United States District Court, Southern District of New York
May 2, 1991
ROGER KINGSEPP, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
WESLEYAN UNIVERSITY, PRINCETON UNIVERSITY, HARVARD UNIVERSITY, YALE UNIVERSITY, DARTMOUTH UNIVERSITY, STANFORD UNIVERSITY, BROWN UNIVERSITY, AMHERST UNIVERSITY, WILLIAMS UNIVERSITY, UNIVERSITY OF PENNSYLVANIA, COLUMBIA UNIVERSITY, AND CORNELL UNIVERSITY, DEFENDANTS.
The opinion of the court was delivered by: Edelstein, District Judge:
OPINION AND ORDER
Defendants Wesleyan University ("Wesleyan"), The President
and Trustees of Williams College ("Williams"), and the
Trustees of Dartmouth College ("Dartmouth") have moved
pursuant to Federal Rule of Civil Procedure 12(b)(2) and
12(b)(3) to dismiss this putative class action antitrust case
against them on the grounds that this Court lacks personal
jurisdiction and that venue is improper, and, in the
alternative, pursuant to 28 U.S.C. § 1406 to transfer this
action to a district in which it could have been brought. For
the following reasons, defendants motions are denied.
Plaintiff Roger Kingsepp, a student at Wesleyan, commenced
this action on September 15, 1989. In his complaint, plaintiff
alleges that defendants "have engaged in a conspiracy to fix
or artificially inflate the price of tuition and financial
aid." (Complaint, ¶ 6). As a result of the alleged conspiracy,
plaintiff claims that "tuition and financial aid have been
fixed, stabilized and inflated in violation of Section One of
the Sherman Act" and that the class has therefore been damaged
by "having to pay higher tuition than in a free competitive
market." Id. at ¶ 13.
Wesleyan, Williams, and Dartmouth (the "moving defendants")
have moved to dismiss the complaint against them for lack of
personal jurisdiction and improper venue, and, in the
alternative, to transfer this action to a district in which it
could have been brought. The moving defendants contend
that they are not subject to jurisdiction under the nationwide
service of process provisions of the antitrust laws or under
the New York long-arm statute, and that venue is improper
under any of the applicable venue statutes. The remaining
defendants do not contest jurisdiction and venue. Plaintiff
has asserted personal jurisdiction over the moving defendants
under section 12 of the Clayton Act, 15 U.S.C. § 22, and New
York Civil Practice Law §§ 301, 302(a)(1), and 302(a)(3).
Plaintiff also claims that venue is appropriate under section
12 of the Clayton Act and under the general federal venue
provision, 28 U.S.C. § 1391(b).
A. Personal Jurisdiction
The moving defendants argue that plaintiff's claim "that
jurisdiction is available under Section 12 of the Clayton Act
even if defendants have no contacts with New York, or this
district, so long as they have contacts with the United
States. . . . is plainly wrong." (Reply Memorandum of Moving
Defendants, p. 14). In support of this argument, they assert
that "this basis of jurisdiction applies only to aliens, and
not to domestic entities such as the moving defendants." Id.
(emphasis in original). Plaintiff's assertion of jurisdiction
under section 12, at least as to Wesleyan and Williams, is well
founded; it is the moving defendants' argument that is plainly
Rule 4(e) of the Federal Rules of Civil Procedure authorizes
service of process on an out of state party when authorized by
a federal statute. Personal jurisdiction in an antitrust
action is governed by section 12 of the Clayton Act, 15 U.S.C. § 22,
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.
Section 12 authorizes out of state service on a corporate
defendant in an antitrust action, but does not specifically
mention the exercise of personal jurisdiction. However, the
statute's authorization of service outside the state has been
interpreted as authorizing federal courts to exercise
nationwide personal jurisdiction over corporate antitrust
defendants. Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine
Distributors Pty. Ltd., 647 F.2d 200, 204 n. 6 (D.C. Cir.
1981); The National Association of Pharmaceutical
Manufacturers, Inc. v. Ayerst Laboratories, No. 86 Civ. 5047,
slip op. at 10 (S.D.N.Y. September 5, 1989); Grosser v.
Commodity Exchange, Inc., 639 F. Supp. 1293, 1312 (S.D.N.Y.
1986); Dunham's, Inc. v. Nat'l Buying Syndicate of Texas,
614 F. Supp. 616, 623 (D.C.Mich. 1985); General Electric v.
Bucyrus-Erie Co., 550 F. Supp. 1037, 1038 (S.D.N.Y. 1982).
In cases where Congress authorizes nationwide federal
jurisdiction, as in section 12 of the Clayton Act, the
district court's jurisdiction is co-extensive with the
boundaries of the United States. Mariash v. Morrill,
496 F.2d 1138, 1143 (2d Cir. 1974); see Go-Video, Inc. v. Akai Electric
Co., Ltd., 885 F.2d 1406, 1414 (9th Cir. 1989). Thus, a
defendant who resides within the territorial boundaries of the
United States is subject to personal jurisdiction under
nationwide service of process without regard to state
jurisdictional statutes. Greene v. Emersons Ltd., 86 F.R.D. 47,
65 (S.D.N.Y. 1980). Further, it is not necessary that the
resident defendant have the requisite minimum contacts with the
state that would exercise jurisdiction. Mariash, 496 F.2d at
1143; see, e.g., F.T.C. v. Jim Walter Corp., 651 F.2d 251, 256
(5th Cir. 1981) ("a resident corporation necessarily has
sufficient contacts with the United States to satisfy the
requirements of due process").
In Mariash v. Morrill, 496 F.2d 1138 (2d Cir. 1974), the
Court of Appeals specifically rejected the argument that a
United States resident subject to nationwide service of process
must have minimum contacts with the state in which the
federal court would exercise jurisdiction. Id. at 1143. The
Court of Appeals stated:
It is not the state of New York but the United
States "which would exercise its jurisdiction
over them [the defendants]." And plainly, where,
as here, the defendants reside within the
territorial boundaries of the United States, the
"minimal contacts," required to justify the
federal government's exercise of power over them,
Id. at 1143 (citations omitted). In sum, when a defendant
resides in the United States and is subject to nationwide
service of process under a federal statute, the defendant is
subject to personal jurisdiction in federal court without
regard to state long-arm statutes and due process requirements
are satisfied by the defendant's contacts with the United
Two of the three moving defendants are corporations.
Wesleyan University is a non-profit, specially-chartered
Connecticut corporation whose campus is located in Middletown,
Connecticut. Williams is a non-profit corporation located in
Williamstown, Massachusetts. As corporations which reside in
the United States, Wesleyan and Williams are subject to
nationwide service of process under Section 12 of the Clayton
Act and subject to personal jurisdiction in this action.
Dartmouth, however, contends that as a trust organized under
a charter issued in the name of King George III of
Britain,*fn1 it should not be deemed a "corporation" for
purposes of section 12.
Section 12's nationwide service of process provision applies
to corporations, and has been narrowly construed. In
McManus v. Tato, 184 F. Supp. 958 (S.D.N.Y. 1959), Judge
Weinfeld refused to apply section 12's nationwide service of
process provision to a voluntary association, reasoning:
"Persons", as defined in the Clayton Act, are
"deemed to include corporations and
associations"; yet section 12 of the same act,
which authorizes extraterritorial service,
specifies only "corporation". This specificity
necessarily excludes individuals and voluntary
associations from those amenable to
Id. at 959. A number of other cases have narrowly construed
section 12's nationwide service of process provision so as to
exclude non-corporate defendants. See, e.g., Pocahontas Supreme
Coal Company v. National Mines Corp., 90 F.R.D. 67, 69
(S.D.N.Y. 1981); In re Chicken Antitrust Litigation,
407 F. Supp. 1285, 1299 (N.D.Ga. 1975); California Clippers, Inc. v.
United States Soccer Football Ass'n, 314 F. Supp. 1057, 1061
(N.D.Cal. 1970); Pacific Seafarers, Inc. v. Pacific Far East
Line, 48 F.R.D. 347, 349 (D.D.C. 1969); Thill Securities
Corporation v. New York Stock Exchange, 283 F. Supp. 239
(E.D.Wis. 1968). Given the narrow construction of the term
"corporation" in section 12 and the reluctance of courts to
extend nationwide service of process under section 12 to
non-corporate defendants, it would be inappropriate to extend
section 12 to encompass a trust such as Dartmouth.
In Kresberg v. Int'l Paper Co., 149 F.2d 911 (2d Cir.), cert.
denied, 326 U.S. 764, 66 S.Ct. 146, 90 L.Ed. 460 (1945), the
Second Circuit was faced with the question of whether to apply
the term "any corporation" in a nationwide service of process
provision to a trust with many of the attributes of a
corporation. In rejecting the exercise of jurisdiction under
the provision, the Court of Appeals stated:
If and when Congress desires to have the term
"any corporation" . . . include an association
like the Massachusetts trust in this case, a
simple amendment is all that is required.
Meanwhile it is not for
us to undertake to enlarge by construction an
exception in a statute restricting federal
Id. at 913. As in Kresberg, this Court will not interpret the
term "corporation" in a statute restricting federal
jurisdiction as encompassing a trust with some of the
attributes of a corporation. Accordingly, Dartmouth can not be
deemed a "corporation" for purposes of section 12.
Since nationwide service of process under section 12 does
not extend to Dartmouth, plaintiff must turn to New York's
long arm statute to provide a basis for personal jurisdiction.
See Grosser v. Commodity Exchange, 639 F. Supp. 1293, 1305-1306
(S.D.N.Y. 1986). When a question of personal jurisdiction is
decided without a full evidentiary hearing, plaintiff need make
only a prima facie showing that jurisdiction exists. Marine
Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981).
However, where, as here, there has been substantial discovery
on the jurisdictional issue, plaintiff is required to
demonstrate jurisdiction by a preponderance of the evidence.
Grill v. Walt Disney Co., 683 F. Supp. 66, 67-68 (S.D.N.Y.
1988); see Volkswagenwerk Aktiengesellschaft v. Beech Aircraft
Corp., 751 F.2d 117, 120 (2d Cir. 1984). New York Civil
Practice Rules ("CPLR") §§ 301 and 302 set forth the bases upon
which New York courts may assert jurisdiction over a
non-resident person or foreign corporation. Plaintiff argues
that this Court has jurisdiction over Dartmouth pursuant to
CPLR §§ 301, 302(a)(1), 302(a)(3), and under a theory of
Neither Dartmouth, nor plaintiff, has raised the issue of
whether Dartmouth, a trust chartered by King George III, can
be subject to jurisdiction for "doing business" under CPLR
§ 301. Although the "doing business" basis of jurisdiction
normally applies to corporations, New York courts have
subjected non-corporate entities, including individuals, to
jurisdiction under the "doing business" test. See Diskin v.
Starck, 538 F. Supp. 877, 880 (E.D.N.Y. 1982); Laufer v. Ostrow,
55 N.Y.2d 305, 449 N.Y.S.2d 456, 460, 434 N.E.2d 692, 697
(1982); ABKCO Indus., Inc. v. Lennon, 52 A.D.2d 435, 384
N.Y.S.2d 781, 784 (1st Dep't 1976). The rationale underlying
CPLR § 301 supports the application of the "doing business"
test to a wide range of business entities:
While ordinarily it is a corporate defendant that
will be subject to jurisdiction for "doing
business" under CPLR 301, the "doing business"
test can be legitimately applied to all business
entities, such as partnerships and unincorporated
associations, and can even be applied to
non-resident individuals. . . . Moreover, equal
treatment of defendants is desirable since the
form of organization by which a defendant does
business is irrelevant to any policy governing
acquisition of jurisdiction. . . . [R]ecent well
reasoned authority has imposed general
jurisdiction in New York even as to non-corporate
defendants "doing business" in New York.
Klinghoffer v. S.N.C. Achille Lauro, 739 F. Supp. 854
(S.D.N.Y. 1990) (quoting 1 Weinstein, Korn & Miller, New York
Civil Practice ¶ 301.15, at 3-30 to 31 (footnotes omitted;
citing ABKCO and Laufer)). As a trust chartered by King George
III, Dartmouth has the ability to conduct business and engage
in substantial commercial activity in New York just like any
other business entity. Accordingly, CPLR § 301's "doing
business" basis of jurisdiction is sufficiently broad to
A defendant is subject to jurisdiction under CPLR § 301 if it
is "engaged in such a continuous and systematic course of
`doing business' here as to warrant a finding of its `presence'
in this jurisdiction." Grill v. Walt Disney Co., 683 F. Supp. at
68 (citing McGowan v. Smith, 52 N.Y.2d 268, 272, 437 N.Y.S.2d
643, 419 N.E.2d 321 (1981) (quoting Simonson v. Int'l Bank,
14 N.Y.2d 281, 285, 251 N.Y.S.2d 433, 200 N.E.2d 427 (1964))). A
defendant is "doing business" within the meaning of CPLR § 301
if it does business in this state "not occasionally or
casually, but with a fair measure of permanence and
continuity." Id. (quoting Tauza v. Susquehanna Coal Co.,
220 N.Y. 259,
267, 115 N.E. 915, 917 (1917)). Whether a defendant may
be deemed to be present by virtue of its doing business in the
jurisdiction depends upon the application of a "simple and
pragmatic" test. Rolls-Royce Motors, Inc. v. Charles Schmitt &
Co., 657 F. Supp. 1040, 1044 (S.D.N.Y. 1987) (citing Bryant v.
Finnish Nat'l Airline, 15 N.Y.2d 426, 432, 260 N.Y.S.2d 625,
628-29, 208 N.E.2d 439, 441 (1965)).
In applying this "simple and pragmatic" test under CPLR
§ 301, New York courts have focused on a number of factors
including: "the existence of an office in New York; the
solicitation of business in the state; the presence of bank
accounts and property in the state; and the presence of
employees of the foreign defendant in the state. Hoffritz For
Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985)
(citing Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533,
537, 281 N.Y.S.2d 41, 44, 227 N.E.2d 851, 853, cert. denied,
389 U.S. 923, 88 S.Ct. 241, 19 L.Ed.2d 266 (1967)). New York
courts also look to whether defendant lists a telephone number
in the state. Rolls-Royce Motors, Inc., 657 F. Supp. at 1044.
It is well settled that "mere solicitation of business by a
foreign corporation in New York is an insufficient basis for
the exercise of personal jurisdiction." Hoffritz For Cutlery,
Inc., 763 F.2d at 59; see Rolls-Motors, Inc. v. Charles Schmitt
& Co., 657 F. Supp. 1040, 1044-45 (S.D.N.Y. 1987). When there
are activities of substance in addition to solicitation,
however, there is presence and therefore jurisdiction. Grill v.
Walt Disney Co., 683 F. Supp. at 68. This theory of jurisdiction
has become known as the "solicitation plus" doctrine. See
Asquascutum of London, Inc. v. S.S. American Champion,
426 F.2d 205, 211 (2d Cir. 1970). Cases which find jurisdiction under
the "solicitation plus" doctrine "have involved either
financial or commercial dealings in New York, either personally
or through an agent." Id. at 212 (citations omitted).
Dartmouth is not licensed to do business in New York, it
maintains no offices in New York, and it does not list a phone
number in New York. Nonetheless, Dartmouth engages in a
continuous and systematic course of conduct sufficient to
warrant a finding that it is doing business in New York.
Dartmouth College actively solicits students in New York by
sending representatives to approximately 44 secondary schools
in the state a year.*fn2 In addition to this solicitation,
Dartmouth has engaged in substantial commercial activity in
the state. Dartmouth has a banking relationship with Chase
Manhattan Bank that dates back to) at least 1982. Since that
time, Dartmouth has maintained at least two accounts in Chase,
with a balance in one account as high as $14,487,051.88 in
1987. Further, from 1982 to 1987, Dartmouth has issued bonds
in New York through Goldman Sachs on at least four separate
occasions. Dartmouth also owns real property in New York
— a future remainder interest in a piece of residential real
estate on Long Island worth approximately $65,000.*fn3
Accordingly, Dartmouth has sufficient contacts with New York to
establish that it engaged in a continuous and systematic course
of "doing business" sufficient to warrant a finding of its
presence in New York for purposes of jurisdiction.
The moving defendants argue that venue is not appropriate
under either the special venue provisions of the Clayton Act
found in section 12, or the general federal venue provision
found in 28 U.S.C. § 1391(b). It is now well settled that the
provisions of 28 U.S.C. § 1391(b) "are supplemental to — not
superseded by — the special antitrust venue statute." Grosser
v. Commodity Exchange, Inc., 639 F. Supp. 1293, 1313 (S.D.N.Y.
1986); General Electric v. Bucyrus-Erie
Co., 550 F. Supp. 1037, 1040 & n. 3, 1042 (S.D.N.Y. 1982). Thus,
venue in this district may be authorized under either section
12 or under the general federal venue provisions of 28 U.S.C. § 1391(b).
Section 1391(b) provides that a federal question case may be
maintained in the forum where all defendants reside.*fn4
Pursuant to section 1391(c), a corporation is deemed to
"reside" in any district "in which it is subject to personal
jurisdiction at the time the action was commenced." Wesleyan
and Williams are corporations who are, and were at the time
this action was commenced, subject to jurisdiction in this
action under section 12 of the Clayton Act. They are therefore
deemed to "reside" in this district pursuant to section
To be sure, although a trust like Dartmouth is not a
"corporation" for purposes of section 12 of the Clayton Act,
it is a "corporation" for purposes of section 1391(c). That
section's reference to "corporations" has been liberally
construed to include trust funds and other entities such as
voluntary associations and partnerships. Hock v. Pacific Mutual
Life Ins. Co., No. 88-3471, slip op. at 8 (D.D.C. May 15,
1989); see, e.g., Denver & Rio Grande Western R.R. Co. v.
Brotherhood of R.R. Trainmen, 387 U.S. 556, 559-62, 87 S.Ct.
1746, 1748-50, 18 L.Ed.2d 954 (1967); Penrod Drilling Co. v.
Johnson, 414 F.2d 1217, 1220 (5th Cir. 1969). Because Dartmouth
is a "corporation" for purposes of section 1391(c) and was
subject to personal jurisdiction at the time this action was
commenced, Dartmouth is deemed to "reside" in this district
pursuant to section 1391(c). Accordingly, all of the moving
defendants are deemed to reside in this district and venue is
therefore appropriate under section 1391(b). See Obee v.
Teleshare, Inc.,725 F. Supp. 913, 916-17 (E.D.Mich. 1989).
Defendants' motions pursuant to Federal Rule of Civil
Procedure 12(b)(2) and 12(b)(3) to dismiss this action against
them for lack of personal jurisdiction and improper venue,
and, in the alternative, pursuant to 28 U.S.C. § 1406 to
transfer this action to a district in which it might have been
brought are denied.