Ferrosilicon Industry Will Face RICO Claims

WASHINGTON (CN) - Foreign competitors can press RICO and antitrust claims against the U.S. ferrosilicon industry, accusing it of cornering the U.S. market by falsely accusing foreign companies of "unfair dumping," a federal judge ruled.

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The bogus accusation prompted the International Trade Commission to impose tariffs on foreign ferrosilicon, which is used to make steel, and allowed AIMCOR, Elkem and Applied Industrial Materials Corp. to fix prices, the foreign companies claim.

U.S. District Judge Rosemary Collyer rejected the U.S. companies' argument that the claims exceed the statute of limitations, ruling that the plight of the plaintiff ferrosilicon producers began in 1999, despite the U.S. industry's argument that the alleged injuries began in 1994, when the tariffs were imposed.

Collyer also dismissed the U.S. companies' arguments of lack of jurisdiction, failure to state a RICO claim and lack of standing to bring an antitrust suit.

"Common sense dictates that the claim alleged here is far from an ordinary business dispute," Collyer wrote in her ruling. "Plaintiffs assert a large price fixing and antidumping scheme involving 57 predicate offenses in furtherance of a ten-year conspiracy to eliminate foreign competition so that conspirators could maintain prices above what market conditions would ordinarily allow."

The plaintiffs, three Brazilian ferrosilicon producers, sued the U.S. companies in 2001, claiming the companies filed a bogus petition in 1992 accusing foreign ferrosilicon producers of "dumping" the material in the United States at low prices. The ITC agreed, and imposed tariffs on foreign ferrosilicon, the companies claimed.

"Defendants were allegedly engaged in a 'massive scheme to manipulate the entire North American market for ferrosilicon and exclude from the market every ferrosilicon producer from numerous countries around the world including China, Russia, Kazakhstan, Ukraine, Venezuela, and Brazil,'" Collyer wrote. "Defendants allegedly injured every ferrosilicon producer in these six countries and affected every purchase of ferrosilicon in the United States during the time of the price fixing conspiracy and the antidumping conspiracy."

She rejected the defendants' motions to dismiss.

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