Catrone v. Ogden Suffolk Downs, Inc.

• Decision Date: 12 November 1986
• Docket Number: Civ. A. No. 86-1529-C.
• Citation: 647 F. Supp. 850
• Court: U.S. District Court — District of Massachusetts
• Parties: Patrick CATRONE, Plaintiff, v. OGDEN SUFFOLK DOWNS, INC.; Robert O'Malley, Individually and In His Capacity as Vice President and General Manager of Ogden Suffolk Downs, Inc.; Thoroughbred Racing Protective Bureau; Victor Wickman, Individually and In His Capacity as President of the Thoroughbred Racing Protective Bureau; Paul Berube, Individually and In His Capacity as Vice President of the Thoroughbred Racing Protective Bureau; Thoroughbred Racing Association; and Kenneth Graf, Individually and In His Capacity as An Officer of the Thoroughbred Racing Association, Defendants.

647 F. Supp. 850

Patrick CATRONE, Plaintiff, v. OGDEN SUFFOLK DOWNS, INC.; Robert O'Malley, Individually and In His Capacity as Vice President and General Manager of Ogden Suffolk Downs, Inc.; Thoroughbred Racing Protective Bureau; Victor Wickman, Individually and In His Capacity as President of the Thoroughbred Racing Protective Bureau; Paul Berube, Individually and In His Capacity as Vice President of the Thoroughbred Racing Protective Bureau; Thoroughbred Racing Association; and Kenneth Graf, Individually and In His Capacity as An Officer of the Thoroughbred Racing Association, Defendants.

Civ. A. No. 86-1529-C.

United States District Court, D. Massachusetts.

November 12, 1986.

COPYRIGHT MATERIAL OMITTED

David L. Kelston, Siverglate, Gertner, Baker, Fine and Good, Boston, Mass., for plaintiff.

Michael J. Liston, Palmer & Dodge, Boston, Mass., Jack Kaplan & Gloria M. Gonzalez, Carter, Ledyard & Milburn, New York City, for defendants Thoroughbred Racing Protective Bureau, Thoroughbred Racing Ass'n, Wickman, Berube and Graf.

Alan R. Hoffman, Lynch, Brewer, Hoffman & Sands, Boston, Mass., for defendants Ogden Suffolk Downs and O'Malley.

MEMORANDUM

CAFFREY, Senior District Judge.

This is a civil action in which plaintiff Patrick Catrone alleges violations of the Sherman Act, 15 U.S.C. § 1 et seq.; the Civil Rights Act, 42 U.S.C. § 1983; interference with business relationships; and defamation. The matter is now before the Court on the nonresident defendants' motion to dismiss the complaint for lack of personal jurisdiction.

This is a federal question case. This Court has pendent jurisdiction over the Massachusetts state law claims. Personal jurisdiction in federal question cases is a matter of federal law, to be governed by the due process standards of the Fifth Amendment rather than the Fourteenth Amendment. Driver v. Helms, 577 F.2d 147, 157 (1st Cir.1978), rev'd other grounds, sub nom Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980) (reversed on statutory construction, constitutional issue not reached).

In support of their motion to dismiss, the nonresident defendants argue that the Fifth Amendment due process standards for the exercise of personal jurisdiction by a federal court in a federal question case should be essentially the same as the due process standards under the Fourteenth Amendment. Specifically, defendants argue for a "minimum contacts" approach. Although defendants acknowledge that the law in the First Circuit is contrary to their argument, they contend that the First Circuit's approach is "inconsistent with the U.S. Supreme Court's recent trend away from the sovereignty principles of Pennoyer v. Neff, 95 U.S. 714, 5 Otto 714, 24 L.Ed. 565 (1877) toward a concern for fairness." In particular, defendants point to the Supreme Court's opinion in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). The approach of the First Circuit has been set forth by the court of appeals in cases decided subsequent to Shaffer. E.g., Johnson Creative Arts, Inc. v. Wool Masters, Inc. 743 F.2d 947, 950 (1st Cir.1984). This Court therefore declines to rule those cases as contrary to current Fifth Amendment due process doctrine.

The First Circuit has adopted the "nationwide contacts" approach to personal jurisdiction in federal question cases. Driver, 577 F.2d at 155; Johnson Creative supra at 950; Trans-Asiatic Oil Ltd. S.A. v. Apex Oil Company, 743 F.2d 956, 959 (1st Cir.1984). The "minimum contacts" test for personal jurisdiction was developed in cases testing the limits of a state's jurisdiction over those not found within its boundaries. Driver, 577 F.2d at 156. The First Circuit has made clear that the Fifth Amendment due process requirement for the exercise of personal jurisdiction was not "minimum contacts" with a particular district or state; instead, in a federal question case, "federal jurisdiction being national in scope, due process only requires sufficient contacts within the United States as a whole...." Trans-Asiatic, 743 F.2d at 959. Furthermore, in a federal question case a federal court need not inquire into whether "sufficient contacts" for personal jurisdiction exist if the defendant is within the territory of the sovereign — the United States — when served. Johnson Creative, 743 F.2d at 950 n. 3. As the court states there,

The minimum contacts concept is grounded upon notions of territorial limitations on the power of the courts of a particular state to subject a non-resident to its jurisdiction and thereby infringe upon that person's individual liberty interest....

In International Shoe, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) the Court determined that ... even a person not present within the territory of the forum may be subjected to a judgment in personam if he has such contacts with the forum that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." ... If a person is served within the territory of the sovereign represented by the issuing court, there is no question that maintenance of the suit against him will not offend traditional notions of fairness.... The United States does not lose sovereignty when a state's border is crossed. citation omitted Thus congress can "provide for service anywhere in the United States." citation omitted.

Thus under the Fifth Amendment due process standard, federal courts can constitutionally exercise personal jurisdiction over anyone found within the sovereign territory of the United States.¹

Plaintiff argues that since all defendants were served within the United States, this Court can exercise in personam jurisdiction over them without offending due process. Critical to plaintiff's argument is that defendants have not raised any claim of improper venue, insufficiency of process, insufficiency of service of process, or any related concern under applicable statutes, and, accordingly, defendants have now waived such claims. Thus, plaintiff contends, defendants' motion to dismiss rests solely on Fifth Amendment due process grounds. Since the First Circuit has clearly stated that the Fifth Amendment permits the exercise of personal jurisdiction on the basis of nationwide contacts or presence in the territory of the United States, plaintiff argues that it is clear that this Court's exercise of personal jurisdiction over all the defendants is entirely consonant with due process. As recognized by a district court of the First Circuit, however, Johnson Creative and Trans-Asiatic "have circumscribed the power of nationwide personal jurisdiction to a specific congressional mandate or rule to exercise such power through a mechanism to serve process and attach personal jurisdiction over a defendant." Colon v. Gulf Trading Company, 609 F.Supp. 1469, 1474 (D.Puerto Rico 1985).

In Johnson Creative the court of appeals stated that the nationwide scope of personal jurisdiction under the Fifth Amendment was not limited by the doctrine of minimum contacts: instead, "the limitation is imposed by the Federal Rules of Civil Procedure." Johnson Creative, 743 F.2d at 950. Specifically, Johnson Creative says that although constitutionally personal jurisdiction can be nationwide, it has been limited by the service of process provisions in Rule 4, Fed.R.Civ.P. Id. The court went on to explain the operation of Rule 4:

Rule 4(f) generally limits the service of process of federal district courts to the territorial limits of the state in which the court is held. Rule 4(e) allows for service outside the state when authorized by a statute of the United States or when a statute or rule of court of the state in which the district court is held provides for such service.²

Id.

An earlier case, Driver, 577 F.2d 147, presents an application of the logic of Johnson Creative on how the scope of personal jurisdiction tracks the scope of service provisions in Rule 4. In Driver, the court addressed a challenge to personal jurisdiction. The statute under which plaintiff sued authorized nationwide service of process. The defendant argued that the statute addressed only the mechanics of service of process, and did not address the exercise of personal jurisdiction. Id. at 155. The court ruled that the statute could also be the basis for personal jurisdiction. Id. "Congress ... provided nationwide service by mail and expected that broadening service would correspondingly broaden personal jurisdiction," the court explained. Id. at 156.

Conversely, in the absence of such express authorization, a federal district court in a federal question case cannot exercise nationwide personal jurisdiction. See Colon, 609 F.Supp. at 1475. In Colon, the district court addressed a motion to dismiss for lack of personal jurisdiction in a Jones Act case. The Jones Act was silent as to scope of service of process of personal jurisdiction. Finding no federal statutory authority for nationwide service of process, the court stated that the only alternative authority to serve process was Rule 4, Fed. R.Civ.P. Colon, 609 F.Supp. at 1475. Reasoning that "Congress or the Supreme Court have the authority to limit the nationwide personal jurisdiction of federal courts through the manner process may be served and that we are compelled to follow such strictures," Id. at 1475 n. 10, the court treated the Rule 4 strictures on service as also strictures on the exercise of personal jurisdiction. Id. at 1475.

Under Rule 4, in the absence of specific federal statutory or court rule authority providing for service of process, extraterritorial service is available in a manner prescribed by state statute or court rule. As a result, analysis under the Fifth Amendment due process standards for exercise of personal jurisdiction by a federal court in a federal question case turns to an interpretation of the state long arm statute. Judge Young made precisely this observation in Buckeye Associates, Ltd. v. Fila Sports, Inc., 616...