State of Illinois v. Harper & Row Publishers, Inc.

308 F. Supp. 1207, 1969 U.S. Dist. LEXIS 13113, 1970 Trade Cas. (CCH) 73,052
District Court, N.D. Illinois·Decided October 10, 1969·No. 67 C 1899·Published·Cited by 15 cases

Opinion

*1209 MEMORANDUM OPINION

DECKER, District Judge.

This is another chapter in the consolidated discovery and pretrial proceedings pending in this court pursuant to transfers made under 28 U.S.C. § 1407.

Presently before the court are the motions of six defendants in various actions to quash service of process and dismiss the actions for improper venue. Defendants maintain that they are not inhabitants of the forum districts, are not found there, and transact no business there within the meaning of § 12 of the Clayton Act, 15 U.S.C. § 22. That provision is directed to the place for venue and service in antitrust actions against corporations, and provides:

“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.”

Accordingly, if venue in the forum districts was proper, extraterritorial service upon defendants at their places of in-habitancy was permissible. 1

The term “transacts business” has been defined to mean “[t]he practical, everyday business or commercial concept of doing or carrying on business ‘of any substantial character’ * * United States v. Scophony Corporation, 333 U.S. 795, 807, 68 S.Ct. 855, 862, 92 L.Ed. 1091 (1948). As applied by the lower courts, the term “embraces elements of substantiality of business done, with continuity in character, regularity, contemporaneousness with time of service, and not looking toward cessation of business.” Commonwealth Edison Co. v. Federal Pacific Electric Co., 208 F.Supp. 936 (N.D.Ill.1962). Factors to be considered also include thé extent of business solicitation and promotion within the district, both in person and by mail or telephone. 2

Applying these tests to the evi-dentiary matter submitted herein, this court has concluded that movants Viking Press, Inc., 3 Thomas Y. Crowell Co., Inc., 4 William Morrow & Company, 5 and David McKay Company, Inc., 6 are transacting business in the relevant districts. Accordingly, their motions to dismiss are denied.

These defendants all make substantial sales to persons in the forum districts, 7 and have done so continuously for a number of years. Additionally, they each are represented by salesmen who visit the relevant states, and each sends catalogs and other promotional and advertising material into these states. “A continuous course of conduct which includes the shipment of goods and the *1210 solicitation of business does constitute transacting business.” School District of Philadelphia v. Kurtz Bros., supra, 240 F.Supp. at 363.

Viking Press has challenged venue in actions brought originally in courts in Arizona, Kansas, Wisconsin and Minnesota. Yet Viking admits by answers to interrogatories that its salesmen make periodic visits to these states, and its estimated sales for fiscal 1968 in each of the relevant states are as follows:

Arizona Kansas Wisconsin Minnesota
$28,225 $31,643 $57,300 $130,850

The affidavits and answers to interrogatories filed by defendant Crowell show significant sales in the forum states, amounting to $45,172 in Kansas in 1967 and $39,470 in Arizona in 1968, 8 In addition, Crowell is represented by a commission salesman who makes periodic visits to solicit sales in these states and by a “traveler” who promotes sales, although he himself takes no orders. Other promotional efforts in the form of catalogs and advertising in the forum states amounted to estimated expenditures of $3,770 in Kansas and $2,895 in Arizona in fiscal 1968.

As to defendant Morrow, its sales amounted to $14,926 in Kansas in 1967 and $24,000 in Arizona in 1968. It is represented in both states by a commission salesman who visits each approximately three times per year for a week at a time, and it has a salaried salesman who visits Kansas approximately six times each year. $200 per year is spent for catalogs and other promotional materials sent into each state.

Defendant McKay’s sales in Kansas totaled $8,665 in 1967. A salesman visits the state twice a year, as does a traveler. An estimated $200 was spent in 1968 to distribute over 1400 catalogs in the forum state.

Defendants point out that they are neither incorporated nor licensed to do business in the forum states, nor do they own real estate or maintain offices or telephones in these states. The absence of these particular business activities reflects only movants’ choices as to how to conduct their sales programs in these states, and is not dispositive of the issue in light of defendants’ admitted solicited sales. See School District of Philadelphia v. Harper & Row Publishers, Inc., 267 F.Supp. 1006 (E.D.Pa. 1967). 9

Applying the aforementioned tests of substantiality to the answers to interrogatories of movants Cosmo Book Distributing Co. 10 and DeWolfe and Fiske Co. 11 conclusively shows that these companies do not transact business in the relevant districts within the meaning of 15 U.S.C. § 22. Cosmo has neither solicited, sold, nor- purchased in Minnesota from 1959 to 1968. DeWolfe has similarly engaged in no promotional efforts in Minnesota, and has made no sales, its sole contact with the state being purchases from Minnesota sellers which did not exceed $1,000 in value until 1968. Although purchasing may, of course, eon- *1211 stitute transaction of business, 12 these insignificant sums in the absence of other contacts do not satisfy the substan-tiality test.

Plaintiffs maintain, however, that the general venue provisions of the Judicial Code supplement the Clayton Act venue statute and support jurisdiction here even if the tests of § 22 are not met. The provision relied on is 28 U.S.C. § 1391(b), which provides:

Free access — add to your briefcase to read the full text and ask questions with AI

State of Illinois v. Harper & Row Publishers, Inc., 308 F. Supp. 1207, 1969 U.S. Dist. LEXIS 13113, 1970 Trade Cas. (CCH) 73,052 (N.D. Ill. 1969).

308 F. Supp. 1207 (State of Illinois v. Harper & Row Publishers, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Buckeye Associates, Ltd. v. Fila Sports, Inc.
616 F. Supp. 1484 (D. Massachusetts, 1985)
Vest v. Waring
565 F. Supp. 674 (N.D. Georgia, 1983)
Fields v. Playboy Club of Lake Geneva, Inc.
250 N.W.2d 311 (Wisconsin Supreme Court, 1977)
In Re National Student Marketing Litigation
413 F. Supp. 1159 (District of Columbia, 1976)
In Re Chicken Antitrust Litigation
407 F. Supp. 1285 (N.D. Georgia, 1975)
Board of County Commissioners v. Wilshire Oil Co.
523 F.2d 125 (Tenth Circuit, 1975)
Kogan v. Longstreet
374 F. Supp. 47 (N.D. Illinois, 1974)
CCP CORPORATION v. Wynn Oil Company
354 F. Supp. 1275 (N.D. Illinois, 1973)
Maricopa County v. American Petrofina, Inc.
322 F. Supp. 467 (N.D. California, 1971)
ABC Great States, Inc. v. Globe Ticket Company
310 F. Supp. 739 (N.D. Illinois, 1970)