Antitrust Law Daily Wrap Up, ANTITRUST—W.D. Pa.: Chinese companies dismissal in diisocyanate chemical price fixing case sustained, (Feb 26, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Court was unpersuaded by the arguments to apply the personal jurisdiction over foreign defendants standard, approved in a Supreme Court terrorism decision, to a Sherman Act matter.

The federal district court in Pittsburgh, Pennsylvania has reaffirmed its dismissal of price fixing claims against two China-based parent entities. Earlier this year, the court held that several purchasers of diisocyanate failed to show that the foreign-based parent companies of named U.S. diisocyanate manufacturers had sufficient minimum contacts, availed themselves of the privileges of American law, or had a reasonable anticipation of being haled into court in the U.S. While the court found that there was no clear error in its initial dismissal, the judge did reconsider the ruling and found no reason to alter it (In Re: Diisocyanates Antitrust Litigation, No. 2:18-mc-01001-WSH (W.D. Pa. Feb. 25, 2026)).

Background. Methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI) are chemicals necessary for the manufacture of polyurethane products. In 2018, 12 separate antitrust actions arising out of allegations that certain entities conspired to manipulate the prices of MDI and TDI were consolidated for multidistrict litigation in the Western District of Pennsylvania. The alleged conspiracies entailed, among other things, coordinated price increases and planned manufacturing plant shutdowns worldwide.

After extensive jurisdictional discovery and renewed dismissal motions, the court dismissed defendants Covestro AG and Wanhua Chemical Group Co., Ltd. (Wanhua China), foreign-based parent companies of named U.S. defendants, for lack of personal jurisdiction in a sealed order dated January 8, 2026 (and subsequently filed on January 29, 2026). On January 15, 2026, the plaintiffs moved for vacatur and reconsideration of the January 8, 2026 order.

Clear error. The judge determined that there was no clear error in the January 8, 2026 order. On June 20, 2025, the Supreme Court had decided a case [Fuld v. Palestine Liberation Org., 606 U.S. 1, 16 (2025)] that "directs courts to evaluate personal jurisdiction in accord with the jurisdiction-granting federal statute at issue." Prior to the Fuld decision, there had been an effective assumption that the requisite minimum contacts required of the Federal government by the Due Process clause of the Fifth Amendment were one and the same as those required of the states by the Fourteenth Amendment; this assumption was set aside by the Fuld ruling that required "a more flexible inquiry than how the Due Process Clause of the Fifth Amendment had been understood pre-Fuld."

The court's January 8, 2026 order did evaluate personal jurisdiction as it pertains to the antitrust laws, and found that the plaintiffs did not establish the necessary sufficient minimum United States contacts on the parts of Covestro AG and Wanhua China. Inasmuch as neither the Third Circuit nor the Supreme Court had explicitly applied the Fuld standard to the antitrust laws, there was no binding authority that could be subject to any clear error.

Reconsideration. Although the court found that the plaintiffs had not shown cause for reconsideration, the court nonetheless did reconsider its January 8, 2026 decision "to ensure no manifest injustice has occurred" in light of the circumstances and to resolve potential issues that might otherwise arise in future aspects of the litigation.

Jurisdiction over the Fuld foreign defendants in the context of terrorism that victimizes United States citizens was explicitly authorized by statute, while no explicit personal jurisdiction over foreign antitrust defendants such as Covestro AG and Wanhua China, who themselves do not directly conduct manufacturing or sales activities within the United States, is similarly authorized by statute. Indeed, the Sherman Act's ambit is limited to foreign entities whose conduct "'has a direct, substantial, and reasonably foreseeable effect' on domestic commerce" [15 U.S.C. § 6a(1)].

The court found that the alleged status of Covestro AG and Wanhua China as holding companies of named U.S. defendants fell short of the required minimum contacts for the court to assert personal jurisdiction.

In addressing the prospect of "manifest injustice," the court also noted that (1) the Plaintiffs did not mention the Fuld decision in any of their submissions to the court until more than six months after Fuld was decided; (2) The U.S. controlled subsidiaries of Covestro AG and Wanhua China remained defendant parties to the litigation; and (3) the Plaintiffs' filings indicated that there remained additional co-conspirators who had not been named as defendants in the case. The errors alleged by the Plaintiffs thus came under the "invited error" doctrine and were not grievable, and the absence of Covestro AG and Wanhua China as defendants would not severely deprive the Plaintiffs of sources from which they might recover any monetary judgment.

The Case is No. 2:18-mc-01001-WSH.

Judge: Hardy, W.

Attorneys: Jason Louis Lichtman (Lieff Cabraser Heimann & Bernstein LLP) for Rhino Linings Corp. Andrew S. Marovitz (Mayer Brown) for BASF SE. John Terzaken (Simpson Thacher & Bartlett LLP) for Covestro AG.

Companies: Rhino Linings Corp.; BASF SE; Covestro AG

Cases: Antitrust PennsylvaniaNews GCNNews