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ROHLFING v. CAT'S PAW RUBBER CO.

June 18, 1951

ROHLFING ET AL.
v.
CAT'S PAW RUBBER CO., INC. ET AL. SHAFFER ET AL. V. UNITED STATES RUBBER CO. ET AL.



The opinion of the court was delivered by: LA Buy, District Judge.

The complaints in both of these suits are brought by alleged class plaintiffs and other similarly situated against the defendants for purported violations of Sections 1, 2, 4, 5 and 7 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, 4, 5, 15 note, and Sections 1, 12 and 16 of the Clayton and Robinson-Patman Acts, 15 U.S.C.A. §§ 12, 22, 26, 13, 13a, 13b, 21a. Plaintiffs in the case of Rohlfing v. Cat's Paw Rubber Co., Inc. are alleged to be independent shoe repair men in the City of Chicago who sell at retail to the public certain merchandise as customarily and usually appertains to a shoe-repair service and who purchase their merchandise from the various defendants. Plaintiffs in the case of Shaffer v. United States Rubber Co. are alleged to be wholesalers of rubber, leather, shoe polish, findings, abrasives, all being material used in the shoe repair field who purchase their merchandise from the defendants. The defendants in both suits are alleged to be manufacturers of rubber goods, leather goods, polish, abrasives, owners of chair repair stores, and finders who sell merchandise commonly and usually sold by plaintiff and who sell to certain of the defendants.

It is alleged certain of these defendants are engaged in the shipping and distributing of their product from and to various states of the United States, including Illinois and Wisconsin, and such manufacturing, transportation and distribution is done directly through subsidiary and associated companies; that the defendant preferred finders purchase and sell their leather and shoe findings from without the State of Illinois and from the defendant manufacturers and are given illegal rebates and otherwise preferred against the plaintiffs in their purchases, resulting in curtailment of competition in interstate commerce; that since 1945 said preferred finders induced the defendant manufacturers to enter into a conspiracy with the defendant owners of chain repair stores and with the defendant preferred finders to monopolize the sale of shoe repair supplies in Chicago and adjoining areas, and for the purpose of granting defendant owners of chain repair stores and defendant preferred finders illegal rebates and to do other illegal acts such as establishing and maintaining a fixed, rigid price, rigid system of distribution and sale whereunder certain of the defendants purchased at prices less than plaintiffs were permitted to purchase, and gave discriminatory rebates during the period of five years preceding the filing of these complaints.

The complaints pray (1) for a judgment against the defendants in the amount of the discriminatory price differential and a treble amount as liquidated damages together with costs and attorneys fees, (2) that the court order the defendants to make an accounting of all discriminatory price differentials allowed and received for a five year period preceding the suit, (3) that the defendants be ordered to supply their books and records, the exact amount of merchandise sold plaintiffs and to defendant preferred finders and defendant owners of chain repair stores, and (4) that the defendants be permanently enjoined from the continuation of said illegal acts.

Certain of the defendants have filed motions which are similar. The motions are (1) to dismiss and to quash service of summons, (2) to require plaintiffs to file an amended complaint stating various claims in separate counts, (3) to dismiss the class action and to strike from the complaint all references to persons similarly situated to plaintiffs, and (4) to drop certain plaintiffs and defendants as misjoined parties from certain claims and to sever such claims.

The defendant Panda Corporation has filed a motion to dismiss on the grounds that (1) the defendant is a corporation incorporated under the laws of Wisconsin and is not and has never been an inhabitant of the Northern District of Illinois, (2) the complaint does not allege facts establishing the defendant is subject to the venue of this court, (3) the defendant is not found within this district and was not found here at the time of or subsequent to the filing of the complaint herein, and (4) the defendant does not and did not transact business within the purview of the venue section, Sec. 22, 15 U.S.C.A., at the time of the filing of the complaint or subsequent thereto.

A motion questioning the court's jurisdiction over the parties may properly be heard on affidavits. Jeffrey-Nichols Motor Co. v. Hupp Motor Car Corporation, D.C.Mass., 1930, 41 F.2d 767, reversed on other grounds 1 Cir., 1931, 46 F.2d 623; Lawlor v. National Screen Service Corporation, D.C.Pa. 1950, 10 F.R.D. 123; United States v. Universal Lens, D.C.N.Y., 37 F. Supp. 459.

The venue of an action of this kind is governed by Section 12 of the Clayton Act, 15 U.S.C.A. § 22, which provides that "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; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found." The burden of proof of jurisdiction and venue is upon the plaintiffs. Becker v. Angle, 10 Cir., 1947, 165 F.2d 140. The issue presented is whether Panda Corporation "transacts business" and was "found" within the Northern District of Illinois under Section 12.

Panda Corporation was served with summons on June 20, 1950 by serving same on August C. Orthmann, President, at Milwaukee, Wisconsin. In support of the aforesaid motion, movant has submitted the affidavits of the President and Vice-President. The president avers as follows:

"Defendant's business is conducted from its principal place of business in Milwaukee, Wisconsin, where it receives orders from customers in Wisconsin and other states. Among the states from which purchasers have sent orders are Arizona, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wisconsin.

Orders have also been received from customers in Canada. All orders are received in Wisconsin, accepted in Wisconsin and filled in Wisconsin. Title to the goods passes in Wisconsin. Panda Corporation retains no legal title to goods sent by it to its customers, either those in Wisconsin or in other states. Panda Corporation does not now and did not, at the time of the filing of the complaint in this case, or at any time thereafter, employ agents, distributors or salesmen to solicit or conduct business in the Northern District of Illinois. Defendant is not qualified to do business in Illinois and has no office, place of business, telephone listing, or property there. It maintains no stock of goods in Illinois nor does it own or lease a warehouse in which to store merchandise there. None of its officers or directors reside in Illinois."

The Vice President, A.L. Cords, avers:

Defendant Panda Corporation does not now and has never had in its employ a representative named Olsen or Olson, as alleged in the affidavit of Norman P. Shaffer. It is believed that Mr. Shaffer refers to one Gilbert Olsen who was at one time employed by The Orthmann Laboratories, Inc., a corporation separate and distinct from defendant Panda Corporation and not a party to this suit. Said Olsen was not employed by The Orthmann Laboratories, Inc., subsequent to 1945 and he was never associated with defendant Panda Corporation.

Since the incorporation of Panda Corporation as aforesaid, affiant has on only one occasion called upon Norman P. Shaffer. This call was in response to the request of Shaffer in May of 1949 to see Aug. C. Orthmann. At that time Mr. Orthmann, President of the Panda Corporation, was ill and this affiant called upon Mr. Shaffer in response to the aforementioned request. At no time in the course of this conversation nor at any other time did this affiant solicit business or accept orders from Mr. Shaffer or anyone else in the State of Illinois. Neither this affiant, said Aug. C. Orthmann, nor any other ...


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