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 ...