Arnold v. SMITH MOTOR CO., BROOKFIELD, MO.

389 F. Supp. 1020, 1974 U.S. Dist. LEXIS 11511
CourtDistrict Court, N.D. Iowa
DecidedDecember 19, 1974
DocketC 74-50
StatusPublished
Cited by15 cases

This text of 389 F. Supp. 1020 (Arnold v. SMITH MOTOR CO., BROOKFIELD, MO.) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arnold v. SMITH MOTOR CO., BROOKFIELD, MO., 389 F. Supp. 1020, 1974 U.S. Dist. LEXIS 11511 (N.D. Iowa 1974).

Opinion

ORDER

McMANUS, Chief Judge.

This matter is before the court on defendant’s resisted motion filed November 12, 1974, under Rule 12(b)(3), FRCP, to dismiss for improper venue.

Plaintiff, a resident of Cedar Rapids, Iowa, commenced this action under Section 409 of the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 1989 1 (Supp. Ill 1973). Subject matter *1022 jurisdiction is granted by 15 U.S.C. § 1989(b).

The complaint alleges that defendant, a Missouri corporation, acquired a 1969 Dodge van with 74,229 miles recorded on the odometer. Subsequently, during July of 1973, plaintiff claims that defendant altered the odometer to read 54,209 miles and certified this figure as the accurate mileage for the vehicle in contravention of 15 U.S.C. §§ 1984 and 1988 2 (Supp. Ill 1973). This same van was assertedly then sold to a Cedar Rapids auto dealer at an auction in Kirks-ville, Missouri, and later purchased by plaintiff from the Iowa dealer.

Defendant’s motion presents a question of first impression to this court. The Act relied upon contains no special venue provision, and hence proper venue must be determined under the general venue statute, 28 U.S.C. § 1391.

Subsection (a) of that statute is inapplicable because jurisdiction in this lawsuit is not founded solely on diversity, there being less than $10,000 in controversy and a federal question involved here. See 1 Moore’s Federal Practice j[ 0.142[3] (1974). Plaintiff does not allege that defendant maintained sufficient contacts with the Northern District of Iowa to be “doing business” within the purview of § 1391(c). Venue must therefore be es-tablished under § 1391(b), 3 and in particular must be derived from where the “claim arose” since defendant is not a resident of this district.

No reported cases have been found by this court or cited by the parties which deal with the question of where a claim arises for venue purposes when the action is founded on the recently enacted Motor Vehicle Information and Cost Savings Act. 4 In fact, a paucity of judicial interpretations exists generally with respect to the clause “or in which the claim arose,” the clause having been added by amendment to § 1391(a) & (b) in 1966.

In construing the clause as added to § 1391(a) for diversity cases, several courts have relied on the Eñe principle in holding state law as determinative of where the claim arose. Geodynamics Oil & Gas, Inc. v. U. S. Silver & Mining Corp., 358 F.Supp. 1345 (S.D. Tex.1973); Ryan v. Glenn, 52 F.R.D. 185 (N.D.Miss.1971); Philadelphia Housing Authority v. American Radiator and Standard Sanitary Corp., 291 F. Supp. 252 (E.D.Pa.1968). However, these decisions incorporating state law have been criticized, see C. Wright, Law of Federal Courts § 42 at 152 n. 23 (2nd ed. 1970), and in any event federal sub *1023 stantive law is applied to test “where the claim arose” in nondiversity cases under § 1391(b). Philadelphia Housing, supra at 260.

Most analogous to the instant situation are those few reported decisions in private antitrust, securities, and trademark cases where the claims were based at least in part on a cause of action created by federal statutes. As discussed below, the rule emerging from these cases is to decide where the claim arose by viewing the weight of the defendant’s contacts with any given district.

In private antitrust actions, the general venue statute supplements the specific venue provisions in the Clayton Act. Philadelphia Housing, supra, involved allegations of a conspiracy to fix prices, and the plaintiff contended the action could be brought under § 1391(b), as amended, in any district where the defendant sold fixtures at an elevated price. The court rejected the mechanical “place of injury” test for determining where a claim arises in tort eases as too simplistic for antitrust actions and announced instead the “weight of contacts” approach. 291 F.Supp. at 260.

The concept of examining the significance of a defendant’s contacts to determine where a claim arises for venue purposes has been followed in several subsequent antitrust cases. Redmond v. Atlantic Coast Football League, 359 F. Supp. 666 (S.D.Ind.1973); Fox-Keller, Inc. v. Toyota Motor Sales, U.S.A., Inc., 338 F.Supp. 812 (E.D.Pa.1972); California Clippers, Inc. v. United States Soccer Football Ass’n, 314 F.Supp. 1057 (N.D.Cal.1970); ABC Great States, Inc. v. Globe Ticket Co., 310 F.Supp. 739 (N.D.Ill.1970).

Two cases brought under the Securities and Exchange Act of 1934, 15 U.S. C. § 78a et seq., discuss venue under § 1391(b), primarily in the context of pendent claims for alleged breach of common law fiduciary duties. Alameda Oil Co. v. Ideal Basic Industries, Inc., 313 F.Supp. 164 (W.D.Mo.1970); Travis v. Anthes Imperial Ltd., 331 F.Supp. 797 (E.D.Mo.1971), rev’d, 473 F.2d 515 (8th Cir. 1973). In Alameda, the court implied in dictum that venue was not proper in Missouri because the overt acts by corporate officials occurred in Colorado, even though stockholders in Missouri were thereby damaged. 313 F.Supp. at 168.

The district court dismissed the action in Travis because, as an alternative basis, the court found the most substantial activity and hence proper venue to lie in Canada. 331 F.Supp. at 806. But the Court of Appeals reversed, finding the only significant contacts with the United States to lie in Missouri and holding venue proper in the Eastern District there since it was the only district where plaintiff could vindicate his statutory rights in an American court. 473 F.2d at 529.

A recent decision in an action brought to redress trademark infringement phrased the question of venue under the “claim arose” clause of 28 U.S.C. § 1391(b) as whether “claim” means the largest part, a substantial part, or any part of a claim. Honda Associates, Inc. v. Nozawa Trading, Inc., 374 F.Supp. 886, 890 (S.D.N.Y.1974). Reviewing the antitrust and securities cases, the court adopted the weight of contacts approach.

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Bluebook (online)
389 F. Supp. 1020, 1974 U.S. Dist. LEXIS 11511, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arnold-v-smith-motor-co-brookfield-mo-iand-1974.