Adams Dairy Company v. National Dairy Products Corp.

• Decision Date: 24 October 1968
• Docket Number: No. 11994-1,12909-1,12028-1,12588-1,16933-1,14916-1,15386-1,15032-1,12910-1,12771-1,15037-1,16939-1 and 16960-1.,11994-1
• Citation: 293 F. Supp. 1135
• Parties: ADAMS DAIRY COMPANY et al., Plaintiffs, v. NATIONAL DAIRY PRODUCTS CORPORATION et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

293 F. Supp. 1135

ADAMS DAIRY COMPANY et al., Plaintiffs, v. NATIONAL DAIRY PRODUCTS CORPORATION et al., Defendants.

Nos. 11994-1, 12028-1, 12588-1, 12771-1, 12909-1, 12910-1, 14916-1, 15032-1, 15037-1, 15386-1, 16933-1, 16939-1 and 16960-1.

United States District Court W. D. Missouri, W. D.

October 24, 1968.

COPYRIGHT MATERIAL OMITTED

Harry P. Thomson, Jr., Robert R. Raymond and George Leonard, William A. Collet, Kansas City, Mo., for Adams Dairy Company and others.

John R. Cleary, Kansas City, Mo., for Juanita Duggins and others.

William H. Sanders and William W. LaRue, Kansas City, Mo., for Frank Bott, and others.

James Wheeler, Keytesville, Mo., and Duke Ponick, Jr., Kansas City, Mo., for Leroy Arnsperger and Helen Arnsperger.

John C. Dods, Kansas City, Mo., for Freddy Powell Meyer.

Martin J. Purcell, James C. Mordy, John E. Besser, Kansas City, Mo., Richard W. McLaren, David L. Aufderstrasse, Chicago, Ill., for National Dairy Products Corp.,

Joseph J. Kelly, Jr., Howard F. Sachs, Kansas City, Mo., Joseph A. Greaves, Chicago, Ill., E. Clark Davis, New York City, for Borden, Inc.

Roy P. Swanson, John C. Thurlo, John J. Kitchin, Kansas City, Mo., William G. Wald, Omaha, Neb., Richard Whiting, Washington, D. C., for Fairmont Foods Co. and Country Club Dairy Co.

Robert D. Sandifer, Kansas City, Mo., John P. Stevens, Chicago, Ill., for Meyer Sanitary Milk Co.

Thomas E. Deacy, Jr., and John H. Ross III, Kansas City, Mo., for Beatrice Foods Co.

Charles F. Lamkin, Jr., Kansas City, Mo., appearing specially on behalf of Foremost—McKesson, Inc. successor to Foremost Dairies, Inc. and Foremost Food Chemical Co.

MEMORANDUM AND ORDER DENYING DEFENDANT WISE'S MOTIONS TO DISMISS OR TO QUASH SERVICE OF PROCESS

JOHN W. OLIVER, District Judge.

These cases pend on the motions of defendant Raymond J. Wise to dismiss, or, in the alternative, to quash service of process on the alleged grounds that (1) this Court lacks jurisdiction over the person of the defendant, (2) that no applicable statute or rule authorizes extraterritorial service upon him in Florida, and (3) under Article I, § 13 of the Constitution of Missouri, V.A.M.S.¹ Sections 506.500 and 506.510, RSMo, may not be construed to have retrospective operation.

All papers filed in United States of America v. National Dairy Products Corp. and Raymond J. Wise, Criminal Action No. 20542, (W.D.Mo.1961) 196 F.Supp. 155, reversed sub nom. United States v. Wise, 370 U.S. 405, 82 S.Ct. 1354, 8 L.Ed.2d 590 (1962), reversed sub nom. United States v. National Dairy Products Corp., 372 U.S. 29, 83 S.Ct. 594, 9 L.Ed.2d 561 (1963); United States v. National Dairy Products Corp., (W.D. Mo.1964) 231 F.Supp. 663 (motions for judgment n. o. v. and new trial), aff'd. (8th Cir. 1965) 350 F.2d 321, remanded to the district court 384 U.S. 883, 86 S.Ct. 1913, 16 L.Ed.2d 995 (1966), on remand, (W.D.Mo.1967) 262 F.Supp. 447, modified (8th Cir. 1967) 384 F.2d 457, cert. den. 390 U.S. 957, 88 S.Ct. 1032, 19 L.Ed.2d 1151 (1968), are incorporated in defendant's motion by reference. The cases in which defendant Wise's present motions pend are all private treble damage antitrust actions that follow in the wake of the criminal conviction in Criminal Action No. 20542.

Service was admittedly obtained pursuant to the applicable portions of Rule 4 of the Federal Rules of Civil Procedure,² and Sections 506.500,³ and 506.510, RSMo, as enacted in 1967.⁴ No question is raised concerning the facts stated in defendant Wise's supporting affidavit that he is now and has for more than eight years been a resident of Daytona Beach, Florida; that he has never been an inhabitant or resident of Missouri; that he retired from employment by National Dairy as of December 31, 1959, and that since that date he has not been engaged in any aspect of the dairy business nor engaged in any other business activity or transacted any business of any kind in the State of Missouri. There likewise cannot be any dispute about defendant Wise's presence in Missouri prior to that time at the places reflected in the proceedings in the criminal case which are incorporated by reference in defendant Wise's pending motions.⁵

I

We examine first defendant Wise's contentions concerning venue. He quotes Section 4 of the Clayton Act, 15 United States Code § 15,⁶ and contends that a federal treble damage antitrust action against an individual defendant can only be maintained in a district in which the individual defendant "resides," "is found," or "has an agent." Although Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed. 2d 786 (1957), is not cited, defendant argues that "because of the specificity of the Clayton Act venue provisions as to individuals, the general venue statute can have no application."

It is at least arguable that venue over defendant Wise could be said to be present under Section 4 of the Clayton Act alone. The Court of Appeals for the Eighth Circuit is committed to the general proposition that venue requirements are to be measured at the time the cause of action arose rather than at the time the complaint is filed. See Farmers Elevator Mut. Ins. Co. v. Carl J. Austad & Sons, Inc., (8th Cir. 1965) 343 F.2d 7 at 12, and Great American Ins. Co. v. Louis Lesser Enterprises, Inc., (8th Cir. 1965) 353 F.2d 997 at 1001.

The rationale of the Eighth Circuit's rule was applied to the federal antitrust venue question presented to the Ninth Circuit in Eastland Construction Co. v. Keasbey and Mattison Co., (9th Cir. 1966) 358 F.2d 777 at 780. Judge Browning did so under the command of cases such as Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927); United States v. Scophony Corp., 333 U.S. 795, 68 S.Ct. 855, 92 L.Ed. 1091 (1948); and United States v. National City Lines, Inc., 334 U.S. 573, 68 S.Ct. 1169, 92 L.Ed. 1584 (1948), which consistently place a broad construction on Congressional legislation designed to provide broader and more effective relief, both substantively and procedurally, for persons injured by violations of its antitrust policy. Appropriate projection of that theory supports the argument that defendant Wise could be said to be "found" in the Western District of Missouri at the time plaintiffs' causes of action arose, within the meaning of Section 4 of the Clayton Act.

Decision need not be based on that argument because Congress has made recent and quite fundamental amendments to the general venue statutes and because the Supreme Court recently confined Fourco Glass Co. to its historically significant juridical facts in Pure Oil Co. v. Suarez, 384 U.S. 202, 86 S.Ct. 1394, 16 L.Ed.2d 474 (1966).

There can be no doubt that the civil antitrust actions here involved were filed in the judicial district "in which the claim arose," within the meaning of the 1966 amendment to Section 1391(b) of Title 28, United States Code. Nor can there be any doubt that "Section 1391(b) is the general venue statute governing transitory causes of action in the federal courts where jurisdiction does not depend wholly on diversity of citizenship." Denver & R. G. W. R. Co. v. Brotherhood of R.R. Trainmen, 387 U.S. 556, at 558, 87 S.Ct. 1746, at 1747, 18 L.Ed.2d 954 (1967). That case definitely determined that the amending Act of November 2, 1966 must be applied retrospectively. In that regard it was stated that "the case must be considered in light of the present form of that section, § 1391(b) that is, as amended by the Act of November 2, 1966, which provides for venue not only at the place of a defendant's residence but also in the district where the claim arose." The Supreme Court reasoned that:

This amendment does not change the substantive law applicable to this lawsuit. It is wholly procedural. Absent some contrary indications by the Congress and absent any procedural prejudice to either party, the 1966 amendment to § 1391 is applicable to this suit. Citing cases. As this Court said in applying 28 U.S.C. § 1404(a) to pending actions, "No one has a vested right in any given mode of procedure". Ex parte Collett, 337 U.S. 55 at 71, 69 S.Ct. 944, 93 L.Ed. 1207. 387 U.S. at 563, 87 S.Ct. at 1750.

Before Fourco Glass Co. was decided in 1957 little doubt was entertained but that "the venue provisions of the antitrust laws were enacted to give anti-trust plaintiffs special venue privileges in addition to those granted by general venue statutes," Auburn Capitol Theatre Corp. v. Schine Chain Theatres, (S.D. N.Y.1949) 83 F.Supp. 872. That case expressly held that the special antitrust venue sections "were intended to facilitate the prosecution of anti-trust actions, not to replace or make unavailable general provisions" and that "anti-trust plaintiffs are not to be deprived of the benefits of these general venue provisions." Id. at 874.

Antitrust cases subsequent to the Supreme Court's 1965 Pure Oil Co. decision establish that principles stated in Auburn Capitol Theatre Corp. were never properly affected by Fourco Glass Co.⁷ State of New York v. Morton Salt Co., (E.D.Pa.1967) 266 F.Supp. 570, collects the pre-Fourco Glass Co. cases which held the general venue statutes applicable to antitrust actions and stated that the clear implication of Pure Oil Co. was to resurrect all those antitrust venue decisions "which supposedly were upset by Fourco."⁸ In School District of Philadelphia v. Harper & Row Publishers, Inc., (E.D.Pa.1967) 267 F.Supp. 1006, Judge Kraft noted that his colleague, Judge Joseph S. Lord, III, had held in Morton Salt that "the general venue statutes are applicable to antitrust actions" and that, "after independent research and analysis, we are in complete accord with Judge Lord's decision and with his interpretation of the recent case of Pure Oil Company * * *" Id. at 1009. And still more recently, Judge John W. Lord, Jr., of the Eastern District of Pennsylvania came to the same conclusion in the Philadelphia Housing Authority...