Kingsepp v. Wesleyan University

• Citation: 763 F. Supp. 22
• Decision Date: 02 May 1991
• Docket Number: No. 89 Civ. 6121 (DNE).,89 Civ. 6121 (DNE).
• Parties: Roger KINGSEPP, On behalf of himself and all others similarly situated, Plaintiff, v. WESLEYAN UNIVERSITY, Princeton University, Harvard University, Yale University, Dartmouth University, Stanford University, Brown University, Amherst University, Williams University, University of Pennsylvania, Columbia University, and Cornell University, Defendants.
• Court: U.S. District Court — Southern District of New York

763 F. Supp. 22

Roger KINGSEPP, On behalf of himself and all others similarly situated, Plaintiff, v. WESLEYAN UNIVERSITY, Princeton University, Harvard University, Yale University, Dartmouth University, Stanford University, Brown University, Amherst University, Williams University, University of Pennsylvania, Columbia University, and Cornell University, Defendants.

No. 89 Civ. 6121 (DNE).

United States District Court, S.D. New York.

May 2, 1991.

Steven M. Kramer & Associates, New York City (Steven M. Kramer, of counsel), for plaintiff.

Kaye, Scholer, Fierman, Hays & Handler, Stanley D. Robinson, John W. Shryber, New York City, (Palmer & Dodge, Thane D. Scott, Michael T. Gass, Bruce D. Berns, Boston, Mass., of counsel), for defendant Williams College.

Baker & Hostetler (Alan S. Ward, Lee H. Simowitz, Jenifer M. Brown, of counsel), Washington, D.C., for defendant Wesleyan University.

Richards & O'Neil, Charles E. Dorkey, III, New York City (Dartmouth College, Cary P. Clark, Thomas W. Soybel, Hanover, N.H., Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Washington, D.C., and Bruce D. Sokler, Bruce F. Metge, Beth I.Z. Boland, Boston, Mass., of counsel), for defendant Trustees of Dartmouth College.

OPINION AND ORDER

EDELSTEIN, District Judge:

Defendants Wesleyan University ("Wesleyan"), The President and Trustees of Williams College ("Williams"), and the Trustees of Dartmouth College ("Dartmouth") have moved pursuant to Federal Rule of Civil Procedure 12(b)(2) and 12(b)(3) to dismiss this putative class action antitrust case against them on the grounds that this Court lacks personal jurisdiction and that venue is improper, and, in the alternative, pursuant to 28 U.S.C. § 1406 to transfer this action to a district in which it could have been brought. For the following reasons, defendants motions are denied.

I. BACKGROUND

Plaintiff Roger Kingsepp, a student at Wesleyan, commenced this action on September 15, 1989. In his complaint, plaintiff alleges that defendants "have engaged in a conspiracy to fix or artificially inflate the price of tuition and financial aid." (Complaint, ¶ 6). As a result of the alleged conspiracy, plaintiff claims that "tuition and financial aid have been fixed, stabilized and inflated in violation of Section One of the Sherman Act" and that the class has therefore been damaged by "having to pay higher tuition than in a free competitive market." Id. at ¶ 13.

II. DISCUSSION

Wesleyan, Williams, and Dartmouth (the "moving defendants") have moved to dismiss the complaint against them for lack of personal jurisdiction and improper venue, and, in the alternative, to transfer this action to a district in which it could have been brought. The moving defendants contend that they are not subject to jurisdiction under the nationwide service of process provisions of the antitrust laws or under the New York long-arm statute, and that venue is improper under any of the applicable venue statutes. The remaining defendants do not contest jurisdiction and venue. Plaintiff has asserted personal jurisdiction over the moving defendants under section 12 of the Clayton Act, 15 U.S.C. § 22, and New York Civil Practice Law §§ 301, 302(a)(1), and 302(a)(3). Plaintiff also claims that venue is appropriate under section 12 of the Clayton Act and under the general federal venue provision, 28 U.S.C. § 1391(b).

A. Personal Jurisdiction

The moving defendants argue that plaintiff's claim "that jurisdiction is available under Section 12 of the Clayton Act even if defendants have no contacts with New York, or this district, so long as they have contacts with the United States.... is plainly wrong." (Reply Memorandum of Moving Defendants, p. 14). In support of this argument, they assert that "this basis of jurisdiction applies only to aliens, and not to domestic entities such as the moving defendants." Id. (emphasis in original). Plaintiff's assertion of jurisdiction under section 12, at least as to Wesleyan and Williams, is well founded; it is the moving defendants' argument that is plainly wrong.

Rule 4(e) of the Federal Rules of Civil Procedure authorizes service of process on an out of state party when authorized by a federal statute. Personal jurisdiction in an antitrust action is governed by section 12 of the Clayton Act, 15 U.S.C. § 22, which 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.

Section 12 authorizes out of state service on a corporate defendant in an antitrust action, but does not specifically mention the exercise of personal jurisdiction. However, the statute's authorization of service outside the state has been interpreted as authorizing federal courts to exercise nationwide personal jurisdiction over corporate antitrust defendants. Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors Pty. Ltd., 647 F.2d 200, 204 n. 6 (D.C.Cir.1981); The National Association of Pharmaceutical Manufacturers, Inc. v. Ayerst Laboratories, No. 86 Civ. 5047, slip op. at 10 (S.D.N.Y. September 5, 1989); Grosser v. Commodity Exchange, Inc., 639 F.Supp. 1293, 1312 (S.D. N.Y.1986); Dunham's, Inc. v. Nat'l Buying Syndicate of Texas, 614 F.Supp. 616, 623 (D.C.Mich.1985); General Electric v. Bucyrus-Erie Co., 550 F.Supp. 1037, 1038 (S.D.N.Y.1982).

In cases where Congress authorizes nationwide federal jurisdiction, as in section 12 of the Clayton Act, the district court's jurisdiction is co-extensive with the boundaries of the United States. Mariash v. Morrill, 496 F.2d 1138, 1143 (2d Cir. 1974); see Go-Video, Inc. v. Akai Electric Co., Ltd., 885 F.2d 1406, 1414 (9th Cir. 1989). Thus, a defendant who resides within the territorial boundaries of the United States is subject to personal jurisdiction under nationwide service of process without regard to state jurisdictional statutes. Greene v. Emersons Ltd., 86 F.R.D. 47, 65 (S.D.N.Y.1980). Further, it is not necessary that the resident defendant have the requisite minimum contacts with the state that would exercise jurisdiction. Mariash, 496 F.2d at 1143; see, e.g., F.T.C. v. Jim Walter Corp., 651 F.2d 251, 256 (5th Cir. 1981) ("a resident corporation necessarily has sufficient contacts with the United States to satisfy the requirements of due process").

In Mariash v. Morrill, 496 F.2d 1138 (2d Cir.1974), the Court of Appeals specifically rejected the argument that a United States resident subject to nationwide service of process must have minimum contacts with the state in which the federal court would exercise jurisdiction. Id. at 1143. The Court of Appeals stated:

It is not the state of New York but the United States "which would exercise its jurisdiction over them the defendants." And plainly, where, as here, the defendants reside within the territorial boundaries of the United States, the "minimal contacts," required to justify the federal government's exercise of power over them, are present.

Id. at 1143 (citations omitted). In sum, when a defendant resides in the United States and is subject to nationwide service of process under a federal statute, the defendant is subject to personal jurisdiction in federal court without regard to state long-arm statutes and due process requirements are satisfied by the defendant's contacts with the United States.

Two of the three moving defendants are corporations. Wesleyan University is a non-profit, specially-chartered Connecticut corporation whose campus is located in Middletown, Connecticut. Williams is a non-profit corporation located in Williamstown, Massachusetts. As corporations which reside in the United States, Wesleyan and Williams are subject to nationwide service of process under Section 12 of the Clayton Act and subject to personal jurisdiction in this action. Dartmouth, however, contends that as a trust organized under a charter issued in the name of King George III of Britain,¹ it should not be deemed a "corporation" for purposes of section 12.

Section 12's nationwide service of process provision applies to corporations, and has been narrowly construed. In McManus v. Tato, 184 F.Supp. 958 (S.D.N.Y. 1959), Judge Weinfeld refused to apply section 12's nationwide service of process provision to a voluntary association, reasoning:

"Persons", as defined in the Clayton Act, are "deemed to include corporations and associations"; yet section 12 of the same act, which authorizes extraterritorial service, specifies only "corporation". This specificity necessarily excludes individuals and voluntary associations from those amenable to extraterritorial service.

Id. at 959. A number of other cases have narrowly construed section 12's nationwide service of process provision so as to exclude non-corporate defendants. See, e.g., Pocahontas Supreme Coal Company v. National Mines Corp., 90 F.R.D. 67, 69 (S.D.N.Y.1981); In re Chicken Antitrust Litigation, 407 F.Supp. 1285, 1299 (N.D. Ga.1975); California Clippers, Inc. v. United States Soccer Football Ass'n, 314 F.Supp. 1057, 1061 (N.D.Cal.1970); Pacific Seafarers, Inc. v. Pacific Far East Line, 48 F.R.D. 347, 349 (D.D.C.1969); Thill Securities Corporation v. New York Stock Exchange, 283 F.Supp. 239, 242 (E.D.Wis. 1968). Given the narrow construction of the term "corporation" in section 12 and the reluctance of courts to extend nationwide service of process under section 12 to non-corporate defendants, it would be inappropriate to extend section 12 to encompass a trust such as Dartmouth.

In Kresberg v. Int'l Paper Co., 149 F.2d 911 (2d Cir.), cert. denied, 326 U.S. 764, 66 S.Ct. 146, 90 L.Ed. 460 (1945), the Second Circuit was faced with the question of whether to apply the term "any corporation" in a nationwide service of process provision to a...