RHODE ISLAND FITTINGS COMPANY v. GRINNELL CORPORATION

• Decision Date: 21 March 1963
• Docket Number: Civ. A. No. 3038.
• Parties: RHODE ISLAND FITTINGS COMPANY, Plaintiff, v. GRINNELL CORPORATION, J. D. Fleming, Stockham Valves and Fittings, Inc., The Grabler Manufacturing Company, and Hajoca Corporation, Defendants.
• Court: U.S. District Court — District of Rhode Island

215 F. Supp. 198

RHODE ISLAND FITTINGS COMPANY, Plaintiff, v. GRINNELL CORPORATION, J. D. Fleming, Stockham Valves and Fittings, Inc., The Grabler Manufacturing Company, and Hajoca Corporation, Defendants.

Civ. A. No. 3038.

United States District Court D. Rhode Island.

March 21, 1963.

C. Keefe Hurley, Boston, Mass., and James A. Higgins, Providence, R. I., for plaintiff.

Roger T. Clapp, Providence, R. I., and Frank A. Fritz, Sr., New York City, for defendants Grinnell Corp. and J. D. Fleming.

Thomas R. Wickersham, Providence, R. I., Douglas Arant and John H. Morrow, Birmingham, Ala., and Robert A. Bicks and Alan S. Ward, New York City, for defendant Stockham Valves and Fittings, Inc.

William H. Edwards and Frederick Lippitt, Providence, R. I., and Robert A. Smith, Baltimore, Md., for defendant Grabler Mfg. Co.

Matthew W. Goring, Providence, R. I., and Matthew J. Broderick, Philadelphia, Pa., for Hajoca Corp.

CAFFREY, District Judge.^*

On November 20, 1962, plaintiff Rhode Island Fittings Company filed a civil antitrust action naming as defendants Grinnell Corporation; J. D. Fleming, President of Grinnell; Stockham Valves and Fittings, Inc.; The Grabler Manufacturing Company; and Hajoca Corporation. The complaint alleges violations by all defendants of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, in the field of malleable iron pipe fittings and unions, and recites that each of the defendants transacts business in the District of Rhode Island and throughout the United States.

Three of the defendants, Stockham, Grabler, and Hajoca, acting pursuant to Rule 12(b), Federal Rules of Civil Procedure, filed motions to dismiss and quash return of service. The motions are substantially the same, each of these defendants alleging in its motion that it is not a resident, is not found, is not qualified to do business, and does not transact business, in the District of Rhode Island. All motions allege that the venue requirements of Section 12 of the Clayton Act are not satisfied by plaintiff.

Each of the three defendants has filed one or more affidavits of its corporate officers in support of its motion and plaintiff has accepted the affidavits as true for purposes of these motions. No counter-affidavit was filed by plaintiff as to any of the three moving defendants. Since each motion must be decided on the basis of the affidavit filed in support of it, I will treat the motions seriatim.

I.

Stockham is not qualified or licensed to do business in Rhode Island, has not paid a Rhode Island franchise or license tax, or filed a tax return here. It has not designated or had an agent for the service of process in Rhode Island and has no office, factory, warehouse, repair or research facility, or any other place of business here. No officer, director, employee, salesman, or agent resides, is located, or has an office in Rhode Island. Stockham has no telephone or telephone listing here. It has not owned real estate or other property in this State, nor has it leased any premises here, nor has it maintained either a bank account or corporate books and records in this State. During the period July 1960 through October 1962, certain shipments have been made by Stockham to points or customers inside Rhode Island. All such shipments have been made by common carrier, usually F.O.B. shipping point. These shipments may be classified as follows:

On occasion, as an accommodation to an independent jobber located outside of Rhode Island, and at that jobber's direction, Stockham during the period July 1960 through October 1962 has made shipments to customers of that jobber in Rhode Island. These shipments amounted to $5,111 in the last six months of 1960, $801 during the calendar year 1961, and $790 during the first ten months of the calendar year 1962. Percentagewise, these shipments constituted respectively .0590, .0041 and .0046 per cent of Stockham's total business for each of the three periods.

The second category of shipments were direct shipments to Grinnell Corporation in Rhode Island. These amounted to $548 in the last six months of 1960, $3,425 during the calendar year 1961, and $2,464 during the first ten months of 1962. These sales constitute .0063, .0176 and .0142 per cent of Stockham's total business for each of the three periods.

The third category of shipments were those made to Stockham customers. These amounted to $3.00 for the last six months of 1960, $1,219 for the calendar year 1961, and to a $21.00 loss for the first ten months of 1962.

Adding these figures, it appears that the total for all shipments by Stockham into Rhode Island amounted to $5,662 in the last six months of 1960 or .0653% of its total business for that period; $5,445 during the calendar year 1961 or .0280% of its total business for that year; and $3,233 during the first ten months of 1962 or .0186% of its total business for that ten month period. Limiting this analysis to the value of malleable pipe fittings and unions — the only product lines involved herein — the figures are reduced to $1,633 for the last six months of 1960, $2,575 for the calendar year 1961, and $5.00 for the first ten months of 1962.

It further appears that almost all of the shipments of malleable fittings and unions made to Grinnell during 1961 were made when production at Grinnell's plant in Pennsylvania was curtailed because of a strike. Excluding shipments made to Grinnell during the strike emergency, the dollar value of malleable fittings and unions shipped to Grinnell in Rhode Island during 1961 was $27.39.

The burden of proof on the issue of venue concededly rests upon plaintiff. Whether a corporation "transacts business" in a particular District is a question of fact in its ordinary untechnical meaning, the answer to which turns on an appraisal of the unique elements of a particular situation. In order to require a defendant to answer to a complaint of this type, plaintiff must satisfy this Court that "The business transacted must be of a substantial character, and it must have some degree of continuity. Mere isolated or sporadic contacts are not sufficient." Bruner v. Republic Acceptance Corp., 191 F.Supp. 200, 203 (E.D.Ark.1961). Plaintiff has failed to establish by a preponderance of the evidence that Stockham's activities in Rhode Island can be deemed to be of substantial character within the meaning of United States v. Scophony Corp. of...