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ZENITH RADIO CORP. v. MATSUSHITA ELEC. INDUS. CO.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


May 7, 1975

ZENITH RADIO CORPORATION
v.
MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. NATIONAL UNION ELECTRIC CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., ET AL. IN RE: JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION

The opinion of the court was delivered by: HIGGINBOTHAM

HIGGINBOTHAM, J.

  INTRODUCTION

 I. HISTORY OF THE ZENITH ACTION, CIVIL ACTION NO. 74-2451.

 On September 20, 1974, plaintiff Zenith Radio Corporation filed this antitrust action in the Eastern District of Pennsylvania, naming twenty-one Japanese and American corporations as defendants. On October 29, 1974, certain of the defendants moved, pursuant to 28 U.S.C. § 1407, to transfer this action to the District of New Jersey for consolidated pretrial proceedings with the previously filed case of National Union Electric Corporation v. Matsushita Electric Industrial Co., Ltd., et al., Civil No. 1706/70. On November 25, 1974, the Judicial Panel on Multidistrict Litigation transferred the NUE action to this Court. That same day, this Court directed the defendants to file whatever pleadings they intended to file with respect to the complaint on or before January 2, 1975. On that date, eight defendants herein -- Matsushita Electric Industrial Co., Ltd. ("MEI"), Matsushita Electronics Corporation ("MEC"), Matsushita Electric Trading Co., Ltd. ("MET"), Sharp Corporation ("Sharp"), Hitachi, Ltd. ("Limited"), Hatachi Kaden Hanbai Kabushiki Kaisha ("Kaden"), Mitsubishi Electric Corporation ("MELCO"), and Sanyo Electric Co., Ltd. ("DENKI") -- moved this Court pursuant to Rule 12(b) of the Federal Rules of Civil Procedure to dismiss the action as to them for lack of personal jurisdiction, improper venue, and insufficient service of process. These issues were briefed, then argued for four days, from February 3, 1975 to February 6, 1975. In addition, the Court propounded to the moving defendants interrogatories designed to elicit facts that were not yet of record but were relevant to the determination of the issues of venue, jurisdiction and process. The defendants having answered these interrogatories, the issues are now ripe for decision. I have examined these answers, as well as the affidavits and exhibits submitted by the plaintiff and the defendants in support of their respective positions. *fn1" On the basis of my examination of this extensive factual record, I have concluded that this Court may exercise jurisdiction over each of the moving defendants, that venue is proper for each of them in this district, and that each of them has been adequately served with process. Accordingly, their motions to dismiss will be denied.

 II. HISTORY OF THE NUE ACTION, CIVIL ACTION NO. 74-3247.

 Plaintiff National Union Electric Corporation filed this antitrust action in the District of New Jersey on December 21, 1970. The complaint named as defendants seven Japanese manufacturing corporations and seven United States sales subsidiaries or affiliates of those Japanese manufacturing corporations. An amended complaint added three other Japanese corporations as defendants. In their responses to the NUE complaint, six defendants raised defenses related to venue, jurisdiction and service of process. Three of those defendants have since withdrawn those defenses, so that presently only Hitachi Kaden Hanbai Kabushiki Kaisha ("Kaden"), Mitsubishi Electric Corporation ("MELCO"), and Sanyo Electric Company, Ltd. ("DENKI") contest venue, jurisdiction and service of process.

 After extensive discovery related to these issues, NUE moved in June, 1973, pursuant to Rule 12(d) of the Federal Rules of Civil Procedure, for a hearing and final determination prior to trial of the defenses of improper venue, lack of personal jurisdiction and insufficiency of service of process. As of November 25, 1974, however, when the Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407, transferred the action to this Court for consolidated pretrial proceedings, no determination of the validity of these defenses had been made.

 In February, 1975, during oral argument on other issues in this multidistrict litigation, counsel for both sides waived argument on these defenses and submitted the issues to the Court on briefs, as supported by the affidavits and exhibits filed by the respective parties, and as supplemented by the answers of the contesting defendants to interrogatories propounded by the Court at the oral argument. The issues are now ripe for decision, and for the sake of procedural consistency with the parallel Zenith action, I shall treat them as raised by motions to dismiss made by Kaden, MELCO and DENKI pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. *fn2"

 My examination of the voluminous factual record in this action leads me inexorably to the conclusion that the three moving defendants are amenable to jurisdiction and venue in the District of New Jersey, and have been adequately served with process. Their motions to dismiss will therefore be denied.

 FINDINGS OF FACT

 I. PRELIMINARY CONSIDERATIONS.

 In support of their defenses based on lack of personal jurisdiction, improper venue, and insufficient service of process, the various defendants have filed numerous affidavits, some of them sworn to by defense counsel, others by officers of the defendant corporations. In large part, these affidavits recite a litany of non-contacts with the Eastern District of Pennsylvania in the Zenith action, and with the District of New Jersey in the NUE action and a similar litany of non-control over the day-to-day operations of their subsidiary or affiliated corporations. Each of the affidavits is offered to bolster one or both of the moving defendants' two basic contentions: (1) that their non-transaction of business in the relevant forums immunizes them from jurisdiction, venue and process; and/or (2) that they do not exercise day-to-day control of their subsidiaries who do transact business in the relevant forums, and therefore may not be reached through those subsidiaries for purposes of jurisdiction, venue and process. In both actions, however, plaintiffs introduced evidence sufficient to make me hesitate to render a decision on the basis of defendants' often conclusory affidavits. Accordingly, I propounded interrogatories to the appropriate defendants in both the Zenith and NUE actions, seeking more detailed information about their corporate relationships, their sales and their contacts with the two districts where the plaintiffs attempt to establish jurisdiction and venue. In order to make the factual basis for my decisions on the instant matters clear, I now set forth and find as facts (1) defendants' answers to the Court's interrogatories in the Zenith and NUE actions; (2) those of plaintiff's proposed findings of fact in the NUE action that are reasonably supported by the evidence; *fn3" and (3) other factual submissions of the plaintiffs that are relevant to the issues raised by the moving defendants.

 II. DEFENDANTS' RESPONSES IN THE ZENITH ACTION AS ADOPTED BY THE COURT

 A. Hitachi Limited and Hitachi Kaden.

 

1. Corporate Relationships for 1965-1974.

 

a. Stock Ownership.

 

Until 1973, Kaden was a wholly-owned subsidiary of Limited, a Japanese manufacturing corporation. In April, 1973, Limited sold 21.8% of Kaden's stock to the public, retaining the remaining 78.2%. Kaden wholesales consumer products, purchased from Limited and others, throughout Japan and the world. Prior to 1969, Kaden had confined its wholesaling activities to the domestic Japanese market.

 

Hitachi Sales Corporation of America ("HSCA") has been a wholly-owned subsidiary of Kaden since 1969, when Kaden purchased all of HSCA's stock from Limited for more than $1 million cash. HSCA distributes consumer products, purchased from Kaden and others, throughout the mainland United States. Since January, 1973, HSCA has been manufacturing in California and these products now account for approximately 10% of HSCA's sales.

 

b. Interlocking Directors and/or Officers.

 

Mr. M. Naito was general manager of Limited's Second Export Sales office from January, 1965 to August, 1965, and deputy general manager of Limited's Consumer Electronics Division from August, 1965 to November, 1967. He was executive managing director of Kaden from November, 1967 to November, 1973, and has been senior executive managing director of Kaden from November, 1973 to the present. He was a director of HSCA from January, 1965 to July, 1968.

 

Mr. T. Shoubouchi was deputy general manager of Limited's Consumer Electronics Division from February, 1965 to August, 1965, general manager of Limited's Yokohoma Works from August, 1965 until February, 1969, and deputy general manager of Limited's Consumer Products Group from February, 1969 to November, 1969. He was a director of Kaden from May, 1968 to May, 1970. He was a director of HSCA from January, 1965 to July, 1968.

 

Mr. K. Nishi was executive managing director of Limited from January, 1965 to March, 1965, senior executive managing director from March, 1965 to November, 1969, and a director of Limited from November, 1969 to November, 1971. He was president of Kaden from January, 1965 to November, 1973, and has been chairman of Kaden from November, 1973 to the present. He was a director of HSCA from May, 1966 to June, 1973.

 

Mr. B. Hayashi has been general manager of Limited's Subsidiaries Office from January, 1965 to the present. He was a director of HSCA from August, 1965 to July, 1968.

 

Mr. N. Takahashi was executive managing director of Kaden from January, 1965 to December, 1968, and senior executive managing director from December, 1968 to November, 1973, and has been vice president and director of Kaden from November, 1973 to the present. He was a director of HSCA from July, 1968 to June, 1973.

 

Mr. T. Komoriya has been a director of HSCA from January, 1965 to the present, and was vice president of HSCA from May, 1966 to April, 1971. Though he has not held any positions with Limited or Kaden, he has been president of Hitachi America, Ltd., a wholly-owned subsidiary of Limited, from 1965 to the present.

 

Mr. I. Kawamato has been a director of Kaden from May, 1969 to the present. He has been a director of HSCA from June, 1973 to the present.

 

Mr. T. Yoshida was a director of Limited from January, 1965 to November, 1968, executive managing director of Limited from November, 1968 to November, 1971, and senior executive managing director of Limited from November, 1970 to November, 1973. He was a director of Kaden from January 1965 to August, 1965, executive managing director of Kaden from August, 1965 to December, 1968, vice president and director of Kaden from December, 1968 to November, 1973, and has been president and director of Kaden from November, 1973 to the present. He has been a director of HSCA from June, 1973 to the present.

 

Mr. T. Takahashi has been executive managing director of Limited from November, 1973 to the present. He has been a director of Kaden from November, 1973 to the present.

 

Mr. H. Arinobu was deputy general manager of Limited's Consumer Products Division from May, 1968 to February, 1969, and deputy general manager of Limited's Consumer Products Group from February, 1969 to November, 1969. He was a director of Kaden from May, 1968 to May, 1970.

 

Limited's total number of directors has varied from a low of 19 in 1967 to a high of 25 in 1973. Presently Limited has 24 directors. Kaden's total number of directors has varied from a low of 12 in 1971 to a high of 16 in 1969. Presently Kaden has 15 directors. HSCA had a total of 5 directors prior to 1968; from 1968 to date, 6 directors.

 

2. Sales.

 

The approximate volume of Limited's and Kaden's sales that were destined for ultimate export to the United States during the relevant time period are listed in the table below. Both Limited and Kaden concede that because HSCA and Hitachi America Limited ("HAL") *fn4" sell throughout the United States a significant amount of their products ultimately arrive in Pennsylvania and in the Eastern District of Pennsylvania. Both Limited and Kaden deny that they have sold any goods directly to customers in Pennsylvania during the five years preceding the date of the Zenith complaint.

  Approximate Sales of Products Ultimately Destined For United States (millions of dollars) Fiscal Year Limited Kaden 1965 17 0 1966 31 0 1967 45 0 1968 55 0 1969 76 12 1970 87 13 1971 88 15 1972 109 28 1973 70 24 1974 (First Half) 21 10

19750507

© 1992-2004 VersusLaw Inc.



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