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NEW YORK v. MORTON SALT CO.

April 5, 1967

STATE OF NEW YORK
v.
MORTON SALT COMPANY, International Salt Company, Cayuga Rock Salt Company, Highway Materials Co., Inc. CITY OF PHILADELPHIA, PENNSYLVANIA, a municipal corporation, on behalf of itself and all others similarly situated v. MORTON SALT COMPANY et al.* MUSKEGON COUNTY ROAD COMMISSION and related actions v. MORTON SALT COMPANY et al.*



The opinion of the court was delivered by: LORD

 Plaintiffs seek to recover damages under the Clayton Act, 38 Stat. 731 (1914), 15 U.S.C.A. § 15, for the defendants' alleged conspiracy to establish, maintain and fix the price of rock salt. Interrogatories propounded by the plaintiffs for the specific purpose of establishing venue in this district were objected to by defendants Cayuga Rock Salt Company ("Cayuga") and Highway Materials Co., Inc. ("Highway"). By stipulation the parties have resolved most of the original objections. We have before us the two areas of dispute which still remain.

 Both defendants object to interrogatories which require of them information and data on business activities in the Middle and Western District of Pennsylvania. They argue that the geographical scope of the interrogatories is unjustifiably broad in view of their limited purpose of establishing venue in this district. Highway alone raises the further objection that its business activities in this district before the date this suit was commenced are not germane to the venue problem, and that the interrogatories should be so limited. For reasons set forth below we overrule the objections of Highway and Cayuga to the geographical scope of plaintiffs' interrogatories, and overrule Highway's objections to interrogatories seeking information on its business activities before the suit was filed.

 While the federal rules distinguish between relevancy in the trial sense and relevance to the subject matter, Griffin v. Memphis Sales & Mfg. Co., 38 F.R.D. 54 (D.C. Miss. 1965), nevertheless, lengthy interrogatories requiring equally lengthy answers should not be permitted. Thus, here, although the problem is presented in the context of a discovery motion, we must decide now the underlying and important problem of venue in order to rule on the discovery motion. Simply stated: if defendants' activities in the Middle and Western Districts provide Eastern District venue, the interrogatories are proper; if they do not, they are not.

 The defendants contend that the Clayton Act's venue provisions, 15 U.S.C.A. § 22, *fn1" provide the sole criteria for establishing venue against a corporation in a private antitrust suit. Plaintiffs, while conceding the applicability of 15 U.S.C.A. § 22, argue that the general venue provisions of the Judicial Code, in particular 28 U.S.C.A. §§ 1391(c) and 1392(a), *fn2" can be read as venue provisions complementary to the special provisions of the Clayton Act.

 The most recent Supreme Court decision, Pure Oil Company v. Suarez, 384 U.S. 202, 203, 86 S. Ct. 1394, 16 L. Ed. 2d 474 (1966), on the relationship between the general venue provisions of the Judicial Code and the special venue provisions of various statutes does not specifically touch Clayton Act venue. It does, however, demand that we take a fresh look at the requirements for venue in an antitrust case as they have developed since the Judicial Code of 1948 was enacted.

 In one of the early interpretations of the venue provisions of the Judicial Code of 1948, the late Judge Allan K. Grim of this court ruled that Section 1391(c) of 28 U.S.C.A. did indeed apply to antitrust suits despite the special venue provisions of the Clayton Act. Lipp v. National Screen Service Corp., 95 F. Supp. 66 (E.D.Pa.1950). Judge Grim pointed out that neither the Revisor's Note nor the legislative history of that section provided much help on the question. However, Judge Grim noted that Professor James W. Moore, a special consultant to the Code's Revisors, had said:

 
"* * * Section 1391(c) * * * is a provision of general applicability to a corporate defendant whether the case be one governed by a general venue provision, * * * or by a special venue provision contained in some other title of the United States Code." (Moore, Commentary on the U.S. Judicial Code (1949) at pp. 192 and 193).

 There had been many other decisions during the 1950s which applied §§ 1391(c) and 1392(a) to antitrust actions. See Sunbury Wire Rope Mfg. Co. v. United States Steel Corp., 230 F.2d 511 (C.A.3, 1956); Noerr Motor Freight, Inc. v. Eastern R. R. Presidents Conference, 113 F. Supp. 737 (E.D.Pa.1953); Bertha Bldg. Corp. v. National Theatres Corp., 103 F. Supp. 712 (E.D.N.Y.1952); Auburn Capitol Theatre Corp. v. Schine Chain Theatres, Inc., 83 F. Supp. 872 (S.D.N.Y.1949).

 However, in 1957 the Supreme Court was faced with a case which required a ruling on the interrelation of 28 U.S.C.A. § 1391(c) and the special venue provisions applicable to patent infringement suits, 28 U.S.C.A. § 1400(b) (1964 ed). The Court held that the definition of "residence" in the general venue provision (§ 1391(c)) did not apply to the special venue provision (§ 1400(b)). Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 77 S. Ct. 787, 1 L. Ed. 2d 786 (1957). Thereafter, the district courts frequently relied on Fourco as authority for the proposition that the general venue provisions of the Judicial Code could not be employed when there was an applicable special venue statute. Kaeppler v. James H. Matthews & Co., 180 F. Supp. 691 (E.D.Pa.1960); Crawford Transportation Co. v. Chrysler Corp., 191 F. Supp. 223, 225 (E.D.Ky.1961); Goldlawr, Inc. v. Shubert, 169 F. Supp. 677 (E.D.Pa.1958).

 In a Jones Act case in this Circuit, Leith v. Oil Transport Company, Inc., 321 F.2d 591 (1963), the court held that the general venue statute's definition of "residence" could not be grafted onto the special provisions of the Jones Act. To resolve a conflict among the holdings of the Third, Fourth and Fifth Circuits on this narrow point, the Supreme Court granted certiorari in Pure Oil Company v. Suarez, 382 U.S. 972, 86 S. Ct. 549, 15 L. Ed. 2d 464 (1965). The Supreme Court's decision in Pure Oil, 384 U.S. 202, 203, 86 S. Ct. 1394, 16 L. Ed. 2d 474, was that the general venue provisions could be referred to for an expanded definition of the "residence" concept used in the Jones Act's special venue provisions. "[It] is unlikely," said Mr. Justice Harlan, "that the Congress meant to infuse the concept of corporate residence with any special meaning that should remain impervious to changes in standards effected by the more general venue statutes." 384 U.S. at p. 207, 86 S. Ct. at p. 1397.

 Counsel for Highway and Cayuga have urged us to view this recent decision in its most narrow sense; viz., special statutes having their own venue provisions and using "residence" as a criteria may now be viewed in terms of the definition of "residence" used in 28 U.S.C.A. § 1391(c). They go on to argue that Pure Oil has no application to the case at hand because the Clayton Act, 15 U.S.C.A. § 22, does not rely upon a "residence" criterion. We believe this reasoning overlooks two points.

 First, the Clayton Act does employ the word "inhabitant" which was deemed by the Revisor of the Judicial Code to be synonymous with "resident". *fn3" This alone might bring the general venue statute into play, at least for the purpose of expanding the definition of "inhabitant". The second - and more compelling - point is that in Pure Oil the Supreme Court was forced to distinguish the Fourco case so that today Fourco is authority only for the proposition that the general venue provisions of the Code do not apply to actions for patent infringement. By implication, all of the antitrust venue decisions which supposedly were upset by Fourco can now be resurrected, as justly they should be.

 The conditions and forces which impelled passage of the Sherman Act, 26 Stat. 210 (1890) and Clayton Act, 38 Stat. 731 (1914), are part of the history of another day. It is important to remember, however, that impetus for the Clayton Act venue provisions came from the difficulties encountered in establishing venue under the Sherman Act, and there is no doubt that the Congressional intent was to promote a wide choice of venue in Clayton Act antitrust actions. United States v. Scophony Corp. of America, 333 U.S. 795, 68 S. Ct. 855, 92 L. Ed. 1091 (1948); Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 374, 47 S. Ct. 400, 71 L. Ed. 684 (1927). It may be logical in patent cases to infer a Congressional intent to limit, rather than to expand venue, for § 1400 of Title 28 U.S.C.A. [formerly § 48 of the Judicial Code, 28 U.S.C. (1940 ed.) § 109] "was a restrictive measure limiting a prior, broader venue", Stonite Products Company v. Melvin Lloyd Co., 315 U.S. 561, 566, 62 S. Ct. 780, 783, 86 L. Ed. 1026 (1942), and was "enacted * * * specifically to narrow venue ...


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