The opinion of the court was delivered by: WILLSON
In this diversity action the defendant, Chesapeake and Ohio Railway Company (hereinafter referred to as C & O) has filed a motion to dismiss the complaint and for summary judgment in its favor. It assigns three reasons:
1. This Court lacks jurisdiction over the C & O.
2. This Court lacks venue under 28 U.S.C.A. 1391 because plaintiff, Joseph Norman Fannin, is admittedly a citizen of Kentucky and plaintiff, Bituminous Casualty Corporation, is a citizen of Illinois, and neither of the defendants are residents or citizens of this judicial district.
3. The Court does not have jurisdiction over the subject matter.
The reason back of No. 3 says the defendant is that the accident occurred in the State of Kentucky and is barred by the Kentucky Statute of Limitations since under the law of Kentucky an action for personal injuries must be instituted within one year of the occurrence and the amended complaint alleges that the cause of action arose on December 14, 1960, and the summons shows that the case was instituted on January 8, 1962, more than one year thereafter.
It is noticed that the motion is double barreled in that it combines a motion for dismissal under the Federal Rules of Civil Procedure, Rule 12(b)(2) and (3) which attack the jurisdiction and the venue with Rule 12(b)(6), 28 U.S.C. -- failure to state a claim upon which relief can be granted. It is believed that the motion is proper as stated even though matters outside the pleadings are presented. Under Rule 12(d) the defenses 2 through 7 in subdivision (b), when made by motion shall be heard and determined before trial unless the court defers the motion until the trial. A hearing has been held at which time counsel stipulated that the two affidavits submitted in support of the motion by the C & O and the deposition submitted in opposition to the motion by the plaintiffs shall be the basis of the fact findings which are to be made by the Court on the issue of doing business within this jurisdiction.
From the complaint, the affidavits and the deposition, the facts may be summarized as follows:
The individual plaintiff, Joseph Norman Fannin, is a citizen of the State of Kentucky. The corporate plaintiff, Bituminous Casualty Corporation, is a citizen of Illinois. The C & O was organized and exists under the laws of the State of Virginia and its legal domicile is in the City of Richmond but its principal office is in the City of Cleveland, Ohio. It, however, maintains general offices in the Cities of Huntington, West Virginia and Detroit, Michigan. The purposes for which the defendant C & O are organized and the business in which it is at all times mentioned has been and is the carriage of passengers and freight within the States of Virginia, West Virginia, Kentucky, Ohio, Illinois, Michigan and elsewhere. It is not incorporated or domesticized under the laws of the State of Pennsylvania nor is it registered nor has it authority to transact business under the laws thereof nor has it been a citizen or resident of the State of Pennsylvania. It owns no railroad tracks in Pennsylvania nor has it carried passengers or freight within Pennsylvania except, of course, under the Rules of the Interstate Commerce Commission when its trains are combined with other carriers and pass within Pennsylvania.
Plaintiff was injured at Ashland, Kentucky while unloading merchandise from a freight car designated as ATSF 13851 and which contained glass which had been loaded at Clarksburg, West Virginia and was consigned to American-Saint Gobain Corporation at Parkersburg, West Virginia, at which point it was reconsigned by American-Saint Gobain Corporation to the ultimate consignee, Fannin Glass and Paint Company at Ashland, Kentucky. The Baltimore and Ohio Railroad Company received the car at Clarksburg, West Virginia and delivered it to the C & O at Huntington, West Virginia from which the C & O carried it to the consignee in Kentucky. No act or omission of the C & O giving rise to the injuries complained of in this suit occurred within the Commonwealth of Pennsylvania.
Without enumerating all the things the C & O does not do in Pennsylvania as an operating railroad, it is best to refer to the affidavits and deposition to determine what it does do in this State. It rents 1,378 square feet of office space at No. 3 Gateway Center, Pittsburgh, Pa. It employs nine people whose headquarters are the office. The lease for the office space was executed in Huntington and the rent and the salary of the employees is paid from either Huntington or Cleveland.
The witness whose deposition was taken is Roland L. Schilke. He is the Freight Traffic Manager and has jurisdiction over five general agencies, that is in the Cities of Buffalo, Toledo, Cleveland, Columbus and Pittsburgh. The activities of the office are the soliciting of carload business for the C & O. The members of the office force in Pittsburgh contact customers in Pennsylvania and solicit their business. A large part of the work is done by telephone, their being four telephone lines in the Pittsburgh Office. Many business establishments in the Western Pennsylvania area are contacted by this office force. The largest are United States Steel, Westinghouse, Jones & Laughlin, Bethlehem Steel, Alcoa and Koppers Company. The witness indicated that any business houses that have car load business or ship in interstate commerce are potential customers of this railroad. There is a similar office in Philadelphia doing a similar type of activity. Hundreds of car loads of freight business are secured by the C & O in a years time by virtue of the Pittsburgh employees. However, those employees do not make any contracts to ship over the C & O lines. The customers are simply contacted indicating a service offered by the railroad together with information on rates. However, complaints as to freight service, delays, etc. are taken by the Pittsburgh employees for investigation throughout the line of the railroad. One automobile for the use of the freight traffic manager is leased by the railroad and is used in the business of contacting customers. Three employees own their own automobiles and travel about the territory which in Pennsylvania comprises about the western half of the State and are reimbursed for their traveling expenses. The staff of nine is composed of three salesmen just mentioned, one woman stenographer, three men clerks, the Freight Traffic Manager, Roland L. Schilke, and a General Agent whose duties are in general equivalent to that of a 'head salesman'. In addition to what might be termed a solicitation or contact of customers for business, the three clerks in the office answer by telephone, giving rate information to prospective shippers and the office force maintains a careful record of freight originating in Pennsylvania which is carried on the C & O after being picked up in the State of Ohio or West Virginia, and records the amount of freight coming into Pennsylvania which has passed over the C & O lines in another state.
The service of the complaint in this action on the C & O was made by a Deputy United States Marshal for this district 'by handing to and leaving a true and attested copy thereof with Bruce Leasure, Chief Clerk at place of business, #3 Gateway Center, Pgh., Pa' as indicated on the return of service.
There is thus presented a clear cut issue in this civil action as to whether the C & O, a foreign interstate railroad corporation, is present in this jurisdiction and thus suable in this judicial district under the venue statute and the due process clause of the Constitution. It is conceded that the cause of action for which suit is brought did not arise in Pennsylvania. Moreover, the cause of action did not arise out of any activity carried on in the State of Pennsylvania by the C & O. It is to be noticed also that the issue presented is not concerned with substituted service under the business corporation law of Pennsylvania. (15 P.S. § 2852-1011)
Counsel for each of the parties filed briefs which have been of material help because the authoritative decisions on the point at issue are cited and discussed. Plaintiffs contend that the factual situation presented is one of a 'solicitation plus' which is sufficient to permit suit here, but this Court has come to the conclusion that, under the ...