Fulton Co. v. Beaird-Poulan, Inc.

54 F.R.D. 604, 15 Fed. R. Serv. 2d 1181, 1972 U.S. Dist. LEXIS 15703, 1972 Trade Cas. (CCH) 74,208
CourtDistrict Court, N.D. Mississippi
DecidedJanuary 5, 1972
DocketNo. GC 7169
StatusPublished
Cited by5 cases

This text of 54 F.R.D. 604 (Fulton Co. v. Beaird-Poulan, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fulton Co. v. Beaird-Poulan, Inc., 54 F.R.D. 604, 15 Fed. R. Serv. 2d 1181, 1972 U.S. Dist. LEXIS 15703, 1972 Trade Cas. (CCH) 74,208 (N.D. Miss. 1972).

Opinion

MEMORANDUM OF DECISION

ORMA R. SMITH, District Judge.

Defendant has filed a Motion in this action, pursuant to Rule 12, F.R.Civ.P., setting forth defenses and objections to the complaint. Defendant moves the court to dismiss the complaint for lack of proper venue; to dismiss Counts III, IV, VI and VII for failure to state a claim upon which relief can be granted; to strike the entire complaint because, inter alia, it is not a short, plain statement of plaintiff’s claim as required by Rule 8(a) F.R.Civ.P., or, in the alternative, if the entire complaint is not stricken, to strike certain specific allegations of the complaint, because such are redundant, immaterial and insufficient as a matter of law.

Plaintiff has filed a motion to compel defendant to answer certain interrogatories served upon defendant, which, according to plaintiff, have not been answered fully and completely by defendant, as the rules require.

Plaintiff has also filed two other motions—one to amend plaintiff’s previous motion to compel answers to interrogatories and the other for leave to amend the complaint.

All motions were submitted to the court on oral argument at Clarksdale, Mississippi, on October 27, 1971 and additional briefs have been received by the court. The matter is now ripe for decision. The court will dispose of all pending motions at this time.

THE VENUE

This action is an antitrust suit with two related state contract claims appended thereto. The antitrust feature of the action arises under the Sherman AntiTrust Act, 15 U.S.C.A. §§ 1-3, and the Clayton Act,. 15 U.S.C.A. §§ 12-27. Plaintiff contends that this court has jurisdiction under the provision of the Clayton Act by reason of 15 U.S.C.A. §§ 15 and 22,1 also, pursuant to the provi[606]*606sions of 28 U.S.C.A. §§ 1331, 1332 and 1337. Additionally, plaintiff asserts the venue to be proper under 28 U.S.C.A. § 1391, the general venue statute.

The main controversy centers on the interpretation to be given to the words “or transacts business” used in 15 U.S. C.A. § 22.

Prior to April 1971 plaintiff was engaged as the distributor of chain saws manufactured and marketed by defendant in several counties within the Northern District of Mississippi (District). During most of this time defendant had one other distributor of its saws situated within the district. Defendant cancelled its contracts with both Mississippi distributors on April 10, 1971 and placed its line with a distributor in Memphis, Tennessee, RCH, Inc. of Memphis, Tennessee (RCH). Defendant assigned all of the territory previously served by its. Mississippi distributors to RCH effective April 12, 1971.

Defendant admits and so represents to the court that prior to April, 1971 it transacted business in the district within the meaning of 15 U.S.C.A. § 22.

Defendant contends, however, that upon the cancellation of the Mississippi distributorships aforesaid, it ceased to transact business within the district, and was not transacting business therein at the time this action was filed on June 18, 1971.

Defendant also contends that 15 U.S. C.A. § 22 does not authorize plaintiff to bring the action in this district unless on the date the suit was filed, i. e., June 18, 1971, defendant was, in fact, transacting business within the district, it being immaterial that defendant transacted business within the district prior to April, 1971.

In support of this position, defendant cites the cases of City of Philadelphia v. Morton Salt Company, 248 F.Supp. 506 (E.D.Pa.1965), in which the court said “The venue statutes are phrased in the present tense, clearly referring to the time that a complaint is filed with the court”;2 and Stern Fish Company v. Century Seafoods, Inc., 254 F.Supp. 151 (E.D.Pa.1966), where the court said “The venue statute speaks in the present tense so that unless the defendant was transacting business in this district at the time the action was commenced, venue is improper”.3

Defendant also cites two cases decided by the Fifth Circuit as supporting its position. The court finds that these cases are not controlling on the issue in the case sub judice. In Braun v. Berenson, 432 F.2d 538 (5th Cir. 1970), the court dealt with an individual defendant (Marks) as distinguished from a corporate defendant. There plaintiff could not rely on 15 U.S.C.A. § 22, which is applicable to corporate defendants only, but was required to rely on 15 U.S.C.A. § 15, which provides a person injured by a violation of the antitrust laws may sue in any district “in which the defendant resides or is found or has an agent”. Marks was served in New York under the Texas long-arm statute and Rule 4(e) F.R.Civ.P. Marks neither resided nor was found nor had an agent in the district. The court held he could not be sued there. It is plain that the decision in Braun is not applicable to the issues facing the court in this action.

The other Fifth Circuit decision, Datamedia Computer Service, Inc. v. AVM Corporation, 441 F.2d 604 (5th Cir. 1971) held that the defendant corporations were transacting business in the district at the time the suit was filed and the venue was proper. In Datamedia the court dealt with an industry which, by its very nature, made sales, and could be expected to make sales, only at [607]*607intervals, governed largely by the periodical nature of the electoral process (The Voting Machine Industry). There were intermittent periods during which there was no business activity in the industry. The suit was filed during one of these periods. Defendants claimed, therefore, that the venue was improper because they were not transacting business in the district when the suit was commenced. The court brushed this aside, holding that because of the nature of the industry the transaction of business in the district by defendants was a continuing one.

Plaintiff relies upon Eastland Construction Co. v. Keasbey & Mattison Co., 358 F.2d 777 (9th Cir. 1966) to sustain the contention that the phrase “transacts business”, as used in 15 U.S.C.A. § 22 refers to the time when the cause of action accrued, rather than the time when the suit is filed. The court, speaking through Circuit Judge Browning, recognized that the decisions on this question are divided, and cited numerous cases on both sides of the issue.4 Of those cited in the footnote as supporting the proposition that the controlling facts are those existing when the action is commenced, one was a decision of the Third Circuit, Sunbury Wire Rope Mfg. Co. v. United States Steel Corp., 230 F.2d 511, 512-513 (1956), the others being district court decisions. The court cited three district court decisions on the other side of the coin. In concluding that 15 U.S.C.A. § 22 authorizes suit against a corporate defendant in any district in which the defendant was transacting business when the cause of action accrued, the court said:

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54 F.R.D. 604, 15 Fed. R. Serv. 2d 1181, 1972 U.S. Dist. LEXIS 15703, 1972 Trade Cas. (CCH) 74,208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fulton-co-v-beaird-poulan-inc-msnd-1972.