business' as having a much broader meaning for establishing venue than the concept of 'doing business' denoted by 'found' under the pre-existing statute and decisions. He stated that 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'. He pointed out that by substituting practical, business conceptions for the previous hair-splitting legal technicalities encrusted upon the 'found'- 'present'-'carrying-on-business' sequence, the Supreme Court in the Eastman Kodak case had yielded to and made effective the remedial purpose of the Congress to relieve persons injured through corporate violations of the anti-trust laws from the often insuperable obstacle of resorting to distant forums for redress of wrongs done in their own places of business or residence. He also pointed out the extraterritorial effect of the service of process provisions of Section 12 were such that once venue was established in a district, service of process could be made in a foreign district of which the corporation was an inhabitant, even in a judicial district of another state. The case recognized that the words 'doing business' and 'found' had technical connotations and as used in the statutes required an interpretation somewhat at variance with their commonly accepted meanings. Since the instant case is based upon the anti-trust laws, the Clayton and Sherman Acts, the much broader venue provisions of those Acts as embodied in Section 12 of the Clayton Act must govern and the determination of these motions must be made under the rules laid down in the Scophony case.
The eight railroads involved in these motions have all presented different factual situations which, however, justify a broad classification of the railroads into four categories: (1) New York, New Haven & Hartford Railroad Company, Boston & Maine Railroad, and Maine Central Railroad Company; (2) Delaware & Hudson Railroad and New York, Ontario & Western Railway; (3) The Akron, Canton & Youngstown Railroad Company and The Virginian Railway Company; (4) Canadian Pacific Railway Company.
In considering the first group, the facts in the record establish that each has an office in Philadelphia, which is listed in building and telephone directories, and is carried in the literature and timetables of the railroads as one of their established offices. The employees in each office regularly solicit business for their respective railroads in the Eastern District of Pennsylvania. In addition to such solicitation, they answer inquiries, trace shipments, arrange for diversions of freight, and receive complaints, most of which are transmitted to the home office for attention. The record shows that these offices have been continuously maintained in this district for many years, that the offices have been staffed by the employees of the respective railroads and their work is exclusively in the interest of their employers. The record also establishes that each of these offices has been instrumental in obtaining a substantial amount of freight and passenger business for the respective railroads. It is clear, therefore, that the activities of these railroads constitute a continuous course of conduct, at least as extensive as the activities of the Eastman Kodak Company in the Eastman case supra, which activities the Supreme Court of the United States held to constitute 'transacting business' within the meaning of Section 12 of the Clayton Act. Venue, therefore, is properly laid in this district as to the four named railroads in that they are 'transacting business' in this district within the meaning of Section 12 of the Clayton Act.
For this Court to obtain jurisdiction of each defendant, however, there must be effective service. Green v. Chicago, Burlington & Quincy Ry. Co., 205 U.S. 530, 27 S. Ct. 595, 51 L. Ed. 916. Recognizing that Section 12 of the Clayton Act did not enlarge the existing limitations as to service of process present in Section 7 of the Sherman Act, we proceed now to a consideration of the question as to whether the defendants are 'doing business' in this district so that they may be 'found' here for purposes of effective service of process. None of the three railroad defendants is an inhabitant of this district, all being foreign corporations which have never registered to do business in the Commonwealth of Pennsylvania. In many respects their activities are similar to those of the Chicago, Burlington & Quincy Railway in Green v. Chicago, Burlington & Quincy Ry. Co., supra. While, as stated by Judge Grim of this Court in Moore v. Atlantic Coast Line R. Co., D.C., 98 F.Supp. 375, the authority of the Green case has been questioned by several circuits, Frene v. Louisville Cement Co., 77 U.S.App.D.C. 129, 134 F.2d 511, 146 A.L.R. 926; Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139; Perkins v. Louisville & N.R. Co., D.C. Cal., 94 F.Supp. 946, this district has rather consistently followed the Green case. The holdings in the Frene v. Louisville Cement Co., Hutchinson v. Chase & Gilbert, and Perkins v. Louisville & N.R. Co. cases, supra, seem to sustain the proposition that mere solicitation of business when substantial and conducted as a regular and continuous course of business, without more, constitutes 'doing business' within a district in the jurisdictional sense so as to subject such a defendant corporation to service in that district. However, because of decisions in this district, indicating a strict adherence to the ruling in the Green case, despite the views expressed in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, as it relates to the concept of 'doing business', I feel constrained in this case to find that the named defendants are not 'doing business' and may not be 'found' within this district and are therefore not subject to service of process here. I do this fully recognizing that the Supreme Court has recently indicated a more practical approach to that problem. Cf. International Shoe Co. v. Washington, supra, and the language of Mr. Justice Black in the dissenting opinion in Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 73 S. Ct. 900.
The motions to quash the return of service as to the three defendants will be granted but it will be without prejudice, however, to the plaintiffs' taking whatever steps are necessary to effect proper service in the appropriate district, it appearing that extraterritorial service of process is permissible. See the Scophony and Eastman Kodak cases supra.
In a second category are the Delaware & Hudson Railroad and the New York, Ontario & Western Railway. The Delaware & Hudson Railroad, like the three in group (1), maintains an office in Philadelphia which performs the same general and regular functions outlined in the discussion concerning that group. I would have no hesitancy in finding that the Delaware & Hudson Railroad 'transacts business' within this district, but there is an additional ground for holding that venue is properly laid in this district. Both railroads have registered to do business in the Commonwealth of Pennsylvania. Venue, therefore, is properly laid in this district under the provisions of 28 U.S.C. § 1391(c). See Lipp v. National Screen Service Corp., D.C., 95 F.Supp. 66. However, service of process in this case was not made either upon the registered agent or at the registered place of business of either corporation in Pennsylvania. In the case of Delaware & Hudson Railroad, service was made at its Philadelphia office, and service on the New York, Ontario & Western Railway was made at its office in Pittsburgh. Since neither corporation is 'doing business' in the district in which service was attempted, service was improperly made. The respective motions to quash the return of service, therefore, will be granted without prejudice, however, to the plaintiffs' taking whatever steps are necessary to effect proper service. In making this ruling, I am mindful of the contention made by the attorney for the New York, Ontario & Western Railway that this Court lacks jurisdiction over that railroad since it is in reorganization proceedings in a New York Federal Court. However, no stay order by that court has been brought to my attention. The question of the exclusiveness of the jurisdiction of the bankruptcy court is, therefore, not before me.
In the third category, The Virginian Railway Company and The Akron, Canton & Youngstown Railroad Company, a slightly different problem, both as to venue and service of process, is present. Neither railroad maintains an office in the Eastern District of Pennsylvania. Each does, however, have an office in the Western District of Pennsylvania. Occasionally employees of those offices solicit business for the respective railroads in the Eastern District. Neither railroad has registered to do business in Pennsylvania, nor has an authorized agent been appointed for service of process. Adopting the practical business standards approach of the Scophony and Eastman Kodak cases, I find that the activities of these two defendants are not such as to constitute 'transacting business' within the Eastern District of Pennsylvania, nor does either defendant come within any of the general venue provisions of the Judicial Code. The motions to dismiss for lack of venue as to these two railroads will, therefore, be granted.
The fourth and final category involves only the Canadian Pacific Railway Company. Since 1890 this company has continuously maintained an office and staff of employees in Philadelphia. In addition to the activities outlined for group (1), the Canadian Pacific performs other services. It issues bills-of-lading, receives prepaid payments of charges on freight to be carried over its lines, maintains a bank account in its name in this district, has handled a substantial number of inquiries and complaints in each of the past three years, handles a substantial amount of money through its office, and originated during the past three years in this district approximately 23,000 carloads of freight in each year. It appears, therefore, that this defendant conducts many activities over and above the mere solicitation of business and the transactions are of such a substantial nature that this defendant is 'doing business' and may be 'found' in this district. See Moore v. Atlantic Coast Line R. Co. supra. Venue, therefore, is properly laid here and the service of process is valid.
There is one other point raised by the motion of Canadian Pacific to quash service of process which requires but little comment. When the process server (an attorney specially designated by this court) attempted to make service, he inquired at the office of the defendant as to the person in charge thereof, and served the person, a Chief Clerk of the Freight Department, who said that he was in charge of the office. It appears that another employee then present in the office, the Passenger Agent, 'outranked' the person served. For that reason, defendant contends that the service was improper. There is no question but that the 'ranking' employee was promptly notified of the service. In any event, it is sufficient that a responsible person, who declared himself to be in charge of the office, was served. The motion of the Canadian Pacific to dismiss for improper venue and to quash return for service of process will, therefore, be denied.
An appropriate order will be entered.
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