only allege and prove that a defendant is engaged in systematic dumping with the intent of injuring, destroying, or preventing the establishment of a domestic industry, or of restraining or monopolising trade or commerce.


Japan argues, moreover, that in a Robinson-Patman Act case, a plaintiff's general allegations of a traditional antitrust violation and injury are insufficient; an antitrust complaint must include enough hard data so that each element of an alleged violation can be identified.281  Thus, a 1916 Act plaintiff faces a lower hurdle in filing its initial complaint because the pleading requirements not only are fewer, but also are less particular.


Japan notes that a federal district court in the state of Ohio - the same state in which a federal district court is handling the Wheeling-Pittsburgh case - recently dismissed a primary-line Robinson-Patman Act claim.  The court granted the defendants' motion to dismiss the Robinson-Patman claim because a "reasonable expectation" of recoupment had not been adequately pleaded.282  In addition, the court held that the plaintiff had failed to plead that the defendant will recoup more than the losses it originally incurred with its allegedly below-cost pricing.283


According to Japan, the lower pleading threshold for a 1916 Act action makes it easier to bring such an action.  Regardless of the likelihood of the plaintiff ultimately succeeding in the case, this makes the 1916 Act a tool for harassment.  For these reasons, the United States is in violation of Article III:4 of the GATT 1994.


The United States considers that there are two reasons to reject Japan's argument.  First, with respect to comparative pleading requirements, it is important to note that under the Federal Rules

281 Japan refers to, e.g., a case from the Federal District Court in Ohio, The Zeller Corp. v. Federal-Mogul Corp., 3:95CV7501, 1996 US Dist. LEXIS 21198 (N.D. Ohio) (hereinafter "Zeller Corp.").  In Zeller Corp., the court granted defendants' motion to dismiss a Robinson-Patman claim because plaintiff had not adequately pled a "reasonable expectation" of recoupment.  (Ibid., p. *8).  The court held that plaintiff had "pled only conclusory allegations in support of its claim that Neapco is capable of obtaining sufficient market power to allow it to recoup alleged below-cost sales."  (Ibid., p. *6).  In addition, the court held that plaintiff had "failed to plead that Neapco will recoup more than the losses it originally incurred with its allegedly below-cost pricing."  (Ibid., p. *8).  In contrast, in Wheeling-Pittsburgh, another Ohio district court judged the conclusory allegations contained in Wheeling-Pittsburgh's 1916 Act complaint sufficient to withstand a motion to dismiss.  (Wheeling-Pittsburgh, Op. Cit., p. 603).

282 Japan refers to Zeller Corp., Op. Cit., n. 74.

283 Japan refers to ibid.

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