an agent of the other. This circular logic is flawed.
First, this court long ago rejected the co-conspiratorial
theory of venue. Commonwealth Edison Co. v. Federal Pacific
Electric Co., 208 F. Supp. 936, 941 (N.D.Ill. 1962). Payne must
prove that each defendant has engaged in some significant or
substantial act pursuant to the RICO conspiracy in this district.
Farmers Bank, 452 F. Supp. at 1281; Eaby, 561 F. Supp. at 140 n. 2.
Second, the first court to construe the RICO venue provision held
that the term "has an agent," like its antitrust counterpart,
does not apply to corporate defendants. King v. Vesco,
342 F. Supp. 120, 123 (N.D.Cal. 1972). Thus, since Payne does not
allege that any of the individual defendants has an agent in this
district, the concept of agency is of no help to her in this
Even if the court discounts the sound reasoning of King,
plaintiff still has not sufficiently shown that MSI is an agent
of the other defendants. Payne's assertion that MSI procures
advertisers for inserts and coupons printed by COC does not
establish an agency relationship among all defendants. See
Westinghouse Electric Corp. v. Rio Algom Ltd., 448 F. Supp. 1284,
1301-03 (N.D.Ill.), aff'd in part and rev'd in part on other
grounds sub nom. Westinghouse Electric Corp. v. Kerr-McGee Corp.,
580 F.2d 1311 (7th Cir.), cert. denied, 439 U.S. 955, 99 S.Ct.
353, 58 L.Ed.2d 346 (1978). Similarly, while plaintiff alleges
that all of the corporations are affiliated, she has not shown
that COC and CCC control the daily business operations of MSI to
such an extent that its actions may be imputed to them for venue
Although plaintiff did not rely on the other terms in §
1965(a), the court will briefly examine them to see if venue is
proper. First, for a corporate defendant to be "found" in this
district, it must be present here by its officers and agents
carrying on the business of the corporation. Van Schaick v.
Church of Scientology, Inc., 535 F. Supp. 1125, 1133 (D.Mass.
1982). The court already concluded that Payne has failed to show
that MSI is an agent of COC and CCC. Furthermore, construing the
Clayton Act venue provision after which § 1965(a) was modeled,
this court defined the word "found" as "presence and `continuous
local activities' within the [d]istrict." E.g., C.C.P. Corp. v.
Wynn Oil Co., 354 F. Supp. 1275, 1278 (N.D.Ill. 1973). Because
plaintiff has not shown that COC, CCC, and the individual
defendants carry on their business in this district to any
significant degree, none of them is "found" here for RICO venue
Finally, the term "transacts his affairs" is considered to be
equivalent to the term "transacts business" in the anti-trust
statute. E.g., Bulk Oil (USA) Inc. v. Sun Oil Trading Co.,
584 F. Supp. 36, 39 (S.D.N.Y. 1983). This court held that a
corporation "transacts business" within a forum when "substantial
business activity is done within the forum with continuity of
character. . . ." C.C.P. Corp., 354 F. Supp. at 1278. Payne's
conclusory allegation that COC does business in this district
falls short of the required standard. With respect to the
individual defendants, "transacts his affairs" refers to their
personal affairs, not the affairs they may have transacted on
behalf of their employer. Bulk Oil, 584 F. Supp. at 39.
Plaintiff's information and belief notwithstanding, the
affidavits of the individual defendants clearly show that they
did not transact their own affairs in this district. Cf. King v.
Vesco, 342 F. Supp. at 123-24.
In sum, plaintiff stretches § 1965(a) too far in her attempt to
manufacture venue over COC, CCC, and the individual defendants
solely through the connection that MSI has with this district.
Plaintiff must provide substance to her claim of an agency
relationship before she may use MSI as a magnet to pull all other
defendants to this district. The court holds that venue is
improper as to COC, CCC, and the four individual defendants under
18 U.S.C. § 1965(a).
B. Venue Under § 1391(b)
Because 18 U.S.C. § 1965(a) is not intended to be exclusive,
the court must next
inquire whether this action can be maintained under the general
venue statute, 28 U.S.C. § 1391(b). Van Schaick, 535 F. Supp. at
1133 n. 6. Since all of the defendants do not reside in this
district, the sole issue is whether "the claim arose" here.
28 U.S.C. § 1391(b). Payne argues that, because the RICO injuries
caused by the defendants occurred in this district, venue is
proper here. On the other hand, defendants claim that the "weight
of the contacts" overwhelmingly points to the Southern District
of New York.
In Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct.
2710, 61 L.Ed.2d 464 (1979), the Supreme Court concluded that:
the broadest interpretation of the language of §
1391(b) that is even arguably acceptable is that in
the unusual case in which it is not clear that the
claim arose in only one specific district, a
plaintiff may choose between those . . . districts
that with approximately equal plausibility — in terms
of the availability of witnesses, the accessibility
of other relevant evidence, and the convenience of
the defendant (but not the plaintiff) — may be
assigned as the locus of the claim.
Id. at 185, 99 S.Ct. at 2717 (original emphasis) (footnote
omitted). As this court has stressed, "[w]here `the claim arose'
should be ascertained by advertence to events having operative
significance in the case, and a common sense appraisal of the
implications of those events for accessibility to witnesses and
records." Robbins v. First American Bank, 514 F. Supp. 1183, 1192
(N.D.Ill. 1981) (quoting Lamont v. Haig, 590 F.2d 1124, 1134
(D.C.Cir. 1978)). In this case, convenience to all of the
litigants, including plaintiff, and accessibility to the major
witnesses and relevant evidence appear to favor venue in New
York. Nevertheless, plaintiff insists that under the "weight of
the contacts" test, venue is proper in this district since it is
the place of injury.
In recent cases, this court has followed the cryptic analysis
of the Supreme Court in Leroy rather than applying the "weight of
the contacts" test. See Medical Emergency Service Associates v.
Duplis, 558 F. Supp. 1312, 1314-16 (N.D.Ill. 1983); Robbins, 514
F. Supp. at 1192-93. Though this shift in analysis may be an
exercise in semantics, Leroy accorded greater weight to the
convenience of the defendant and the witnesses than did the
"weight of the contacts" test. A common sense appraisal of the
considerations embodied in Leroy indicates that the locus of
Payne's claim is New York, not Illinois. This is not the unusual
case referred to in Leroy that gives rise to multiple candidates
Contrary to plaintiff's wishes, the place of the injury*fn2, while
significant, is not determinative. Soper v. Simmons
International, Ltd., 582 F. Supp. 987, 992 (N.D.N.Y. 1983). This
is especially true with respect to RICO and anti-trust claims,
which are often not susceptible to such a simplistic rationale.
See Philadelphia Housing Authority v. American Radiator &
Standard Sanitary Corp., 291 F. Supp. 252, 260 (E.D.Pa. 1968). In
her RICO claims, Payne contends that all of the defendants
combined to form an "association in fact" enterprise to defraud
her through a pattern of racketeering activity under § 1962(c),
invested the wrongfully diverted funds in the enterprise under §
1962(a), and conspired to defraud her under § 1962(d). It is
clear from these allegations that the heart of plaintiff's RICO
claims is the association and conspiracy to defraud her. Cf.
Ohio-Sealy Mattress Manufacturing Co. v. Kaplan, 429 F. Supp. 139,
141 (N.D.Ill. 1977); ABC Great States, Inc. v. Globe Ticket Co.,
310 F. Supp. 739, 743 (N.D.Ill. 1970).
Any scheme to defraud Payne of her commissions must have taken
place in New York. MSI, COC, and CCC are New York corporations
with offices in New York City.
The defendant officers work and live in New York, with the
exception of one who lives in New Jersey, and have minimal
contact with Illinois. All pertinent correspondence and wire
communications with plaintiff originated in New York. Any alleged
diversion of funds and subsequent investment occurred in New
York. Most of the principal witnesses live in New York. The
affidavits submitted by defendants make clear that all relevant
documents are located in New York. Finally, plaintiff resided in
New York when she filed this suit.*fn3
Thus, because no defendant except MSI has a significant
connection with this district, the fact that plaintiff may have
suffered her losses here does not make venue proper here. The
convenience of both the litigants and the witnesses, access to
the relevant proof, and the nature of the case convince the court
that the locus of the claim is New York. Rather than dismiss this
case, however, the court concludes that the interest of justice
warrants transferring this action to the Southern District of New
York where plaintiff's claim arose and where venue is proper as
to all parties. 28 U.S.C. § 1406(a)*fn4.
Payne requests the court to transfer venue on the condition
that the decision in Haroco, Inc. v. American National Bank and
Trust Co., 747 F.2d 384 (7th Cir. 1984), cert. granted, ___ U.S.
___, 105 S.Ct. 902, 83 L.Ed.2d 917 (1985), declining to impose a
"racketeering enterprise injury" requirement on civil RICO
plaintiffs, be followed in the Southern District of New York.
This unusual request may reveal plaintiff's motivation for
bringing suit here, since the Second Circuit recognizes a
"racketeering enterprise injury" requirement in RICO actions. See
Sedima, S.P.R.L. v. Imrex Co., 741 F.2d 482 (2d Cir. 1984), cert.
granted, ___ U.S. ___, 105 S.Ct. 901, 83 L.Ed.2d 917 (1985).
Plaintiff's request is moot, however, because the Supreme Court
has granted certiorari in both Haroco and Sedima and will soon
resolve the current split between the circuits.
For the foregoing reasons, the court finds that venue is
improper in this district. In the interest of justice, the court
transfers this case to the United States District Court for the
Southern District of New York.