Paper Systems Inc. v. Mitsubishi Corp.

• Decision Date: 19 June 1997
• Docket Number: Civil Action No. 96-C-0959.
• Citation: 967 F.Supp. 364
• Parties: PAPER SYSTEMS INCORPORATED, Plaintiff, v. MITSUBISHI CORPORATION; Mitsubishi International Corporation; Mitsubishi Paper Mills Ltd.; Elof Hansson Paper & Board, Inc.; Kanzaki Specialty Papers; New Oji Paper Co., Ltd.; and Nippon Paper Industries, Co., Ltd.; Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

967 F.Supp. 364

PAPER SYSTEMS INCORPORATED, Plaintiff, v. MITSUBISHI CORPORATION; Mitsubishi International Corporation; Mitsubishi Paper Mills Ltd.; Elof Hansson Paper & Board, Inc.; Kanzaki Specialty Papers; New Oji Paper Co., Ltd.; and Nippon Paper Industries, Co., Ltd.; Defendants.

Civil Action No. 96-C-0959.

United States District Court, E.D. Wisconsin.

June 19, 1997.

Beth J. Kushner, Von Briesen, Purtell & Roper S.C., Milwaukee, WI, Michael D. Hausfeld, Daniel A. Small, Sharon A. Snyder, Victoria C. Arthaud, Cohen, Milstein, Hausfeld & Toll, P.L.L.C., Washington, DC, Howard J. Sedran, Donald E. Haviland, Jr., Levin Fishbein Sedran & Berman, Philadelphia, PA, for Plaintiff.

Howard Pollack, James G. Schweitzer, Godfrey & Kahn, Milwaukee, WI, Richard E. Donovan, Mark S. Gregory, Kelley Drye & Warren L.L.P., New York City, for Defendants Kanzaki & Oji Paper.

Frank W. Doster, Arnstein & Lehr, Milwaukee, WI, Stanley M. Lipnick, David B. Goodman, George P. Apostolides, Arnstein & Lehr, Chicago, IL, for Defendant Elof Hansson.

Robert H. Friebert, Brian R. Smigelski, Friebert, Finerty & St. John, Milwaukee, WI, Jerold S. Solovy, Jenner & Block, Chicago, IL, for Defendant Mitsubishi Paper Mills.

Thomas M. Pyper, Whyte Hirschboeck Dudek, S.C., Madison, WI, for Defendants Mitsubishi Corp. and Int'l Corp.

David J. Cannon, Michael Best & Friedrich, Milwaukee, WI, Richard G. Parker, O'Melveny & Myers L.L.P., Washington, DC, for Defendant Nippon Cannon.

DECISION AND ORDER DENYING MOTIONS TO DISMISS

REYNOLDS, District Judge.

Paper Systems Incorporated ("Paper Systems") is suing the defendants for violations of section one of the Sherman Act, 15 U.S.C. § 1. Allegedly, the defendants conspired to fix the price of thermal fax paper. Two of the defendants Nippon Paper Industries, Co., Ltd. ("Nippon"), and New Oji Paper Company Ltd., ("Oji"), have moved to dismiss the complaint for lack of personal jurisdiction; both are alien corporations. See Fed. R.Civ.P. 12(b)(1). In the alternative, Oji asks the court to transfer the case to the Western District of Washington. The court denies the motions to dismiss and the motion to transfer. This court has jurisdiction over Nippon and Oji because Paper Systems can rely on 15 U.S.C. § 22 for service of process and because Nippon and Oji have substantial contacts with the United States. Transferring the case is inappropriate because Oji has not shown that the Western District of Washington is a more convenient forum than the Eastern District of Wisconsin.

As a preliminary matter, Paper Systems moved to file a sur-reply brief. Antitrust actions are often complicated with all parties wishing to have the last word. A sur-reply leads to a sur-sur-reply. The amount of paper filed in an antitrust action is large enough without extra briefs. The court denies the motion to file a sur-reply brief.

The facts for the dismissal motion are simple. Paper Systems admits that it cannot satisfy any of the Wisconsin Long Arm Statutes and that neither of the defendants have substantial contacts with the State of Wisconsin.¹ In the District Court of Massachusetts, Nippon was a defendant in a criminal antitrust action involving a thermal fax price-fixing scheme. After Nippon moved to dismiss for lack of personal jurisdiction, the District Court of Massachusetts denied the motion, finding that service was proper under Fed.R.Crim.P. 4 and that Nippon has sufficient contacts with the United States of America to satisfy any due process concerns. Oji has not argued that it lacks substantial contacts with the United States of America.

As a preliminary to any action, a court must have subject matter jurisdiction (which no one disputes) and personal jurisdiction over the parties. In addition, the district in which the case is filed must be the proper venue for the action. A court has personal jurisdiction over a defendant if the plaintiff has properly served the defendant and if the defendant has sufficient contacts with the forum to satisfy procedural due process protections. Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276, 279, 283 (7th Cir.1990). Rule 4 of the Federal Rules of Civil Procedure defines when service of process establishes personal jurisdiction over a defendant. If the plaintiff relies on a federal service of process statute, service establishes jurisdiction. Fed.R.Civ.P. 4(k)(1)(D). Many federal statutes, however, lack a service of process provision; in those cases, service establishes jurisdiction over the defendant if the defendant "could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located." Fed.R.Civ.P. 4(k)(1)(A).

I. Service of Process

Under 15 U.S.C. § 22:

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.

(emphasis added). Although Paper Systems relies on 15 U.S.C. § 22 for establishing jurisdiction over the defendants, Nippon and Oji argue that Paper Systems can use 15 U.S.C. § 22's service of process clause only if Paper Systems has satisfied § 22's venue clause. Because Paper Systems can not satisfy § 22's venue clause, and because a Wisconsin court would not have jurisdiction over Nippon or Oji, Nippon and Oji conclude that this court would lack jurisdiction over them. The statute's language is ambiguous. Neither the legislative history nor the case law is dispositive.

Nevertheless, the answer is clear. When, as here, the underlying substantive law suggests worldwide service and when, as here, the law provides for worldwide service of process and when, as here, nothing in the legislative history implies reading a venue provision as a jurisdictional limitation, the worldwide service of process clause should stand on its own, independent from the venue clause. Paper Systems may rely on § 22's service of process provision without satisfying § 22's venue provisions. Instead, Paper Systems may rely on 28 U.S.C. § 1391(d) for venue, which states "an alien may be sued in any district."

The problem turns on the phrase "in such cases." In Paper Systems' view, "in such cases" refers to "any suit, action, or proceeding under the antitrust laws against a corporation." As a result, an antitrust plaintiff can always use § 22's service of process provision. In Nippon and Oji's view, "in such cases" refers to antitrust cases against corporations brought in any district that the corporation inhabits, where it is found, or in which it transacts business; only antitrust plaintiffs satisfying the venue provision can use the service of process provision.

When interpreting a statute, the court looks first to the language itself. Contrary to Nippon and Oji's view, "in such cases" is either ambiguous or refers to cases brought under the antitrust laws. "Such" refers to a noun and the words, phrases, and clauses modifying that noun; it does not refer to an independent clause. Bucyrus-Erie, 550 F.Supp. at 1042 n. 7 (citing Webster's Third International Dictionary (unabr. ed.1963); see also Go-Video v. Akai Elec. Co. 885 F.2d 1406, 1412 (9th Cir.1989), (citing Bucyrus-Erie); see also H.W. Fowler, A Dictionary of Modern English Usage 602 (2nd ed.1965)). In other words, "such" refers to "Any suit, action, or proceeding under the antitrust laws against a corporation" (nouns modified by two prepositional phrases).

Although strict application of the rules of grammar refutes Oji and Nippon's plain meaning argument,² it does not resolve the issue in Paper Systems's favor. Any time a court must refer to obscure rules of grammar, the statute has no plain meaning. Judges — not grammarians — interpret the law, and slavish devotion to grammar may hide the real reason for the decision.

Neither the legislative history nor Supreme Court decisions suggest that § 22's venue clause is supposed to serve a second purpose: a limitation on personal jurisdiction. The legislative history is silent. Go-Video, Inc., 885 F.2d at 1410-11. In interpreting similar language in different statutes, the Supreme Court has refused to read a jurisdictional requirement into a venue statute. In Panama R. Co. v. Johnson, 264 U.S. 375, 44 S.Ct. 391, 68 L.Ed. 748 (1924), the Court interpreted 46 U.S.C.App. § 688, which provides "Jurisdiction in such actions [under the Jones Act] shall be under the court of the district in which the defendant employer resides or in which his principal office is located." Despite the reference to jurisdiction, the Court treated it as a venue statute with no implication for jurisdiction. Id. at 378.

Courts have split in interpreting this statute with more recent cases siding with the plaintiff. Compare Goldlawr, Inc. v. Heiman, 288 F.2d 579 (2nd Cir.1961) (must satisfy venue clause to use service clause), rev'd on other grounds, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962); Frederick Cinema Corp. v. Interstate Theatres Corp., 413 F.Supp. 840 (D.D.C.1976) and cases cited in footnote 2, supra with Go-Video, Inc. v. Akai Elec. Co., 885 F.2d 1406 (9th Cir.1989) (service and venue clauses are independent of one another); Icon Indus. Controls Corp. v. Cimetrix, Inc., 921 F.Supp. 375 (W.D.La. 1996); Miller Pipeline Corp. v. British Gas plc, 901 F.Supp. 1416 (S.D.Ind.1995) and General Elec. Co. v. Bucyrus-Erie Co., 550 F.Supp. 1037 (S.D.N.Y.1982); but see Michelson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 709 F.Supp. 1279 (S.D.N.Y.1989) (relying on Goldlawr despite showing sympathy with Bucyrus-Erie). Nippon and Oji argue that the majority of courts who addressed the issue have decided it in their favor. Most of the cases, however, give no explanation for their position, or they cite other cases that also...