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STATE OF ILLINOIS v. HARPER & ROW PUBLISHERS

October 10, 1969

STATE OF ILLINOIS, PLAINTIFF,
v.
HARPER & ROW PUBLISHERS, INC., ET AL., DEFENDANTS (AND RELATED CASES).



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

  MEMORANDUM OPINION

This is another chapter in the consolidated discovery and pretrial proceedings pending in this court pursuant to transfers made under 28 U.S.C. § 1407.

Presently before the court are the motions of six defendants in various actions to quash service of process and dismiss the actions for improper venue. Defendants maintain that they are not inhabitants of the forum districts, are not found there, and transact no business there within the meaning of § 12 of the Clayton Act, 15 U.S.C. § 22. That provision is directed to the place for venue and service in antitrust actions against corporations, and provides:

  "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."

Accordingly, if venue in the forum districts was proper, extraterritorial service upon defendants at their places of inhabitancy was permissible.*fn1

The term "transacts business" has been defined to mean "[t]he practical, everyday business or commercial concept of doing or carrying on business `of any substantial character' * * *." United States v. Scophony Corporation, 333 U.S. 795, 807, 68 S.Ct. 855, 862, 92 L.Ed. 1091 (1948). As applied by the lower courts, the term "embraces elements of substantiality of business done, with continuity in character, regularity, contemporaneousness with time of service, and not looking toward cessation of business." Commonwealth Edison Co. v. Federal Pacific Electric Co., 208 F. Supp. 936 (N.D.Ill. 1962). Factors to be considered also include the extent of business solicitation and promotion within the district, both in person and by mail or telephone.*fn2

Applying these tests to the evidentiary matter submitted herein, this court has concluded that movants Viking Press, Inc.,*fn3 Thomas Y. Crowell Co., Inc.,*fn4 William Morrow & Company,*fn5 and David McKay Company, Inc.,*fn6 are transacting business in the relevant districts. Accordingly, their motions to dismiss are denied.

These defendants all make substantial sales to persons in the forum districts,*fn7 and have done so continuously for a number of years. Additionally, they each are represented by salesmen who visit the relevant states, and each sends catalogs and other promotional and advertising material into these states. "A continuous course of conduct which includes the shipment of goods and the solicitation of business does constitute transacting business." School District of Philadelphia v. Kurtz Bros., supra, 240 F. Supp. at 363.

Viking Press has challenged venue in actions brought originally in courts in Arizona, Kansas, Wisconsin and Minnesota. Yet Viking admits by answers to interrogatories that its salesmen make periodic visits to these states, and its estimated sales for fiscal 1968 in each of the relevant states are as follows:

Arizona       Kansas       Wisconsin       Minnesota
$28,225       $31,643      $57,300         $130,850

The affidavits and answers to interrogatories filed by defendant Crowell show significant sales in the forum states, amounting to $45,172 in Kansas in 1967 and $39,470 in Arizona in 1968.*fn8 In addition, Crowell is represented by a commission salesman who makes periodic visits to solicit sales in these states and by a "traveler" who promotes sales, although he himself takes no orders. Other promotional efforts in the form of catalogs and advertising in the forum states amounted to estimated expenditures of $3,770 in Kansas and $2,895 in Arizona in fiscal 1968.

As to defendant Morrow, its sales amounted to $14,926 in Kansas in 1967 and $24,000 in Arizona in 1968. It is represented in both states by a commission salesman who visits each approximately three times per year for a week at a time, and it has a salaried salesman who visits Kansas approximately six times each year. $200 per year is spent for catalogs and other promotional materials sent into each state.

Defendant McKay's sales in Kansas totaled $8,665 in 1967. A salesman visits the state twice a year, as does a traveler. An estimated $200 was spent in 1968 to ...


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