Aro Manufacturing Co. v. Automobile Body Research Corp.

• Decision Date: 09 November 1965
• Docket Number: No. 6551.,6551.
• Parties: ARO MANUFACTURING CO., Inc., et al., Plaintiffs, Appellants, v. AUTOMOBILE BODY RESEARCH CORPORATION, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

352 F.2d 400 (1965)

ARO MANUFACTURING CO., Inc., et al., Plaintiffs, Appellants, v. AUTOMOBILE BODY RESEARCH CORPORATION, Defendant, Appellee.

No. 6551.

United States Court of Appeals First Circuit.

November 9, 1965.

Charles Hieken, Boston, Mass., with whom David Wolf and Wolf, Greenfield & Hieken, Boston, Mass., were on the brief, for appellants.

Stephen A. Moore, Boston, Mass., for appellee.

Before ALDRICH, Chief Judge, HAMLIN, Senior Circuit Judge,^* and McENTEE, Circuit Judge.

McENTEE, Circuit Judge.

This is a suit for alleged Federal Anti-Trust Act violations brought by two Massachusetts plaintiffs, Aro Manufacturing Company and Aro Top Sales Company, (both hereinafter called Aro) against three defendants, one of which is appellee, Automobile Body Research Corporation (hereinafter called Automobile Body). The case is before us on appeal of Aro from an order of the district court dismissing the suit against Automobile Body for lack of jurisdiction.

Automobile Body is a Maryland corporation. It is not registered to do business in Massachusetts. Its principal assets are two combination patents covering convertible automobile folding top mechanisms. This corporation does not manufacture or sell any products of any kind. Its business consists of assigning rights in these patents and collecting royalties thereon. Aro makes and sells unpatented replacement fabrics for automobile tops. Service of process in this case was purported to have been made on the defendant, Automobile Body, in Massachusetts, by serving a summons on one Paul V. Power, the Massachusetts attorney for the defendant, Convertible Top Replacement Company (hereinafter called Convertible Top). This corporation, Aro contends, is the agent or alter ego of Automobile Body in Massachusetts. Service was also purported to have been made on Automobile Body by serving a summons on the Massachusetts Commissioner of Corporations and Taxation. In support of its motion to dismiss, the treasurer of Automobile Body submitted an affidavit stating, amongst other things, that neither he, as treasurer or as agent for service, nor any of the other officers of the corporation have received any service in connection with this suit; that the officers and directors of Automobile Body, all of whom live in Maryland, do not travel outside of that state on company business; that from an examination of all correspondence of Automobile Body for a period of six months prior to the date of his affidavit (May 23, 1962) he found no record of any correspondence with anyone in Massachusetts; and that this corporation has never maintained an office or other place of business in Massachusetts. With reference to Convertible Top, the affidavit flatly states that none of the officers, employees, directors or stockholders of Automobile Body have ever had any position or connection with Convertible Top and that these two corporations are entirely separate and distinct. The affidavit further states that Automobile Body has never directly or indirectly retained Attorney Power in any connection and he has never been a representative or agent of Automobile Body for any purpose whatsoever. The oral testimony of Attorney Power at the hearing on the motion corroborated this statement. Aro contends that Automobile Body itself does business directly in Massachusetts and also indirectly through its agent and alter ego, Convertible Top. In support of these contentions Aro's attorney filed a counter affidavit, most of which is based upon information and belief, in which he asserts, among other things that Convertible Top was set up as a "shell" or "dummy" corporation for the purpose of bringing suit on behalf of Automobile Body against Aro in Massachusetts for patent infringement. This counter affidavit further states that prior to the formation of Convertible Top, Automobile Body had attempted to collect royalties from Aro on these patents and that on several occasions the patent attorney for Convertible Top submitted proposed license agreements to Aro's attorney with reference to the patents then owned by Automobile Body.

There are two basic questions involved in this case: (1) service of process and (2) venue. Inasmuch as service of process is the vehicle by which the court may obtain jurisdiction, we shall consider first the question of service. The venue provision of the Clayton Act,¹ under which this suit is brought, also provides where process in such suit may be served. In suits under this statute, service on a foreign corporation is also valid if made in the manner prescribed by the law of the state in which service is made. Fed.R.Civ.P. 4(d)(7).

The district court in granting defendant's motions to dismiss for lack of jurisdiction, held that service upon Attorney Power was not authorized by Automobile Body and also that an attempt to collect royalties for an alleged patent infringement does not constitute "doing business" within the meaning of the Massachusetts statute so as to permit service of process on the Commissioner of Corporations and Taxation.

From an examination of the record it is clear that Attorney Power was not authorized to accept service for Automobile Body. Furthermore the record is devoid of proof that Convertible Top is the agent of Automobile Body. The allegation of agency here is a mere conclusion. There is no indication of the source of this information or of the dates or the frequency with which Convertible Top so acted. The affidavit presented on behalf of Automobile Body specifically stated that these two corporations are...