In re New Motor Vehicles Canadian Export

• Decision Date: 04 March 2004
• Docket Number: No. MDL 1532.,MDL 1532.
• Citation: 307 F.Supp.2d 145
• Parties: In re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION
• Court: U.S. District Court — District of Maine

307 F.Supp.2d 145

In re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION

No. MDL 1532.

United States District Court, D. Maine.

March 4, 2004.

COPYRIGHT MATERIAL OMITTED

Robert S. Frank, Harvey & Frank, Portland, ME, for Plaintiffs.

William J. Kayatta, Jr., Pierce Atwood, Portland, ME, for Defendants.

MEMORANDUM DECISION AND ORDER ON DEFENDANTS' MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

HORNBY, District Judge.

In this opinion I conclude that section 12 of the Clayton Act permits worldwide service of process upon alien corporate defendants in antitrust cases, and that the Fifth Amendment measures the constitutional adequacy of contacts by such defendants according to their contacts with the United States as a whole.

I. SUMMARY

New motor vehicle purchasers and lessees claim that American and Canadian car manufacturers, distributors, dealers (although not named as defendants) and dealer associations conspired to prevent a discount distribution channel from operating in the United States — specifically, that cheaper Canadian versions of various models were prohibited entry into the American market. They maintain that the conspiracy violated section 1 of the Sherman Act, 15 U.S.C. § 1 (1997), and that the resulting lack of competition kept American retail prices excessively high. They seek class-wide damages¹ and injunctive relief under sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26 (1997). The Multi-District Panel has transferred 26 such cases to this District for pretrial management. Parallel cases are pending in a number of state courts.

Certain Canadian defendants — Toyota Canada, Inc. ("Toyota Canada"); DaimlerChrysler Canada, Inc. ("Daimler Canada"); Mercedes-Benz Canada, Inc. ("Mercedes-Benz Canada"); Nissan Canada, Inc. ("Nissan Canada"); BMW Canada, Inc. ("BMW Canada"); and the Canadian Automobile Dealers Association ("CADA") — move to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2).

After oral argument on January 5, 2004, it is my understanding that (1) the plaintiffs' Amended Consolidated Class Action Complaint supercedes all previous complaints in these consolidated actions; (2) no defendants now seek dismissal for improper service of process; (3) the plaintiffs do not assert jurisdiction based on any state long-arm statute; and (4) the plaintiffs do not attempt to meet the First Circuit's requirement for asserting personal jurisdiction under Fed.R.Civ.P. 4(k)(2). See United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 41-42 (1st Cir.1999).

I DENY the 12(b)(2) motions of Daimler Canada and CADA. I GRANT the 12(b)(2) motions of Nissan Canada, BMW Canada and Toyota Canada. I DEFER action on the motion of Mercedes-Benz Canada, while permitting jurisdictional discovery concerning Mercedes-Benz non-export arrangements.

II. ANALYSIS

(A) Section 12 of the Clayton Act

Section 12 of the Clayton Act provides:

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; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.

15 U.S.C. § 22 (1997).

The cases are unanimous that this single sentence has two topics. The clause before the semi-colon is a venue provision (describing districts where an antitrust lawsuit against a corporate defendant may be heard). See United States v. Scophony Corp., 333 U.S. 795, 802, 68 S.Ct. 855, 92 L.Ed. 1091 (1948); GTE New Media Services v. BellSouth Corp., 199 F.3d 1343, 1350 (D.C.Cir.2000); In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288, 293 (3d Cir.2004). The clause following the semi-colon is a jurisdiction/service of process provision (describing where a corporate defendant may be served with papers that bring it before a particular court). See id. The cases also agree that the second clause's final phrase, "wherever it may be found," permits worldwide service of process upon a corporate defendant if that corporate defendant is subject to section 12's language. See Go-Video, Inc. v. Akai Elec. Co., Ltd., 885 F.2d 1406, 1413 (9th Cir.1989); Auto. Refinishing Paint, at 293; Amtrol. Inc. v. Vent-Rite Valve Corp., 646 F.Supp. 1168, 1171 (D.Mass.1986).

But courts have struggled for years with the meaning of the second clause's limiting phrase "in such cases."² Does "such cases" mean antitrust lawsuits against a corporate defendant? Or does it mean only antitrust cases against a corporate defendant that meet all the criteria of the first clause, i.e., where venue is established on the criteria set out there? The question is important because there is a separate venue statute that is broader for alien defendants, permitting venue over alien defendants in any district. See 28 U.S.C. § 1391(d). If plaintiffs can use the alien venue statute in combination with section 12's service of process provision, they can sue an alien corporate defendant in federal court anywhere in the United States, subject to constitutional limitations, and serve that defendant anywhere in the world. But if section 12's worldwide service provisions are limited to cases where venue exists under section 12's first clause, plaintiffs will be far more limited in their choice of forum.

The parties agree that in this multi-district case I must apply First Circuit law to determine the answer. Unfortunately the First Circuit has not spoken on the issue. Until last month, there was an even split of the other Circuits, the Ninth Circuit choosing the first (broader) interpretation and the D.C. Circuit choosing the second (narrower).³ Compare Go-Video, 885 F.2d at 1413 with GTE, 199 F.3d at 1351. Part of the delay in issuing this opinion reflected my own effort to write an opinion dealing with the ambiguous language of the statute, the circuit and district cases, the legislative history, and Supreme Court pronouncements about venue generally and about the section 12 language in particular. But now the Third Circuit has written a comprehensive opinion surveying the authorities, In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288. I see no reason as a trial court judge to repeat what it has done. Its reasoning is persuasive. I believe the First Circuit will follow it, if presented with the issue. I therefore follow the Third Circuit (and the Ninth Circuit), concluding that the second, worldwide service, clause of section 12 is available in antitrust cases generally against corporate defendants, and that a plaintiff can use it in conjunction with the alien venue statute.

(B) Nationwide Contacts

Finding that the statutes permit personal jurisdiction is the first step in the analysis. But there is a second step: the exercise of jurisdiction must also meet constitutional requirements. Because the personal jurisdiction asserted here derives from federal statutes, I do not apply the traditional Fourteenth Amendment due process analysis that deals with the power of the individual states. Instead, the constitutional inquiry arises under the Fifth Amendment (dealing with the federal government) and the analysis is whether a particular defendant has sufficient contacts with the United States as a whole to justify the assertion of federal court jurisdiction over it. The Supreme Court has not spoken to this issue, but that is the teaching of First Circuit caselaw. In United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir.2001), the court stated:

The personal jurisdiction inquiry in federal question cases like this one differs from the inquiry in diversity cases. Here, "the constitutional limits of the court's personal jurisdiction are fixed ... not by the fourteenth Amendment but by the Due Process Clause of the Fifth Amendment." This distinction matters because under the Fifth Amendment, a plaintiff need only show that the defendant has adequate contacts with the United States as a whole, rather than with a particular state.

(internal citations omitted); accord United Elec., Radio & Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1085 (1st Cir.1992). Here, the plaintiffs assert both general and specific jurisdiction. I analyze the showing they have made under the prima facie standard of Boit v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir.1992). Thus I "consider only whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Id. I consider both "general" jurisdiction (jurisdiction asserted in connection with suits not directly founded on forum-based conduct) and "specific" jurisdiction (jurisdiction asserted when a suit arises directly out of forum-based activities). See Donatelli v. National Hockey League, 893 F.2d 459, 462-63 (1st Cir.1990) (citations omitted). Because there is no Supreme Court caselaw on the Fifth Amendment issue, I use the factors identified in its Fourteenth Amendment jurisdictional cases, as they apply to nationwide contacts.

(1) General Jurisdiction

Assertion of general jurisdiction over a defendant requires a court to examine a defendant's contacts with the forum "to determine whether they constitute the kind of continuous and systematic general business contacts" that will satisfy constitutional standards. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). If sufficient contacts do exist, the exercise of jurisdiction must also be reasonable. Swiss Am. Bank, 274 F.3d at 619 (citing Donatelli, 893 F.2d at 465). But if such contacts do not exist in sufficient abundance, the general jurisdiction inquiry ends. Donatelli, 893 F.2d at 465. The constitutional parameters of general jurisdiction require the contacts to be "continuous" and "substantial" (single or isolated activities are insufficient), and at a level "tha...