The opinion of the court was delivered by: Decker, Senior District Judge.
MEMORANDUM OPINION AND ORDER
On August 2, 1984, Mare Payne ("Payne") filed a ten-count
complaint against Marketing Showcase, Inc. ("MSI"), Charles
Offset Co. ("COC"), Charles Communications Co., Inc. ("CCC"), and
four officers of these corporations. The first three counts
allege violations of the Racketeer Influenced and Corrupt
Organizations Act ("RICO"), 18 U.S.C. § 1962(a), (c), and (d).
The remaining counts allege pendent state law claims. The case is
before the court on defendants' motion to dismiss the complaint
for improper venue under Fed.R.Civ.P. 12(b)(3) or, in the
alternative, to transfer this case pursuant to either 28 U.S.C. § 1406(a)
or § 1404(a).
Payne was paid on a net commission basis. Under her employment
contract, which was expressly governed by New York law, MSI
deducted certain charges, such as printing costs, from her
commissions. The gist of Payne's complaint is that all of the
defendants conspired to defraud and actually defrauded her of the
true amount of her commissions by falsely inflating the
deductible charges. The complaint alleges that defendants
intentionally misrepresented to Payne the amount of these charges
either in person, by mail, or by wire while she was in Chicago.
Payne was a resident of New York when she brought this action.
MSI, COC, and CCC are New York corporations. It is undisputed
that MSI is licensed to do business in Illinois and transacts
business in this district. Three of the individual defendants
reside in New York, and one resides in New Jersey. In addition,
the individual defendants submitted affidavits to the effect that
they have little, if any, contact with Illinois and that all
relevant documents are located in New York. Many of the principal
witnesses reside in New York also.
Plaintiff contends that venue is proper in the Northern
District under 18 U.S.C. § 1965(a) and 28 U.S.C. § 1391(b).
Defendants move to dismiss the complaint for improper venue under
Fed.R.Civ.P. 12(b)(3) or, in the very least, to transfer this
case to the Southern District of New York in the interest of
justice under 28 U.S.C. § 1406(a). If venue is proper here,
defendants move to transfer the case pursuant to 28 U.S.C. § 1404(a).
The purpose of statutory venue provisions "is to protect the
defendant against the risk that a plaintiff will select an unfair
or inconvenient place of trial." Leroy v. Great Western United
Corp., 443 U.S. 173, 183-84, 99 S.Ct. 2710, 2716-17, 61 L.Ed.2d
464 (1979) (original emphasis). Venue must be properly laid as to
each defendant. Eaby v. Richmond, 561 F. Supp. 131, 140 n. 2
(E.D.Pa. 1983). In addition, where multiple causes of action are
joined, venue must be proper as to each one. International Patent
Development Corp. v. Wyomont Partners, 489 F. Supp. 226, 230
(D.Nev. 1980). Although there is a split of authority on the
question, this court follows the rule that where, as here, a
defendant challenges venue under Fed.R.Civ.P. 12(b)(3), the
plaintiff has the burden of proving that venue is proper in this
district. Pfeiffer v. International Academy of Biomagnetic
Medicine, 521 F. Supp. 1331, 1336 (W.D.Mo. 1981); see Grantham v.
Challenge-Cook Bros., Inc., 420 F.2d 1182, 1184 (7th Cir. 1969).
A. Venue Under 18 U.S.C. § 1965(a)
Section 1965(a), the venue provision for civil RICO actions,
provides that a suit may be instituted in any district where a
defendant "resides, is found, has an agent, or transacts his
affairs." Id.*fn1 Although this section was intended to liberalize
existing venue provisions, plaintiff must show that there is
venue over each defendant due to his own contacts with the
district as opposed to those of a co-defendant. Farmers Bank v.
Bell Mortgage Corp., 452 F. Supp. 1278, 1281 (D.Del. 1978).
MSI is clearly "found" and "transacts [its] affairs" here for
purposes of § 1965(a). The only basis for venue that Payne raises
with respect to the other defendants is that they have an agent,
namely MSI, in this district. Payne reasons that because
defendants constituted an enterprise to defraud her, each of them
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 ...