Raul International Corp. v. Nu-Era Gear Corp.

28 F.R.D. 368, 5 Fed. R. Serv. 2d 8, 1961 U.S. Dist. LEXIS 5920, 1961 Trade Cas. (CCH) 70,034
CourtDistrict Court, S.D. New York
DecidedMay 24, 1961
StatusPublished
Cited by19 cases

This text of 28 F.R.D. 368 (Raul International Corp. v. Nu-Era Gear Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Raul International Corp. v. Nu-Era Gear Corp., 28 F.R.D. 368, 5 Fed. R. Serv. 2d 8, 1961 U.S. Dist. LEXIS 5920, 1961 Trade Cas. (CCH) 70,034 (S.D.N.Y. 1961).

Opinion

EDELSTEIN, District Judge.

Defendant has moved to dismiss the action on the ground of improper venue and to quash the service of process. The complaint alleges a violation of the Robinson-Patman Act, 49 Stat. 1526, 15 U.S. C. § 13, 15 U.S.C.A. § 13, and the Sherman Act, 26 Stat. 209, as amended 15 U.S.C. §§ 1-7, 15 U.S.C.A. §§ 1-7. Plaintiff alleges that it has been damaged in its business and property by reason of alleged price discrimination and an alleged conspiracy between defendant and its distributors. Plaintiff prays for an injunction and treble damages.

Defendant’s motion raises three issues: (1) Is the Southern District of New York the proper venue for trial of this suit? (2) Is the defendant amenable to service of process within this district? (3) Was service of the summons and complaint made on a proper person? The relevant facts as they bear on these issues are as follows:

Plaintiff is a New York corporation, engaged in the business of buying and selling automobile parts. Defendant was a Michigan corporation with its principal place of business in Rochester, Michigan. Since the commencement of suit, defendant has been consolidated with several other corporations to form the Nu-Era Corporation, a Michigan corporation. Defendant is not qualified to do business in New York, conducted no manufacturing activities in New York, owned no real or personal property in New York, had no bank account and borrowed no money from sources inside New York, and kept no business or corporate records in New York. No resident of New York ever was an officer, director, or stockholder of defendant. No directors or stockholders meetings have ever been held in New York. Defendant has not filed any tax returns or paid any taxes in or for the State of New York. Defendant sold automotive products to domestic customers in the State of New York through an exclusive manufacturer’s representative located in New York. Similarly, export sales were handled by another exclusive representative, one Bernard Neidenberg, [370]*370who represented at least one other manufacturer. Defendant’s customers are solicited by these sales representatives. Orders are forwarded through the representatives or directly by the customer to defendant in Michigan. All orders are subject to approval and acceptance in Michigan, and shipments are made f. o. b. Michigan. Plaintiff and defendant have had business dealings since 1954, encompassing at least one hundred different transactions. Records submitted with the motion papers indicate that these dealings have been substantial.

Neidenberg acted as defendant’s sales representative. His compensation consisted of commissions on goods shipped to his territory, whether solicited by him or not. No social security, withholding taxes or disability benefits were withheld from payments to Neidenberg. No control was exercised over the time or manner in which Neidenberg conducted his business and he was not reimbursed for expenses. Neidenberg is not an officer, director, or shareholder of defendant. However, Neidenberg caused defendant to be listed in the New York telephone book at his address and caused a listing of defendant in the directory of his building. Defendant’s invoices sent to plaintiff contain the initials “B. N.” under the heading “Salesman.”

Venue

In cases under the antitrust laws where the defendant is a corporation, venue is determined by § 12 of the Clayton Act, 15 U.S.C.A. § 22, which provides as follows:

“Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.”

Defendant urges that “transacting business” is synonomous with the “doing business” test applied to determine whether a corporation is amenable to process. The “doing business” test, however, is one of jurisdiction, while “transacts business” is a measure of venue. The “doing business” decisions cited by defendant are thus not conclusive on the question of venue. See Naifeh v. Ronson Art Metal Works, Inc., D.C.W.D.Okl. 1953, 111 F.Supp. 491, 493. “From the beginning it has been held that the transacting business test can be met by fewer local contacts than the doing business test requires.” Note, 56 Colum.L.Rev. 394, 416 (1956); Abrams v. Bendix Home Appliances, Inc., D.C.S.D.N.Y. 1951, 96 F.Supp. 3, 5. In Eastman Kodak Co. of New York v. Southern Photo Materials Co., 1927, 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684, the Supreme Court gave “transacting business” a broader meaning than the concept of carrying on business denoted by “found” under the prior law. “[A] corporation is engaged in transacting business in a district * * * if in fact, in the ordinary and usual sense, it ‘transacts business’ therein of any substantial character.” 273 U.S. at page 373, 47 S.Ct. at page 403.

“In other words, for venue purposes, the Court sloughed off the highly technical distinctions theretofore glossed upon ‘found’ for filling that term with particularized meaning, or emptying it, under the translation of ‘carrying on business.’ In their stead it substituted the practical and broader business conception of engaging in any substantial business operations. * * * Refinements such as previously were made under the ‘mere solicitation’ and ‘solicitation plus’ criteria, * * were no longer determinative. The practical, everyday business or commercial concept of doing or carrying on business ‘of any substantial [371]*371character’ became the test of venue. United States v. Scophony Corp., 1948, 333 U.S. 795, 807, 68 S.Ct. 855, 861, 92 L.Ed. 1091.

Under the test as outlined, defendant transacted business in New York. “Shipment of goods to points within the district, coupled with solicitation of orders therein, activities which defendant concededly engaged in * * *, have been held sufficient to meet the ‘transacting business’ test of section 12. See Eastman Kodak Co. v. Southern Photo Materials Co., supra.” Gem Corrugated Box Corp. v. Mead Corp., D.C.S.D.N.Y. 1960, 189 F.Supp. 584, 586. And the correspondence, invoices and other records submitted by defendant certainly show that in the ordinary and practical commercial sense, the degree of business transacted was of a substantial character. Thus, venue is properly laid in the Southern District of New York, pursuant to § 12 of the Clayton Act.

Service of Process and In Personam Jurisdiction

When venue is properly chosen, the service of process is not subject to the conventional territorial limitations set forth in Rule 4, F.R.Civ.P., 28 U.S. C.A. Section 12 of the Clayton Act permits extraterritorial service of process upon a corporate defendant in any “district of which it is an inhabitant, or wherever it may be found.” “ [F] or purposes of liability to service the section merely carried forward the pre-existing law, so that in some situations service in a district would not be valid, even though venue were clearly established under § 12.” United States v. Scophony Corp., supra, 333 U.S.

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Bluebook (online)
28 F.R.D. 368, 5 Fed. R. Serv. 2d 8, 1961 U.S. Dist. LEXIS 5920, 1961 Trade Cas. (CCH) 70,034, Counsel Stack Legal Research, https://law.counselstack.com/opinion/raul-international-corp-v-nu-era-gear-corp-nysd-1961.