Barber-Greene Company v. Blaw-Knox Company

• Decision Date: 11 January 1957
• Docket Number: No. 12806.,12806.
• Citation: 239 F.2d 774
• Parties: BARBER-GREENE COMPANY, Appellant, v. BLAW-KNOX COMPANY and All Purpose Spreader Company, Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

239 F.2d 774 (1957)

BARBER-GREENE COMPANY, Appellant, v. BLAW-KNOX COMPANY and All Purpose Spreader Company, Appellees.

No. 12806.

United States Court of Appeals Sixth Circuit.

January 11, 1957.

Charles F. Meroni and Anthony R. Chiara, Chicago, Ill. (Hill, Sherman, Meroni, Gross & Simpson, Chicago, Ill., Horace B. Fay, Jr., Fay & Fay, Cleveland, Ohio, on the brief), for appellant.

Walter J. Blenko, Pittsburgh, Pa. (John H. F. Leonard, Walter J. Blenko, Jr., Blenko, Hoopes, Leonard & Buell, Pittsburgh, Pa., McCoy, Greene & TeGrotenhuis, Cleveland, Ohio, William Henry Venable, Pittsburgh, Pa., on the brief), for appellees.

Before ALLEN, MILLER and STEWART, Circuit Judges.

STEWART, Circuit Judge.

The appellant is an Illinois corporation, licensed to do business in Ohio, where it has appointed a statutory agent for service of process. On August 1, 1955, the appellees filed a complaint in the District Court for the Northern District of Ohio, seeking a declaratory judgment holding six of the appellant's patents invalid and not infringed. Service of process in this action was effected on August 8, 1955. On August 4, 1955, the appellant filed a complaint in the District Court for the Northern District of Illinois against one of the appellees, asking an injunction and damages for infringement of the same six patents. Service of process in that suit was made on August 5, 1955. This appeal is from an interlocutory order entered in the declaratory judgment suit enjoining the appellant from prosecuting the Illinois action.

The appellant contends that the injunction was wrongly issued, and that the Ohio district court instead should have dismissed the declaratory judgment action or transferred it to Illinois pursuant to appellant's motion filed prior to issuance of the injunction. The argument in support of these contentions is that venue in the Ohio district was improper, and that even if venue was proper there, the case should have been transferred to Illinois "in the interest of justice," because the Illinois district court first acquired jurisdiction of the controversy, and in any event was the more convenient forum.¹

Although the district court's dismissal of the appellant's alternative motion to dismiss or transfer for improper venue is not itself an appealable order, it is reviewable on this appeal from a preliminary injunction. 28 U.S.C.A. § 1292(1); Deckert v. Independence Shares Corp., 1940, 311 U.S. 282, 286-287, 61 S.Ct. 229, 85 L.Ed. 189; American Chemical Paint Co. v. Dow Chemical Co., 6 Cir., 1947, 161 F.2d 956, 958; Riverbank Laboratories v. Hardwood Products Corp., 7 Cir., 1955, 220 F.2d 465, 466.

In determining whether proper venue for the declaratory judgment action lay in the Ohio district, we look to the provisions of the general venue statute, 28 U.S.C.A. § 1391; the venue provisions of 28 U.S.C.A. § 1400(b), relating to suits for patent infringement, do not apply. American Chemical Paint Co. v. Dow Chemical Co., 6 Cir., 1947, 161 F. 2d 956, 959.

This general venue statute provides as follows:

"Venue generally (a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside.

"(b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, except as otherwise provided by law.

"(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.

"(d) An alien may be sued in any district. June 25, 1948, c. 646, 62 Stat. 935." 28 U.S.C.A. § 1391.

Since this is a "civil action wherein jurisdiction is not founded solely on diversity of citizenship," but is founded on the district court's exclusive and original jurisdiction under 28 U.S.C.A. § 1338(a), the general venue statute in subsection (b) lays venue alone in the judicial district where the defendant resides. Since the defendant is a corporation licensed to do business in the northern district of Ohio, subsection (c) of the statute provides that that district is to be regarded as its residence for venue purposes. The clear terms of the statute therefore make venue in the northern district of Ohio proper in this case.

The appellant's effort to avoid this plain statutory language is staked primarily on this court's decision in American Chemical Paint Co. v. Dow Chemical Co., 6 Cir., 1947, 161 F.2d 956, opinion on rehearing, 6 Cir., 1947, 164 F.2d 208, which the appellant says, states the rule of this circuit "that only the state of a defendant's incorporation has venue in a declaratory judgment action under the patent laws."

It is important to understand the background against which the American Chemical Paint Co. case was decided. The applicable venue statute then in effect was former section 51 of the Judicial Code, which provided in pertinent part that "no civil suit shall be brought * * in any other district than that whereof defendant is an inhabitant." 28 U.S. C.A. § 112(a) (1946 Ed.). It had long been settled that under this and predecessor statutes a corporation was an inhabitant only of the state of incorporation. Shaw v. Quincy Mining Co., 1892, 145 U.S. 444, 453, 12 S.Ct. 935, 36 L.Ed. 768. It had also long been settled that, unlike federal jurisdiction, venue in the federal courts is a privilege personal to each defendant, which can be waived. Panama R. Co. v. Johnson, 1924, 264 U.S. 375, 385, 44 S.Ct. 391, 68 L.Ed. 748. The Supreme Court's decisions in Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167 and Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 1939, 309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 537, had not overturned these established concepts, but had radically expanded traditional doctrine as to what might constitute a waiver of statutory venue requirements. Those cases had held that a finding of actual consent to be sued in the federal courts in a given state could be based upon a corporation's having received a license to do business and having designated an agent for service of process in that state.

This court's decision in the American Chemical Paint Co. case was that a foreign corporation's appointment of an agent in Michigan did not constitute a waiver of the venue provisions of section 51, for the reason that the Neirbo rule was thought to be limited to cases in which state courts had concurrent jurisdiction; and on rehearing, that since the Michigan statute was not so broad as the statute involved in the Oklahoma Packing Co. case, there had not in fact been a waiver. The courts of appeals in other circuits viewed the rule of the Neirbo and Oklahoma Packing Co. cases more broadly. See e. g. Crosley Corp. v. Westinghouse Electric & Manufacturing Co., 3 Cir., 1942, 130 F.2d 474, 476.

It is unnecessary in this case, however, to consider whether the appellant in qualifying to do business and appointing a statutory agent in compliance with the Ohio statute thereby waived objection to venue in the Ohio forum. The Revision Act of 1948, by providing in 28 U.S.C.A. § 1391(c), that the judicial district in which a corporation is licensed to do business, "shall be regarded as the residence of such corporation...