Court Opinion

ID: 9442680
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:55:50.143649+00
Date Added: 2024-06-11T17:29:11.248177
License: Public Domain

HASTIE, Circuit Judge, with whom Mc-LAUGHLIN, Circuit Judge, joins
(dissenting).
Judge McLaughlin and I think the district court correctly construed Section 1404 (a) of the new Judicial Code.
In that Section, Congress has said that in the interest of convenience and justice “a district court may transfer any civil action to any other district or division where it might have been brought”. 28 U.S.C.A. § 1404(a). The district judge who is respondent here, acting upon a petition to transfer civil antitrust suits from the District of Delaware to the Northern District of Texas, had to decide whether the Northern District of Texas was a place where the suits “might have been brought”. A reasonable and obvious way of determining this was to see whether Congress in some other statute had designated the places where litigation of this sort might be brought. Such an inquiry with reference to antitrust suits leads directly to the provision of Section 12 of the Clayton Act, which is Section 22 of Title 15 of the United States Code Annotated and will be so designated throughout this opinion. This section provides that “Any suit * * 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 *117wherein it may be found or transacts business * * *.” To the learned district judge who had concluded that the Northern District of Texas met none of these requirements, it seemed that a reading of this section in conjunction with Section 1404(a) solved the problem. We can find no fault in this reasoning.
On the other hand, it seems to us that in rejecting Section 22 of Title 15 as definitive of the limits of power to transfer suits under Section 1404(a) this court is holding that the latter statute empowers a district court to transfer litigation to any district whatever if the court deems such action just and convenient. In brief, the court is holding that the concluding phrase <of Section 1404(a) is surplusage.
Logically, the district where an action ■in personam “might have been brought” can mean a place of proper venue for the •original proceeding, or a place where the ■defendant was amenable to the authority of the court,1 or both. We are unable to find any other reasonable construction which would give the language substantial ■effect. The phrase under construction is treated as surplusage unless it is given one ■of the above suggested meanings. Apparently, the court believes that problem can be avoided here by reasoning that, even if venue does not lie in Texas, all of the defendants were amenable to the authority •of the district court there. We think that conclusion is mistaken.
Both venue and personal jurisdiction over a defendant corporation in antitrust ■suits are properly approached through Section 22 of Title 15 which reads as follows:
“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."
This section states as determinants of proper venue the normal criteria of personal jurisdiction over a corporation. For unless a corporation is “an inhabitant” of, or “found” in or “transacts business” in a state, it normally is not subject to original process of a district court for a district within that state. 2 The only relevant exception to this rule is the restricted authority for extraterritorial service of process contained in the concluding clause of Section 22. But we read that clause as restricting extraterritorial power to “such cases” as are within the requirement of the preceding provision of the Section that suit be brought where, at least, the corporation “transacts business”. 3 We believe a corporation would be entitled to have extraterritorial service attempted under this Section quashed upon a showing that it did not transact business in the state from which summons had issued. Thus, whether “a district [where suit] might have been brought” is viewed precisely in terms of proper venue or more generally to include conceptions of power of a court to subject defendants to its authority, Section 22 incorporates the concept and in so doing excludes power to transfer to Texas in these cases.
In brief, Section 22 states the only meaningful limitations to which the concluding phrase of Section 1404(a) can refer. And once these limitations are rejected, as we think the court is rejecting them, a *118substantial provision of Section 1404(a) is left meaningless, or at least too vague for practical application.
Whatever merit there may be as a matter of policy, in the view implicit in the opinion of the court that a district court should be free to transfer cases according to justice and convenience without technical restrictions, we think Congress has not expressed or embodied that policy in Section 1404(a). If such had been the intention of Congress we think the concluding phrase of Section 1404 (a) would have been omitted. But that phrase was included and we should give it substantial effect according to its tenor.
We think this analysis suffices to sustain the position of the district judge. However, to the extent that reinforcing considerations may be useful, they are not lacking.
One familiar and often helpful aid to statutory construction is afforded by reference to similar statutory language of un-controverted meaning used in some context which permits useful comparison. This approach is illuminating here.
Throughout Chapter 87, of which Section 1404(a) is a part, we find references to places where suits may be brought originally or to which suits may be transferred. It is not disputed that these sections are directions as to proper venue. They afford some support for the construction of similar language in Section 1404(a) as similarly limiting transfers to districts of proper venue. Particularly noteworthy is Section 1406(a) of Title 28 which authorizes a judge of a district in which a suit has been improperly brought to transfer the litigation to a district where it could have been brought. We think it will not be disputed that under this section, the receiving' forum must be a district of proper venue.4 Here again, the analogy supports our analysis of 1404(a).
The reviser’s notes concerning Section 1404(a) are also indicative of its proper construction.5 Those notes state that “Subsection (a) was drafted in accordance with the doctrine of forum non conveniens, permitting transfer to a more convenient forum, even though the venue is proper. As an example of the need of such a provision, see Baltimore & Ohio R. Co. v. Kepner, 1941, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28, which was prosecuted under the Federal Employer’s Liability Act in New York, although the accident occurred and the employee resided in Ohio.” 28 U.S. C.A. § 1404, Historical and Revision Notes.
In the light of this explanation it is significant that when these notes were written the technique of dismissing a suit because another forum was more convenient was employed only where the more convenient forum was also proper venue for the suit.6 Moreover, the problem of Baltimore and Ohio Railroad Co. v. Kepner mentioned in the reviser’s notes, was the lack of power to dismiss actions of particular type even if the forum was not convenient. This background suggests that proper venue in more than one forum is the limiting context of the Code revision and that within this context Section 1404(a) substitutes a broad power of transfer for a more restricted pre-existing power of dismissal. Plaintiffs are prevented from abusing their normal privilege of choice among districts of proper venue. At the same time, courts are directed to respect the legislative enumeration of places which Congress has deemed appropriate for the trial of various types of litigation.
*119We are not unmindful of the contention, a principal support of the position of our brethren, that the existence of judicial power to adjudicate a controversy in a place of improper venue unless the defendant shall object7 is a basis of power to transfer to a place of improper venue, the defendant willing. But we do not see how the conduct of a defendant after suit has been instituted can add to the forums where “it might have been brought”. In the normal meaning of words this language of Section 1404(a) directs the attention of the judge who is considering a transfer to the situation which existed when suit was instituted. Certainly it would not be argued that by beginning business in Texas after suit was filed in Delaware, the present defendants could have made Texas a place where the present suits “might have been brought”. We do not see how present tender to waive objection to venue in Texas can have any greater effect. We think the language of Section 1404(a) of Title 28, takes on precise meaning in the light of Section 22 of Title IS, so that there is neither warrant nor occasion for enlargement dependent upon the conduct of the parties during the course of a lawsuit.
Finally, it has been argued at bar that even assuming Section 22 of Title IS is controlling, the Northern District of Texas is a place where all of the defendants are to be “found” or “transact business” and, therefore, that these suits might have been brought there. But on the record, the district court concluded and made an explicit finding that certain of the defendants were neither to be found nor transacting business in Texas. We are asked to examine and set aside this finding if we should conclude that the district court correctly construed the language of Section 1404(a).
Our construction of the statute brings us to the consideration of the issue thus raised. However, the construction which has prevailed in these cases makes it unnecessary for the majority of the court even to consider this point, although the opinion of the court suggests that it may have merit. Since the point is not decided, we state our position on it summarily.
We think review of the finding in question is neither required nor proper in this proceeding. We are acting on a petition for writ of mandamus. Once it has been concluded that the district court was correct in its construction of Section 1404(a), we have gone as far as is appropriate in acting upon the present petition.
Other considerations aside, these cases present special circumstances which should cause us to refuse to employ the discretionary writ of mandamus to review the finding that certain defendants were not transacting business in Texas. It is not contended that the district judge acted arbitrarily in making such a finding but rather that he was mistaken in a conclusion of interrelated fact and law. And though petitioners now complain of that finding, each of them whose relation to Texas is in question signed and filed in the District Court for the Northern District of Texas as one of the papers in support of an action to stay one of the present Delaware actions a statement conceding: “That it had not transacted and is not transacting business in Texas; that it has no agent, representative or employee in Texas; that it cannot be found in Texas; that it is not domiciled in Texas and is not subject to the venue of a Federal District court or any court in Texas.”8 We find it impossible to be impressed by their plea now that they were so wrong then that we should use a discretionary writ to reverse a judge who in the exercise of his best judgment has agreed with them.
For these reasons, we would deny the writ.

. Of. Foster-Milburn Co. v. Knight, 2 Cir., 1950,181 F.2d 949.

. Such is the common law rule. Restatement, Conflict of Laws §§ 89, 92 (1934). This rule is given full effect by the limitations imposed upon the process of district courts by Rule 4(d) and (f) of the Federal Rules of Civil Procedure. Compare the decision of this court in Orange Theatre Corp. v. Rayherst Amusement Corp., 3 Cir., 1944, 139 F.2d 871.

. A corporation may transact business within a state yet not be subject to process of a district court there. With the conception of transacting business stated in United States v. Scophony Corp., 1948, 333 U.S. 795, 68 S.Ct. 855, 92 L.Ed. 1091, contrast the more limited provision for service of process upon a corporation in Rule 4(d) (3), Federal Rules of Civil Procedure.

. Professor Jamos W. Moore, special consultant on the revision of the Code, testified before the House Subcommittee holding hearings on the proposed Code that Section 1406 provides for transfer of the case “to the proper venue”. 28 U.S.Code Congressional Service, 80th Cong., 2d Sess. (1948) p. 1969.

. In Ex parte Collett, 1949, 337 U.S. 55, 69 S.Ct. 944, 959, 93 L.Ed. 1207 where the meaning of this very section was in question, the Supreme Court emphasized the value of the reviser’s notes as an aid to proper construction.

. Gulf Oil Corp. v. Gilbert, 1946, 330 U. S. 501, 506-507, 67 S.Ct. 839, 91 L.Ed. 1055; Tivoli Realty, Inc., v. Interstate Circuit, Inc., 5 Cir., 1948, 167 F.2d 155, 156, certiorari denied 1948, 334 U.S. 837, 68 S.Ct. 1494, 92 L.Ed. 1762.

. Neirbo Co. v. Bethlehem Shipbuilding Corp., 1939, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167; 28 U.S.C.A. § 1406(b).

. Relying in large measure upon this absence of relationship between these defendants and Texas, the Court of Appeals for the Fifth Circuit concluded that it would not be proper to restrain parties from proceeding with the Delaware litigation which is now before us. Tivoli Realty, Inc., v. Interstate Circuit, Inc., supra, note 6.