Antitrust Law Daily Wrap Up, ANTITRUST—NDMiss: AT&T Was Not Subject to Personal Jurisdiction in Mississippi in Case Alleging Manipulation of Wireless Spectrum Standard Setting Process, (Nov 5, 2012)

By Peter Reap, J.D., LLM

AT&T, Inc. was not subject to personal jurisdiction in Mississippi in a suit brought by three licensees of the wireless spectrum through the Federal Communications Commission (FCC) that alleged AT&T, along with other defendants, maintained a conspiracy that manipulated the 3GPP standard setting process, the federal district court in Aberdeen, Mississippi, has decided (Corr Wireless Communications, LLC v. AT&T, Inc., November 1, 2012, Aycock, J.). Because the court lacked personal jurisdiction over AT&T, Inc., it was dismissed. However, even if the court could assert jurisdiction over AT&T, the plaintiffs failed to state a valid claim for relief, according to the court.

3GPP is a consensus-driven international partnership of industry-based telecommunications standards bodies. The FCC held an auction to sell and repurpose licenses in the 700 MHz spectrum in 2008 and the plaintiffs’ complaint focused on three blocks of spectrum in the Lower 700 MHz band. Essentially, the plaintiffs maintained that AT&T and the other defendants conspired to control the entire process and that 3GPP “rubber-stamped” the “concerted work” of AT&T and the other defendants. The plaintiffs also based their antitrust claims on alleged exclusive dealing arrangements.

Personal Jurisdiction

The court did not have personal jurisdiction over AT&T under the Clayton Act, as venue was not proper in the Northern District of Mississippi, the court held. In the alternative, the plaintiffs failed to show that the exercise of jurisdiction over AT&T Inc. under the Mississippi Long-Arm Statute was appropriate.

Clayton Act. The plaintiffs contended that the Clayton Act provided for nationwide service of process over antitrust defendants, thus establishing personal jurisdiction over AT&T Inc. as it undeniably had minimum contacts with the United States.

Section 12 of the Clayton Act provides:

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 consists of two separate clauses, the first relating to the venue and the second concerning service of process and, therefore, personal jurisdiction. The parties disputed whether the two clauses of Section 12 should be read as an integrated whole or independently of each other. Specifically, they disputed whether the venue provision of the first clause of Section 12 must be satisfied before the plaintiffs can avail themselves of the authorization of worldwide service of process contained in the second clause.

After reading and analyzing all case law cited by the parties, as well as indulging in an extensive national examination of other courts’ treatment of Section 12, the two clauses of the provision should be read as an integrated whole, the court determined. Thus, without satisfying the venue provision of the Clayton Act, service of process was not proper, and therefore, personal jurisdiction could not be had pursuant to that federal statute.

The plain reading of the statute was not ambiguous, according to the court. The clauses were separated by a semi-colon, not a period, and are further conjoined by the word “and.” Therefore, the statutory phrase “in such cases” referred to those causes of action filed where the antitrust defendant was an “inhabitant,” could be “found,” or “transacts business.”

Because nationwide service of process was not available without a proper venue finding, the court was required to decide whether venue was appropriate in order to determine whether the exercise of personal jurisdiction over AT&T was proper under the statute.

It was undisputed that AT&T was incorporated in Delaware, with its principal place of business in Texas. AT&T filed an affidavit stating that AT&T Inc. did not conduct business in Mississippi, was not registered to conduct business in Mississippi, and maintained no registered agent in Mississippi. Moreover, AT&T was the stock-holder of its subsidiaries, but did not itself own equipment or maintain any property or employees in Mississippi.

As admitted by the plaintiffs, culpability as to AT&T for their claims was not premised on the actions of its subsidiaries, but AT&T itself. It was undisputed that AT&T was not an “inhabitant,” as it was not incorporated in Mississippi. In addition, the plaintiffs did not show, other than by general unsubstantiated allegations, that AT&T was or is transacting business or found within the court’s reach.

Accordingly, the plaintiffs failed to satisfy the first clause of Section 12, and were not entitled to the benefits of the nationwide service of process provision. Therefore, Section 12 was inapplicable because operation of the statute was predicated on proper venue, which was lacking in the Northern District of Mississippi.

Mississippi long-arm statute. Jurisdiction was not appropriate under the doing business prong of the long-arm statute because the plaintiffs failed to refute AT&T’s affidavit that it was not doing business in Mississippi, the court held. Indeed, the plaintiffs did not even argue that jurisdiction was appropriate under the doing business prong of the long-arm statute.

Moreover, jurisdiction was not appropriate under the tort prong of the long-arm statute. The plaintiffs failed to allege or provide evidence that AT&T committed a tort in whole or in part in Mississippi. If anything, the causes of action alleged only that the consequences stemming from AT&T’s violations occurred in Mississippi.

Even if the plaintiffs attempted to argue that AT&T was subject to personal jurisdiction in the state of Mississippi by virtue of the activities of its subsidiary corporation, AT&T Mobility, that argument would fail, the court decided. The plaintiffs only presented evidence that AT&T Inc. had acted on its subsidiaries’ behalf in court filings, and that AT&T Inc.’s CEO had spoken of the AT&T wireless telecommunications business generally. The plaintiffs even failed to argue that AT&T was liable for the actions of its subsidiaries, the court observed. Accordingly, jurisdiction over AT&T was not proper on the basis of its subsidiaries’ contacts with the State of Mississippi.

Alternatively, even if it was able to exercise jurisdiction over AT&T, pursuant to the court’s Memorandum Opinion entered August 31, 2012, the plaintiffs failed to survive a 12(b)(6) inquiry as to all other defendants in the suit. Therefore, because the plaintiffs failed to separately allege action or omissions separate and apart from the general “AT&T” defendants, under the reasoning employed in Corr Wireless Comm. v. AT&T, Inc., 2012-2 Trade Cases ¶78,035 (N.D. Miss. Aug. 31, 2012), the dismissal of AT&T Inc. was appropriate.

The case is Civil Action No. 3:12CV036- SA.

Alan Walter Perry (Forman, Perry, Watkins, Krutz & Tardy, PLLC) for Corr Wireless Communications, L.L.C. Aaron M. Panner (Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC) for AT&T, Inc.

Cases: Antitrust MississippiNews