Bertha Bldg. Corp. v. National Theatres Corp., Civ. No. 12073

• Decision Date: 21 February 1952
• Docket Number: 12074.,Civ. No. 12073
• Parties: BERTHA BLDG. CORP. v. NATIONAL THEATRES CORP. GUMBINER THEATRICAL ENTERPRISES, Inc. v. NATIONAL THEATRES CORP.
• Court: U.S. District Court — Eastern District of New York

103 F. Supp. 712

BERTHA BLDG. CORP. v. NATIONAL THEATRES CORP.

GUMBINER THEATRICAL ENTERPRISES, Inc. v. NATIONAL THEATRES CORP.

Civ. Nos. 12073, 12074.

United States District Court E. D. New York.

February 21, 1952.

Dwight, Royall, Harris, Koegel & Caskey, New York City (Charles F. Young, New York City, of counsel), for plaintiffs.

Corcoran & Kostelanetz, New York City (Boris Kostelanetz and Rexford E. Tompkins, New York City, of counsel), for National Theatres Corp.

KENNEDY, District Judge.

These actions are brought under the antitrust laws of the United States. They were begun on September 5, 1951, and in both cases the defendant was served with process in the Southern District of New York. In neither case does the defendant do any business within the Eastern District of New York. But defendant is a foreign corporation licensed to do business within the state of New York.

Defendant moves pursuant to Section 12 of the Clayton Act, 15 U.S.C.A. § 22, for orders dismissing the actions on the ground of improper venue, or in the alternative for orders transferring both causes to the Southern District of New York pursuant to the appropriate code section. 28 U.S. C.A. § 1406(a). In other words, both motions raise the same question: is the venue jurisdiction proper?

It is clear that venue is not here properly laid under the section of the Clayton Act specifically applicable, 15 U.S.C.A. § 22. Defendant is not "an inhabitant" of this district, is not "found" here, and does not "transact business" here. But plaintiffs say this district has venue jurisdiction under the general venue statute. 28 U.S.C.A. § 1391(c). That statute, so far as it is pertinent here, provides as follows: "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.

As I have hinted, defendant argues that the general statute, just quoted, is not applicable at all. It says that where Congress has, for a particular type of action, provided a particular rule of venue, then the plaintiff must bring himself within that specific statute. Plaintiffs say that where Congress has enacted a general venue statute and also a specific one, they may sue in any district which comes within the description of either statute. One can well understand how an answer either way to these contentions could be sustained on logical grounds. However, I shall not labor the point because there are some decided cases which I find persuasive. Lipp v. National Screen Service Corp., D.C.E.D.Pa. 1950, 95 F. Supp. 66; Auburn Capitol Theatres Corp. v. Schine Chain Theatres, D.C.S.D.N.Y. 1949, 83 F.Supp. 872. I have not overlooked the criticism which the defendant makes of these decisions. For even if the matter were res integra I would reach the conclusion that when Congress affords a plaintiff-litigant the opportunity to sue in a prescribed district because of the existence of a specific federal question (arising under the anti-trust laws), and also in another statute gives wider latitude where any federal question exists, it would be a narrow technicality to close the doors of the courts of the latter district unless Congress had given some indication that this was its intention, which here it did not. The question, I admit, is not free from difficulty because apparently in cases under the patent laws Congress has evinced an intention to restrict venue jurisdiction¹ whereas in cases under the Jones Act most of the decisions take the position that it has not. But I find no reason why a suitor under the anti-trust laws should by implication be unduly fettered by venue provisions, particularly since cases of harassment can be dealt with under the forum non conveniens theory.

Assuming that I am right, and that plaintiffs are entitled to invoke the venue provisions of 28 U.S.C.A. § 1391(c), there still remains a somewhat perplexing question. That section (quoted above) permits a corporate defendant to be sued in a judicial district (1) where it is incorporated, or (2) licensed to do business, or (3) doing business. Defendant is not incorporated in the Eastern District nor is it doing business here. It is, however, licensed to do business in the State of New York. Does that bring this district within the statutory description of a "district" where the defendant is "licensed to do business"?

It must be acknowledged that there are at least three cases in this district which either suggest or hold that the question must be answered in the negative. (Judge Galston in Wood v. Pennsylvania Greyhound Lines, D.C.E.D.N.Y.1949, 86 F.Supp. 91; Chief Judge Inch in Kibler v. Trans-Continent & Western Air, D.C.E.D.N.Y. 1945, 63 F.Supp. 724; and Judge Abruzzo in Hill v. New England Greyhound Line, D.C.E.D.N.Y.1939.²) It will be observed that both Judge Inch's case and Judge Abruzzo's case were decided prior to the 1948 amendment. And in the Wood case, decided by Judge Galston, it is true that there were some special circumstances which may or may not be controlling, i. e., the defendant was prohibited against doing business in the Eastern District of New York and therefore even though it was licensed to do business in the state, that fact may possibly have had some effect upon Judge Galston's conclusion.

Here again, on principle, it is easily possible to sustain either one of the arguments of counsel, which were, by the way, set forth in very thorough briefs. Defendant argues that to hold a corporation suable in a district where it does no business produces two...