Ford Motor Co. v. Chroma Graphics, Inc.

678 F. Supp. 169, 1987 U.S. Dist. LEXIS 13186, 1987 WL 40565
CourtDistrict Court, E.D. Michigan
DecidedNovember 10, 1987
DocketCiv. A. No. 86-CV-74607-DT
StatusPublished
Cited by2 cases

This text of 678 F. Supp. 169 (Ford Motor Co. v. Chroma Graphics, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ford Motor Co. v. Chroma Graphics, Inc., 678 F. Supp. 169, 1987 U.S. Dist. LEXIS 13186, 1987 WL 40565 (E.D. Mich. 1987).

Opinion

OPINION GRANTING DEFENDANT’S MOTION TO TRANSFER

DUGGAN, District Judge.

This matter is before the Court on Motion of defendant Chroma Graphics, Inc., to transfer this case to the Eastern District of Tennessee, for the reason that venue is improper in the Eastern District of Michigan. Alternatively, defendant seeks transfer of this case to the Eastern District of Tennessee for reasons of convenience.

Plaintiff Ford Motor Co. brought this action against defendant Chroma Graphics, a Tennessee corporation, for trademark infringement.

Pursuant to 28 U.S.C. § 1406(a), a court must either dismiss a case laying venue in the wrong district or transfer it to any district in which it could have been brought, if it is in the interest of justice to do so. Because this case is not founded solely on diversity, venue is proper in the district where all defendants reside, or in which the claim arose. 28 U.S.C. § 1391(b).

The residence of a corporation for venue purposes is set forth in 28 U.S.C. § 1391(c):

“A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.”

Venue is proper in the instant case in Michigan only if defendant Chroma Graphics is doing business in Michigan or if the claim arose in Michigan.

“Doing Business”

There is split authority as to whether “doing business” for purposes of § 1391(c) should be construed as business activities sufficient to meet the “minimum contacts” tests for personal jurisdiction, see Houston Fearless Corp. v. Teter, 318 F.2d 822, 825 (10th Cir.1963), or business activities that exhibit the sort of localized or intrastate character such that the state is permitted under the Commerce Clause to require the corporation to qualify to do business there. Maybelline Co. v. Noxell Corp., 813 F.2d 901, 905 (8th Cir.1987); Eli Lilly and Co. v. Home Ins. Co., 794 F.2d 710, 721-722 (D.C.Cir.1986); Johnson Creative Arts v. Wool Masters, 743 F.2d 947, 954 (1st Cir.1984).1 The proponents of the higher “commerce clause” standard [171]*171reason that “the considerations underlying personal jurisdiction are not the same as those underlying venue.” (Wool Masters at 949):

The minimum contacts test for personal jurisdiction is based on the minimum amount of “fairness” required in order to comport with due process. Venue limitations are added by Congress to insure a defendant a fair location for trial and to protect him from inconvenient litigation.

Wool Masters, id. Indeed, the Supreme Court in Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 2716, 61 L.Ed.2d 464 (1979), recognized the intent of Congress in enacting venue statutes, to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient forum:

In most instances, the purposes of statutorily specified venue is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial. For that reason, Congress has generally not made the residence of the plaintiff a basis for venue in nondiversity cases. But cf. 28 U.S.C. § 1391(e). The desirability of consolidating similar claims in a single proceeding may lead defendants, such perhaps as the New York and Maryland officials in this case, to waive valid objections to otherwise improper venue. But that concern does not justify reading the statute to give the plaintiff the right to select the place of trial that best suits his convenience. So long as the plain language of the statute does not open the severe type of “venue gap” that the amendment giving plaintiffs the right to proceed in the district where the claim arose was designed to close, there is no reason to read it more broadly, on behalf of plaintiffs.

Leroy, 99 S.Ct. at 2716-2717.

This Court is persuaded that the test for “doing business” under § 1391(c) should not be the same as the “minimum contacts” test for personal jurisdiction. Convenience to the defendant is the underlying basis for all venue statutes. On the other hand, convenience is not a significant factor in determining whether or not a state has personal jurisdiction over a defendant.

Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another state ... [and] even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment. Wool Masters, supra at 951 citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 294, 100 S.Ct. 559, 565, 62 L.Ed.2d 490 (1980).

The venue statute requires that a defendant “reside” in the district in order for venue to be proper. Residence of a corporate defendant is definéd as any judicial district in which “it is incorporated or licensed to do business or is doing business”. 28 U.S.C. 1391(c). Such definition suggests a greater “localization” or “presence” of a corporation in a district than is required by the “minimum contacts” test for acquiring personal jurisdiction over a non-resident.

This Court agrees with the reasoning and conclusion of the Wool Masters court that the venue test to be applied is whether the defendant is “doing business” in Michigan using the ‘commerce clause’ standard. Under this standard, a defendant is “doing business” in the state if it is “engaging in transactions there to such an extent and of such a nature that the state in which the district is located could require the foreign corporation to qualify to ‘do business’ there.” Wool Masters at 954. The Commerce Clause prohibits a state from requiring a corporation to qualify to do business in that state, absent some kind of intrastate activity or localization of the business in that state. Id. at 954. In Allenberg Cotton Co., Inc. v. Pittman, 419 U.S. 20, 95 S.Ct.

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Cite This Page — Counsel Stack

Bluebook (online)
678 F. Supp. 169, 1987 U.S. Dist. LEXIS 13186, 1987 WL 40565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ford-motor-co-v-chroma-graphics-inc-mied-1987.