Stern Fish Co. v. Century Seafoods, Inc.

• Decision Date: 18 May 1966
• Docket Number: Civ. A. No. 37702.
• Parties: STERN FISH CO., Inc. v. CENTURY SEAFOODS, INC., William M. McClain, Inc., South African Rock Lobster Ass'n. and Sarl Service Corporation.
• Court: U.S. District Court — Eastern District of Pennsylvania

254 F. Supp. 151

STERN FISH CO., Inc. v. CENTURY SEAFOODS, INC., William M. McClain, Inc., South African Rock Lobster Ass'n. and Sarl Service Corporation.

Civ. A. No. 37702.

United States District Court E. D. Pennsylvania.

May 18, 1966.

Norman Shigon, Philadelphia, Pa., for plaintiff.

William T. Steerman, Zarwin, Prince, Baum & Steerman, Philadelphia, Pa., for Century Seafoods, Inc.

Edwin P. Rome, Marvin Comisky, Philip C. Patterson, Blank, Rudenko, Klaus & Rome, Philadelphia, Pa., for Wm. M. McClain, Inc., South African Rock Lobster Ass'n. and Sarl Service Corp.

DAVIS, District Judge.

The plaintiff has instituted a civil antitrust suit against the defendants alleging a conspiracy in restraint of trade in the importation and sale of South African rock lobster tails. The matter presently before the Court is the motion of the defendant, South African Rock Lobster Association (SARLA) to dismiss the complaint and quash the return of service of the summons on grounds of improper venue, lack of jurisdiction, and insufficient service of process.

The uncontested affidavit of Albert J. Stella, former president of South African Rock Lobster Association, establishes that prior to and during 1959 this defendant was engaged in institutional advertising of South African rock lobster tails (SARL tails) on both the wholesale and retail level. Several of the Association's officers and employees made visits at "infrequent intervals" to its various members, including those in Philadelphia, for the purpose of discussing various items in connection with the campaign, but they made no other trips to Pennsylvania except those mentioned.

SARLA, incorporated under the laws of New York, has never been licensed to do business in this Commonwealth and has never had a bank account, owned or leased property, had a telephone listing, or had any agent or representative in this state.

In 1959, SARLA made a decision to liquidate and dissolve, a decision that was formalized by a resolution of its Board of Directors on August 1, 1961. The Secretary of State of New York issued its Certificate of Dissolution under the New York Membership Corporation Law on February 23, 1962. Between 1959 and its final liquidation, the defendant engaged in no other activities except those involved in "winding up of its affairs".

Since this action is an antitrust suit, the venue requirements are governed by § 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."

There is no contention that the defendant was an inhabitant of the Eastern District of Pennsylvania so that we need not pass upon that provision of the statute. Moreover, there is no question in our mind that the defendant was not found in this jurisdiction within the meaning of the Act. The word "found" connotes presence and "continuous local activities" within the District. Eastman Kodak Co. of New York v. Southern Photo Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927); United States v. Watchmakers of Switzerland Information Center, 133 F.Supp. 40 (S.D. N.Y.1955). The uncontested affidavits of the former president of SARLA at most show sporadic and intermittent activity here. In any event the term "found" requires more contact within the jurisdiction than the phrase "transacts business" so that if the defendant comes within the ambit of the latter provision there is no need to concern ourselves with the former. See Goldlawr, Inc. v. Shubert, 169 F.Supp. 677 (E.D.Pa.1958).

The term "transacts business" was a later addition to the venue provision of the Clayton Act and was designed to enlarge the jurisdiction of the various federal district courts in adjudicating antitrust cases. United States v. Scophony Corp., 333 U.S. 795, 809, 68 S.Ct. 855, 92 L.Ed. 1091 (1948). Eastman Kodak Co. of New York v. Southern Photo Materials Co., supra, 273 U.S. at 372, 47 S.Ct. at 403. It is not to be given a technical or legalistic meaning; for "a corporation is engaged in transacting business in a district * * * if in fact, in the ordinary and usual sense, it `transacts business' therein of any substantial character." "The practical, everyday business or commercial concept of doing or carrying on business of any substantial character became the test of venue." United States v. Scophony Corp., supra, 333 U.S. at 807, 68 S.Ct. at 862. See Eastman Kodak Co. of New York v. Southern Photo Materials Co., supra, 273 U.S. at 373, 47 S.Ct. at 403; Rhode Island Fittings Co. v. Grinnell Corp., 215 F. Supp. 198 (D.R.I.1963); Ohio-Midland Light & Power Co. v. Ohio Brass Co., 221 F.Supp. 405 (S.D.Ohio 1962); Commonwealth Edison Co. v. Federal Pac. Elec. Co., 208 F.Supp. 936 (N.D.Ill.1962).

Even though the addition of the term "transacts business" was intended to broaden venue in antitrust cases, it is not without its limitations, for the Supreme Court as well as the lower courts have interpreted the statute to require some amount of business continuity and certainly more than a few isolated and peripheral contacts with the particular judicial district. United States v. Scophony Corp., supra; Eastman Kodak Co....