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UNITED STATES v. WATCHMAKERS OF SWITZERLAND INFORM

July 13, 1955

UNITED STATES of America, Plaintiff,
v.
The WATCHMAKERS OF SWITZERLAND INFORMATION CENTER, Inc., et al., Defendants



The opinion of the court was delivered by: WALSH

See 134 F.Supp. 710.

Five of the defendants in the above entitled action have moved to dismiss the complaint for lack of jurisdiction over their persons. The motions were argued together.

 In this action several Swiss and American organizations are charged with violations of the Sherman Act, 15 U.S.C.A. § 1, in that they allegedly have combined and conspired unreasonably to restrain interstate and foreign trade and commerce in watches, component parts and repair parts, and also with violation of the Wilson Tariff Act, 15 U.S.C.A. § 8. It may be roughly summarized as a claim that Swiss organizations compel American companies to restrict the manufacture and export of American made watches and parts in order to be allowed to obtain Swiss watches and parts. Two of the most powerful Swiss forces are Federation Suisse Des Associations de Fabricants D'Horlogerie (hereafter referred to as FH), and Ebauches, S.A. They are two of the moving defendants who claim not to be within the jurisdiction of this court.

 Section 12 of the Clayton Act, 15 U.S.C.A. § 22 provides as follows:

 ' § 22. District in which to sue corporation

 '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.'

 The question here is whether the moving defendants were found within this country, and properly served. 'Found' requires something more than 'transacting business'. Eastman Kodak Co. v. Southern Photo Material Co., 273 U.S. 359, 370-374, 47 S. Ct. 400, 71 L. Ed. 684. United States v. Scophony Corporation of America, 333 U.S. 795, 817, 68 S. Ct. 855, 92 L. Ed. 1091, does not equate 'found' to 'transacting business' but it does require that the presence of a corporation within the jurisdiction be determined from a realistic appraisal of its overall business rather than upon the sum of the disassembled parts of that picture.

 A corporation is 'found' within the jurisdiction if it is 'present' there. The question is whether there is proof of continuous local activities and whether under all the circumstances of the case, the forum is not unfairly inconvenient. Latimer v. S/A Industrias Reunidas F. Matarazzo, 2 Cir., 175 F.2d 184, 186, certiorari denied 338 U.S. 867, 70 S. Ct. 141, 94 L. Ed. 531; Kilpatrick v. Texas & P. Ry. Co., 2 Cir., 166 F.2d 788, 791; Hutchinson v. Chase & Gilbert, 2 Cir., 45 F.2d 139.

 For proof of continuous activities within this jurisdiction by FH and Ebauches, the government relies on its claim that their jointly owned subsidiary, Watchmakers of Switzerland Information Center, Inc. (hereafter referred to as Watchmakers), itself a defendant, acts as their agent and upon the activities of Foote, Cone & Belding, another defendant.

 FH is in many ways comparable to an American trade association, but has more power than customarily given such an association. It is a Federation of six regional organizations having a combined membership of over 450 and consisting of substantially all manufacturers and assemblers of jeweled Swiss watches. It conducts negotiations and acts for the industry in matters of great importance. According to its own claims, it was created in 1924 'in order to attempt to correct chaotic conditions which prevailed at that time in the watch industry'. Its aims are described as follows:

 'Article 4 -- The Federation has as its aim to watch over the general interests of Swiss watch manufacturers by:

 '1. The coordination of the economic policy of its sections;

 '2. The improvement and the fixing of conditions of manufacture, sale and exportation of watch products;

 '3. The improvement of industrial conditions by the concluding of agreements with suppliers, their associations, or third parties;

 '4. The supervision of the labor market and the study of questions relating thereto;

 '5. The examination of all questions of interest to watch manufacturers, including those which are submitted to it by its ...


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