UNITED STATES DENT. INST. v. American Ass'n of Orth.

• Decision Date: 06 June 1975
• Docket Number: No. 74 C 2924.,74 C 2924.
• Parties: UNITED STATES DENTAL INSTITUTE et al., Plaintiffs, v. AMERICAN ASSOCIATION OF ORTHODONTISTS et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

396 F. Supp. 565

UNITED STATES DENTAL INSTITUTE et al., Plaintiffs, v. AMERICAN ASSOCIATION OF ORTHODONTISTS et al., Defendants.

No. 74 C 2924.

United States District Court, N. D. Illinois, E. D.

June 6, 1975.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Lee A. Freeman, Freeman, Freeman & Salzman, Chicago, Ill., for plaintiffs.

Thomas L. Croft, Peter W. Herzog, Jr., and John R. McFarland, Coburn, Croft, Shepherd & Herzog, St. Louis, Mo., John Edward Burke, Ross, Hardies, O'Keefe, Babcock & Parsons, Chicago, Ill., for Am. Assoc. of Orthodontists and certain individual defendants.

Owen Rall, Peter M. Sfikas, Russell M. Pelton, Jr. and Michael P. Tone, Peterson, Ross, Rall, Barber & Seidel, Chicago, Ill., for Am. Dental Assn. and certain individual defendants.

Raymond R. Cusack, Kirkland & Ellis, Chicago, Ill., for Antonio J. Venezia.

MEMORANDUM OPINION

DECKER, District Judge.

The United States Dental Institute ("USDI"), a private, for-profit, post-secondary educational institution, and ten individual general practitioner dentists have filed this antitrust action against two professional organizations, the American Association of Orthodontists ("AAO") and the American Dental Association ("ADA"), and twenty-five individual defendants, twenty-three of whom are officials of those organizations.¹ In this three-count complaint, plaintiffs seek injunctive and declaratory relief and treble damages. Count I is a claim by USDI brought under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2. USDI alleges that it seeks to teach orthodontic skills and techniques to general practitioner dentists by means of monthly three-day seminars over a five-year period. In this manner, these dentists would be able to expand their general practice within the limits of their license to practice dentistry, without interrupting their careers to return to school for two years of specialty training. Such training would further qualify them as orthodontists. USDI does not claim to be in a position to certify its students as qualified orthodontists; it claims to serve only as an educational facility teaching specialty techniques to practicing dentists. The basis of the claim in Count I is that defendants "engaged in a combination, conspiracy and continuing course of conduct designed to unreasonably restrain and destroy USDI" for the purpose of restricting the number of individuals able to practice orthodontia and thus protect the monopolistic position of certified orthodontists. Among the acts charged against defendants in Count I are: (1) actions to prevent USDI from receiving approval from the State of Illinois to operate as a private post-secondary educational facility, and once such approval had been granted, defendants acted to have it revoked by the Illinois Superintendent of Public Instruction; (2) approval of "Guidelines for Continuing Dental Education" which eliminated USDI from the list of defendant-approved educational programs; (3) refusal to publish listings of USDI courses or USDI advertisements for qualified faculty members in defendant-controlled journals; and (4) approval of an advisory opinion declaring it to be "unethical" for a dentist to participate as a teacher in a non-defendant-approved educational program.

Count II is a pendent state claim charging defendants with libel of USDI allegedly resulting from the publication of certain letters and articles.

Count III is a claim by the ten individual general practitioner dentist plaintiffs, on behalf of themselves and their purported class, who have been unable to receive training in orthodontia, who must refer their patients to recognized specialists in orthodontia, and who consequently have been unable to improve their earnings through expanded services for their patients.

Defendants have filed a plethora of motions in this case. There were a series of motions to dismiss based on lack of personal jurisdiction, improper venue, lack of subject matter jurisdiction, and failure to state a claim upon which relief can be granted. Alternatively, defendants moved to strike portions of the complaint. I will now turn to a consideration of each of these motions.

Personal Jurisdiction

Nine individual defendants, who were officers and officials of AAO, have moved to dismiss the complaint as to them on grounds of lack of personal jurisdiction, pursuant to F.R.Civ.P. 12(b)(2).² By way of personal affidavit, each of these defendants states that he is not an inhabitant of Illinois, was "found" in this lawsuit (i. e., served with summons) outside of Illinois, and therefore is not properly subject to this court's jurisdiction. In determining the validity of service of process in general, and extra-territorial service of process, in particular, the Federal Rules of Civil Procedure provide:

"Service of process upon a defendant is . . . sufficient if the summons and complaint are served . . . in the manner prescribed by the law of the state in which the district court is held for the service of summons or other like process upon any such defendant in an action brought in the courts of general jurisdiction of that state." F.R.Civ.P. 4(d)(7).

". . . Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of a summons . . . upon a party not an inhabitant of or found within the state, . . . service may . . . be made under the circumstances and in the manner prescribed in the statute or rule." F.R. Civ.P. 4(e).

In Illinois, the long-arm statute, Section 17 of the Illinois Civil Practice Act, Ill. Rev.Stat. ch. 110, § 17, provides, in pertinent part:

"(1) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person, and, if an individual, his personal representative, to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any such acts:

(a) The transaction of any business within this State;

(b) The commission of a tortious act within this State;

. . . . . .

"(2) Service of process upon any person who is subject to the jurisdiction of the courts of this State, as provided in this Section, may be made by personally serving the summons upon the defendant outside this State, as provided in this Act, with the same force and effect as though summons had been personally served within this State."

Extra-territorial service of process under this statute is proper in treble damage actions under the federal antitrust laws. Metropolitan Sanitary District of Greater Chicago v. General Electric Co., 35 F.R.D. 131 (N.D.Ill. 1964). Before applying this statute in this case, however, in considering defendants' motion to dismiss for lack of jurisdiction over the person, certain guidelines must be recognized. Such standards were recently set forth by my colleague Judge Will in Tatham-Laird & Kudner, Inc. v. Johnny's American Inn, Inc., 383 F.Supp. 28, 29 (N.D.Ill.1974), where he made an analysis of § 17 as interpreted by the courts:

"It has been repeatedly stressed by the Illinois courts that the legislative intent of the Illinois long arm statute, Chap. 110, Ill.Rev.Stat., §§ 16 and 17, was the exertion of jurisdiction over non-residents to the maximum extent permitted by the due process clause. O'Hare International Bank v. Hampton, 437 F.2d 1173 (7th Cir. 1971); Rosenthal & Company v. Dodick, 365 F.Supp. 847 (N.D.Ill.1973); Nelson v. Miller, 11 Ill.2d 378, 143 N.E.2d 673 (1957). As set forth in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny, due process requires that there be sufficient minimum contacts with the forum state so that the exercise of jurisdiction over the non-resident be both reasonable and just according to the traditional concepts of fair play and substantial justice. Personal jurisdiction thus depends upon the existence of some voluntary act or conduct which affords the defendant the benefits and protections of the forum's law. Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961). In Illinois, this does not necessitate the defendant's actual physical presence in the state, but only that the transactions have a substantial connection with this forum. Cook Associates, Inc. v. Colonial Broach & Machine Co., 14 Ill.App.3d 965, 304 N.E.2d 27 (1973)."

To this well reasoned statement of law, I would further note only that there is no formula or rule of thumb for determining whether sufficient minimum contacts exist, other than by ascertaining what is fair and reasonable in the circumstances of the particular situation. Hutter Northern Trust v. Door County Chamber of Commerce, 403 F.2d 481, 484 (7th Cir. 1968).

In applying these standards to the instant case, this court must closely examine both the allegations of the complaint relevant to these defendants and the facts stated in each defendant's affidavit. The complaint charges that these individual defendants furthered the conspiracy to illegally restrain the commerce of plaintiffs by: (1) adopting the "Guidelines for Continuing Dental Education" which allegedly sought to eliminate USDI as a source of continuing education in orthodontia; and (2) allegedly acting to prevent USDI from gaining approval from the State of Illinois to operate as a private post-secondary educational facility in orthodontia and, when such approval was granted, seeking to have the approval revoked.³

In their individual affidavits, defendants Aldrich, Bushey, Sather and West state that they attended a meeting of the AAO Council on Orthodontic Education held in April, 1974, at the O'Hare Inn in Rosemont, Illinois, at which meeting the Council adopted the allegedly restrictive "Guidelines" cited in the complaint. Bushey, Sather and West admit in their affidavits that they were members of the Council which approved the "Guidelines". This was a...