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PHILADELPHIA HOUS. AUTH. v. AMERICAN RADIATOR & ST

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


August 9, 1968

The Philadelphia Housing Authority
v.
American Radiator & Standard Sanitary Corp., et al. Lindy Bros. Builders Inc. of Philadelphia, et al. v. American Radiator & Standard Sanitary Corp., et al.

John W. Lord, Jr., D. J.

The opinion of the court was delivered by: LORD, JR.

OPINION AND ORDER

JOHN W. LORD, JR., D. J.:

 The above-captioned antitrust suits were brought as class actions on behalf of (1) state and municipal governments, authorities and subdivisions which build or renovate homes and apartment dwellings, and (2) builders of home and apartment dwellings, alleging violations of the antitrust laws by defendants with respect to the manufacture and sale of plumbing fixtures. Included among the defendants were two so-called "Short Line Manufacturers" who manufacture the lowest price line of staple vitreous china plumbing fixtures, Kilgore Ceramics Corporation ("Kilgore") and Georgia Sanitary Pottery, Inc. ("Georgia Sanitary"). These two defendants have moved to dismiss the actions for lack of venue.

 I. Venue under Section 12 of the Clayton Act

 Venue in private antitrust actions against corporate defendants is governed by the special venue provision of Section 12 of the Clayton Act (15 U.S.C.A. § 22), as supplemented by 28 U.S.C.A. §§ 1391(c) and 1392(a) of the general venue statute. *fn1" This has been established by both Judges Kraft and Joseph S. Lord, III of this Court in the cases of School District of Philadelphia v. Harper & Row Publishers, Inc., 267 F. Supp. 1006 (E.D. Pa. 1967) and State of New York v. Morton Salt Co., 266 F. Supp. 570 (E.D. Pa. 1967) respectively. Section 12 of the Clayton Act provides in part:

 

District in which to sue corporation 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 . . . .

 Since plaintiffs' antitrust actions have been brought in this Eastern District of Pennsylvania under the antitrust laws, venue is proper here as to both Kilgore and Georgia Sanitary only if they are (a) inhabitants of this District, (b) found in this District, or (c) transacting business in this District.

 (a) Inhabitant. A corporation is an inhabitant of the State in which it is incorporated. Aro Manufacturing Co. v. Automobile Body Research Corp., 352 F.2d 400 (1st Cir. 1965), cert. den. 383 U.S. 947, 16 L. Ed. 2d 210, 86 S. Ct. 1199 (1966). Neither Kilgore nor Georgia Sanitary are incorporated in the Commonwealth of Pennsylvania. Kilgore is incorporated under the laws of the State of Texas; Georgia Sanitary under the laws of Indiana.

 (b) Found. The word "found" within this provision of the Clayton Act connotes presence and continuous local activities within the district. So held Judge Davis of this Court in Stern Fish Co. v. Century Seafoods, Inc., 254 F. Supp. 151 (E.D. Pa. 1966). This is to say that the corporation must be present in the District by "its officers and agents carrying on the business of the corporation." Aro Manufacturing Co. v. Automobile Body Research Corp., supra at 404. Neither defendant has any officers, employees or agents in this District who continually carry on local activities here.

 (c) Transact Business. In 1948, the Supreme Court held that a corporation is transacting business in a District if in fact in practical and business sense it carries on business "of any substantial character." United States v. Scophony Corporation of America, 333 U.S. 795, 807, 92 L. Ed. 1091, 68 S. Ct. 855 (1948). Since this decision there has been of necessity a case by case examination of the facts at hand to determine whether from a practical business standpoint a corporation is carrying on business of any substantial character in the District.

 Where the only activity carried on within a certain District is sales into the District, it is helpful to examine and be guided by the late Judge Grim's opinion in Sunbury Wire Rope Manufacturing Co. v. United States Steel Corp., 129 F. Supp. 425 (E.D. Pa. 1955). He said there, whether or not a corporation is transacting business in a District should not depend on the percentage of its overall sales made in the District, but rather "whether or not the sales would appear to be substantial from the average businessman's point of view." Id. at 427. There Detroit Steel Corporation's overall sales amounted to almost $100 million a year as compared to its almost $600,000 worth of steel delivered into the Eastern District of Pennsylvania in less than two years. While this only constituted 0.3 per cent a year of Detroit Steel's total sales, Judge Grim held that almost $600,000 worth of business in less than two years, viewed without reference to overall sales volume, would appear to be quite substantial to the average businessman. In the case at bar, Georgia Sanitary's vice-president in charge of manufacturing attended a convention of the American Ceramics Society, Inc. in Philadelphia; the corporation placed advertisements in three trade publications distributed in this District; and made the following deliveries of goods sold into this District: 10/1/63 - 9/30/64 $3,295.00 10/1/64 - 9/30/65 3,012.75 10/1/65 - 9/30/66 925.00 10/1/66 - 5/15/67 1,890.00

19680809

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