Black v. Acme Markets, Inc.

• Citation: 564 F.2d 681
• Decision Date: 09 December 1977
• Docket Number: No. 76-3040,76-3040
• Parties: 1977-2 Trade Cases 61,765 A. L. BLACK et al., Plaintiffs-Appellants, v. ACME MARKETS, INC., et al., Defendants, First National Stores, Inc., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 681

564 F.2d 681

1977-2 Trade Cases 61,765

A. L. BLACK et al., Plaintiffs-Appellants, v. ACME MARKETS, INC., et al., Defendants, First National Stores, Inc., Defendant-Appellee.

No. 76-3040

United States Court of Appeals,

Fifth Circuit.

Dec. 9, 1977.

Richard E. Green, Hereford, Tex., Joseph M. Alioto, San Francisco, Cal., for plaintiffs-appellants.

Charles I. Thompson, Jr., James D. Coleman, Philadelphia, Pa., A. W. Sorelle, III, Harlow Sprouse, Amarillo, Tex., for First Nat. Stores.

Chester Bedell, John A. DeVault, III, Charles P. Pillans, III, Jacksonville, Fla., for Winn-Dixie Stores, Inc.

Robert H. Smith, Amarillo, Tex., Morgan, Lewis & Bockius, Philadelphia, Pa., for Acme Markets, Inc.

Fred H. Bartlit, Jr., Chicago, Ill., for National Provisioner, Inc.

Jess B. Hawley, Boise, Idaho, for Albertson's Inc.

Gerald S. Cook, Detroit, Mich., for Allied Super Markets, Inc.

Alf R. Brandin, San Francisco, Cal., for Arden Mayfair.

William D. Baker, Phoenix, Ariz., for Circle K Corp.

George B. Haley, Atlanta, Ga., for Colonial Stores.

Appeal from the United States District Court for the Northern District of Texas.

Before TUTTLE, GOLDBERG and CLARK, Circuit Judges.

GOLDBERG, Circuit Judge:

This is an appeal from an order granting defendant's motion to dismiss for lack of personal jurisdiction and improper venue. The defendant, First National Stores, is one of a large group of supermarket chains whom the plaintiffs, Texas producers and feeders of cattle, accuse of conspiring together to depress the price of beef in violation of the anti-trust laws. ¹ The defendant is a Massachusetts corporation with its headquarters in Somerville. Process was served by substituted service upon the Secretary of State of the State of Texas pursuant to the Texas long-arm statute. Tex.Rev.Civ.Stat.Ann. art. 2031b (Vernon) (1964).

The Secretary of State sent the complaint and summons by certified mail to the defendant in Massachusetts. First National moved to dismiss the complaint for improper venue and lack of personal jurisdiction and to quash service of process. An affidavit, the factual averments of which were not controverted, was submitted in support of the motion to dismiss. Based upon the affidavit and the complaint, the district court ruled that venue in the Northern District of Texas was improper either under the special venue provisions of the antitrust laws, 15 U.S.C. § 15; 15 U.S.C. § 22, or the general venue statute, 28 U.S.C. § 1391(b).

The court also concluded that service pursuant to the Texas long-arm statute was insufficient and did not confer personal jurisdiction over the defendant because First National did not have the requisite minimum contacts with Texas.

I. FACTS

The affidavit showed that First National does not maintain an office, warehouse or place of business in Texas; that none of its sixteen thousand employees reside in Texas; that it has not appointed an agent for receipt of process in Texas; that it solicits no business and makes no sales in Texas; that it purchases no beef products of any kind from any person in Texas; and that it does not contract with any person located in Texas. In 1975, however, First National purchased aluminum foil from Arrow Industries, Carrollton, Texas, in an amount valued at.$374,698 and salad oil, salad dressing and shortening in an amount valued at $1,069,444 from Anderson Clayton Foods, Inc., headquartered in Dallas, Texas. The salad dressing was purchased through an independent broker located in Massachusetts; the salad oil and shortening were ordered directly. The foil purchases were made by telephone or mail contact with the Texas producer. Additionally, First National purchased $64,529 worth of turkeys from Armour Food Co., Lampassas, Texas. As a result of this purchase and temporary storage of the turkeys in a Dallas warehouse, First National paid $364.55 and $1,929.41 taxes to the county and city of Dallas, respectively. ² The complaint alleged that the defendants had conspired together to depress beef prices and that this conspiracy had injured the plaintiffs' businesses in Texas. ³

II. PERSONAL JURISDICTION

The parties have framed the issue of personal jurisdiction in terms of the prerequisites to jurisdiction over an out-of-state corporation under the Texas long-arm statute. Tex.Rev.Civ.Stat.Ann. art. 2031b (Vernon 1964). ⁴ Both sides, however, partially Section 12 of the Clayton Act, 15 U.S.C. § 22, permits service of process in anti-trust actions in any district of which the defendant corporation is an inhabitant, or wherever it may be found. In the typical case, the defendant might be served with process by a U.S. Marshal or by registered mail at its corporate headquarters, see Fed.R.Civ.P. 4(c), 4(e), 4(f); see also Hilgeman v. Nat'l Ins. Co. of America, 547 F.2d 298, 301 (5th Cir. 1977); Oxford First Corp. v. PNC Liquidating Corp., 372 F.Supp. 191, 192 (E.D.Pa.1974); Kramer v. Scientific Control Corp., 365 F.Supp. 780, 787 (E.D.Pa.1973); Emerson v. Falcon Mfg. Co., 333 F.Supp. 888 (S.D.Tex.1971); cf. Chemical Specialties Sales Corp.-Indus. Div. v. Basic Inc., 296 F.Supp. 1106, 1109 (D.Conn.1968); Raul Int'l Corp. v. Nu-Era Gear Corp., 28 F.R.D. 368, 371 (S.D.N.Y.1961). In such cases, the requirements of state long-arm statutes are simply irrelevant to the in personam jurisdiction of a federal court.

misconceive the question of personal jurisdiction in this case. When a federal statute provides for nationwide service of process, the court has jurisdiction over the person so long as the manner of service is proper and constitutional limits on extra-territorial service are respected. See, e. g., Hilgeman v. Nat'l Ins. Co. of America, 547 F.2d 298 (5th Cir. 1977); Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326, 1339-44 (2d Cir. 1972).

In this case, brought in the Northern District of Texas, service of process was made in the manner prescribed by the Texas long-arm statute. Service pursuant to a state long-arm statute is clearly permissible, even when the cause of action is one under the federal anti-trust laws; purely federal procedures for service have no monopoly in anti-trust actions. Bd. of City Comm'rs v. Wilshire Oil Co. of Texas, 523 F.2d 125 (10th Cir. 1975); Lone Star Package Car Co. v. Baltimore and Ohio Ry. Co., 212 F.2d 147, 152 (5th Cir. 1954); Hitt v. Nissan Motor Co., 399 F.Supp. 838, 846-54 (S.D.Fla.1975); Chemical Specialties Sales Corp.-Indus. Div. v. Basic Inc., 296 F.Supp. 1106, 1109 (D.Conn.1968). Just as there are many roads to Rome, there is more than one avenue to personal jurisdiction in anti-trust cases. The route travelled here, from Section 12 of the Clayton Act to the provisions of the state long-arm, is, however, a tortuous one through Rule 4 of the Federal Rules of Civil Procedure.

The first signpost along the road is Rule 4(e). Rule 4(e) provides:

(e) Same: Service Upon Party Not Inhabitant of or Found Within State. Whenever a statute of the United States or an order of court thereunder provides for service of a summons . . . upon a party not an inhabitant of or found within the state in which the district court is held, service may be made under the circumstances and in the manner prescribed by the statute or order, or, if there is no provision therein prescribing the manner of service, in a manner stated in this rule. . . .

Fed.R.Civ.P. 4(e).

Section 12 of the Clayton Act authorizes extraterritorial service but does not prescribe the mode of service. The final quoted clause of Rule 4(e), prescribing service "in a manner stated in this rule," is therefore, applicable to actions under the anti-trust laws. One manner of service stated in Rule 4 is service in the manner prescribed by Rule 4(d)(7), the next of our statutory signposts.

Rule 4(d)(7) of the Federal Rules of Civil Procedure specifically permits service "in the manner prescribed by the law of the state in which the district court is held for the service of summons or other like process upon any such defendant in an action brought in the courts of general jurisdiction of that state." Fed.R.Civ.P. 4(d)(7). The federal rules empower the states to furnish procedures for federal service of process. The fact that the federal government uses state procedures in the service of process illustrates the accommodation of the reciprocal operations of the states and the federal government so important to the vitality of federalism. It is undisputed that service in this case was effected in the manner prescribed by Texas law for actions against nonresident corporations. On a plausible reading of Rule 4, then, this is all that is necessary. ⁵

It must be admitted, however, that in anti-trust and securities cases, in which service has been made pursuant to state law, some courts have analyzed the provisions of the state long-arm statute in order to determine that the state procedure has been employed in circumstances in which a state court would employ that procedure. Hilgeman v. Nat'l Ins. Co. of America, 547 F.2d 298 (5th Cir. 1977); Hitt v. Nissan Motor Co., 399 F.Supp. 838, 846-54 (S.D.Fla.1975); Chemical Specialties Sales Corp.-Indus. Div. v. Basic Inc., 296 F.Supp. 1106, 1109-10 (D.Conn.1968). In Hilgeman we held that substituted service pursuant to the Alabama long-arm statute for actions arising out of policies of insurance was not proper for claims based on the federal securities laws. Id. at 300-01. However, we specifically rejected any implication that "a state's provision for personal jurisdiction over insurance companies can never be used where federal securities claims are asserted." The decision was based "solely on our interpretation of the Alabama statute." Id. at 301 n. 5.

Even if Hilgeman were taken to stand for the broad proposition that a federal plaintiff with a federal claim who employs a state procedure is bound by all the terms and conditions of the state long-arm statute, the district court erred in dismissing...