UCAR International Inc. v. Union Carbide Corp.
UCAR International Inc. v. Union Carbide Corp.
Opinion of the Court
SUMMARY ORDER
On February 23, 2000, plaintiff-appellant UCAR International Inc., along with two of its subsidiary companies, UCAR Global Enterprises Inc., and UCAR Carbon Co. Inc. (collectively, “UCAR”), filed suit against its previous controlling stockholders, Union Carbide Corp. (“Union Carbide”) and Mitsubishi Corp. (“Mitsubishi”), as well as Mitsubishi International Corp., a Mitsubishi subsidiary; Hiroshi Kawamura, the executive vice president of Mitsubishi, who served as a UCAR director from June 1992 to January 1995; and Robert Kennedy, Union Carbide’s former CEO and present UCAR director. In its complaint, UCAR asserted, pursuant to various provisions of Delaware statutory and common law, that the defendants inflicted substantial harm on UCAR by establishing an illegal stock repurchase plain in 1995. For several years prior to the stock repurchase, until a Department of Justice investigation in 1997 that culminated in UCAR’s 2000 conviction for criminal antitrust violations, UCAR was a participant in a global price-fixing scheme. UCAR’s complaint alleged that the defendants, by executing the stock repurchase plan without informing UCAR’s new controlling stockholders of the price-fixing conspiracy’s existence, or the distorting effect of the conspiracy on UCAR’s stock value, wrongfully obtained $ 750 million from UCAR’s corporate treasury.
The defendants moved to dismiss the complaint for failure to state a claim. They also sought to disqualify William Blumenthal, UCAR’s attorney (and Union Carbide’s former antitrust advisor), along with his law firm, King & Spaulding. On November 7, 2001, the district court (Daniels, J.) disqualified Blumenthal and his firm. On January 26, 2004, UCAR’s complaint was dismissed, in its entirety, for failure to state a claim. The court concluded, inter alia, that because UCAR was convicted of criminal antitrust violations for participating in the same price-fixing scheme that formed the basis for its complaint against defendants, plaintiffs claims were barred by the in pari delicto doctrine. UCAR now appeals the district court’s order of dismissal, as well as its decision to disqualify attorney Blumenthal.
In reviewing the dismissal of a complaint under Rule 12(b)(6), we must accept the plaintiffs factual allegations as true and draw all reasonable inferences in the plaintiffs favor. See, e.g., United States v. City of New York, 359 F.3d 83, 91 (2d Cir. 2004). “General, conclusory allegations need not be credited, however, when they are belied by more specific allegations of the complaint.” Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1092 (2d Cir. 1995). In addition to the complaint itself, a court may consider “all papers and exhibits appended to the complaint, as well as any matters of which judicial notice may be taken.” Id.
Applying those standards to this case, the district court did not err in dismissing UCAR’s complaint. The in pari delicto defense prohibits suits in which the plaintiff is as or more culpable than the defen
UCAR’s challenge to the district court’s disqualification order is also unavailing, and we reject it for substantially the reasons expressed by the district court.
We have considered all of UCAR’s arguments and find them to be without merit. The judgment of the district court is therefore AFFIRMED.
Reference
- Full Case Name
- UCAR INTERNATIONAL INC., UCAR Global Enterprises, Inc. and UCAR Carbon Company, Inc. v. UNION CARBIDE CORPORATION, Mitsubishi Corporation, Mitsubishi International Corporation, Hiroshi Kawamura, and Robert D. Kennedy
- Cited By
- 12 cases
- Status
- Published