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HOUGHTON MIFFLIN CO. v. NATIONAL COMPUTER SYS.

July 10, 1974

HOUGHTON MIFFLIN COMPANY and THE STATE UNIVERSITY OF IOWA, Plaintiffs,
v.
NATIONAL COMPUTER SYSTEMS, INC., Defendant


Knapp, D.J.


The opinion of the court was delivered by: KNAPP

MEMORANDUM AND ORDER

KNAPP, D.J.

 Defendant National Computer Systems, Inc. moved on March 9, 1973 to dismiss this case for lack of in personam jurisdiction and improper venue, or in the alternative, for an order under 28 U.S.C. § 1404(a) transferring the action to the District Court in Minnesota. The Court permitted plaintiffs to take discovery of the facts bearing on defendant's motion and assigned the case to a magistrate for supervision of such discovery. Thereafter both sides submitted memoranda and defendant's motion was finally argued on May 31, 1974.

 For the reasons that follow, the motion is denied.

 The complaint alleges violations of the federal copyright laws. Venue for copyright actions is governed by 28 U.S.C. § 1400(a), which provides:

 
"Civil actions, suits, or proceedings arising under any Act of Congress relating to copyrights may be instituted in the district in which the defendant or his agent resides or may be found."

 Venue would thus properly be laid in this district if defendant National Computer Systems or its agent "resides" or "may be found" here.

 In personam jurisdiction over the defendant equally would exist should the defendant or its agent be "found" here, as that term has been interpreted to conform to due process requirements. Accordingly the question dispositive of both venue and jurisdiction is the same: whether the defendant or its agent is found here. Backer v. Gonder Ceramic Arts (S.D.N.Y. 1950) 90 F. Supp. 737, Boltons Trading Corp. v. Killiam (S.D.N.Y. 1970) 320 F. Supp. 1182.

 From our reading of the cases, it appears that a corporation is considered to be "found" where the corporation has contacts sufficient -- qualitatively or quantitatively -- to render fair and reasonable the exercise of the district court's power over the corporation. Between the extremes of contacts so minimal that jurisdiction based upon them would offend traditional notions of fairness, [see e.g. Gauvreau v. Warner Bros. Pictures Inc. (S.D.N.Y. 1958) 178 F. Supp. 510] and contacts so extensive that no reasonable mind could question its being found in the forum jurisdiction [see e.g. Backer v. Gonder Ceramic Arts, supra, (S.D.N.Y. 1950) 90 F. Supp. 737], lies a wide spectrum of corporate activity which must simply be weighed by the Court in an effort to determine in which direction the scales tip. That is the task at hand.

 Defendant National Computer Systems is a Minnesota corporation and its principal place of business is in Minnesota. It is in the business of performing data processing for institutions, primarily educational. Such institutions mail their material to be processed to defendant's office in Minnesota, the processing is then done wholly in Minnesota, and the results are mailed back to the customers. Additionally, the defendant produces and sells optical mark reading systems. These systems are produced in Minnesota.

 It is apparently the plaintiffs' claim that the defendant makes use of plaintiff Houghton Mifflin's copyrighted materials in order to engage in its data processing.

 We begin by emphasizing what contacts with this district are lacking. The defendant maintains no office in New York. It pays no taxes to New York. It is not licensed to do business in New York. It doesn't have -- or at least never intended to have -- a New York telephone listing. *fn1" It has no employees residing in this district. And it has no agent performing functions so essential to its doing of business in New York that were such functions not performed by an agent, they would be undertaken by the defendant itself. Cf. Gelfand v. Tanner Motor Tours, Ltd. (2d Cir. 1967) 385 F.2d 116.

 The plaintiff contends that Data Input, Inc., a corporation that maintained a New York office in 1972-73, is such an agent of the defendant. From the affidavit of that corporations' President, submitted by the defendant in lieu of answers to plaintiffs' interrogatories on this issue, we cannot conclude that the services performed by Data Input, Inc. for the defendant "are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services." Gelfand, supra, 385 F.2d at 121; see Blount v. Peerless Chemicals Inc. (2d Cir. 1963) 316 F.2d 695.

 Furthermore, we have placed no weight on the company President's trip to New York for the purpose of meeting with counsel, nor on a trip made by one Joel Jennings to attend a function sponsored by the Advertising Distributors of New York. Finally, we have not focused on New York contacts which occurred prior to ...


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