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KINGSEPP v. WESLEYAN UNIVERSITY

May 2, 1991

ROGER KINGSEPP, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
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.

I. BACKGROUND

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.

II. DISCUSSION

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 wrong.

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, which provides:

  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 ...

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