7th Circuit Rules That Clayton Act § 12’s Venue and Service-of-Process Provisions Must Be Read Together

On Aug. 2, 2013, the 7th U.S. Circuit Court of Appeals in a unanimous decision held that when a plaintiff sues a corporate defendant in an antitrust case, it must elect to proceed under Section 12 of the Clayton Act (15 U.S.C. § 22) or under 28 U.S.C. § 1391 for purposes of venue and personal jurisdiction, and it cannot mix and match the two sections. (See KM Enterprises, Inc. v. Global Traffic Tech., Inc., et al., 725 F.3d 718 (7th Cir. 2013)). The decision places limits on a plaintiff’s choice of forum for suing a corporate defendant in the 7th Circuit.

The general federal venue statute, 28 U.S.C. § 1391(b), provides for venue in judicial districts as laid out in the statute. However, Section 12 of the Clayton Act provides special personal jurisdiction and venue rules in cases brought under the antitrust laws. The 3rd and 9th Circuits have held that a plaintiff may combine Section 12’s personal jurisdiction rule with the venue rule of 28 U.S.C. § 1391, which has the effect of expanding the districts in which a corporate defendant may be sued in an antitrust case. The D.C. and 2nd Circuits have taken the view that Section 12’s personal jurisdiction and venue rules must be read together, which limits the districts in which a corporate defendant may be sued to those in which it is an inhabitant, is found, or where it transacts business. The issue, as the 7th Circuit put it, is “if a plaintiff chooses to take advantage of Section 12’s nationwide service-of-process provision (and thus in effect rely on nationwide personal jurisdiction), must she then establish venue under Section 12 as well, or may she mix and match, relying on the Clayton Act for personal jurisdiction and Section 1391 for venue?”

The 7th Circuit sided with the D.C. and 2nd Circuits, holding that “Section 12 must be read as a package deal. To avail oneself of the privilege of nationwide service of process, a plaintiff must satisfy the venue provisions of Section 12’s first clause. If she wishes to establish venue exclusively through Section 1391, she must establish personal jurisdiction some other way.” The 7th Circuit’s decision is available here.