Sunbury Wire Rope Mfg. Co. v. United States Steel Corp.

• Decision Date: 29 February 1956
• Docket Number: No. 11731.,11731.
• Citation: 230 F.2d 511
• Parties: SUNBURY WIRE ROPE MANUFACTURING COMPANY, Appellant, v. UNITED STATES STEEL CORPORATION; The Youngstown Sheet & Tube Company; Detroit Steel Corporation; John A. Roebling's Sons Corporation; Bethlehem Steel Company; Jones & Loughlin Steel Corporation; Union Wire Rope Corporation; Wire Rope Corporation of America, Incorporated; Universal Wire Products, Inc.; and The Roebling Securities Corporation.
• Court: U.S. Court of Appeals — Third Circuit

230 F.2d 511 (1956)

SUNBURY WIRE ROPE MANUFACTURING COMPANY, Appellant, v. UNITED STATES STEEL CORPORATION; The Youngstown Sheet & Tube Company; Detroit Steel Corporation; John A. Roebling's Sons Corporation; Bethlehem Steel Company; Jones & Loughlin Steel Corporation; Union Wire Rope Corporation; Wire Rope Corporation of America, Incorporated; Universal Wire Products, Inc.; and The Roebling Securities Corporation.

No. 11731.

United States Court of Appeals Third Circuit.

Argued January 19, 1956.

Decided February 29, 1956.

Edward W. Mullinix, Philadelphia, Pa. (Bernard G. Segal, Charles C. Hileman, III, Philadelphia, Pa., on the brief), Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., of counsel, for appellant.

H. Francis DeLone, Philadelphia, Pa. (Raymond W. Midgett, Jr., Barnes, Dechert, Price, Myers & Rhoads, Philadelphia, Pa., on the brief), for appellee Roebling Securities Corp.

Before GOODRICH, McLAUGHLIN and HASTIE, Circuit Judges.

HASTIE, Circuit Judge.

Seeking trebled damages under the antitrust laws, Sunbury Wire Rope Manufacturing Company, a Pennsylvania corporation, has brought this suit against several other corporations in the District Court for the Eastern District of Pennsylvania. Sunbury charges that the defendants have participated in a conspiracy in restraint of trade which has destroyed its Pennsylvania manufacturing business.

One of the defendants is the Roebling Securities Corporation, formerly J. A. Roebling's Sons Company. This defendant is a New Jersey corporation which had been registered and doing business in Pennsylvania at the time of the alleged wrongs, but had duly cancelled its registration and discontinued its business in Pennsylvania before this action was instituted against it. It was brought into this litigation by substituted service, complaint and summons being served upon the Secretary of the Commonwealth of Pennsylvania. This was thought to be a proper and effective procedure because, in applying for leave to withdraw its Pennsylvania registration, Roebling had filed with the Secretary of the Commonwealth, as required by the Pennsylvania Business Corporation Law, 15 P.S. § 2852-1 et seq., a document containing the following provision:

"6th. The corporation consents that lawful process against it in any action or proceeding upon any liability or obligation incurred within the Commonwealth of Pennsylvania before the issuance of the certificate of withdrawal hereby applied for may be served upon the Secretary of the Commonwealth of Pennsylvania after the issuance of such certificate of withdrawal."

Roebling moved to dismiss the action on the ground that venue was improperly laid in the Eastern District of Pennsylvania and its consent to suit and service did not extend to this litigation. The court granted the motion and entered judgment for Roebling. The court also undertook to make its action immediately appealable by entering certification of finality under Rule 54(b) of the Rules of Civil Procedure, 28 U.S.C. This appeal followed.

The relevant provision of the Clayton Act concerning venue in antitrust suits is in the following language:

"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; * * *." 38 Stat. 736, 15 U.S.C.A. § 22.

In addition, Section 1391(c) of the Judicial Code provides that a "corporation may be sued in any judicial district in which it is * * * licensed to do business." 28 U.S.C. § 1391(c) (1952). It is true that at the time the cause of action asserted in this case is said to have arisen, Roebling was registered in Pennsylvania as a foreign corporation and maintained its principal Pennsylvania office in Philadelphia within the Eastern District of Pennsylvania. But before the present suit was filed, this New Jersey corporation had terminated its registration and activities in Pennsylvania. Therefore, the present choice of forum does not satisfy the venue requirements of the Clayton Act or Section 1391 of Title 28, and this action cannot be maintained unless Roebling has waived venue and submitted to this kind of suit in the Eastern District of Pennsylvania.

For legal analysis of such a problem the obvious starting point is Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167. That case establishes that when a foreign corporation, obeying a requirement of state law, files an actual designation and consent empowering a statutory agent to accept for it legal process issued within the state, its action may amount to an effective agreement to submit to suit, at least on causes of action arising under local law, not only in state courts but also in federal courts with subject matter jurisdiction, despite any defect of federal statutory venue which might otherwise be asserted. The companion case of Oklahoma Packing Co. v. Oklahoma Gas and Electric Co., 1939, 309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 447, is to the same effect with one point added. Such consent and waiver may embrace suits which, in addition to being brought in a federal court, assert a cause of action created by federal rather than state law.

We think it is the teaching of these leading cases and a number of decisions of courts applying them¹ that there is no federal rule or overriding federal policy which limits the effectiveness of this type of consent in its application to federal litigation. If the state scheme is to require foreign corporations to submit to all suits filed in any competent federal court within the state and a foreign corporation files an appropriate consent, such facilitation of suability in the federal courts is legally unobjectionable.

This means that the scope of the foreign corporation's consent and waiver of venue must be determined as a factual question. In deciding this issue of fact a court will appropriately consider the actual language of any document filed by the corporation with reference to the service of process upon it and will construe that expression of consent in the light of the statutory scheme and requirements it was designed to satisfy. The provisions of the state statute and the corporation's undertaking pursuant thereto may be narrow or broad. They may be in such terms as to indicate or imply that all or some litigation in federal courts is beyond their intended coverage. But no such limitation is inherent in the rule of the Neirbo case. The entire question is a matter of interpreting state legislation and attributing reasonable meaning to corporate action pursuant thereto. We approach this case that way.

Provisions of the relevant Pennsylvania statutes and the language of Roebling's consent, quoted at the beginning of this opinion, make it apparent that Roebling has expressed very general and comprehensive submission to the jurisdiction of courts in Pennsylvania with no intimation that any type of federal or state litigation is excluded. Roebling's certificate of consent was filed pursuant to Section 1015 of the Pennsylvania Business Corporation Law which provides that such an undertaking as to continuing suability shall be filed with every application of a foreign corporation to cancel its registration and withdraw from Pennsylvania. Both the...