City of Philadelphia v. Morton Salt Company

248 F. Supp. 506
CourtDistrict Court, E.D. Pennsylvania
DecidedNovember 10, 1965
DocketCiv. A. 33781, 37159-37169, 37173, 37174
StatusPublished
Cited by31 cases

This text of 248 F. Supp. 506 (City of Philadelphia v. Morton Salt Company) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Philadelphia v. Morton Salt Company, 248 F. Supp. 506 (E.D. Pa. 1965).

Opinion

GRIM, District Judge.

On July 1, 1963, the City of Philadelphia “on behalf of itself and others similarly situated” filed its complaint against certain producers and distributors of rock salt, including Cayuga Rock Salt Company, averring that these producers and distributors, including Cayuga, had engaged in an unlawful combination and conspiracy to fix the prices of rock salt. For the purposes of this case, it will be assumed that venue in the original action (filed by Philadelphia on July 1, 1963) was proper because Cayuga filed a motion to dismiss the action on the ground of improper venue, but after some discovery stipulated that this motion to dismiss would be withdrawn by it thereby indicating to me that at that time Cayuga regarded venue to be proper as to it and thereby removing the question of the appropriateness of the venue of the original action from the case.

However, another question has arisen. Venue was proper in the original action by the City of Philadelphia only because at that time Cayuga had a sales representative and distributor, Salt Service, Incorporated, in the Eastern District of Pennsylvania. However, on July 1, 1964, Cayuga completely detached itself from Salt Service, Incorporated, and established no other agency connections in this district thereby, at that time, destroying the possibility of service upon a sales agent within the Eastern District of Pennsylvania and also thereby destroying the fitness for venue purposes of suits against Cayuga in the Eastern District of Pennsylvania. On December 11, 1964, after Cayuga had withdrawn its connection with the Eastern District of Pennsylvania, the first of many petitions to intervene (now seventy-one) were filed in the original City of Philadelphia class action and allowed by this court. On January 4 and 5, 1965, thirteen independent (independent from the class action and the intervening actions) antitrust suits against the same defendants as those in the class suit, including Cayuga, were filed. Subsequently Cayuga filed the motions now being considered by the court to dismiss the intervenor actions as to Cayuga as well as the independent suits against it contending that these actions are invalid for lack of proper venue since they were instituted after Cayuga had withdrawn its connection with the Eastern District of Pennsylvania and consequently was no longer “transacting business” nor “found” within the Eastern District of Pennsylvania.

The intervenors on the other hand contend that a class action by its nature theoretically includes all prospective plaintiffs similarly situated and that the decision to join in the original action later as intervenors or to bring an action of their own is a choice which prospective plaintiffs at their option can make. They contend further that in view of the nature of class actions, the advantages, such *509 as proper venue, of the original action accrue to prospective plaintiffs similarly situated, if they choose to intervene in the original class action.

There is much to be said for and against each of these contentions by Cayuga and plaintiff intervenors. 1 Without attempting to analyze thoroughly in this opinion the arguments and contentions of each side, I am of the opinion that intervenors in a spurious class suit such as the class action in the present case, need not independently satisfy venue requirements, but may stand in the shoes of the party who brought the class suit on their behalf. See Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561 (10th Cir. 1961), petition for cert. dismissed 371 U.S. 801, 83 S.Ct. 13, 9 L.Ed.2d 46 (1962); Escott v. Barchris Const. Co., 340 F.2d 731 (2 Cir. 1965); 4 Moore Federal Practice, 147, 148 (2d Ed. 1963).

In view of my conclusion that there was proper venue for the intervenor actions and that the motions of Cayuga to dismiss them must be denied, it is unnecessary to discuss the intervenors’ other contention that by withdrawing its motion to dismiss the orginal action and filing an answer to the original complaint on the merits, Cayuga waived its privilege (see Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167 (1939), to assert a lack of proper venue, except to say that there is good authority for this waiver contention. See Drabik v. Murphy, 246 F.2d 408 (2d Cir. 1957); U.S. for Use and Benefit of Bryant Electric Co. v. Aetna Cas. & Surety Co., 297 F.2d 665, 669 (2d Cir. 1962).

Service of the intervenor complaints was effected on Cayuga by delivering a copy of the complaint to Cayuga’s attorney of record purportedly in accordance with Fed.R.Civ.P. 5(b). Such service is proper, Berman v. Herrick, 30 F.R.D. 9, 11 (E.D.Pa.1962, Luongo, J.), and, accordingly, Cayuga’s motion to quash the service must be denied.

Cayuga also was named as one of the defendants in the thirteen independent suits which were filed on January 4 and 5, 1965. It has moved to dismiss these thirteen independent suits as to it on the contention that venue as to it in these suits is improper because at the time they were instituted it was not “found” nor “transacting business” in the Eastern District of Pennsylvania. 2

The plaintiffs contend that the special antitrust venue provision applicable here should be liberally construed so as to render amenable to suit in this District a corporation which up until the time of suit and presumably during the time that the alleged antitrust violations took place, transacted substantial business in this District, although it actually had left the jurisdiction before a suit was instituted. See Farmers Elevator Mut. Ins. Co. v. Carl J. Austad & Sons, Inc., 343 F.2d 7 (8th Cir. 1965); L’Heureaux v. Central American Airways Flying Service, Inc., 209 F.Supp. 713 (D.Md.1962).

The court cannot agree. The venue statutes are phrased in the present tense, clearly referring to the time that a complaint is filed with the court. Moreover, the Supreme Court of the United States has counseled us that “[t]he requirement of venue is specific and unambiguous ; it is not one of those vague principles which, in the interest of some overriding policy, is to be given a ‘liberal’ construction.” Olberding v. Illinois Central Ry. Co., 346 U.S. 338, 340, 74 S.Ct. 83, 85, 98 L.Ed. 39 (1953). Finally, the *510 Court of Appeals for this Circuit has specifically found on facts similar to those in this case that venue is improper absent a showing of waiver, in a district when a defendant foreign corporation did not transact business at the time of the antitrust suit despite the fact that it did business in the district some time prior to the institution of the suit. Sunbury Wire Rope Mfg. Co. v.

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Bluebook (online)
248 F. Supp. 506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-philadelphia-v-morton-salt-company-paed-1965.