Crusader Marine Corporation v. Chrysler Corporation

• Decision Date: 22 March 1968
• Docket Number: Civ. A. No. 27892.
• Parties: CRUSADER MARINE CORPORATION, Plaintiff, v. CHRYSLER CORPORATION and Johnson and Towers, Inc., Defendants.
• Court: U.S. District Court — Western District of Michigan

281 F. Supp. 802

CRUSADER MARINE CORPORATION, Plaintiff, v. CHRYSLER CORPORATION and Johnson and Towers, Inc., Defendants.

Civ. A. No. 27892.

United States District Court E. D. Michigan, S. D.

March 22, 1968.

John P. O'Neill, Blinstrub, O'Neill & Shannon, Detroit, Mich., John T. Miller, Washington, D. C., for plaintiff.

Walter B. Maher, Keith A. Jenkins, Detroit, Mich., for defendant, Chrysler Corp.

Sol. J. Schwartz, Schwartz & Cooper, Detroit, Mich., for defendant, Johnson and Towers, Inc.

OPINION AND ORDER DENYING MOTION TO DISMISS

LEVIN, District Judge.

The question presented on this motion to dismiss filed by defendant Johnson and Towers, Inc. is whether the Eastern District of Michigan is a district in which it may be sued under the provisions of the Clayton Act. The pertinent section of the Act provides that:

"Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business." 15 U.S.C. § 22.

I have concluded that Johnson and Towers was transacting business within this district in the years 1962 to 1965 inclusive and hence that it was subject to suit here at the commencement of this action on January 13, 1966.

The relevant facts as established by answers to interrogatories filed by the president of defendant Johnson and Towers are as follows: Johnson and Towers is a Pennsylvania corporation engaged in selling marine engines and other products for boats, principally to boat manufacturers. During the four-year period at issue, approximately ninety-five to ninety-eight per cent of the engines which it sold were manufactured in Michigan by the defendant Chrysler Corporation, the Detroit Diesel Division of General Motors Corporation, and other Michigan suppliers.

Johnson and Towers served as a distributor for General Motors Corporation under contracts executed annually. Purchases from General Motors Corporation for each of the years in question were between $1,000,000 and $1,250,000, and personnel of Johnson and Towers visited General Motors offices in Michigan approximately twenty times during this period, primarily to attend training school and sales meetings.

Johnson and Towers' gross purchases from defendant Chrysler Corporation during the four years next preceding the filing of the complaint ranged from $600,000 to $850,000 a year. Johnson and Towers served as a distributor for Chrysler Corporation under a non-exclusive agreement covering portions of Pennsylvania, New Jersey, Maryland and Delaware. The latest agreement, executed in the Camden, New Jersey store of Johnson and Towers on November 11, 1964, states that it "will be interpreted and construed under and according to the Laws of the State of Michigan". Shipment by Chrysler was by common carrier with freight paid by Johnson and Towers. However, on six occasions, "probably in 1963", Johnson and Towers sent its own trucks into Michigan to pick up products. Officers and personnel of Johnson and Towers visited Chrysler Corporation facilities in Michigan approximately four times between 1962 and 1965, spoke by telephone to the General Manager of Chrysler's Marine and Industrial Division an average of twelve times a year, and exchanged approximately twenty-four letters a year other than purchase orders with Chrysler Corporation. About five times a year Johnson and Towers shipped defective material or overstocked material to Michigan offices of Chrysler Corporation for replacement or credit.

Defendant Johnson and Towers argues that because it is not licensed to do business in Michigan, has no property or agents in Michigan and solicits no business in Michigan, it is not an "inhabitant" of this state nor is it "found" here or "transacting business" here.

The Sherman Act provided for suit only in the district where the defendant "resides or is found" 26 Stat. 210. It is clear that the intent of Congress in 1914, when it included the words "or transacts business" in the venue provision of the Clayton Act, was to enlarge the venue and broaden the choice of forum available in antitrust actions. The additional words in the Clayton Act were intended to remedy the difficulties in enforcement of the antitrust policy apparent under the earlier act. Eastman Kodak Co. v. Southern Photo Material Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927). "The practical, everyday business or commercial concept of doing or carrying on business `of any substantial character' became the test of venue," United States v. Scophony Corp. of America, 333 U.S. 795, 807, 68 S.Ct. 855, 861, 92 L.Ed. 1091 (1948), and the words "transacts business" were given a broader meaning than terms such as "doing business", "found", and "carrying on business"....