403 F.2d 949 (9th Cir. 1968), 22565, Pacific Car & Foundry Co. v. Pence

Docket Nº:22565.
Citation:403 F.2d 949
Party Name:PACIFIC CAR AND FOUNDRY COMPANY, Petitioner, v. Honorable Martin PENCE, United States District Judge, District of Hawaii, and L. C. O'Neil Trucks Pty. Limited, Respondents.
Case Date:November 04, 1968
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 949

403 F.2d 949 (9th Cir. 1968)



Honorable Martin PENCE, United States District Judge, District of Hawaii, and L. C. O'Neil Trucks Pty. Limited, Respondents.

No. 22565.

United States Court of Appeals, Ninth Circuit.

November 4, 1968

Page 950

Richard S. White (argued), of Helsell, Paul, Fetterman, Todd, Hokanson, Seattle, Wash., Chung, Vitousek, Chuck & Fujiyama, Honolulu, Hawaii, for petitioner.

Joseph L. Alioto (argued), Maxwell M. Blecher, San Francisco, Cal., Damon, Shigekane & Char, Vernon F.L. Char, Honolulu, Hawaii, Marquis Jackson, Sydney, Australia, for respondents.

Before BARNES, HAMLIN and MERRILL, Circuit Judges.

MERRILL, Circuit Judge:

Petitioner, Pacific Car and Foundry, seeks a writ of mandamus to compel respondent District Judge to dismiss or transfer an action brought against petitioner in the District Court for the District of Hawaii by L. C. O'Neil Trucks Pty. Ltd., an Australian corporation, which action alleges violation by petitioner of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2.

In that action petitioner, contending for lack of venue, moved that the action be dismissed or transferred under 28 U.S.C. § 1406(a). 1 The District Court found that petitioner 'transacts business' in Hawaii and concluded that the action properly was brought in Hawaii

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under § 12 of the Clayton Act, 15 U.S.C. § 22. 2 Accordingly, petitioner's motion was denied.

In the alternative petitioner moved, under 28 U.S.C. § 1404(a), 3 for change of venue 'for the convenience of parties and witnesses, in the interest of justice.' This motion the District Court also denied. Its opinion appears sub nom. L. C. O'Neil Trucks, Pty. Ltd. v. Pacific Car and Foundry Co., 278 F.Supp. 839 (D. Hawaii 1967).

These proceedings followed.

The Background

Petitioner, a Washington corporation, manufactures two lines of trucks, Kenworth and Peterbilt, through separate divisions of the company. The Kenworth division has factories in Seattle, Washington, which is also petitioner's home office. The Peterbilt division has a factory in Newark, California.

L. C. O'Neil Trucks, Pty., Ltd., the plaintiff in the Hawaiian action, was organized in 1963 under the laws of New South Wales for the purpose of serving as Australian distributor of petitioner's Peterbilt trucks. In 1965 it was advised by petitioner that Peterbilt trucks would no longer be supplied to Australia and was appointed distributor of petitioner's Kenworth trucks. In 1967 its franchises were terminated by petitioner. In its action brought in Hawaii it charges that the termination resulted from a conspiracy (to which petitioner was party) contrary to § 2 of the Sherman Act to monopolize the exportation of heavy duty trucks from the United States to Australia and to eliminate O'Neil as an importer. It seeks damages in the sum of $8,250,000.

Propriety of Review by Mandamus

This court, 4 in line with the rule in other circuits, 5 has held that orders respecting venue entered under § 1404(a) and § 1406(a) are interlocutory in nature and are not appealable prior to final judgment.

This court has also held that orders entered under §1406(a) are not reviewable in mandamus, at least in absence of extraordinary circumstances. Gulf Research & Development Co. v. Harrison, 185 F.2d 457 (9th Cir. 1950).

This court, 6 in line with the rule in most other circuits, 7 will, however, review

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on mandamus clearly erroneous orders entered under § 1404(a). Accordingly we direct our attention to the order of the District Court denying motion for change of venue under this section.

It is argued that this practice of review by mandamus should be re-examined in light of the Supreme Court's sharp criticism of undue resort to mandamus in Will v. United States, 389 U.S. 90, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967).

That case is readily distinguishable. As stressed by the Supreme Court, Will involved interlocutory review on behalf of the United States in a criminal case. Issuance of the writ there not only violated the policy against piecemeal appeal; it was totally contrary to the established policy that appeals by the Government are not favored in criminal cases, Carroll v. United States, 354 U.S. 394, 77 S.Ct. 1332, 1 L.Ed.2d 1442 (1957), and it was inconsistent with the defendant's right to a speedy resolution of the charges against him. DiBella v. United States, 369 U.S. 121, 82 S.Ct. 654, 7 L.Ed.2d 614 (1962).

In contrast the petition before us is not truly an instance of piecemeal appeal. A decision denying change of venue is complete and final in itself. It is not a step toward final judgment on the merits which will merge in such final judgment. Instead, it is collateral to and separable from the rights asserted in the action. Venue provisions deal with right too important to be denied review. Yet error in denying change of venue cannot be effectively remedied on appeal from final judgment. 8 The purpose of the rule is to avoid the disruption, expense, and inconvenience parties and witnesses must suffer by having the trial in an improper forum. To require litigants to await final judgment for relief serves to defeat the very purpose of the venue rule by requiring them to submit to the disadvantages from which the rule is designed to relieve them. Once trial has been completed damages cannot be collected for the extra expense suffered.

This does not mean that review on mandamus is available in all instances since the factors favoring immediate review may be present in varying degrees. While there can be no doubt that there exists the 'naked power' to issue the writ, 9 the power is to be exercised only in the 'sound discretion of the court.' 10

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The exercise of that 'sound discretion' requires the weighing of numerous factors, including the possible disruption of orderly trial processes as opposed by the hardship and loss of rights that may result from delay of review, 11 and the saving of an expensive and protracted trial that leads nowhere but to a complete retrial. 12

Judged by these standards we conclude that mandamus is proper here. It is apparent that the trial will be a long and protracted one, with voluminous documentary evidence and a host of witnesses. The irremediable hardship that might result is substantially in excess of the usual inconvenience of an unnecessary trial. The orders here complained of were issued well before trial and there will be no wasteful repetition of judicial effort in the event of transfer.

The Merits

In support of its motion for change of venue under § 1404(a) petitioner made a strong showing of inconvenience. Many witnesses, including several members of petitioner's corporate staff, would have to travel from the mainland to Hawaii in order to give testimony with consequent disruption of the conduct of petitioner's operation. Documents generally demanded by O'Neil in pretrial motion for production, the originals or duplicates of which would have to be shipped to Hawaii, would include a substantial portion of up to one thousand file drawers of records.

O'Neil did not bother to dispute this showing except to suggest that it was grossly exaggerated and that any inconvenience could be eliminated by resort to depositions. Further it made no showing worth mentioning that its own convenience would be served by its choice of forum. Instead, it relied on its right as plaintiff to select its forum.

There can be no doubt that in antitrust cases the plaintiff is given a wide choice of forum. This is made clear by the language of § 12 of the Clayton Act (footnote 2, supra), and the construction judicially placed on the words 'transacts business.' That language is given a broader meaning than has traditionally been given the 'engaging in business' articulation of presence within a state. The words are to be taken in the 'ordinary and usual sense' in which they may be used in the business world. Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927). They are intended to substitute 'practical business conceptions for the previous hair-splitting legal technicalities.' United States v. Scophony Corp., 333 U.S. 795, 808, 68 S.Ct. 855, 862, 92 L.Ed. 1091 (1948). Courts of appeals have refined the concept. A corporation can transact business without ever entering a state; without having salesmen or agents present there. Artful arrangements such as the geography of minute incidents of contracting (e.g., designation of place of title transfer) do not alter the substance of relationships. If the corporation in a practical business sense has business within the state it may be said to be in business there. 13

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The reason for this broad interpretation is relevant here. The legislative idea was that when a plaintiff has had business transactions with the defendant through which the defendant has injured him, the plaintiff should not be forced to follow the defendant into the defendant's home district. United States v. Scophony Corp., supra. The purpose of the Act is to allow the plaintiff, who has been hurt in his dealings with the defendant, to bring suit where the 'defendant had committed violations of the Act and inflicted the forbidden injuries.' United States v. National City Lines, 334 U.S. 573, 583, 68 S.Ct. 1169, 1175, 92 L.Ed. 1584 (1948). This purpose was recognized by this court in Eastland Construction Co. v. Keasbey & Mattison Co., 358 F.2d 777 (9th Cir. 1966).

On the other hand the Supreme Court has noted that Congress was not willing to extend the plaintiff's right to choice of venue beyond reasonable limits. In United States v. National City Lines, supra, it notes that bills providing for unlimited choice were rejected by Congress. It states:

'Congress therefore was not indifferent to possibilities of abuse involved in the various proposals for change. Exactly the opposite...

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