DocketNumber： No. 81-2573
Judges： Garth, Higginbotham, Rosenn
Filed Date： 12/10/1982
Status： Precedential
Modified Date： 11/4/2024
concurring and dissenting.
If it were not for the Majority’s holding that Myers had properly placed venue in the Virgin Islands pursuant to 15 U.S.C. § 22,
I cannot agree, however, with the Majority’s strained attempt to find venue with respect to the ADA on the basis of 15 U.S.C. § 22. That holding distorts the entire focus of the ADA’s appeal, which disclaimed venue under section 22 as well as under section 1391(b), but which concentrated on the section 1391(b) argument, because Myers’ entire emphasis and the district court’s emphasis was on section 1391(b) venue. Indeed, before us on appeal, no one urged or even mentioned section 22 venue.
In such a setting it is understandable that the Majority ignored the absence of fact findings or reasoned articulation by the district court. Obviously, because no one ever claimed section 22 venue, the district court had no occasion to make the findings of fact or to furnish reasons which would be crucial for a determination of whether the ADA “transacted business” in the Virgin Islands. Accordingly, the Majority was without benefit of district court findings or the reasons which could support the district court’s conclusions, both of which are essential for appellate review. Despite this lack no remand was ordered to cure this deficiency. Rather, the Majority has seen fit to make its own findings as an initial fact finder. It has done so, in order to support an unwarranted conclusion — that venue lies in the Virgin Islands because the ADA transacted business there within the meaning of 15 U.S.C. § 22. Thus, while in my opinion, the record developed by plaintiff is so inadequate that an outright reversal is called for, at the very least, the failure of the district court to find facts or identify its reasons pertaining to “transacting business”, requires us to remand for that purpose.
Of even greater significance, the Majority holds that the ADA, the defendant, had the burden of proving that it had not “transacted business” in the Virgin Islands, when as a matter of law it was the plaintiff who was charged with the burden of proving venue and who failed to carry his burden. Additionally, I suggest that the Majority has employed an incorrect standard in defining “transacting business” within the meaning of 15 U.S.C. § 22.
For all these reasons, I dissent.
I.
When a plaintiff seeks to assert his rights in a federal court, as Myers has done in this case, he must prove that that court, and not another court in a different locality or in a state system, has the authority to hear the case. KVOS, Inc. v. Associated Press, 299 U.S. 269, 57 S.Ct. 197, 81 L.Ed. 183 (1936); ARO Manufacturing Co. v. Automobile Body Research Corp., 352 F.2d 400, 403 (1st
However, unlike affirmative exculpatory defenses, which touch the merits of the cause of action and which the defendant must prove, it does not follow that the defendant also has the burden of proving improper venue, which is an affirmative dilatory defense. While there exists some authority for the proposition that the burden is on the objecting defendant to establish that venue is improper, see Maj. op. at 723-724, “the better view, and the clear weight of authority is that, when objection has been raised [by the defendant], the burden is on the plaintiff to establish that the district he chose is a proper venue.” 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3826 at 168 (1976 & Supp.1982). Ryan v. Glenn, 52 F.R.D. 185,192 (N.D.Miss.1971) (“Although there is a sharp split of authority on this point, the better view is that the burden of proving proper venue rests with plaintiffs”); Hawkins v. National Basketball Ass’n, 288 F.Supp. 614, 615 (W.D.Pa.1968).
The Majority opinion, however, claims that because venue is not “jurisdiction,” and because the defendant must raise an objection to venue in the first instance, it “logically follows” that, on a motion to dismiss for improper venue under Fed.R.Civ.P. Rule 12(b)(3), “the movant [here the defendant] has the burden of proving [that venue was not proper].” Maj. op. at 724. Although authority is cited to support this view, the cases which are cited either offer no reasons to support their position, or they confuse venue, a dilatory defense, with affirmative exculpatory or substantive defenses.
While the party asserting an exculpatory defense, i.e., such as those listed in Fed.R. Civ.P. Rule 8(c),
As I have noted, those cases cited by the Majority that hold that the burden of establishing venue is upon the defendant, reach this result without distinguishing between affirmative dilatory defenses and affirmative exculpatory or substantive defenses, the latter of which are the only defenses included in Ped.R.Civ.P. 8(c). (Maj. op. at 724). Significantly, the defense of improper venue is not to be found in Rule 8(c), nor is it “a matter constituting an avoidance or affirmative defense” within the meaning of Rule 8(c). Accordingly, I find little logic in Professor Moore’s unsupported assertion that the rule that plaintiff has the burden of establishing venue, when contested, is “unsound.” See 1 J. Moore, Moore’s Federal Practice, 10.140[a] at 1319-20 (1982) and Maj. op. at 724. Rather, reason dictates that, when objection is raised, it is the plaintiff who has the burden to establish that the venue he has chosen is proper. 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, § 3826 at 166-68 (1976 and Supp.1982). Indeed in the 15 U.S.C. § 22 context, the authorities are uniform in concluding that such is the case, i.e., that it is the plaintiff who must carry the burden of establishing proper venue. Bartholomew, supra, 612 F.2d 811; ARO Mfg. Co., supra, 352 F.2d 400; Grappone, Inc. v. Subaru of America, supra, 403 F.Supp. 123; United Industrial Corp. v. Nuclear Corp. of America, supra, 237 F.Supp. 971; Bruner v. Republic Acceptance Corp., supra, 191 F.Supp. 200; Wentling v. Popular Science Publishing Co., 176 F.Supp. 652, 656 (M.D.Pa.1959); Pfeiffer v. United Booking Office, 93 F.Supp. 363, 365 (N.D.Ill.1950).
Thus, contrary to the Majority’s view, which has criticized reliance on cases involving dilatory defenses (at 723-24), such reliance is completely appropriate when analyzing on whom the burden of proof falls with respect to proving venue. It is for that reason that ARO Manufacturing Co., supra, and those cases relying upon ARO Manufacturing, are appropriate precedents supporting “the better view” that in venue, as in jurisdiction, the plaintiff must bear the burden of proving proper venue. 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, supra, § 3826
A.
Before the district court, the ADA challenged venue in the Virgin Islands both on the basis of 15 U.S.C. § 22 and the general venue provisions in 28 U.S.C. § 1391(b). Myers, in his Affidavit in Opposition to Motion of Defendant American Dental Association to dismiss for improper venue, never addressed the challenge to 15 U.S.C. § 22 “transacting business” venue. Myers’ only claim was that venue was proper under section 1391(b) and that defendant ADA was “found” in the Virgin Islands within the meaning of 15 U.S.C. § 22. Myers asserted no more than that his claims occurred in the Virgin Islands (Myers’ Motion, Page 1, App. 31); that the ADA could be found in the Virgin Islands (Myers’ Motion Page 2, App. 32), and that the VIDA was not an autonomous body, only largely autonomous. Id. Consistent with the absence of sworn assertions which could support a claim of “transacting business,” was the absence of a section 22 argument in Myers’ brief on appeal. (Myers’ Brief at 46-47).
The district court’s opinion on venue is conclusive evidence of the fact that Myers did not depend upon section 22 venue and that no consideration was given to the elements of such venue. The district court properly recited that ADA claimed that neither section 22 nor section 1391(b) afforded venue in the Virgin Islands. However, with the exception of just one sentence in the district court opinion which stated “.. . the anti-trust acts expand venue to any district where a corporation transacts business,” the district court opinion is totally barren of any section 22 discussion, fact finding or reasons why section 22 venue was established. The opinion stresses the local Virgin Islands antitrust law, section 1391(b) venue (a decision which the Majority here properly overrules) and the fact that the Virgin Islands is not an inconvenient forum for trial under 28 U.S.C. § 1404(a). The entire opinion of the district court is reproduced in the margin revealing the absence of any section 22 discussion, rationale, or findings.
B.
It is undisputed that the particular facts and circumstances must be found and assessed in each case in order to determine whether the defendant corporation is “transacting business” in the district where the plaintiff has sought to establish venue.
While it is true that neither the Majority nor I have found any case dealing directly with the need for the district court to find facts or to discuss its reasons for its choice of section 22 venue, it is clear that in analogous circumstances this court has uniformly imposed such a requirement so that appellate review would be possible. We have done so even though no such mandate was to be found in the governing statute, regulation, or rule. For example, in the context of bargaining orders imposed by the NLRB after finding violations of the National Labor Relations Act, Judge Rosenn, writing for the court, explained that the Board was required to articulate its reasons so that we, as a court, could properly exercise our reviewing function and could “guarantee the integrity of the administrative process.” NLRB v. Armcor Industries Inc., 535 F.2d 239, 245 (3d Cir.1976). Accordingly this court required, even in the absence of statute, regulation, or rule that the Board had to make “specific findings” and had to “clearly explicate the basis for its decision to issue a bargaining order.” Id. at 245.
The same requirements have been made in other administrative contexts for the same reasons, i.e., that such an articulation is essential for intelligent court review. See e.g., Sun Shipbuilding & Dry Dock Co. v. McCabe, 593 F.2d 234 (3d Cir.1979) (requiring an ALJ to make findings of fact); Cotter v. Harris, 642 F.2d 700 (3d Cir.1981) (requiring ALJ in determining disability under Social Security Act to make findings of fact and articulate reasons). If the requirements which we have imposed for fact finding and articulation of reasons have been imposed upon administrative agencies so that the court can properly fulfill its review function, certainly we cannot require less when we are called upon to review a judicial determination. And, indeed, we have not.
We have required district courts to articulate the grounds for their decision when they dismiss a complaint with prejudice under Fed.R.Civ.P.Rule 37, even though Rule 37 is silent as to such a requirement. Quality Prefabrication v. Daniel J. Keating Co., supra, 675 F.2d at 81. Similarly, an articulation of reasons has been required upon entry of final judgment under Fed.R.Civ.P. 54(b), Allis-Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d 360, 364 (3d Cir.1975), and upon approval of a class action settlement, Bryan v. Pittsburgh Plate Glass Co., 494 F.2d 799, 804 (3d Cir.), cert. denied, 419 U.S. 900, 95 S.Ct. 184, 42 L.Ed.2d 146 (1974). Of greatest relevance for this case, however, is our requirement that district courts articulate the basis for their decision on a transfer of venue motion under 28 U.S.C. § 1404(a) where the evidence and arguments are in doubt.
Similarly, the Supreme Court has required consideration and articulation of those factors crucial to a district court’s venue determination. Gulf Oil Corp. v. Gilbert, supra, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055; see DeMateos v. Texaco, Inc., 562 F.2d 895, 900 (3d Cir.1977) (listing the seven factors found in Lauritzen v. Larsen, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254 (1953) which must be considered by the district court).
With these principles as a background, it is difficult for me to understand why the Majority not only ignores such salutory requirements but, in order to substantiate its untenable determination that a remand is unnecessary, seeks refuge in a literal reading of Fed.R.Civ.P. 52(a). See Maj. op. at 729 (formal findings of fact “are unnecessary on decisions of motions under Rule 12 or 56”).
While it is true that we do not require formal findings of fact on decisions of Rule 12 motions, one of which includes venue, we have nevertheless acknowledged that “where, ... the district court is presented with conflicting positions of substance .. ., it is a salutary practice to give the litigants, either orally or in writing, at least a minimum articulation of the reasons for its decision.” Interpace Corp. v. City of Philadelphia, 438 F.2d 401, 404 (3d Cir.1971). In Interpace, supra, this court refused to issue a writ of mandamus vacating certain class actions. The majority, while recognizing the need for an articulation by the district court of its reasons, nonetheless held that the class action rule (Fed.R.Civ.P. 23) did not require specific findings in the context of that case. Judge Adams forcefully disagreed with the majority’s interpretation of Rule 23 and stressed, as I do here in a venue context, that an appellate court cannot review a district court’s naked determinations without findings or an articulation of the underlying basis of the decision.
It is not surprising therefore that in order to be in a position to assess the propriety of a district court’s judgment, we have departed from the strict and literal terms of Rule 52(a) in order to achieve this worthwhile end. Thus we have required the district courts to state their grounds for decision in a number of discretionary areas wherever “values of consistency and predictability, reviewability, and deterrence [citations] outweigh the values of economy and efficiency that may be promoted by allowing inarticulate decisions.” Quality Prefabrication v. Daniel J. Keating Co., 675 F.2d 77, 81 and n. 6 (3d Cir.1982). This rule not only makes possible the effective review of district court decisions but is consistent with the purpose of Rule 52(a) and with the intent of the Advisory Committee on Rules, which drafted the final sentence of the Rule. Indeed it has been argued that Rule 52(a) should be read as a whole to require findings of fact whenever a decision rests on factual determinations; Horizons Titanium Corp. v. Norton Co., 290 F.2d 421, 424 n. 3 (1st Cir.1961); 5A J. Moore, Moore’s Federal Practice H 52.08 (1982); see Williamson v. Tucker, supra, 645 F.2d at 410-11 (noting Fifth Circuit rule requiring the articulation of grounds for decision on motions to hold party in civil contempt).
I submit that if we require the district courts to specify the grounds for their decision when making a venue transfer under 28 U.S.C. § 1404(a), we can require no less when district courts must determine whether venue is proper in the first instance under 15 U.S.C. § 22. Such a requirement is essential to our function of review and places no great burden on the district courts, especially when, as here, the district court had already prepared a memorandum opinion (see note 4, supra). Once made, such findings, reasons, and conclusions, of course, are subject to our rules on review. See O’Neill v. U.S., 411 F.2d 129, 146 (3d Cir.1969). If the findings, reasons, or conclusions are insufficient to permit review, as they are in this case, a remand is required, at the very least, to cure that deficiency. Plum Tree, Inc., supra; O’Neill, supra.
It is apparent from the district court’s discussion that its entire emphasis was on section 1391(b) venue. The Majority correctly disposes of that issue because of the teaching of Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979) which does not depend upon fact finding or reasons. Therefore in the section 1391(b) context little hinges on the district court’s failure to furnish either. In the section 22 context, however, the district court’s failure
II.
Because it is evident that Myers has failed to carry his burden, no matter what the proper test for “transacting business”
A.
A corporation “transacts business” in a district for purposes of section 12 of the Clayton Act (15 U.S.C. § 22) only if in the “ordinary and usual sense” it transacts business of a “substantial character” Eastman Kodak Co. of New York v. Southern Photo Materials Co., 273 U.S. 359, 373, 47 S.Ct. 400, 403, 71 L.Ed. 684 (1927); United States v. Scophony Corp., 333 U.S. 795, 807, 68 S.Ct. 855, 861, 92 L.Ed. 1091 (1948) (“The practical everyday business or commercial concept of doing or carrying on business ‘of any substantial character’ [is] the test of venue”); Bartholomew v. Virginia Chiropractic Ass’n., 612 F.2d 812, 815 (4th Cir.1979); Sherman College of Straight Chiropractic v. American Chiropractic Ass’n., 534 F.Supp. 438, 440-41 (N.D.Ga.1982); Health Care Equalization Committee of the Iowa Chiropractic Society v. Iowa Medical Society, 501 F.Supp. 970, 980 (S.D.Iowa 1981); Athletes Foot of Delaware, Inc. v. Ralph Libonati Co., Inc., 445 F.Supp. 35, 43 (D.Del. 1977); Bogus v. American Speech & Hearing Ass’n., 389 F.Supp. 327, 328-29 (E.D.Pa.1975), rev’d on other grounds, 582 F.2d 277 (3d Cir.1978); Friends of Animals, Inc. v. American Veterinary Medical Ass’n., 310 F.Supp. 620, 622 (S.D.N.Y.1970); Philadelphia Housing Authority v. American Radiator and Standard Sanitary Corp., 291 F.Supp. 252, 256 (E.D.Pa.1968). This “transacts business” standard was intended by Congress to be broader than the “may be found” standard, Eastman Kodak Co., supra, 273 U.S. at 372-73, 47 S.Ct. at 402-403; United States v. National City Lines, Inc., 334 U.S. 573, 579, 68 S.Ct. 1169, 1172, 92 L.Ed. 1584 (1948), but certainly more than a few isolated and peripheral contacts with the particular judicial district must be present to constitute business of a substantial character. Golf City, Inc. v. Wilson Sporting Goods Co., Inc., 555 F.2d 426, 438 (5th Cir.1977); Stern Fish Co. v. Century Seafoods, Inc., 254 F.Supp. 151, 153 (E.D.Pa.1966). See also Bogus v. American Speech and Hearing Ass’n., supra, 389 F.Supp. at 330. Ultimately, this court’s conclusion about the ADA’s business presence in the District of the Virgin Islands must stem from a common sense determination of whether, as a “broader business conception,” the ADA engages in any substantial business operations in the district. U.S. v. Scophony Corp. of America, supra, 333 U.S. at 807, 68 S.Ct. at 861; Academy of Ambulatory Foot Surgery v. American Podiatry Ass’n., 516 F.Supp. 378, 382 (S.D.N.Y.1981).
In reaching that determination I cannot ignore the fact that the ADA is not the conventional commercial profit making organization whose business transactions have traditionally been described by sales and purchases. Rather, it must be determined under what circumstances a not-for-profit membership organization such as the ADA may be said to “transact business” within the meaning of section 22.
While my overall thesis is that section 22 cannot be viewed in a vacuum but must have factual content nourished by district court findings of fact, in this part of my discussion I am obliged to refer to those undisputed facts which appear in affidavits filed by the ADA. To complete the entire factual context presented to the district court and to this court, I also include the two “factual circumstances” upon which the Majority relies in upholding section 22 venue.
The following are excerpts from affidavits submitted by the ADA:
*740 1. ADA’s headquarters and principal place of business are located in Chicago, Illinois, with one additional office in Washington, D.C. ADA has no office and no employees in the Virgin Islands. (Affidavit of T. Boerschinger, H 2);
2. Dr. Asher G. Chavoor, the member of the ADA’s Board of Trustees who represents the Virgin Islands, resides in Arlington, Virginia and practices in Washington, D.C., not the Virgin Islands; (Affidavit of L. Miller, ADA Membership Supervisor, H 6);
3. Of ADA’s approximately 130,000 members, only 19 resided in the Virgin Islands as of December 3, 1979 (Affidavit of L. Miller, K 2);
4. ADA's Annual Session, its major activity each year, has never been held in the Virgin Islands (Affidavit of H. Wells, 12);
5. No advertising in ADA’s Journals originates from advertisers located in the Virgin Islands (Affidavit of F. Cordero, 112);
6. ADA officials travel to the Virgin Islands only on sporadic occasions on ADA business and, in fact, ADA has only held two small meetings in the Virgin Islands (Affidavit of H. Wells, 113);
7. Under ADA’s constitution and bylaws, the VIDA is largely autonomous in the conduct of its activities (Affidavit of T. Boerschinger, 113);
8. Only $2,400 in membership dues out of $14,000,000 collected nationally by the ADA came from members in the Virgin Islands in 1980, or 0.01714% of total membership revenues. (Affidavit of L. Miller, 13).
The affidavits submitted by Myers are not addressed to section 22 conduct, but rather to personal jurisdictional - concepts. Nevertheless, it appears of record in Myers’ affidavit that for some eight years Dr. Cappuccio participated in the VIDA’s annual meetings to “make sure that the local association toed the line with respect to ADA policy.” (App. 51; Maj. op. at 730). In addition, that same affidavit can be read as claiming that three of ADA’s officers had visited the Virgin Islands on ADA business, and that Dr. Kerr, the 1980 President of the ADA, addressed the VIDA at its 1980 annual meeting and urged the passage of bylaws incorporating the ADA Code of Professional Conduct (App. 52; Maj. op. at 730).
These latter assertions by Myers are all that can be gleaned from his affidavits as acts which in any way pertain to the ADA’s transaction of business in the Virgin Islands. Indeed the Majority opinion depends wholly on those two circumstances to support its holding that the ADA “transacts business” sufficient to support Myers’ choice of venue in the Virgin Islands. In so holding, the Majority states that “enforcing a Code of Conduct is at the heart of . .. a professional membership organization [’s business],” and “ADA’s direct continual supervision in the Virgin Islands of the VIDA to ensure enforcement of ADA’s professional Code subjects it to plaintiff’s choice of [federal anti-trust] venue in the District of the Virgin Islands.” (Maj. op. at 730-31). I cannot agree.
I suggest that the authorities dealing with section 22 venue in the context of not-for-profit professional organizations do not support the Majority’s conclusion and that the Majority has erred in a significant respect when it departs from the test established by those authorities for determining the transaction of business under 15 U.S.C. § 22. I also suggest that based on the meager record before us there is no evidence which could even support a finding that the ADA “transacted business” in the Virgin Islands. See, e.g., FTC v. British Oxygen Co., supra, 529 F.2d at 200.
B.
My examination of the authorities in this not-for-profit associational context reveals the following.
1. Every case that has held that an Association “transacted business” within the meaning of section 22 did so on the basis of facts which established a continuing licensing, accreditation or qualitative evaluation function on the part of the Association.
Levin v. Joint Commission on Accreditation of Hospitals, supra, 354 F.2d at 517 (“The business of the Joint Commission is that of accrediting hospitals. Field inspections are an essential aspect of that business.”) Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Breeding and Exhibitors’ Ass’n. of America, 344 F.2d 860 (9th Cir.1965) (The association is the sole body in the U.S. in which this breed of horses may be registered. Horses not so registered are not recognized as pure breeds and may not compete in shows. The Association supplies judges for the competition from which a horse’s value is determined); Sherman College of Straight Chiropractic v. American Chiropractic Ass’n., supra, 534 F.Supp. at 441 (National Board of Chiropractic Examiners) (That Board designs and scores the national chiropractic examination, sends the results to the state licensing board, and administers the test in the judicial district semi-annually); Bogus v. American Speech & Hearing Ass’n., supra, 389 F.Supp. at 329 (Association is the accrediting agent for college and university programs. “The workshops, certification, and accreditation are the means by which defendant attempts to fulfill its goal of maintaining high standards for professionals providing speech and hearing services and are sufficient to meet the venue requirement that defendant ‘transacts business’ in this District”); Health Care Equalization Committee of the Iowa Chiropractic Society v. Iowa Medical Society, supra, 501 F.Supp. at 983 (AMA’s Committee on Quackery transacts business in Iowa by its direct involvement in its study of aspects of the practice of chiropractic and its relation to the practice of medicine in Iowa).
2. The only Court of Appeals which did not discuss the concept of licensing, accreditation or evaluation but which considered section 22 venue in an associational context, found no transaction of business even where the Association had prepared materials for dissemination through the radio, television or newspaper media. Bartholomew v. Virginia Chiropractors Ass’n., 612 F.2d 812 (4th Cir.1979). That court considered a variety of factors in holding that the Association had not transacted business. Consideration of these factors was summarized as follows:
Enumeration of the points of contact ACA [American Chiropractic Ass’n.] has with Virginia, even without limiting the discussion to the Western District, will entirely raze all imprint of its venue-presence. Virginia accounted for only 53 of the 8875 national members, .06 percent of its membership. ACA never qualified to do business in Virginia (only in Delaware) and its sole office was in Iowa. In Virginia, there were no offices, no officers, no agents, no property, no purchases, no seminars or workshops, and no sales save of pamphlets, journals, and other educational and public relations materials generating very little revenue. All transactions were by mail. No membership meetings were convened in Virginia; no directors or employees resided there.
Id. at 816.
3. Other cases which refused to find a transaction of business also looked to the factors of residence, membership, meeting activities, dues payment, seminars, and the like which Bartholomew, supra, 612 F.2d at 815-17 had also considered. Golf City Inc. v. Wilson Sporting Goods Co., supra, 555 F.2d 428; Academy of Ambulatory Foot Surgery v. American Podiatry Ass’n., 516 F.Supp. at 380-81; Health Care Equalization Committee of the Iowa Chiropractic Society v. Iowa Medical Society, supra, 501 F.Supp. 970; Friends of Animals v. American Veterinary Medical Ass’n., supra, 310 F.Supp. at 624.
4. Those cases where the findings did not support an imputation of the local association’s activities to the national association, held that the national association did not “transact business” for venue purposes within the meaning of section 22. Golf City Inc. v. Wilson Sporting Goods Co., supra, 555 F.2d 428. (PGA did not transact business in the district merely because members
5. The only case to hold that an association had “transacted business” where the most significant contact with a district consisted of a series of three to'four seminars held by the national organization over a period of five years was Sherman College of Straight Chiropractic v. American Chiropractic Ass’n., supra, 534 F.Supp. 438 (American Chiropractic Ass’n.), a case which, in light of the other authorities cited, appears to be out of the mainstream of authority, but is in any event inapposite to the case sub judice.
From this review, the following principles and standard clearly emerge:
A. “Transacting business” cannot be determined without an extensive factual basis, i.e., evidence in the record from which findings can be made.
B. The business activities of an association must be of a substantial character and unless its activity demonstrates a total disregard for the separate corporate entities in its relationship with a local association, the local association’s activities will not be imputed to the national association and the national association will not be held to have transacted business in the foreign locale.
C. The type of business, if it is not of a conventional commercial character, must be of a nature whereby the very licensing, accreditation and evaluative determinations with respect to qualifications of the subject of the association, must be conducted by the national association.
D. The plaintiff bears the burden of establishing section 22 venue.
E. The standard by which a non-professional association’s conduct must be measured in determining whether it transacts business within the meaning of section 22 in the district where the plaintiff has brought suit, may therefore be stated as follows:
Where a national not-for-profit membership organization (directly or through its societies, which act as its agent), either conducts traditional business activities of a substantial character which by themselves would support a holding of “transacting business” in a conventional sense; or, where such an association conducts regular evaluation, licensing or accreditation functions of a substantial character, such activity will constitute the transaction of business supporting venue under 15 U.S.C. § 22.
It is apparent from this recapitulation that the ADA has not transacted business in the Virgin Islands and the Majority’s holding that it has, must be deemed erroneous, because contrary to the Majority’s holding, mere enforcement of a professional code, even if such enforcement is undertaken by a national organization, or encouragement that such a code be adopted, with
C.
First, as I have earlier demonstrated, the only relevant evidence which appears of record has been that furnished by ADA and no findings of fact have ever been made with respect to any evidence. It must be remembered that the evidence is undisputed that the ADA has only nineteen out of 130,000 members resident in the Virgin Islands; that the ADA has no offices or employees in the Virgin Islands; that the ADA’s Annual Session has never been held in the Virgin Islands; that no advertising in the ADA’s Journals originates from advertisers located in the Virgin Islands; that only 0.01714% of total ADA membership revenues ($2,400 out of $14,000,000) originate in the Virgin Islands; and that once the VIDA adopts a constitution and by-laws in conformity with that of the ADA, the VIDA is autonomous. See p. 9-10 supra, for text of affidavits.
Second, the ADA does not license, evaluate or accredit any members of the VIDA. Nor can it be said that VIDA’s actions may be imputed to the ADA so as to establish venue in the Virgin Islands through the actions of the VIDA. The standard established for such imputation requires that there be a total disregard for the separate corporate entities. Golf City Inc. v. Wilson Sporting Goods Co., 555 F.2d at 437. Nor can imputation be demonstrated merely because a local association is obliged to follow the constitution and by-laws of the national organization. St. Elizabeth Hospital v. Richardson, supra, 167 F.Supp. 155, 159 (AMA actions); Friends of Animals, Inc. v. American Veterinary Medical Ass’n., 310 F.Supp. at 624; Academy of Ambulatory Foot Surgery v. American Podiatry Ass’n., supra, 516 F.Supp. at 382.
Third, the lack of development by Myers of an adequate record militates against any conclusion that Myers has carried his requisite burden of proving section 22 venue.
Fourth, having shown that on the record available, neither the commercial nor the associational activities of the ADA are of a substantial character which could constitute the transaction of business in the Virgin Islands, all that remains to support the Majority’s view is the Majority’s reliance on Sherman College (American Chiropractic Ass’n.), supra, and Bogus, supra. The Majority, citing those two authorities, has adopted a questionable standard that has no application in this case. Moreover, the Majority’s assertion (which is not established by findings) that the ADA’s “direct, continual supervision ... of VIDA” (Maj. op. at 730) to ensure enforcement of ADA’s professional code, is insufficient to satisfy section 22 venue.
I suggest that Sherman College of Straight Chiropractic, supra, (American Chiropractic Ass’n.) was incorrectly decided when it held that the American Chiropractic Ass’n., transacted business in the Northern District of Georgia.
In Bogus, the national association was the accrediting agent for college and university programs in its field. That in itself was enough to constitute the transaction of business within the meaning of the general rule of 15 U.S.C. § 22. The AS & HA also conducted a series of seminars in the district. This, the Bogus court concluded, was further evidence of the AS & HA’s direct involvement in the district and complemented the organization’s primary accreditation activities. 389 F.Supp. at 330. The Bogus decision however does not stand for the principle that the holding of seminars is sufficient to find venue under the “transacts business” standard of 15 U.S.C. § 22. It stands only for the proposition that, where a national organization engages in licensing accreditation or evaluation activities, the holding of seminars serves as further evidence of the involvement of that organization in the district.
Even if I assume, however, that Sherman College and Bogus stand for the proposition the Majority claims for it, the rule of those cases is inapplicable to the facts before us because nothing appears in the record — and no findings of fact have been made — that the ADA ever held any seminars or symposia in the Virgin Islands. Nor did the Majority base its holding on the fact that seminars were held in the Virgin Islands. Sherman College and Bogus are therefore inapplicable to the situation here and cannot support the Majority’s holding that venue for the ADA properly lies in the Virgin Islands.
Nor is there support on this record for the Majority’s holding that the “ADA’s direct continual supervision in the Virgin Islands of the VIDA to induce enforcement of ADA’s professional code subjects it to plaintiff’s choice of [federal anti-trust] venue in the District of the Virgin Islands.” (Maj. op. at 730). To substantiate such a conclusion, the Majority is necessarily remitted to the constitution and bylaws of the ADA. Yet neither the constitution or bylaws of the ADA or the VIDA were made part of the record.
An examination of the meager record on this point, however, reveals that there is very little difference between the constitution and bylaws of the ADA and those of the APA as described in Academy of Ambulatory Foot Surgery, supra. The ADA Principles of Ethics and Code of Professional Conduct provides that “the constituent and component societies may adopt additional provisions or interpretations not in conflict with these Principles of Ethics and Code of Professional Conduct,” as adopted by the ADA. Complaint, H 10B, App. at 6. The VIDA is a constituent society of the ADA, but “under the ADA’s Constitution and Bylaws it is largely an autonomous organization.” Affidavit of Boerschinger, counsel for ADA, App. 17 H 3. This statement was not contradicted by Myers. Rather, with reference to this statement, Myers submitted only that “Mr. Boerschinger feels compelled to say ‘largely autonomous,’ for he cannot say ‘autonomous,’ not in light of the ADA rule cited at [110B] of the Complaint [, reproduced above].” Myers’ Affidavit in Opposition to Motion of Defendant American Dental Association App. at 32.
However, in Academy of Ambulatory Foot Surgery, supra, it was enough that the constituent society was largely autonomous. Moreover, constituent societies were found to be autonomous even in cases where the constituent society could not adopt any rule or bylaw which conflicted with or limited the constitution or bylaws of the parent society. As the district court itself noted,
The core around which the threads of plaintiff’s complaint winds is the ADA’s adoption of the code of ethics which restricted Dr. Myers’ practice. That code was formulated and adopted by the ADA in Illinois. Once the ADA embraced the code VIDA’s charter required it to do likewise. Thus defendants make a strong showing that no overt act occurred in this jurisdiction.
Thus neither the facts nor legal principles support the Majority’s naked conclusion that the ADA maintained a “direct and continuing supervision” over VIDA. Because the Majority relies solely on that circumstance, and on this record that circumstance is unavailing, it is evident to me that the Majority has erred. It has erred not only in failing to adopt a standard which, because of the unique nature of a not-for-profit association requires reference to accreditation, licensing or evaluative functions in order to find a “transaction of business” of a substantial character, but it has failed even more egregiously in refusing to acknowledge that no factual support exists for the erroneous standard that it has adopted.
III.
Thus I conclude that on this record the federal antitrust claim against Dr. Cappuccio and the ADA could not be tried in the Virgin Islands for lack of proper venue under either section 1391(b) or 15 U.S.C. § 22(a).
In this dissent, I have taken issue with the Majority because it has persisted in reaching and deciding the 15 U.S.C. § 22 issue. It has done so in the face of a completely inadequate record, a record which contains no findings of fact or reasons for the district court’s erroneous determination that 15 U.S.C. § 22 venue lies in the Virgin Islands. Moreover, the Majority has placed the burden of proving section 22 venue on the defendant in this case, when, as I have demonstrated, proof of section 22 venue is properly the burden of the plaintiff — a burden which Myers has failed to carry. In addition, the Majority has adopted an erroneous section 22 standard for a not-for-profit membership organization.
I believe the Majority’s analysis and approach is so fundamentally flawed that unless attention is called to its deficiencies, subsequent cases to which 15 U.S.C. § 22 would be applicable, will have their results seriously distorted. This is particularly true with respect to the requisite burden of proof and the need for articulated reasons and findings.
I therefore respectfully dissent.
. 15 U.S.C. § 22 provides that:
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.
. See also Bartholomew v. Virginia Chiropractic Ass’n, 612 F.2d 812 (4th Cir.1979); Grantham v. Challenge-Cook Bros., Inc., 420 F.2d 1182, 1184 (7th Cir.1970); ARO Mfg. Co. v. Automobile Body Research Corp., supra; Hodson v. A.H. Robins Co., Inc., 528 F.Supp. 809, 812 (E.D.Vir.1981); National Distillers and Chemical Corp. v. Dept. of Energy, 487 F.Supp. 34, 37 n. 9 (D.Del.1980); Grappone, Inc. v. Subaru of America, Inc., 403 F.Supp. 123 (D.N.H.1975); Funnelcap Inc. v. Orion Industries, 392 F.Supp. 938, 942 (D.Del.1975); Besuner v. Faberge, Inc., 379 F.Supp. 278, 280 (N.J.Ohio 1974); United Industrial Corp. v. Nuclear Corp. of America, 237 F.Supp. 971, 979 (D.Del.1964); Bruner v. Republic Acceptance Corp., 191 F.Supp. 200 (E.D.Ark. 1961).
. Fed.R.Civ.P.Rule 8(c) provides in part:
In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, and any other matter constituting an avoidance or affirmative defense.
. I suggest that the Majority Opinion has misconceived the thrust of the analogy which I have drawn between jurisdiction and venue. See Maj.Op. at 724 n. 7. I am quite aware of the difference between the power of the court to entertain an action and the place where it may be heard.
My discussion does not seek to equate the two concepts but only to point out that both jurisdiction and venue are dilatory defenses which require the plaintiff to bear the burden of proving both. As such they do not go to the merits of the cause of action. Both being dilatory defenses, I have argued that cases discussing burden of proof in a jurisdictional context, are appropriate authorities to rely upon in determining burden of proof in a venue context. Thus, just as the burden of proving jurisdiction rests upon the plaintiff as the Majority concedes, (see Maj.Op. at 724-25 n. 10), so too must the plaintiff bear the burden of establishing proper venue. Bartholomew v. Virginia Chiropractic Ass’n, 612 F.2d 812 (4th Cir.1979); ARO Manufacturing Co. v. Automobile Body Research Corp., 352 F.2d 400 (1st Cir.1965), cert. denied, 383 U.S. 947, 86 S.Ct. 1199, 16 L.Ed.2d 210 (1966); 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, § 3826. Indeed, Bartholomew, supra, is the only court of appeals authority addressing 15 U.S.C. § 22 burden of proof in a not-for-profit membership organization context. And, Bartholomew holds that the burden of proving venue is squarely on the plaintiff.
Thus, the distinction as to where the burden of proof lies — a distinction which the Majority seeks to draw between jurisdiction, venue and various other defenses (which are characterized by the Majority as “dilatory”), is not compelling. Without conceding in the least that the defenses characterized by the Majority as “dilatory defenses” are indeed dilatory defenses, I note that in support of its argument, the Majority refers to the defense of forum non conveniens.
I have discussed burden of proof in that context in n. 5, infra, in which I point out that the issue for resolution in a 28 U.S.C. § 1404(a) motion is wholly different than the issue in a 15 U.S.C. § 22 motion. In a 15 U.S.C. § 22 motion, as we have here, the question is whether Congress has specifically authorized the plaintiff to bring an action in the chosen locale. Satisfaction of the statutory criteria is mandated at the outset, or the action must be dismissed.
It is in that setting that it is appropriate that the ■ defendant, who must prove the inconvenience of the legally established venue, bear the burden of doing so.. The very statement of, and considerations affecting, these two disparate types of venue, reveal that principles affecting burden of proof in the one case have no relation to the other. The same is true with respect to the other examples of “dilatory defenses” found in n. 10 of the Majority Opinion, none of which can be analogized sufficiently to the 15 U.S.C. § 22 context to carry the weight needed in order to support the Majority’s argument that the ADA, rather than Myers, is charged with the burden of proving 15 U.S.C. § 22 venue.
. Following is the district court’s entire venue opinion:
VENUE
The ADA and VIDA contend that venue cannot lie in the Virgin Islands in the case at bar. They base their assertions on 15 U.S.C. § 22 and 28 U.S.C. § 1391(b). Under the general federal venue statute in non diversity cases venue will lie where the cause of action arose or where the defendants reside. In addition, the antitrust acts expand venue to any district where a corporation transacts business. The defendants maintain that Dr. Myers failed to meet any of the venue standards and therefore the case must be transferred or dismissed. We cannot agree.
The District Court of the Virgin Islands has more expansive jurisdiction than its stateside counterparts. As a territorial court is is [sic] not limited to the constraints placed on federal courts by Article III Section 2 of the con*735 stitution. In essence a federal territorial court wears two hats — one when it sits as a federal court and another when it hears local matters. In the case sub judice we are wearing both hats simultaneously.
Certainly plaintiffs cause of action based on the local antimonopolies law, 11 V.I.C. § 1501 et seq. is properly before this Court. In Godfrey v. International Moving Consultants, 1980 STT Supp. 498 (D.V.I.1980) we held that the federal venue provisions do not apply to the District Court of the Virgin Islands when it is deciding local matters. We cannot as readily circumvent the venue provisions however, when the court is exercising federal jurisdiction.
Because the ADA and some of the individual defendants do not reside here, venue will only lie in this Court if the cause of action arose in the Virgin Islands. Defendants rely on the “weight of the contacts test” to support their contention that the action arose outside the territory. That test provides that “if some overt act pursuant to the conspiratorial meetings took place in a district and it was a significant and substantial element of the offense, then venue would lie in the district.” Philadelphia Housing Authority v. American Radiator and Standard Sanitary Corp., 291 F.Supp. 252, 260-61 (E.D.Pa. 1968); see Friends of Animals, Inc. v. American Veterinary Med. Ass'n, 310 F.Supp. 620 (S.D.N.Y.1970). The core around which the threads of plaintiff’s complaint winds is the ADA’s adoption of the code of ethics which restricted Dr. Myers’ practice. That code was formulated and adopted by the ADA in Illinois. Once the ADA embraced the code VIDA’s charter required it to do likewise. Thus defendants made a strong showing that no overt act occurred in this jurisdiction.
Plaintiffs choice of venue however is proper. Again it is justified in part by the special status of the District Court of the Virgin Islands. Dr. Myers’ federal cause of action is based on the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. Because in most circumstances sections 1 and 2 of the Act do not apply in the Territories of the United States, plaintiff must specifically rely on 15 U.S.C. § 3. Section 3 provides that restraints of trade affecting the Territories of the United States are illegal. The ADA’s promulgation of the code of ethics in Illinois and VIDA’s compulsory adoption ot [sic] if [sic] [of it] affected Dr. Myers’ practice in St. Thomas. Thus, even though many of the overt acts of the alleged conspiracy occurred in Illinois the injurious effects could be found in the Virgin Islands.
Furthermore, civil antitrust actions arise where the damages occur. The injury that flows from an illegal conspiracy sounds in tort. Thus the antitrust claim can be tried where the injury (i.e. the business damage) occurs. Albert Levine Assoc. v. Bertoni & Cotti, S.p.A., 314 F.Supp. 169, 171 (S.D.N.Y.1970).
In summary, venue properly lies in this forum. Firstly, plaintiff’s claim based upon local law invokes our article I jurisdiction. Secondly, Dr. Myers brought suit under a federal statute aimed at preventing illegal' combinations in restraint of trade in the territories. The restraint of trade caused injury in the Virgin Islands and therefore the cause of action arose here. Defendants’ motions based on improper venue will be denied.
Defendants also assert that the Virgin Islands is an inconvienent [sic] [inconvenient] forum to try this case. See 28 U.S.C. § 1404(a). Based on the affidavits proffered by plaintiff it is clear that any forum would be inconvenient to some of the witnesses. We foresee no undue hardship or injustice to the parties by requiring them to try this action before us. Accordingly, defendants’ motion based on forum non conveniens will be denied.
District Court Opinion, Appellant’s Appendix 81-84 (footnotes omitted).
. I recognize that in a Plum Tree, Inc. v. Stockment, 488 F.2d 754 (3d Cir.1973), 28 U.S.C. 1404(a) context, the burden of proof is appropriately upon the defendant because in such a circumstance, where a plaintiff has properly laid his action in a venue permissible under § 1404(a), any motion by the defendant to change venue to a venue of the defendant’s choice requires the defendant to produce evidence or considerations proving his position. Thus, a 28 U.S.C. § 1404(a) decision is relevant only after a determination has been made as to compliance with the mandate of, in this case, 15 U.S.C. § 22 — a statute prescribing the legal standards to be satisfied in determining venue. Indeed, the Supreme Court has stated that “the doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 504, 67 S.Ct. 839, 840, 91 L.Ed. 1055 (1946) (emphasis supplied).
Hence, the fact that the burden of proving venue is placed on a defendant in a § 1404(a) context can give little comfort to the Majority in a 15 U.S.C. § 22 context.
. The Majority Opinion has criticized my contention that a district court should furnish a Court of Appeals with findings of fact, or at least, with a reasoned articulation of its basis for decision, so that intelligent review is possible. Maj.Op. at 729-733 n. 19. The Majority’s criticism has taken the form of distinguishing those cases cited in support of this argument. Those cases reflect that, in many different contexts, such findings or reasons have been precisely what we have required. Indeed, those cases, and the contexts which have given rise to them, all have one common feature: in each, we have insisted that even in the absence of any rule, regulation or statute requiring findings or reasons, the district court or the agency must furnish findings or reasons, so that meaningful review can be effected.
I am fully aware that the cases to which I have referred in order to illustrate this principle, are not 15 U.S.C. § 22 cases. See text, supra at 735-37. However, the doctrine of
. My reference to the district court’s failure to furnish findings or reasons is not intended as a criticism of the district court. As I have taken pains to point out earlier in light of Myers’ actions in pressing only his § 1391(b) venue argument it would have been surprising if the district court had nevertheless insisted upon making findings under § 22. My only purpose in emphasizing the lack of such findings made by the district court is to point out this court’s improvidence in seeking to provide facts and reasons and thus supply that, which the district court was unable to, and did not supply.
. I have been careful to distinguish between the two defendant parties in this case. One of the parties, the National Association of Chiropractic Examiners was properly found to have transacted business for venue purposes because it designed, scored and administered the accreditation examination within the district. These functions, without exception, have been deemed sufficient for § 22 venue. See text supra, pgs. 739-40. I note that the ADA performs no such functions in the Virgin Islands.
The second party, the American Chiropractic Association, was held to have “transacted business” in the Northern District of Georgia solely because it conducted three to four seminars over a five-year period. It is this latter holding which I believe to be flawed and inconsistent with all other § 22 venue cases arising in a not-for-profit associational context.
. The Majority Opinion charges that a reversal or remand on the 15 U.S.C. § 22 issue would result in compelling the plaintiff Myers, to “proceed on his lcoal anti-monopoly claims in the Virgin Islands and on his federal claims separately in Illinois ... [thereby splitting] the proceedings into two and [trying] one in a distant point on the mainland. ...” Maj.Op. at 729. I point out, however, that it is Congress which has drawn 28 U.S.C. § 1391(b) to require that, in this case, venue would lie only in Illinois. It is also Congress that has mandated that the ADA must “transact business” or be “found” in the Virgin Islands to sustain venue under 15 U.S.C. 22 in that locale.
Thus it is not my analysis that may lead to “judicially inefficient and costly [proceedings],” Maj.Op. at 729, but rather the specific venue legislation duly enacted by Congress for its own policy reasons — legislation which we are not authorized to repeal.