Before: SWAN, HINCKS and MOORE, Circuit Judges.
SWAN, Circuit Judge: This is an appeal by plaintiff and cross-appeal by defendants from different paragraphs of an interlocutory order entered October 14, 1958 which involved rulings with respect to the statute of limitations applicable in this action for treble damages under § 4 of the Clayton Act. Leave to appeal was granted to both parties under the recently enacted Interlocutory Appeals Act, 28 U.S.C.A. § 1292(b).
Plaintiff, a Connecticut corporation, was engaged in the business of selling in that state bananas purchased from defendants. Defendant United Fruit Company, a New Jersey corporation, is a producer of bananas grown in Central and South America and transported by vessel to the United States. Defendant Fruit Dispatch Company, a Delaware corporation, is a wholly owned subsidiary of United Fruit and is the importer and distributor of United Fruit's bananas. On September 3, 1953 plaintiff filed its complaint in the Southern District of New York, alleging violations by defendants of the federal anti-trust laws from 1946 to the date of suit and seeking recovery of treble damages. Concededly plaintiff's cause of action, if any, arose in Connecticut.
There being no applicable federal statute of limitations,*fn1 it was conceded that the federal courts look to the New York statutes of limitation. See Bertha Building Corp. v. National Theatres Corp. filed herewith. Pursuant to the so-called "borrowing statute" of New York, section 13 of the Civil Practice Act,*fn2 defendants pleaded the Connecticut one year statute*fn3 and in the alternative the three year statute.*fn4 Defendants also pleaded the three year New York statute of § 49(3) Civil Practice Act and in the alternative the six year statute of § 48(2) Civil Practice Act. In December 1957 a preliminary jury trial was held in accordance with the opinion in Bertha Building Corp. v. National Theatres Corp. 2 Cir. 248 F.2d 833, cert. den. 356 U.S. 936, to determine whether the defendants were "without the state" of Connecticut, as contended by plaintiff, during each of the six years preceding the commencement of this action.
The Connecticut tolling statute provides that the time during which a defendant is "without the state" shall be excluded in computing the Connecticut period of limitations.*fn5 Judge Levet ruled that the "transacting business test" of section 12 of the Clayton Act, 15 U.S.C.A.§ 22, was not applicable to the issue of whether defendants were "without the state" for purposes of the Connecticut tolling provision. Judge Levet's opinion embodying that ruling is reported in 158 F.Supp. 153. The jury's verdict on the preliminary trial found that both defendants were without the state of Connecticut during the entire period in question.
Following the preliminary jury trial, Judge Levet filed an opinion, reported in 158 F.Supp. 160, holding that the applicable statute of limitations is the three year limitation prescribed by § 49(3) Civil Practice Act rather than the six year period of § 48(2), as claimed by plaintiff. This ruling precluded plaintiff from recovering any damages for the period prior to September 3, 1950. A jury trial was then had on the merits of plaintiff's cause. When the jury was unable to agree on a verdict, a mistrial was declared and a new trial ordered. For the purposes of this new trial, pursuant to Rule 16 of the Fed. Rules Civ. Proc., Judge Levet entered the order which is before us on appeal. His ruling on the New York statute of limitations is set out in the first paragraph of this order and plaintiff's appeal challenges its correctness. For the reasons stated in our opinion in Bertha Building Corp. v. National Theatres Corp., filed herewith, Judge Levet's ruling that the New York three year statute rather than the New York six year statute is applicable if the Connecticut statutes of limitation are tolled, must be reversed.*fn*
Defendants' appeal challenges the second and third paragraphs of the aforesaid order. The second paragraph incorporates Judge Levet's ruling as to the non-applicability of the "transacting business" test of section 12 of the Clayton Act. The third paragraph denied defendants' several motions to set aside the jury's verdict in the preliminary trial as contrary to the weight of the evidence and contrary to law, and for a directed verdict n.o.v.
On the defendants' appeal it is necessary to construe the Connecticut tolling statute in order to determine as to each defendant whether the pertinent Connecticut statute of limitations has been tolled; if so the pertinent New York statute will be applicable. The first question presented is the correctness of Judge Levet's ruling that the defendants' presence in Connecticut for purposes of applying the Connecticut tolling statute is to be measured by whether they were sufficiently transacting business there to sustain service of process upon them under the law of Connecticut rather than by whether they were transacting business there under the broader standards of section 12 of the Clayton Act which govern the propriety of venue in a federal anti-trust suit.*fn6 This section of the Clayton Act was considered at length in Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359. At pages 372-373 the opinion states:
"And we think it clear that, as applied to suits against corporations for injuries sustained by violations of the Anti-Trust Act, its necessary effect was to enlarge the local jurisdiction of the district courts so as to establish the venue of such a suit not only, as theretofore, in a district in which the corporation resides or is 'found,' but also in any district in which it 'transacts business' - although neither residing nor 'found' therein - in which case the process may be issued to and served in a district in which the corporation either resides or is 'found'; and, further, that a corporation is engaged in transacting business in a district, within the meaning of this section, in such sense as to establish the venue of a suit - although not present by agents carrying on business of such character and in such manner that it is 'found' therein and is amenable to local process, - if in fact, in the ordinary and usual sense, it 'transacts business' therein of any substantial character. * * *"
"We are further of opinion that a corporation is none the less engaged in transacting business in a district, within the meaning of this section - which deals with suits respecting unlawful restraints upon interstate trade - because of the fact that such business may be entirely interstate in character and be transacted by agents who do not reside within the district. * * *"
And at page 374, the court added:
"To construe the words 'or transacts business' as adding nothing of substance to the meaning of the words 'or is found,' as used in the Anti-Trust Act, and as still requiring that the suit be brought in a district in which the corporation resides or is 'found,' would to that extent defeat the plain purpose of this section and leave no occasion for the provision that the process might be served in a district in which the corporation resides or is found. And we find nothing in the legislative proceedings leading to its enactment which requires or justifies such a construction."
See also United States v. Scophony Corp., 333 U.S. 795, 807-808; United States v. National City Lines, 334 U.S. 573, 583.
It seems clear, therefore, that plaintiff could have filed its complaint in the federal court in Connecticut, if the defendants were "transacting business" there within the meaning of that phrase as construed in the Eastman Kodak decision, and could have had process served upon them in another district. Plaintiff, however, contends that Connecticut would nevertheless hold that the running of its statutes of ...