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METRO. SAN. DIST. OF GR. CHICAGO v. GEN. E.

July 19, 1962

THE METROPOLITAN SANITARY DISTRICT OF GREATER CHICAGO, A MUNICIPAL CORPORATION, PLAINTIFF,
v.
GENERAL ELECTRIC COMPANY ET AL., DEFENDANTS.



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

This is a civil antitrust treble damage suit against some seventeen corporations and some twenty-six individuals. Twelve motions seeking to quash service of summons and/or dismiss have been filed, covering most of the individual defendants.*fn1

Joint briefs by the moving defendants have been filed, and oral argument had, asserting the bases of the motions to be that (1) the individual defendants were not subject to suit in the Northern District of Illinois, not being citizens or residents of Illinois; (2) they were not served within the territorial limits of Illinois, but were served in the states of the respective individual defendant's residence, and (3) as to four of the defendants a contention is made that the manner of service was improper under Rule 4 of the Federal Rules of Civil Procedure, 28 U.S.C.A. Defendants assert that none of them is "found," "resides," or has an agent in this District as required by Section 4 of the Clayton Act. That statute provides that a suit of this nature may only be brought in the district "in which the defendant resides or is found or has an agent." (15 U.S.C.A. § 15) Defendants further maintain that discovery which plaintiff seeks would, at most, establish agency of the corporate, not the individual, defendants.

The complaint alleges at ¶ 1.2 that

    "All individual defendants are present in the
  Northern District of Illinois, Eastern Division, by
  an agent."

Defendants counter that their affidavits prove they do not reside in this District, and have no agent in this State.*fn2

This Court very recently concluded that it could not bring itself to "`accept the suggestion in Giusti v. Pyrotechnic Industries, Inc., et al., 9 Cir., conspiracy theory*fn3 and differentiate criminal antitrust suits, or Government equity proceedings to restrain violations of the antitrust laws.*fn4

    "The mere allegation of a conspiracy or that acts
  in furtherance of the conspiracy were performed
  within the district is insufficient to support
  venue."

Defendants also contend that service of process was insufficient under Rule 4 of the Federal Rules of Civil Procedure, subsection (f) of which provides that

    "All process other than a subpoena may be served
  anywhere within the territorial limits of the state
  in which the district court is held and, when a
  statute of the United States so provides, beyond the
  territorial limits of that state. * * *" (Italics
  supplied.)
They maintain that this Circuit's Court of Appeals has repeatedly
held that absent an enabling statute, extraterritorial service of
process is unauthorized (Reiter v. Illinois Nat. Cas. Co., et
al., 213 F.2d 946 (7 Cir., 1954), and Blank v. Bitker,
135 F.2d 962 (7 Cir., 1943)), and no such statute exists as to individual
defendants in private antitrust cases. Defendants claim that
motions to dismiss and quash have been uniformly sustained where
service of this nature has been effected. (Orange Theatre
Corporation v. Rayherstz Amusement Corporation et al.,
139 F.2d 871 (3rd Cir. 1944); Rohlfing v. Cat's Paw Rubber Co., Inc. et
al., 99 F. Supp. 886 (D.C. 1951); Huntington Imported Cars, Inc.
v. Standard-Triumph Motor Company, Inc. et al., 27 F.R.D. 21
(D.C.N.Y. 1960); McManus v. Tato, 184 F. Supp. 958 (D.C.N Y
1959); Elizabeth Hospital, Inc. v. Richardson et al., 167 F. Supp. 155
 (D.C.Ark. 1958)) (Similarly, see Periodical Distributors,
Inc. v. The American News Co., Inc.,¶ 70,011, C.C.H. Trade Cases,
1961, p. 78,006.) In the last cited case extraterritorial service
was held invalid, absent the transaction of business or residence
in district in which service was had.

Plaintiff asserts the validity of this extraterritorial service under Rule 4(d)(7) authorizing service in the manner prescribed by any United States statute, or

    "* * * the manner prescribed by the law of the
  state in which the service is made for the summons or
  other like process upon any such defendant in an
  action brought in the courts of general ...

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