KM Enterprises Incorporated v. Global Traffic Technologies In
725 F.3d 718
7th Cir.2013Background
- KME (Illinois) sued GTT (Delaware corp. headquartered in Minnesota) in Southern District of Illinois alleging antitrust violations (Clayton/Sherman Acts) based on GTT’s alleged conduct steering public procurement and offering a dual optical-GPS unit.
- None of the alleged tying/antitrust conduct (the dual unit scheme) occurred in the Southern District of Illinois; some GTT devices are installed in the district but not the implicated dual units.
- GTT’s contacts with the Southern District: ~71 installed units across the district (installed/maintained by third parties), six direct sales over four years totaling $2,327.25, two meetings with KME reps; no offices, agents, or direct maintenance in the district.
- District court dismissed for improper venue under 28 U.S.C. § 1391; KME appealed, arguing venue was proper under § 12 of the Clayton Act (15 U.S.C. § 22) and that Section 12’s nationwide service-of-process can be mixed with § 1391 venue.
- Seventh Circuit affirmed dismissal, holding Section 12’s service and venue provisions must be read together (no mix-and-match), and found GTT did not “transact business” in the Southern District for § 12 venue nor was there personal jurisdiction for § 1391 corporate-venue treatment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Clayton Act § 12 service-of-process clause may be combined with general venue (§ 1391) (i.e., decoupling clauses) | §12’s nationwide service gives personal jurisdiction and, under §1391(c), makes defendant a resident of every district so venue is proper everywhere | §12’s clauses must be read together; allowing mix-and-match would nullify venue limits and create absurd nationwide venue in all districts | Court held §12 must be read as a package: plaintiff cannot use §12’s nationwide service unless §12’s venue test is satisfied; rejected decoupling |
| Whether venue is proper under § 12 (15 U.S.C. § 22) in the Southern District of Illinois | GTT’s installed devices and sparse sales/transacting justify §12 venue (transacts business) | GTT’s in-district contacts are de minimis (no offices, agents, installations or meaningful sales/control) | Held: GTT does not “transact business” of substantial character in the district; §12 venue not satisfied |
| Whether venue is proper under general venue statute § 1391 (corporate residence via personal jurisdiction) | If §12 personal jurisdiction is used with §1391, venue is satisfied; alternatively, Illinois long-arm establishes personal jurisdiction making venue proper | GTT lacks both specific and general personal jurisdiction in Southern District; contacts are insufficient | Held: No specific or general personal jurisdiction in the Southern District; §1391 venue unavailable |
| Whether waiver or parent-subsidiary attribution of venue applies (LLC concession; trace to parent corp.) | LLC conceded Illinois jurisdiction; that concession and parent-subsidiary relationship bind GTT, Inc. for venue | LLC conceded jurisdiction as to the State but contested district venue; ordinary parent-subsidiary relationship does not transfer venue absent veil-piercing facts | Held: LLC’s concession did not waive district-venue defense; no basis to impute LLC contacts to parent—no veil-piercing; waiver theory rejected |
Key Cases Cited
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (establishes "minimum contacts" due process test for personal jurisdiction)
- Scophony Corp. of Am. v. United States, 333 U.S. 795 (interprets "transacts business" in venue context)
- Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359 (examples of commercial activities constituting transacting business)
- Pure Oil Co. v. Suarez, 384 U.S. 202 (special venue statutes may supplement general venue rules)
- Go-Video, Inc. v. Akai Elec. Co., 885 F.2d 1406 (9th Cir. — held §12 clauses may be decoupled; argued for mix-and-match approach)
- GTE New Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. — held §12 clauses are linked; rejected decoupling)
- Daniel v. American Board of Emergency Medicine, 428 F.3d 408 (2d Cir. — held §12 clauses are linked and §12 venue must be satisfied to use §12 service)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (discusses general vs. specific jurisdiction and "at home" standard for general jurisdiction)
- United States v. National City Lines, 334 U.S. 573 (context on Congress’s intent limiting plaintiff’s ability to haul defendants anywhere in §12 discussion)