Daniel v. American Bd. of Emergency Medicine

988 F.Supp. 127

Gregory F. DANIEL, M.D., et al., Plaintiffs, v. AMERICAN BOARD OF EMERGENCY MEDICINE, et al., Defendants.

No. 90-CV-1086A.

United States District Court, W.D. New York.

November 19, 1997.

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Jaeckle, Fleischmann & Mugel, Buffalo, NY (Ralph L. Halpern, of counsel), Shearman & Sterling, New York, NY (James T. Halverson, Kathleen M. Comfrey, of counsel), for plaintiffs.

Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, NY (Robert E. Glanville, of counsel), for American Board of Emergency Medicine, Henry A. Thiede, Frank A. Disney, Council of Emergency Medicine Residency Directors.

Petree Stockton, LLP, Winston-Salem, NC (Denise M. Jennings, George L. Little, of counsel), for Forsyth Memorial Hospital.

Magner, Love & Morris, Buffalo, NY (William J. Love, Jr., of counsel), for Johns Hopkins Hospital, Part of the Johns Hopkins Health System.

Collidge, Wall, Womsley & Lombard, Dayton, OH (Terence L. Fague, of counsel), for Kettering Medical Center.

Schnader, Harrison, Segal & Lewis, Philadelphia, PA (Sam Silver, of counsel), for Mercy Catholic Medical Center, Misericordia Division.

Kohrman, Jackson & Kranz, Cleveland, OH (Donald S. Scherzer, of counsel), for Ohio State University Hospitals.

Keck, Mahin & Cate, Washington, DC (Philip O'Neil, of counsel), for Riverside Methodist Hospitals.

Hinshaw & Culbertson, Chicago, IL (Robert E. Nord, of counsel), for St. Francis Medical Center.

Rushfeldt, Shelley & Drake, Sherman Oaks, CA (Doreen Wener Shefeld, Gail A. Reisman, Jerry R. Sparks, of counsel), for Tri-City Medical Center.

Dennis C. Vacco, Atty. Gen., State of NY, Buffalo, NY (Douglas S. Cream, Asst. Atty. Gen., of counsel), for State University of New York at Stony Brook Medical Center.

LeBeouf, Lamb, Greene & Macrae, New York, NY (Molly S. Boast, Sara C. Kay, of counsel), for Children's Hospital of Michigan, Children's Hospital and Health Center (San Diego), Detroit Receiving and University Health Center, Loma Linda University Medical Center, Lutheran General Hospital, Medical College of Pennsylvania and Medical College Hospitals, Mercy Hospital and Medical Center, Methodist Hospital of Indiana, Inc., Oregon Health Sciences University Medical Center, St. Anthony Hospital, University of California (Irvine) Medical Center, University of California (Los Angeles) Medical Center, University of California (San Diego) Medical Center, University of Massachusetts Medical Center, University Medical Center, (Tucson), and University of New Mexico, University Medical Center.

Paul A. Crotty, Corp. Counsel, Bob Bailey, Asst. Corp. Counsel, City of New York Law Depart., New York, NY, for Lincoln Medical and Mental Health Center.

Kelley, Drye & Warren, New York, NY (Richard E. Donovan, Lynne M. Glass, of counsel), for Our Lady of Mercy Medical Center.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636(b)(1), on April 24, 1991. Defendants filed various motions to dismiss the Second Amended Complaint on grounds of immunity, lack of personal jurisdiction, improper venue and improper service of process. On January 16, 1996, Magistrate Judge Foschio filed a Report and Recommendation regarding the various motions.¹

Plaintiffs and several of the defendants have filed objections to the Report and Recommendation.² Oral argument on the objections was held on October 17, 1996.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions of the parties and hearing argument from counsel, the Court adopts the proposed findings of the Report and Recommendation.

The Court finds the analysis of Magistrate Judge Foschio to be extremely thorough and well-reasoned. The Court will take this opportunity, however, to expand on Magistrate Judge Foschio's analysis regarding venue in light of two recent cases, Paper Sys., Inc. v. Mitsubishi Corp., 967 F.Supp. 364 (E.D.Wis. 1997) and Icon Indus. Controls Corp. v. Cimetrix, Inc., 921 F.Supp. 375 (W.D.La.1996).

Under 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.

The Court finds that the worldwide service of process clause in § 22 is totally independent from the venue clause. See Paper Systems Inc. v. Mitsubishi Corp., 967 F.Supp. 364, 366-67 (1997). There is nothing in the legislative history of § 22 nor Supreme Court precedent suggesting that the venue clause is supposed to serve as a limitation on the worldwide service of process clause. Id. at 367 (citing Go-Video, Inc. v. Akai Elec. Co., 885 F.2d 1406, 1410-11 (9th Cir.1989)). As the court stated in Paper Sys.:

Personal jurisdiction defines a court's power; if § 22 provides for worldwide service without exception, Congress has extended the federal court's powers to their constitutional limit to enforce the antitrust laws. Perhaps more than any other law, the antitrust laws are national in scope and impact. The antitrust laws define the rules of the free market economy; like the weather, the economy respects no state or natural boundaries.

* * * * * *

If the antitrust laws are to be effective, district courts' jurisdiction must reach the limits of the power of the United States of America. In the case of antitrust laws, it makes no sense to tie a district court's jurisdiction to the state in which it sits; it neither promotes the enforcement of antitrust law nor the management of litigation.

Id. at 368.

28 U.S.C. § 1391(b) provides, in pertinent part, that venue is proper in a federal question case in "a judicial district where any defendant resides, if all defendants reside in the same State." 28 U.S.C. § 1391(c) provides that "a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Because all the corporate defendants in this case are subject to personal jurisdiction in New York, by virtue of their amenability to worldwide service of process under § 22, they all "reside" in New York for venue purposes under § 1391(b).

The Second Circuit's decision in Goldlawr, Inc. v. Heiman, 288 F.2d 579 (2d Cir.1961), rev'd on other grounds, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962), does not bar this result. In Goldlawr, the Second Circuit stated, incidental to concluding that a transferor court lacked personal jurisdiction over the defendants, that "the extraterritorial service privilege [of § 22] is given only when the other [venue] requirements are satisfied." Id. at 581. This statement, however, was merely dictum. See Go-Video, 885 F.2d at 1411. Further, Goldlawr was decided in 1961, when the general venue provisions for domestic corporations contained in 28 U.S.C. § 1391(c) were more restrictive than § 22. Thus, the Goldlawr court had no occasion to consider whether the worldwide service of process clause in § 22 could apply if grounds for venue were provided by another statute. See General Elec. Co. v. Bucyrus-Erie Co., 550 F.Supp. 1037, 1041-42 (S.D.N.Y.1982).

The Court rejects defendants' argument that application of the general venue provisions contained in 28 U.S.C. § 1391 in conjunction with the worldwide service of process clause in § 22 renders superfluous the special venue provisions contained in § 22. Defendants argue against such an application on the premise that Congress presumably intended the venue provisions contained in § 22 to have some meaning. This argument overlooks, however, the fact that § 22 was enacted in 1914, decades before Congress expanded the general venue provisions in 1988. Thus, at the time § 22 was enacted, the special venue provisions contained therein served a definite purpose. It may well be that the 1988 amendments to § 1391 made those provisions superfluous, but if so, such was the prerogative of Congress.

The Court also rejects defendants' argument that it would be unfair to allow antitrust plaintiffs to obtain personal jurisdiction and venue over corporate defendants in any district in the United States. That is a policy issue best left to Congress. Had it desired to do so, Congress could have prevented this result in 1988 by providing that § 1391(c), as amended, did not apply to antitrust actions, but it failed to do so. Even if Congress did not consider the impact that the amendment would have on antitrust cases brought against corporate defendants, it is certainly free to restrict antitrust venue through new legislation if desired. In the meantime, there are other safeguards against the filing and prosecution of an antitrust action in a district which has no meaningful connection to the location of the parties or the underlying controversy, including the doctrine of forum non conveniens and the right to seek a change of venue for the convenience of the parties and witnesses under 28 U.S.C. § 1404(a). See Icon Indus. Controls Corp., 921 F.Supp. at 383.

The policies underlying the Clayton Act are "designed to expand the reach of the antitrust laws and make it easier for plaintiffs to sue for antitrust violations." Go-Video, Inc., 885 F.2d at 1413. What defendants are attempting to do here, however, is to narrow the scope of §...