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ABC GREAT STATES, INC. v. GLOBE TICKET COMPANY

March 24, 1970

ABC GREAT STATES, INC., ET AL., PLAINTIFFS,
v.
GLOBE TICKET COMPANY ET AL., DEFENDANTS.



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

 
MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS FOR
  IMPROPER VENUE

This is a consolidation of several private, treble damage antitrust actions alleging a nation-wide price-fixing and market allocation conspiracy in the ticket industry beginning at least in 1952 and continuing to the filing of the complaint (September, 1968) in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The cases have been consolidated in this court for discovery and pretrial proceedings after transfers made under 28 U.S.C. § 1407. One corporate and five individual defendants in actions originally brought in the Northern District of Illinois have moved to dismiss for improper venue. This court has previously ruled that venue is to be determined as of the time the cause of action arose, i.e., 1952-1968, and that the special antitrust venue statutes, 15 U.S.C. § 15 and 22, are supplemented by the general venue statutes, 28 U.S.C. § 1391 et seq. Memorandum and Order on Defendants' Objections to Plaintiffs' Venue Discovery Motions, October 16, 1969, 304 F. Supp. 1052. This court will consider the corporate and the individual defendants separately due to their differing statutory venue provisions.

I. THE CORPORATE DEFENDANT

The term "transacts business" of Section 22 has been held to mean the carrying on of business "of any substantial character," and the measure is to be a "practical, nontechnical, business standard." United States v. Scophony Corp., 333 U.S. 795, 808, 68 S.Ct. 855, 92 L.Ed. 1091 (1948). Factors to be considered under the above test are substantiality of the business, continuity in character, regularity, and extent of business solicitation and promotion within the District. Commonwealth Edison Co. v. Federal Pacific Electric Co., 208 F. Supp. 936 (N.D.Ill. 1962); State of Illinois v. Harper & Row Publishers, Inc., 308 F. Supp. 1207 (N.D.Ill.).

It is clear that National Ticket Company is not an inhabitant of Illinois, is not licensed to do business here, and has no sales office in this District. The evidence shows, however, that during the period January, 1960, to March, 1969, National made sales to customers in Illinois in the amount of $146,351.39, or an average of approximately $14,500 per year. In this District specifically, sales for 1965-October, 1968, amounted to $71,129.09, or $17,800 per year. The evidence also shows that for the years 1966-1969, the only years for which records are available, National made purchases within Illinois of $3,690.78. Solicitation of Illinois business is regularly conducted by officers and employees of National Ticket Company from sales offices in New York and Los Angeles, and officers of the company have traveled to Chicago annually since 1958 to attend the International Association of Amusement Parks Convention during which significant amusement park ticket business is generated. The fact that most contacts made at the convention are with non-Illinois purchasers does not detract from the fact that the contacts are made in this District.

This continuous course of conduct in the District is substantial and is sufficient to meet the Section 22 venue standard of transacting business. State of Illinois v. Harper & Row Publishers, Inc., supra. Though the sales amounted to 1.7% of the company's total sales volume, the amount cannot be considered a "very negligible proportion" viewed against an everyday, business standard, Commonwealth Edison Co. v. Federal Pacific Electric Co., supra, 208 F. Supp. at 939, especially in the full context of National's activities in the Northern District. National Ticket Company's motion to dismiss for improper venue will therefore be denied.

II. THE INDIVIDUAL DEFENDANTS

J. Edward Ludes and John J. Conway of the National Ticket Company, Clifford Elliott and John B. Elliott of the Elliott Ticket Company, and William F. Gillenwater of Arcus-Simplex-Brown, Inc., argue that they do not reside, are not found, and do not have an agent in this District under 15 U.S.C. § 15, the special anti-trust venue statute applicable to individual defendants. They further argue that no claim arose as to them within the District under Section 1391(b). Without reaching the other bases of venue, this court is of the opinion that venue is proper here as to John J. Conway, Clifford Elliott, and John B. Elliott because this is the District where the claim arose against them. This court is of the further opinion that venue is improper as to William F. Gillenwater and J. Edward Ludes on all bases.

This court is in agreement with Judge John W. Lord in Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., 291 F. Supp. 252, 260-261 (E.D.Pa. 1968), concerning the application of Section 1391(b) to antitrust actions:

    "It is submitted that `where the claim arose'
  should be dependent upon where the contacts weigh
  most heavily. A `weight of the contacts' test
  would enable venue to exist in a district where
  the injury occurred, if significant sales causing
  substantial injury were made to plaintiffs there
  by defendants. If some other overt act pursuant to
  the conspiratorial meetings took place in a
  district and it was a significant and substantial
  element of the offense, then venue would lie in
  that district. Conversely, if one insignificant
  sale was made in a district, as set forth above in
  the hypothetical, venue would not lie there.
  Similarly, if a meaningless and insignificant
  meeting of the conspirators took place in a
  certain district, venue would not exist there
  either."

Since the defendants and the plaintiffs are farflung and the conspiracy is alleged to have been nation-wide, significant sales causing substantial injury cannot be said to be the key consideration here. Rather, since the heart of the complaint against the individual defendants is that, in their capacities as high-ranking officers of their respective ticket companies, they conspired with one another to violate the antitrust laws, the most significant conspiratorial acts of the defendants would be the key to venue under Section 1391 in this case.

This court finds, on the basis of the necessarily limited venue discovery before the court, that the most significant conspiratorial acts occurred in the Northern District of Illinois. The main vehicle of the conspiracy is alleged to have been the meetings of a trade association, the Printing Institute of America, and particularly its Ticket and Coupon Section, of which the defendants' companies were members during the relevant period. Discovery shows that prices were discussed at these meetings and that at least one competitor was "badgered" about its low prices. The founding session of the Ticket and Coupon Section was held in Chicago in 1956 and subsequent meetings were held in Chicago at least in the years 1958, 1959, and 1965, more than in any other location on the basis of the evidence before the court. Without reaching the merits of the claim, such meetings were most significant in giving rise to the claim alleged against the defendants, and therefore the weight of the contacts test under Section 1391(b) would place venue in this District.

The inquiry, however, does not end at this point, for unless the court were to resurrect the widely rejected coconspirator theory of venue, see State of Illinois v. Harper & Row Publishers, Inc., supra, 308 F. Supp. at 1207; Commonwealth Edison Co. v. Federal Pacific Electric Co., supra, 208 F. Supp. at 941, and Bankers Life & Casualty Co. v. Holland, 346 U.S. 379, 384, 74 S.Ct. 145, 98 L.Ed. 106 (1953), venue as to each defendant must be established independently. Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., supra, 291 F. Supp. at 262. On this basis, it is clear that venue here as to John J. Conway, Clifford Elliott, and John B. Elliott is proper. All ...


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