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Antitrust and Trade Law Venue

Private parties, including persons, corporations, and other entities, may sue in U.S. District Courts for three times their damages caused by violations of federal antitrust law. Special venue provisions are provided to assist persons in seeking treble damages from corporations with offices in distant states.

Section 4 of the Clayton Act, 15 U.S.C.S. § 15(a), provides generally for venue in a private federal action for treble damages:



[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent…

The “defendant” may be an individual, company, government, or other entity, and where the defendant resides or is found will vary according to the type of entity.

Individuals


For individual defendants, venue under Section 4 of the Clayton Act will include wherever the individual is domiciled or can be served with process. Venue under Section 4 for treble damage actions against a corporation will be where the corporation resides or where agents do business for the corporation.

To assist private parties in their treble damage actions against corporations, Section 12 of the Clayton Act, 15 U.S.C.S. § 22, adds venue wherever the corporation may be found or transacts business:

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 thus allows most private plaintiffs to file their actions for treble damages in a U.S. district court in their home state if the corporate defendant is found or transacts business in that state.

Corporations


A corporation is considered “found” within any district in which it is incorporated or carrying on its business through its officers or agents.

The “transacts business” alternative for venue is construed broadly by the courts to support a home state action for plaintiffs. Under a common sense approach, the courts will consider whether at the time the cause of action arose the corporation was engaged in business of any “substantial character” within the district. Some courts will consider whether there was substantial business carried on within the district at the time plaintiff’s action is served.

In determining business of substantial character, courts will consider various factors such as dollar volume and percentage of in-district sales and purchases, continuity and regularity of business activities within the district, and existence of sales solicitation and advertising within the district. The viewpoint of the “average” businessperson will be taken so that business considered substantial by an average businessperson will support venue within a district even if that business is considered a small portion of all the business of the defendant considered on a national or worldwide basis.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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