Kingsepp v. Wesleyan University
763 F. Supp. 22 (1991)
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Rule of Law:
Under Section 12 of the Clayton Act, federal courts may exercise nationwide personal jurisdiction over corporate defendants in antitrust actions without regard to their contacts with the forum state. For non-corporate defendants, personal jurisdiction must be established through the forum state's long-arm statute, which may require a showing that the defendant is continuously and systematically "doing business" within the state.
Facts:
- Roger Kingsepp, a student at Wesleyan University, alleged that Wesleyan, Williams College, and Dartmouth College engaged in a conspiracy to fix or artificially inflate the price of tuition and financial aid.
- Wesleyan University is a non-profit corporation located and chartered in Connecticut.
- The President and Trustees of Williams College is a non-profit corporation located in Massachusetts.
- The Trustees of Dartmouth College is a trust organized under a charter issued by King George III of Britain and is not incorporated in any state.
- Dartmouth College actively solicits students in New York by sending representatives to approximately 44 secondary schools annually.
- Dartmouth maintains at least two bank accounts in New York with Chase Manhattan Bank, with one account balance reaching as high as $14.4 million.
- Dartmouth has issued bonds in New York through Goldman Sachs on at least four separate occasions and owns a future remainder interest in residential real estate on Long Island.
Procedural Posture:
- Plaintiff Roger Kingsepp filed a putative class action lawsuit in the United States District Court for the Southern District of New York.
- Kingsepp's complaint alleged that Wesleyan, Williams, Dartmouth and other universities violated Section One of the Sherman Act.
- Defendants Wesleyan University, Williams College, and Dartmouth College filed a motion to dismiss for lack of personal jurisdiction under FRCP 12(b)(2) and for improper venue under FRCP 12(b)(3).
- In the alternative, the defendants moved to transfer the action to another district pursuant to 28 U.S.C. § 1406.
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Issue:
Does a federal district court in New York have personal jurisdiction over out-of-state universities in an antitrust lawsuit, where two are corporations and one is a trust, based on the Clayton Act's nationwide service of process and New York's long-arm statute?
Opinions:
Majority - Edelstein, District Judge
Yes, the court has personal jurisdiction over all three defendants. Section 12 of the Clayton Act authorizes nationwide service of process for corporate defendants in antitrust cases, meaning a federal court's jurisdiction is co-extensive with the boundaries of the United States. As corporations residing in the United States, Wesleyan and Williams are subject to personal jurisdiction in this court without needing minimum contacts with New York. However, Section 12 is narrowly construed to apply only to corporations and does not extend to a trust like Dartmouth. Jurisdiction over Dartmouth must therefore be established under New York's long-arm statute, CPLR § 301, which allows jurisdiction over entities "doing business" in the state. Dartmouth's continuous and systematic activities in New York—including student solicitation, maintaining substantial bank accounts, issuing bonds, and owning property—go beyond mere solicitation and are sufficient to establish its presence under the "doing business" test.
Analysis:
This opinion reinforces the broad jurisdictional reach of federal courts in antitrust cases against corporate defendants, confirming that the Clayton Act's nationwide service of process obviates the need for a state-specific minimum contacts analysis. It highlights a critical distinction for non-corporate entities like trusts, clarifying that they are not subject to this expansive federal statute and that plaintiffs must instead satisfy the traditional "doing business" or specific-act requirements of the forum state's long-arm statute. This decision provides a clear roadmap for establishing jurisdiction in multi-defendant antitrust cases involving different organizational structures, emphasizing the importance of analyzing each defendant's legal form.
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