Eastman Kodak Co of New York v. Southern Photo Materials Co

• Citation: 47 S.Ct. 400,71 L.Ed. 684,273 U.S. 359
• Decision Date: 21 February 1927
• Docket Number: No. 6,6
• Parties: EASTMAN KODAK CO. OF NEW YORK v. SOUTHERN PHOTO MATERIALS CO
• Court: United States Supreme Court

273 U.S. 359

47 S.Ct. 400

71 L.Ed. 684

EASTMAN KODAK CO. OF NEW YORK

v SOUTHERN PHOTO MATERIALS CO.

No. 6.

Argued Nov. 19, 1925.

Decided Feb. 21, 1927.

Messrs. John W. Davis, of New York City, Alex W. Smith, of Atlanta, Ga., Frank L. Crawford, of New York City, and Clarence P. Moser, of Rochester, N. Y., for plaintiff in error.

[Argument of Counsel from pages 360-364 intentionally omitted] Mr. Daniel MacDougald, of Atlanta, Ga., for defendant in error.

[Argument of Counsel from pages 365-367 intentionally omitted] Mr. Justice SANFORD delivered the opinion of the Court.

This suit was brought by the Southern Photo Materials Company, a Georgia corporation, in 1915, in the Federal District Court for Northern Georgia, against the Eastman Kodak Company, a New York corporation, to recover damages for injuries sustained by the plaintiff through the defendant's violation of the Sherman Anti-Trust Act.¹ Proceeding under section 12 of the Clayton Act² process was issued and served upon the defendant, pursuant to an order of the court, at Rochester, New York, where it had its principal place of business. The defendant, appearing specially, traversed the return, entered a plea to the jurisdiction, and moved to quash the service. The jurisdictional issues thus raised were tried by the judge, who overruled these defenses. (D. C.) 234 F. 955. The defendant, by leave of court, then answered on the merits. The trial to the court and jury resulted in a verdict for the plaintiff assessing its actual damages at $7,914.66. Judgment was entered against the defendant for triple this amount and an attorney's fee. This was affirmed by the Circuit Court of Appeals. ,295 F. 98. And the case was then brought here by writ of error, prior to the Jurisdictional Act of 1925 (43 Stat. 936).

The plaintiff operates a photographic stock house in Atlanta and deals in photographic materials and supplies, which it sells to photographers in Georgia and other Southern States. The defendant is a manufacturer of photographic materials and supplies, which it sells to dealers throughout the United States.

The case made by the allegations of the complaint was, in substance, this: The defendant, in violation of the Anti-Trust Act, had engaged in a combination to monopolize the interstate trade in the United States in photographic materials and supplies, and had monopolized the greater part of such interstate trade. This had been brought about by purchasing and acquiring the control of competing companies engaged in manufacturing such materials, and the businesses and stock houses of dealers; by restraining the vendors from re-entering these businesses; by imposing on the dealers to whom it sold goods restrictive terms of sale fixing the prices at which its goods could be resold and preventing them from handling competitive goods; and by other means of suppressing competition.

Prior to 1910 the plaintiff had dealt with the defendant and purchased its goods on the same terms as other dealers, with whom it was enabled to compete; but in that year the defendant, having acquired the control of the stock houses in Atlanta which were in competition with the plaintiff and unsuccessfully attempted to purchase the plaintiff's business, had, in furtherance of its purpose to monopolize, thereafter refused to sell the plaintiff its goods at the dealers' discounts, and would no longer furnish them except at the retail prices at which they were sold by other dealers and the agencies which the defendant owned and controlled, with whom the plaintiff could no longer compete. And, the plaintiff being thus deprived, by reason of the monopoly, of the ability to obtain the defendant's goods and supply them to its trade, its business had been greatly injured and it had sustained large damages in the loss of the profits which it would have realized in the four years covered by the suit had it been able to continue the purchase and sale of such goods.

The answer denied that the defendant had combined to monopolize or monopolized interstate trade, or refused to sell its goods to the plaintiff at the dealers' discounts in furtherance of a purpose to monopolize; and averred that the defendant had not only committed no actionable wrong, but that in any event the plaintiff had sustained no damages capable of ascertainment upon any legal basis.

While many errors were assigned, some of which were also specified, in general terms, in the defendant's brief in this Court, we confine our consideration of the case in this opinion to the controlling questions which are stated in that brief to present the chief issues here in controversy, and to which alone the argument in the brief is directed. See I. T. S. Co. v. Essex Rubber Co. (decided November 22, 1926) 272 U. S. 429, 47 S. Ct. 136, 71 L. Ed. 335. These do not involve the existence of the defendant's monopoly-which is not questioned here³-but relate solely to the questions whether there was local jurisdiction or venue in the District Court; whether the refusal of the defendant to continue to sell the plaintiff its goods at the dealers' discounts was in furtherance of a purpose to monopolize and constituted an actionable wrong which could form the basis of any recovery; and whether there was any competent and legal proof on which a measurement of the plaintiff's damages could be based.

1. Whether or not the jurisdiction of the District Court was rightly sustained-which resolves itself into a question whether the venue of the suit was properly laid in that court-depends upon the construction and effect of section 12 of the Clayton Act and its application to the facts shown by the evidence set forth in the separate bill of exceptions relating to the hearing on the jurisdictional issues. Dunlop v. Munroe, 7 Cranch, 242, 270, 3 L. Ed. 329; Jones v. Buckell, 104 U. S. 554, 556, 26 L. Ed. 841.

It appears from this evidence that the defendant-which resides and has its principal place of business in New York-had not registered in Georgia as a non-resident corporation for the purpose of doing business in that State, and had no office, place of business or resident agent therein. It had, however, for many years prior to the institution of the suit, in a continuous course of business, carried on interstate trade with a large number of photographic dealers in Atlanta and other places in Georgia, to whom it sold and shipped photographic materials from New York. A large part of this business was obtained through its traveling salesmen who visited Georgia several times in each year and solicited orders from these dealers, which were transmitted to its New York offices for acceptance or rejection. In furtherance of its business and to increase the demand for its goods, it also employed travelling 'demonstrators,' who visited Georgia several times in each year, for the purpose of exhibiting and explaining the superiority of its goods to photographers and other users of photographic materials. And, although these demonstrators did not solicit orders for the defendant's goods, they took at times retail orders for them from such users, which they turned over to the local dealers supplied by the defendant.

It is clear that upon these facts this suit could not have been maintained in the Georgia district under the original provision in section 7 of the Anti-Trust Act (Comp. St. § 8829) that anyone injured in his person or property 'by any other person or corporation' by reason of anything declared to be unlawful by the Act, might sue therefor 'in the district in which the defendant 'resides or is found."⁴ In People's Tobacco Co. v. Am. Tobacco Co., 246 U. S. 79, 84, 86, 38 S. Ct. 233, 234 (62 L. Ed. 587, Ann. Cas. 1918C, 537) decided in 1918, it was held that this provision, as applied to a corporation sued in a district in which it did not reside, required that it 'be present in the district by its officers and agents carrying on the business of the corporation,' this being the only way in which it could be said to be 'found' within the district; that to make it amenable to service of process in the district, the business must be of such nature and character as to warrant the inference that it had subjected itself to the local jurisdiction, and was by its duly authorized officers or agents present therein; and that advertising its goods in a state and sending its soliciting agents therein, did not amount to 'that doing of business' which subjected it to the local jurisdiction for the purpose of serving process upon it.

Manifestly the defendant was not present in the Georgia district through officers or agents engaged in carrying on business of such character that it was 'found' in that district and was amenable to the local jurisdiction for the service of process.

However, by the Clayton Act-which supplemented the former laws against unlawful restraints and monopolies of interstate trade-the local jurisdiction of the district courts was materially enlarged in reference to suits against corporations. By section 4 of that Act (Comp. St. § 8835d) it was provided that any person 'injured in his business or property by reason of anything forbidden in the anti-trust laws' might sue therefor in the district 'in which the defendant resides or is found or has an agent.' Whether, as applied to suits against corporations, as distinguished from those against individuals, the insertion of the words 'or has an agent' in this section can be held, in the light of the decision in the People's Tobacco Co. Case, to have enlarged to any extent the jurisdictional provision in section 7 of the Anti-Trust Act, we need not here determine. Be that as it may, it is clear that such an enlargement was made by section 12 of the Clayton Act (Comp. St. § 8835k)-dealing specifically with the venue and service of process in suits against corporations-under which the plaintiff proceeded in the present case. This provided that 'any suit, action, or proceeding under the...