Haskell v. Aluminum Co. of America

• Decision Date: 18 August 1926
• Docket Number: No. 2624.,2624.
• Citation: 14 F.2d 864
• Parties: HASKELL v. ALUMINUM CO. OF AMERICA et al.
• Court: U.S. District Court — District of Massachusetts

14 F.2d 864 (1926)

HASKELL v. ALUMINUM CO. OF AMERICA et al.

No. 2624.

District Court, D. Massachusetts.

August 18, 1926.

Sherman L. Whipple and Edward C. Park, both of Boston, Mass., for plaintiff.

Charles E. Hughes, of New York City, and Edward F. McClennen, of Boston, Mass., for defendant Aluminum Co. of America.

BREWSTER, District Judge.

From the record in this case, the following appears:

A writ of summons and attachment in the usual form obtaining in this district, except that it was directed, not only "to the marshal of our district of Massachusetts, or his deputy," but also "to the marshal of the Western district of Pennsylvania, or his deputy," issued out of this court on the 21st day of September, 1925. In the writ the Aluminum Company of America, a Pennsylvania corporation, together with eight individual defendants, none of whom were citizens of Massachusetts, were named as defendants.

On September 25, 1925, service was made on the defendant Aluminum Company of America by the deputy marshal of the Western district of Pennsylvania, by giving in hand to the vice president of the corporation at Pittsburgh, Pa., a copy of the writ and an original summons. On the 30th day of September service was also made on this defendant by a deputy marshal for this district, by giving in hand to Andrew J. Hamilton, defendant's New England manager, at Boston, Mass., a "true and attested copy" of the writ and an original summons. None of the other defendants have been served with process.

The defendant Aluminum Company of America (hereinafter referred to as defendant) appeared specially for the purpose of filing a motion to dismiss and a plea and answer in abatement. The motion and answer were seasonably filed. The motion and answer are now presented for consideration, after hearing at which evidence was received material to the issues of fact raised by the plea and answer. It is conceded that, if the declaration filed with the writ states a cause of action, the cause arises under and by virtue of the anti-trust laws of the United States. There is no controversy respecting the facts. The questions demanding consideration are wholly questions of law, and relate to the jurisdiction of this court and the sufficiency of the service upon the defendant.

The defendant contends that the District Court of this district is without jurisdiction to entertain a suit brought against it under the Clayton Act, alleging that the "defendant at the time of the alleged injury and at any and all times thereafter was never found in the district of Massachusetts, nor did it transact business therein, nor did it have an agent therein, nor was it an inhabitant thereof nor did it reside therein. * * *"

A determination of this question of jurisdiction necessitates a somewhat detailed statement of the manner in which the defendant conducted its activities within the commonwealth of Massachusetts and the extent of them as disclosed by the evidence presented at the hearing. I find that the defendant, a Pennsylvania corporation, had its principal place of business in Pittsburgh, Pa. For over 20 years it, or its predecessor, has maintained an office in Boston, in this district, known as the "New England District Sales Office." For over 5 years its office has been at 209 Washington street, Boston, where the defendant leases and occupies a suite of seven rooms. The only sign on the door leading to this suite is "Aluminum Company of America." These rooms are completely furnished with desks, filing cabinets, typewriters, and other furniture found in a well-equipped business office, including a telephone switchboard, into which two trunk lines run.

In the fall of 1925, the office force consisted of a district sales manager, an assistant district sales manager, a local sales manager, eight salesmen, and seven stenographers, nearly all of whom resided in Massachusetts and made the office their headquarters. It was the duty of the defendant's employees to solicit orders for products manufactured by the defendant or its subsidiaries from persons resident in the New England states, except Connecticut. It was also a part of the duties incumbent upon the employees attached to this office to investigate and report on customers' complaints, to inspect and report upon aluminum scrap offered for sale in Massachusetts, and upon delinquent accounts.

These duties were performed under the supervision of the district sales manager or his assistants. These managers did whatever was necessary to the maintenance of the New England district sales office, and, subject to the approval of the home office at Pittsburgh, employed salesmen and stenographers, and contracted with the telephone company for service and for advertisement. Circulars furnished by the Pittsburgh office giving information regarding aluminum were mailed to customers from the Boston office.

The general sales manager from Pittsburgh visited the Boston office several times each year during the years 1924 and 1925, and on these occasions discussed with the New England sales managers and salesmen the business of the defendant transacted with persons in Massachusetts, made recommendations and gave directions in respect to the business, and generally investigated, consulted, and directed regarding the activities carried on through the Boston office. The defendant kept no bank account in Massachusetts. Rent and salaries were paid by check from the Pittsburgh office. Office expenses, such as telegraph, telephone, water, light, and office supplies, were paid by the district manager, or his subordinates, out of funds advanced by the defendant, but deposited in the name of the employee receiving the advance. Traveling expenses of the salesmen were paid in the same way. The general course of the business as carried on by the office was as follows:

Orders would be received at the Boston office by letter, telephone, or telegram, sometimes as a result of solicitations, and sometimes without solicitation. All original orders were kept at the Boston office. These orders were transcribed by stenographers onto blank forms, of which the original and two copies were sent to the Pittsburgh office, and one copy kept in the Boston office in an order book. The order would be acknowledged from the Boston office, and correspondence with the customers was carried on relating to the prices, dates of shipment, whether shipment to be by freight or express, and relating to errors, to complaints, and to credits. Much of this correspondence, when in the usual course of business, would be attended to by stenographers without consultation with the district manager. If the product was that of one of the defendant's subsidiaries, the employee at the Boston office would sometimes communicate by wire or letter directly with the subsidiary company with reference to the order, for example, dates of shipment, without referring the matter to the Pittsburgh office. The authority of these employees, however, was limited. They had no authority to fix prices, to accept orders, or to agree upon terms of payment, without the approval of the Pittsburgh office. Payments for goods purchased by customers in the New England district were made to the Pittsburgh office. Whether the local employees had authority to receive, for the purpose of transmitting to Pittsburgh, payments for such purchases, does not appear; but it does appear that the Boston office kept no books of account showing payments made by customers. All contracts of employment were also subject to the approval of the officials at Pittsburgh, but a manager interviewed applicants for positions and recommended the employment and the salary to be paid.

In 1925 the defendant sold customers, resident in Massachusetts, goods to the total amount of $3,112,212.45. Substantially all of that amount represents transactions carried on, in part, at least, through the New England district office at Boston. The great bulk of the sales, in value, represented sales of product manufactured, not by the defendant, but by affiliated or subsidiary companies in which the defendant owned a controlling interest — for example, the United States Aluminum Company, with manufacturing plants in New York, Pennsylvania, New Jersey, Michigan, Tennessee, Connecticut, and Ohio; the Aluminum Ore Company, with plant in Illinois; the Aluminum Seal Company, with plant in Pennsylvania; the Aluminum Die Castings Corporation, with plant in New Jersey; the Aluminum Screw Machine Products Company, with plant in New Jersey, and the American Magnesium Corporation, with plant in New York. During this same period the defendant bought from persons in Massachusetts about $10,000 worth of scrap aluminum. The employees of the defendant in Massachusetts looked over the material and conducted the negotiations for its purchase.

Section 12 of the Clayton Act (Act of October 15, 1914, c. 323, § 12, 38 Stat. 736 Comp. Stat. § 8835k) provides as follows: "Any suit, action, or proceeding under the anti-trust 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; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found."

The first inquiry is whether, on the state of facts above outlined, it can be said that the defendant is "found" within the judicial district of Massachusetts, and the secondary question is whether it is "transacting business" in the district, within the meaning of that term as used in the section just quoted.

It seems to be too firmly established to admit of argument that in statutes affecting venue the word "found" has been given a definite legal significance when applied to foreign corporations, and it will be presumed that, when Congress enacted the Clayton Act, it used the word as defined by the courts. Standard Oil Co. v. United...