author: VUKASIN, District Judge.

text:
    FALSTAFF BREWING COMPANY, a Delaware corporation; General Brewing Company, a California corporation; Pearl Brewing Company, a Texas corporation; and S & P Company, a California corporation, Plaintiffs, v. The STROH BREWERY COMPANY, Peter Stroh, Christopher Lole, Arthur J. Tonna, Roger Fridholm, and Joseph Englert, Defendants.
    No. C-85-1361-JPV.
    United States District Court, N.D. California.
    Feb. 19, 1986.

      Joseph L. Alioto, Alioto & Alioto, San Francisco, Cal., for plaintiffs.
    William Alsup, Morrison & Foerster, San Francisco, Cal., for defendants.
   MEMORANDUM OPINION AND ORDER

VUKASIN, District Judge.

I. INTRODUCTION

Plaintiffs, Falstaff Brewing Company, General Brewing Company and Pearl Brewing Company, all wholly owned subsidiaries of plaintiff S & P Company [hereinafter collectively referred to as “Falstaff”] filed this civil action for damages, as well as for injunctive and declaratory relief on February 4, 1985. The original complaint alleged that defendants Stroh Brewery Company [“Stroh”], Joseph Englert, and four executives of Stroh conspired to restrain trade, attempted to monopolize the domestic beer market, and tortiously interfered with plaintiffs’ contract negotiations, all in violation of Sections 1 and 2 of the Sherman Anti-trust Act, and state law.

On May 2, 1985, this Court denied Stroh’s motion to dismiss the complaint in its entirety, instead quashing service of process, dismissing the complaint as to the Stroh executives, and granting defendant’s alternative motion for a more definite statement. On July 26, 1985, a more definite statement, in the form of an amended complaint, was filed. The matter now before the Court is defendant Stroh’s motion, joined in by defendant Englert, to dismiss the amended complaint.

II. THE COMPLAINT

Plaintiffs’ complaint alleges violations of Sections 1 and 2 of the Sherman Act, to wit, conspiracy to restrain trade and attempted monopolization. Plaintiffs, as well as defendant Stroh, are engaged in the business of brewing and distributing beer throughout the United States. Accordingly, the relevant market upon which the claim must be determined is the United States domestic beer market. The alleged acts constituting the anti-trust violations are: (1) Stroh came to an internal decision to institute predatory pricing programs aimed at eliminating independent, smaller breweries of the size of plaintiff; (2) Stroh publicly announced that plaintiff companies “can’t survive and we’re looking at picking up those companies;” (3) Stroh directed the public remarks at the distributor network of plaintiffs; (4) Prior to the public announcement, Stroh salesmen and distributors engaged in continuing commercial disparagement of plaintiff companies; (5) Stroh interfered with plaintiff S & P’s plan to buy Pabst Brewing Company and delayed the acquisition by approximately six months; and (6) Stroh is selling its beer below cost in markets specifically selected to injure or destroy plaintiffs’ sales and profits. See Amend.Compl., 1112. Plaintiffs further allege the specific intent behind the aforementioned acts to be the elimination of plaintiff companies, and, therefore, price competition in the United States. Finally, plaintiff alleges the effects of Stroh’s acts to be, among others: (1) delaying plaintiff S & P’s aquisition of Pabst; (2) impairing plaintiffs’ profits; and (3) causing economic concern among plaintiffs’ network of distibutors. Amend. Compl., ¶ 15.

III. MOTION TO DISMISS

In ruling on a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court may only determine the legal sufficiency of the complaint. For purposes of a motion to dismiss, material allegations of the complaint are to be taken as admitted. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1848, 23 L.Ed.2d 404 (1969). The complaint is to be liberally construed in favor of plaintiffs. See F.R.Civ.P. 8(f); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). The complaint should not be dismissed unless it appears that plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Conley, supra, 355 U.S. at 45-46, 78 S.Ct. at 101-02. The Court, however, does not have to accept every allegation in the complaint as true. Conclusory allegations of law, unsupported conclusions and unwarranted inferences need not be accepted for purposes of a Rule 12(b)(6) motion. See, e.g., United States v. Tulare Lake Canal Co., 535 F.2d 1093, 1097 (9th Cir.1976). With these preliminary considerations in mind, the Court turns to the claims which defendant moves to dismiss.

A. SHERMAN ACT, SECTION 1 CLAIM

Section 1 of the Sherman Act prohibits contracts, agreements and conspiracies in restraint of trade. 15 U.S.C. Section 1. Accordingly, the complaint must set out, at a minimum, some concerted action among two or more persons or distinct business entities, which is intended to harm or unreasonably restrain competition, and some adverse effect on competition caused by the concerted action. Kaplan v. Burroughs Corp., 611 F.2d 286, 290-91 (9th Cir.1979). Although plaintiffs’ complaint is somewhat lacking in specificity with respect to concert of action, that being the alleged conspiracy between Falstaff and its distributors and salesmen, these shortcomings should not form the basis for dismissal. It is sufficient, for purposes of a Rule 12(b)(6) motion that plaintiff has alleged some concerted action. Whether or not this allegation in fact is true should be determined on a factual basis, not as a matter of law. For like reasons, the complaint also passes 12(b)(6) muster with respect to the allegation of defendants’ intent to restrain trade.

The cornerstone of anti-trust law is competition. Congress’ intent in passing the Sherman Act was not to subject all business and commercial torts to the scrutiny of federal law. Indeed, only acts which adversely affect competition are proscribed. Accordingly, the primary consideration in determining a Section 1 claim is whether the alleged acts have significant anticompetitive effects. Sherman v. British Leyland Motors, LTD., 601 F.2d 429, 449 (9th Cir.1979). It is with regard to the requirement of an allegation of this adverse effect on competition that the Section 1 complaint is defective.

In making this determination the Court notes section seven of the amended complaint titled “Effects.” In this section, plaintiffs state the alleged results of Stroh’s illegal activity, to wit: delaying plaintiffs’ acquisition of Pabst stock, impairing plaintiffs’ profits, and causing economic concern among plaintiffs’ distributors. Amend.Compl., ¶ 15. Nowhere does plaintiff claim an adverse effect on competition as distinguished from effects on plaintiff’s own business. Absent injury to competition, injury to plaintiffs as competitors will not satisfy the pleading requirements of Section 1. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). The anti-trust laws were enacted for the protection of competition not competitors. Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962).

In its opposition to the motion to dismiss plaintiff claims that no allegation of anti-competitive effect is necessary. Rather, plaintiff argues that the alleged actions of Stroh are per se anti-competitive; that by virtue of plaintiffs’ commercial demise, competition in the domestic beer industry will necessarily suffer. The law, however, is clear. Only in certain limited circumstances will an adverse impact on a single or group of competitors constitute an adverse impact on competition as a whole. This per se treatment is limited to traditional anti-trust activities such as horizontal and vertical price fixing, horizontal divisions of markets, and horizontal boycotts or concerted refusals to deal. See N.C.A.A. v. Board of Regents of University of Oklahoma, 468 U.S. 85, 104 S.Ct. 2948, 2960-62, 82 L.Ed.2d 70 (1984); Silver v. New York Stock Exchange, 373 U.S. 341, 347-49, 83 S.Ct. 1246, 1251-52, 10 L.Ed.2d 389 (1963); Northern Pacific Railway v. United States, 356 U.S. 1, 5-7, 78 S.Ct. 514, 518-19, 2 L.Ed.2d 545 (1958); United States v. Sacony-Vacuum Oil Co., 310 U.S. 150, 218, 60 S.Ct. 811, 841-42, 84 L.Ed. 1129 (1940). Plaintiffs have not alleged any of these types of activities.

The cases relied on by plaintiffs to support the application of a per se analysis are inapposite. In Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959) the Court held that elimination of a single competitor through a group boycott/concerted refusal to deal was per se anticompetitive. In the present action, although plaintiffs have alleged that Stroh’s activities are aimed at eliminating plaintiffs from the domestic beer market, there is no allegation of boycott. In Silver v. New York Stock Exchange, 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963), the Supreme Court applied a per se analysis when the Exchange members collectively removed the private wire service^ of a single broker. Finally, in United States v. General Motors Corp., 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966), General Motors’ agreement with franchise dealers to eliminate the automobile sales of discount houses was held to be a per se restraint of trade. Plaintiff has not alleged any such concerted deprivation of essential goods or services upon which reliance on these cases could be based. The court recognizes the fact that a multitude of cases have imposed anti-trust liability on a per se basis when the anti-competitive activity is directed at only one competitor. The common denominator among these cases, however, is the notion that certain actions, such as horizontal and vertical price fixing, horizontal divisions of markets, and horizontal boycotts ore concerted refusals to deal, are presumed to be anti-competitive, regardless of any market context. Plaintiffs have not alleged any such per se anti-competitive action by defendant Stroh.

At oral argument on the motion, plaintiffs’ counsel intimated that the action was in fact a price fixing case. Dec. 5, 1985, Tr. 15:16-16:20. The only reference to prices in the complaint, however, is the paragraph containing the allegation of intent. Plaintiff alleges that defendants’ intent is to eliminate plaintiff from the domestic beer market. Amend.Compl., ¶ 13. This elimination, it is contended, will remove a “downward pressure on competitive beer prices.” Id. The complained of concerted acts, in this Court’s opinion, do not constitute price fixing. Rather, the complaint indicates a concerted commercial disparagement of the plaintiff companies by Stroh, its retailers and distributors.

Furthermore, this stated removal of “downward pressure” on price competition does not constitute a sufficient allegation of anti-competitive effect. Such conclusory, self-serving allegations, and the inferences therefrom, need not be given credence by this Court. Under the rule of reason, alleged adverse effects of competition must be causally related to the alleged concerted acts. Kaplan, supra, 611 F.2d at 290-91. Plaintiffs’ complaint fails to allege any reasonable or legitimate connection between the asserted anti-competitive effect and either the concerted commercial disparagement or the interference with the aforementioned Pabst acquisition.

To be sure, the complained-of acts by Stroh appear to present the potential for severe and extensive commercial injury. From the allegations in both the original and amended complaint, however, it is clear to the Court that the specified adverse effects resulting from Stroh’s alleged conduct relate solely to the business of the plaintiffs rather than to competition in the U.S. domestic beer market. The legislators who passed the Sherman Act did not intend to make ordinary business torts federal torts. Their concern was with business torts which cause a public injury by making markets less competitive. Sutliff, Inc. v. Donovan Companies, Inc., 727 F.2d 648, 655 (7th Cir.1984). Although Stroh’s actions, if left unchecked, might lead to the commercial demise of plaintiffs, the elimination of a single competitor, standing alone, will not constitute an injury to competition compensable under the Sherman Act. Gough v. Ross Moor Corp., 585 F.2d 381, 386. (9th Cir.1978). To injure, even to cripple or destroy, one or two competitors in a market will not, if there are many competitors in that market, have much, if any, effect on consumers or anyone else beside the competitors in question. Sutliff, supra, 727 F.2d at 655. Indeed, it is the large number of competitors and their relative power in the subject market, U.S. domestic beer brewing and sales, which precludes plaintiffs’ claims under Section 1 of the Sherman Act, as well as Section 2.

B. SHERMAN ACT SECTION 2 CLAIM

Section 2 of the Sherman Act proscribes monopolization of, as well as attempts and conspiracies to monopolize, any part of the trade or commerce of the United States. 15 U.S.C. § 2. Generally, a Section 2 claim consists of three elements: (1) specific intent to control prices or destroy competition in the relevant market; (2) predatory or anti-competitive conduct directed to accomplishing the unlawful purpose; and (3) a dangerous probability of success. Foremost Pro Color v. Eastman Kodak Co., 703 F.2d 534, 543-44 (9th Cir.1983). The requisite specific intent and dangerous probability of success may, in appropriate circumstances, be inferred from the existence of predatory or anti-competitive conduct. Ernest W. Hahn, Inc. v. Codding, 615 F.2d 830, 845 (9th Cir.1980). In light of this Court’s determination that the complaint fails to allege an adverse effect on competition resulting from Stroh’s actions, or any per se anti-competitive acts, plaintiff cannot rely on any such inferences to overcome infirmities with respect to specific intent and dangerous probability of success.

The amended complaint asserts that defendant Stroh intends to eliminate plaintiff companies and to assume third place in the domestic beer market Amend. Compl., 13 & 14. Plaintiffs, however, have not alleged any specific intent on the part of defendants to control or destroy competition in the relevant market beyond normal competition. Even direct evidence of intent to vanquish a rival or exclude competition is insufficient to establish specific intent to monopolize by some illegal means. Blair Foods Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 670 (9th Cir.1980). More than mere intent to beat the opposition is required to establish specific intent to monopolize. In re IBM Peripheral EDP Devices Anti-Trust Litigation, 481 F.Supp. 965, 1010 (N.D.Cal.1979); aff'd sub nom., Transamerica Computer Co. v. IBM Corp., 698 F.2d 1377 (9th Cir.), cert. denied, 464 U.S. 955, 104 S.Ct. 370, 78 L.Ed.2d 329 (1983). To conclude otherwise would contravene the very essence of a competitive market place which is to prevail against all competitors. The Sherman Act was not intended as a shield against all competitive practices tending to improve a firm’s market position. Hirsh v. Martindale-Hubble, Inc., 674 F.2d 1343, 1348 (9th Cir.1982).

A showing of monopoly power within the relevant market has consistently been equated with the requisite probability of success element of a Section 2 claim. Market share is evidence from which the existence of monopoly power may be inferred. Whether monopoly power actually exists depends on a variety of factors. The focus must be on the danger to competition presented by the activity and the actor. In some circumstances clearly anti-competitive conduct, coupled with specific intent, may pose such a threat to competition that it should be condemned regardless of the market power of the actor. In a sense this conduct presents an inherent probability of success. Such treatment is usually limited to activities which are per se anti-competitive under Section 1 of the Sherman Act. See California Computer Products, Inc. v. IBM Corp., 613 F.2d 727, 736 (9th Cir.1979) ; Sherman, supra, 601 F.2d at 453 n. 47; Gough, supra, 585 F.2d at 390. Conversely, when the conduct involved is ambiguous with respect to its anti-competitive nature, the requisite danger of success may not exist absent appreciable market power. Hunt-Wesson Foods, Inc. v. Ragu Foods, Inc., 627 F.2d 919, 924-25 (9th Cir.1980) . Although this Court recognizes that blind reliance on market share data, divorced from commercial reality, can give a misleading picture of a business concern’s actual ability to control prices or exclude competition, there is a minimum market share necessary to possess monopoly power when the complained of actions are not per se anti-competitive.

In the instant case, plaintiffs’ complaint denominates the relevant market as the entire domestic beer market of the United States. Amend.Compl., 117. The admitted runaway leaders in this market are the Anheuser-Busch Brewing Company and the Miller Brewing Company, who together control approximately sixty percent of the beer sales in the United States. Amend.Compl., ¶ 14; Tr.17:20-24. Positioned behind these two market leaders are various small and medium-sized brewers of beer, among them defendant Stroh and the plaintiff companies. At the December 5 hearing on the motion to dismiss plaintiffs’ market share was determined to be eight percent, while defendant’s was placed at thirteen percent. Tr.l7:16-19. It is alleged that as a distant third place finisher in this market Stroh does in fact possess market monopoly power.

While this Court acknowledges that the use of market share data as a basis for determining monopoly power has an unsettled history, it is abundantly clear that defendant, as a matter of law, cannot make the required showing of monopoly power and thus a dangerous probability of monopolization. In General Communications Engineering, Inc. v. Motorola Communications Electronics, Inc., 421 F.Supp. 274, 291-92 (N.D.Cal.1976) the district court held that a market share of seventy-one percent, due to the competitive nature of the industry, was insufficient to show monopoly power. While in Transource International v. Trinity Industries, Inc., 725 F.2d 274, 283-84 (5th Cir.1984) the Court viewed market shares in the range of sixteen to twenty-five percent to be insufficient as a matter of law to support monopolization. See also Hiland Dairy, Inc. v. Kroger Co., 402 F.2d 968 (8th Cir.1968), cert. denied, 395 U.S. 961, 89 S.Ct. 2096, 23 L.Ed.2d 748 (1969) (twenty percent market share inadequate to allow exclusion of competition or control of prices). In the present case defendant Stroh hold a mere thirteen percent of the relevant market. Common sense, as well as case law, leads this Court to believe that no brewer other than Anheuser-Busch or Miller could possibly possess monopoly power in the domestic beer market as a whole. Therefore, having failed to allege actions that are per se anti-competitive, defendants’ low market share precludes plaintiff from being able to demonstrate a dangerous probability of success in its alleged attempt at monopolization.

To support their claim that the defendant does possess monopoly power, plaintiffs point to the.Jact that Stroh’s merger with Schlitz Brewing Company was subject to the scrutiny of the Justice Department’s Anti-Trust Division, and in fact resulted in a consent decree under which defendant was required to divest itself of one brewery. Plaintiff asserts that the consent decree itself demonstrates Stroh’s monopoly power. Plfs’ Opp., p. 7. This Court, however, declines to make such an unreasonable inference. At best, the activity surrounding the Schlitz acquisition demonstrates market power in the southeastern United States. Plaintiffs have chosen to define the relevant market, for purposes of their Sherman Act claims, to encompass domestic beer sales in the entire United States. Amend.Compl., 117. As such, the Schlitz acquisition has little relevance to, and is entitled to little weight in, this Court’s evaluation of the sufficiency of the complaint with respect to allegations of monopoly power.

IV. CONCLUSION

Plaintiffs’ amended complaint clearly fails to state a Sherman Act anti-trust claim upon which this Court could grant relief. Furthermore, the deficiencies in the amended complaint are substantially the same deficiencies which compelled the Court to previously order plaintiff, in lieu of dismissal, to file a more definite statement. It appears to the Court that plaintiffs have failed to cure these defects, and in fact, based on the allegations of the amended complaint, cannot do so. Further amendment would be futile in this Court’s view. The amended complaint contains little new material, rather it recites the same conclusory allegations previously rejected by the Court. As such, dismissal with prejudice is appropriate. Jones v. Community Redevelopment Agency, 733 F.2d 646, 650-51 (9th Cir.1984).

Although dismissal with prejudice is a harsh and draconian measure upon which to terminate a lawsuit, there are sound policy reasons for denying further leave to amend an anti-trust complaint where two attempts have failed to sufficiently state a claim. Discovery in these actions is quite extensive, and the expense of such litigation crushing. To require defendants to further defend an anti-trust action, where it appears that plaintiffs cannot properly allege, much less prove, anything beyond mere business torts or unfair trade practices, would be a gross miscarriage of justice. Plaintiffs, in fact, may have been harmed in their business by the alleged acts of defendants. The remedy upon which they pin their claim, however, a civil anti-trust action pursuant to Sections 1 and 2 of the Sherman Act, was not intended to serve as either a shield or sword against such individual commercial injury. While this Court does not rule on the validity or viability of any potential business tort claims, it is abundantly clear that no Sherman Act antitrust action has been properly alleged. Accordingly;

IT IS HEREBY ORDERED that the above-entitled action be, and is, DISMISSED.

      . These named defendants were Peter Stroh, Chairman and Chief Executive Officer of Stroh; ■Roger Fridholm, President of Stroh; Arthur Tonna, Vice President for Operations; and Christopher Lole, Vice President for Development.

      . The Court viewed plaintiffs’ initial complaint for violations of Sections 1 of the Sherman Anti-Trust Act to be deficient in its allegations of both concerted action and competitive effect, and the Section 2 claim to be lacking with respect to allegations of specific intent, predatory/anti-competitive conduct and probability of success.

      . At this juncture the Court feels compelled to note the procedural activity, or more correctly, inactivity, that has caused this case, in the Court's opinion, to go down in the annals of case management infamy. On March 8, 1985, defendant Stroh filed and duly noticed for hearing on April 18, 1985, motions to dismiss, or, in the alternative, for a more definite statement, and to quash service of process. According to Local Rule 220-3, plaintiffs’ opposition to these motions was required to be filed on or before April 4, 1985. The opposition brief was not filed until April 9. The Court’s initial inclination was to treat the motion as unopposed; however, upon further consideration the Court allowed hearing on the motion to be continued to May 7, 1985 to allow for proper briefing of the issues. At the May 7 hearing, the Court, in lieu of dismissing the entire complaint, ordered plaintiff to file a more definite statement and granted the motion to quash service. This ruling was reflected in a minute order entered on the docket on May 8, 1985.
      On May 9, 1985, all parties failed to appear at the status conference which was set when the action was originally filed. The matter was placed on the Court’s June 20, 1985 dismissal calendar. On that date counsel for defendant Stroh properly appeared. Ño appearance was recorded by plaintiffs’ counsel of record; however, in-house counsel for Pabst Brewing Company entered an appearance. At the June 20 hearing, the Court announced that a reporter’s error had evidently caused some confusion as to the precise ruling emanating from the May 7 hearing. The Court reiterated the substance of that ruling, giving plaintiffs twenty days in which to file their more definite statement. A written order reflecting the directive was entered on the docket the same day.
      The Court’s next brush with the developing debacle that Falstaff v. Stroh had become was on July 19, 1985, nine days after the date on which the more definite statement was to be filed. An associate from the office of plaintiffs’ counsel telephoned chambers to explain that the more definite statement could not be filed in the absence of Joseph Alioto, then vacationing in Italy and not expected to return until the first week of August. Although concerned about the sincerity with which plaintiffs’ counsel was prosecuting the action, the Court issued an order extending the date by which the more definite statement could be filed until August 1, 1985. The more definite statement, in the form of a first amended complaint, was filed on July 26, 1985.
      On August 28, 1985, defendant Stroh filed, and noticed for hearing on September 26, a motion to dismiss the first amended complaint. Pursuant to Local Rule 220-3, plaintiffs' opposition was due on September 12. The opposition was in fact not filed until September 16. On September 20, this Court ordered the aforesaid opposition brief to be "unfiled,” thus leaving the motion to dismiss effectively unopposesd. This order, however, was without prejudice; plaintiff being free to formally move for an enlargement of time within which to file its opposition brief. On September 24, 1985, at 4:40 P.M., less than forty-eight hours prior to the scheduled hearing on the motion to dismiss, an application for an enlargement was filed with the clerk. All counsel appeared at the scheduled September 24 hearing, at which time the Court continued the hearing on Stroh’s motion to dismiss the first amended complaint until November 21, 1985 in order to allow defendant an adequate opportunity to reply to the opposition. At this hearing, the Court also imposed sanctions, in the amount of $2,500, on plaintiffs’ counsel, the law firm of Alioto & Alioto. These sanctions were imposed due to conduct which the Court viewed as a continuing failure and refusal to abide by the orders of this Court, the procedures and Rules of the Northern District of California and the Federal Rules of Civil Procedure, as well as flagrant indifference toward counsel’s responsibilities to his clients.

      . On November 6, 1985, following eight months of apparently successful evasion of service, this Court ordered that the elusive Joseph Englert be served by publication. Thereafter, on December 2, 1985, through retained counsel, Mr. Englert joined in Stroh’s Motion to Dismiss the Amended Complaint.

      . Under the Sherman Act prices are fixed when they are agreed upon. United States v. Masonite Corp., 316 U.S. 265, 276, 62 S.Ct. 1070, 1076, 86 L.Ed. 1461 (1942). The agreement to fix prices renders the conspiracy illegal. Adolph Coors Company v. FTC, 497 F.2d 1178, 1184 (10th Cir.1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1974). Plaintiffs have alleged no agreement to fix or stabilize prices.

      . The Court takes judicial notice of these other breweries, including most notably the Adolph Coors Company, the Anchor Steam Brewer, and the Blitz Weinhardt Brewery, of whose existence and viability this Court is well cognizant.

      . On April 16, 1982, the Department of Justice filed a complaint under Section 7 of the Clayton Act, 15 U.S.C. § 18, challenging the proposed merger of the Joseph Schlitz Brewing Company and the Stroh Brewing Company. On November 10, 1982, a court-approved consent decree was entered into by Stroh and the Department of Justice. This consent decree was later modified in September 1983. Under the terms of the original and modified consent decrees the proposed merger was allowed to occur. As a condition of the approval, Stroh was required to divest itself of either the Memphis, Tennessee or Winston-Salem, North Carolina brewing plants, acquired from Schlitz in the merger, or the Stroh brewery in Tampa, Florida. It is obvious to this Court that the merger raised governmental concern with regard to competition in the beer market. It is equally obvious, however, that by the very terms of the consent decree, requiring divestment of one of three plants all located in the southeast, the concern was limited to a single geographical region. Also worth noting is the fact that the consent decree, by its express terms, constituted no admission, finding of fact or conclusion of law. United. States v. The Stroh Brewery Co., 1982-83 Trade Cas. (CCH) ¶ 65,037 (D.D.C. Nov. 10, 1982), modified, 1983-2 Trade Cas. (CCH) ¶ 65,627 (D.D.C. Sept. 15, 1983).


source: Caselaw Access Project

author: McLAUGHLIN, District Judge.

license: Public Domain

text:
    UNITED STATES of America, v. Javier IPARRAGUIRRE, Defendant.
    No. 85 CR 604.
    United States District Court, E.D. New York.
    Feb. 19, 1986.

      Raymond J. Dearie, U.S. Atty. E.D.N.Y. (Steven M. Gold, Asst. U.S. Atty., of counsel), for plaintiff.
    Roger J. Schwarz, New York City, for defendant.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

Defendant moves to suppress evidence seized from his apartment. He argues first that the government, in obtaining the warrant to search the premises, did not comply with the provisions of Fed.R.Crim.P. 41(c)(2)(D). He also contends that the warrant was overbroad and not supported by probable cause. For the reasons stated below, the motion is denied.

Facts

The facts are not in dispute. On September 23, 1985, defendants Robert Aponte, Felix Torres, and Juan Rivera were arrested by agents of the New York Drug Enforcement Task Force while attempting to sell a kilogram of cocaine to an undercover officer. This transaction had been arranged by a confidential informant acting as middleman. Defendant Aponte stated that the source of the cocaine was a man who he knew as “Chile” and who lived at 110th Street in Queens, New York. All three of the arrested defendants were able to identify the house. At about 9:25 p.m. Aponte, under the supervision of the agents, called the residence in Queens and arranged to return with the money from the kilogram sale and to pick up a second kilogram.

Detective Kevin Schnupp of the Task Force then contacted the office of the United States Attorney in this District and spoke to Assistant United States Attorney (“AUSA”) Gordon Mehler. AUSA Mehler telephoned United States Magistrate A. Simon Chrein to apply for a warrant to conduct a search of the second floor apartment at 107-73 110th Street in Queens. Magistrate Chrein granted the application. When Task Force detectives executed the warrant, they discovered quantities of cocaine, narcotics paraphernalia, records and weapons. Defendant Iparaguirre was then arrested.

Discussion

Rule 41(c)(2)

Fed.R.Crim.P. 41(c)(2) was enacted in 1977 “to establish a procedure for the issuance of a search warrant when it is not reasonably practicable for the person obtaining the warrant to present a written affidavit ...” Advisory Committee Note to 1977 Amendment to Fed.R.Crim.P. 41. It provides that “[i]f the circumstances make it reasonable to dispense with a written affidavit, a Federal magistrate may issue a warrant based on sworn oral testimony communicated by telephone or other appropriate means.” Fed.R.Crim.P. 41(c)(2)(A). The provision recognizes that under the fourth amendment and the Supreme Court eases interpreting it, “the preferred method of conducting a search is with a search warrant.” Notes of Senate Committee on the Judiciary, Sen.Rep. No. 95-354, U.S.Code Cong. & Admin.News 1977, p. 527. Accordingly, the rationale of the rule “is to encourage Federal law enforcement officers to seek search warrants in situations when they might otherwise conduct warrantless searches.” Id. In other words, by enabling them to take advantage of technology not yet invented at the time the Bill of Rights was drafted, the provision makes it feasible for officers in the field to comply with the law under the fourth amendment that a warrant ordinarily must be obtained before a search is conducted.

In the instant case, Detective Schnupp was in the field; in fact, at the time AUSA Mehler spoke to Magistrate Chrein, Detective Schnupp was standing with the defendant Aponte and the confidential informant in front of the residence for which the search warrant was sought. Because it was thus not practical to proceed by written affidavit, the agent contacted the United States Attorney’s office to request that an AUSA obtain a search warrant by telephone. See Fed.R.Crim.P. 41(c)(2)(A)(C).

Fed.R.Crim.P. 41(c)(2)(D) provides that when a caller contacts a magistrate to procure a warrant, the “magistrate shall immediately place under oath each person whose testimony forms a basis of the application and each person applying for that warrant.” The transcript of the September 23, 1985 application reveals that the only person to whom Magistrate Chrein spoke was AUSA Mehler, who was thus obviously the person applying for the warrant. AUSA Mehler identified himself as the affiant, and Magistrate Chrein swore him (Transcript of Oral Application for a Search Warrant September 23, 1985 (“Tr.”) at 1).

Defendant raises two objections to this procedure. First, he argues that Detective Schnupp was in fact the affiant, and that he was never sworn. Second, he argues that even if Schnupp was not the affiant, he was the person whose testimony formed the basis of the application and should have been sworn in that capacity.

Defendant bases his argument that Detective Schnupp was the affiant on an exchange between AUSA Mehler and Magistrate Chrein as they were filling out their respective copies of the warrant. At that time, both stated that the name to be filled in as the affiant was Kevin Schnupp. If Detective Schnupp had in fact been the affiant, the warrant would be defective because Schnupp was never sworn.

It is manifest, however, that Detective Schnupp was not the affiant, At the outset of the conversation, Magistrate Chrein swore AUSA Mehler as the affiant (Tr. 1). Moreover, the Magistrate could hardly have thought that anyone other than AUSA Mehler was the affiant or the applicant, because AUSA Mehler was the only one to whom he spoke. In fact, at the time he granted the warrant application, Magistrate Chrein was aware that Detective Schnupp was standing outside .the residence in Queens, awaiting the warrant (Tr. 2).

It was thus obvious to all parties involved that AUSA Mehler, not Detective Schnupp, was the affiant. In such a case, the fact that Magistrate Chrein and AUSA Mehler mistakenly filled in Schnupp’s name on the warrant does not require suppression of the fruits of the search. The oath “is designed to ensure that the truth will be told by insuring that the ... affiant will be impressed with the solemnity and importance of his words.” United States v. Turner, 558 F.2d 46, 50 (2d Cir.1977). To argue that the erroneous entry of Detective Schnupp’s name on the warrant means that he should have been sworn is to ignore the rationale of the oath requirement that the person communicating with the Magistrate be aware of the seriousness of the proceedings. Here the person communicating with the Magistrate — AUSA Mehler— was sworn, and therefore the warrant was not deficient in that respect.

Defendant’s other objection under Rule 41 is that Detective Schnupp should have been sworn in his capacity as a “person whose testimony forms a basis of the application.” Fed.R.Crim.P. 41(c)(2)(D). Defendant focuses on the word “basis” and argues that because Schnupp had personal knowledge of the facts underlying the application, he supplied the basis, and therefore should have been sworn. The proper focus, however, is on the word “testimony.” Rule 41(c)(2)(D) does not require the swearing of every individual with knowledge of the investigation; rather, it requires the swearing of the applicant and of any witness who actually testifies before the issuing magistrate. See Notes of the Senate Committee on the Judiciary, Sen. Rep. No. 95-354 (“Subparagraph (c)(2)(D) [of Rule 41] requires the magistrate to place the requestor and any witness under oath ... ”). If there is no witness, obviously only the applicant need be sworn, as he was here.

The gist of defendant’s objection appears to be that the warrant issued upon “hearsay-type information imparted by a government attorney” (Defendant’s Memorandum of Law at 3). Aside from the fact that this precise situation is envisioned by Rule 41, see 1977 Amendment Advisory Committee Note (the “information may come ... from the attorney for the government ... ”), it has been consistently held that a search warrant may properly issue “upon a finding of probable cause based on hearsay,” Advisory Committee Note to 1972 Amendment to Fed.R.Crim.P. 41, and that an affiant’s statements need not reflect his own direct personal observations, as long as the magistrate is informed of the underlying circumstances supporting the affiant’s conclusions, see, e.g., McCray v. State of Illinois, 386 U.S. 300, 311, 87 S.Ct. 1056, 1062, 18 L.Ed.2d 62 (1967); United States v. Ventresca, 380 U.S. 102, 108, 85 S.Ct. 741, 745, 13 L.Ed.2d 684 (1965). In short, the fact that the warrant was based on AUSA Mehler’s hearsay statements as to what Detective Schnupp had told him does not itself invalidate the search. Cf. Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 2334, 76 L.Ed.2d 527 (1983) (“affidavit relying on hearsay ‘is not to be deemed insufficient on that score ...’”) (quoting Jones v. United States, 362 U.S. 257, 269, 80 S.Ct. 725, 735, 4 L.Ed.2d 697 (1960)). Whether the hearsay on which Detective Schnupp* based his statements was sufficiently reliable to support the finding of probable cause is the subject of defendant’s second contention.

Probable Cause

Defendant argues that the warrant, even if issued in compliance with Rule 41, was overbroad and not supported by probable cause. “The traditional standard for review of an issuing magistrate’s probable cause determination has been that so long as the magistrate had a ‘substantial basis for ... concluding]’ that a search would uncover evidence of wrongdoing, the Fourth Amendment requires no more. Jones v. United States, 362 U.S. 257, 271, 80 S.Ct. 725, 736, 4 L.Ed.2d. 697 (1960).” Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 2331, 76 L.Ed.2d 527 (1983).

The task of the issuing magistrate is simply to make a practical, commonsense decision whether, given all the circumstances set forth in the affidavit before him, including the “veracity” and “basis of knowledge” of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place.

Id. at 2332.

Defendant’s main argument against a finding of probable cause in these circumstances is that although AUSA Mehler presented Magistrate Chrein with information about the reliability of the confidential informant who introduced the undercover agent to defendant Aponte, the Magistrate was provided with nothing regarding the reliability of Aponte himself. It is the law of this Circuit, however, that when a declarant is “not a paid informant but an admitted ‘participant in the very crime at issue,’ the government [is] not required ‘to show past reliability.’ United States v. Rueda, 549 F.2d 865, 869 (2d Cir.1977).... His participation as an accomplice satisfied] the reliability standard.” United States v. Dunloy, 584 F.2d 6, 10 (2d Cir.1978).

Moreover, Magistrate Chrein had good reasons to believe that Aponte was telling the truth. First, as the government points out, Aponte had been recently arrested and probably had not “had an opportunity to concoct a false story consistent with [everything] that had transpired up to that point” (Government’s Memorandum in Opposition at 11). Further, a defendant who has just accepted an offer to cooperate with the authorities is trying to win their favor and thus is unlikely to tell a lie about his source that will cause them to waste time chasing down a false lead.

In addition, the address of the house to which Aponte took the agents was confirmed by defendants Torres and Rivera, and the phone number Aponte dialed was also verified independently. Finally, although the phone call to the defendant was not recorded, Aponte’s part of the conversation — which was overheard by the agents — was consistent with what Aponte had told the confidential informant before Aponte was arrested: that the two kilogram deal was going to take place in parts and that Aponte would return to the Queens residence with the money for the first kilogram and would pick up the second kilogram at that time. Thus, based on the totality of the circumstances, Magistrate Chrein was more than justified in relying on Aponte’s statements.

Defendant also attacks the warrant as overbroad. He argues that even if there was probable cause to search the apartment for the second kilogram of cocaine, there was no reason to believe that the search would reveal “narcotics paraphernalia, books and records pertaining to narcotic trafficking, currency [or] other fruits of narcotics trafficking,” for all of which the warrant authorized the agents to search. I disagree.

Magistrate Chrein was aware that Aponte had obtained the first kilogram of cocaine from the apartment and that the second kilogram was to be picked up from the same place. This alone might justify the inference that the apartment was a drug storage facility or stash pad and would therefore contain tools, records and fruits of narcotics transactions. In addition, Aponte was arrested along with two guards who were following the confidential informant’s car to ensure that the deal went smoothly. The fact that defendant had at least three people working for him further supports the inference that defendant was a drug source of some consequence and that his apartment was likely to contain paraphernalia of that trade. Thus there was ample probable cause to search for all the items listed in the search warrant.

Accordingly, for the reasons stated above, the motion to suppress is denied.

SO ORDERED

      . Magistrate Chrein: Fine. Are you going to be the affiant?
      AUSA Mehler: Yes I am.
      Magistrate Chrein: Well then let me swear you. Mr. Mehler do you swear that the testimony that you’re about to give in this proceeding will be the truth, the whole truth and nothing but the truth, so help you God? AUSA Mehler: Yes I do.

      . The Rule providing for the issuance of a warrant upon oral testimony states that the magistrate shall complete a document called the original warrant, and that the applicant shall complete a duplicate original warrant:
      (B) Application. The person who is requesting the warrant shall prepare a document to be known as a duplicate original warrant and shall read such duplicate original warrant, verbatim, to the Federal magistrate. The Federal magistrate shall enter, verbatim, what is so read to such magistrate on a document to be known as the original warrant. The Federal magistrate may direct that the warrant be modified.
      (C) Issuance. If the Federal magistrate is satisfied that the circumstances are such as to make it reasonable to dispense with a written affidavit and that grounds for the application exist or that there is probable cause to believe that they exist, the Federal magistrate shall order the issuance of a warrant by directing the person requesting the warrant to sign the Federal magistrate’s name on the duplicate original warrant. The Federal magistrate shall immediately sign the original warrant and enter on the original warrant the exact time when the warrant was ordered to be issued. The finding of probable cause for a warrant upon oral testimony may be based on the same kind of evidence as is sufficient for a warrant upon affidavit.
      Fed.R.Crim.P. 41(c)(2)(B), (C).

      . Defendant does not appear to challenge the reliability of Detective Schnupp.

      . Even if the warrant were overbroad or not supported by probable cause, the seized evidence would not be suppressed because the search was conducted in good faith reliance on a warrant issued by a neutral and detached magistrate. See United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984); United States v. Fama, 758 F.2d 834 (2d Cir.1985).


author: SHAW, District Judge.

text:
    Emma FRANCIS on Behalf of her minor children, Joseph FRANCIS, Andrea Francis, Jonathan Daigle and Troy Daigle v. FOREST OIL CORPORATION, et al.
    Civ. A. No. 85-1747.
    United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
    Feb. 20, 1986.
    Paul Colomb, David J. Dennis, Lafayette, La., for plaintiffs.

      Vance E. Ellefson, New Orleans, La., for defendants.
   RULING

SHAW, District Judge.

Now before the Court is a motion for summary judgment filed on behalf of Petroleum Helicopters, Inc. (“PHI”). PHI asks the Court to dismiss the claims of Emma Francis, individually and on behalf of Joseph and Andrea Francis and Jonathan and Troy Daigle. PHI claims that there is no genuine issue of fact, that plaintiffs lack standing, that the claims are time-barred, that plaintiffs have no right or cause of action, that their claims constitute an improper collateral attack on the judgment of a Louisiana court, and that their claims are barred by a previously executed compromise and release of claims executed by the duly appointed administratrix of the Succession of Bradley J. Mouton, Jr.

On June 16, 1983, Bradley J. Mouton, Jr. was employed by Forest Oil Corporation as a pumper, engaged in the extraction and production of petroleum products from the seabed of the Outer Continental Shelf. On that day, Mr. Mouton was a passenger in a Bell 206B-3 helicopter which crashed on the navigable waters of the Gulf of Mexico, adjacent to but more than one marine league from the shores of Louisiana. Mr. Mouton died as a result of the injuries suffered in that crash.

Mr. Mouton was survived by a wife, Sandra Agatha McElroy Mouton, a minor legitimate child, Bradley J. Mouton, III, and four acknowledged minor illegitimate children, Joseph Francis, Andrea Francis, Jonathan Daigle and Troy Daigle. Sandra Mouton as administratrix of the estate of Mr. Mouton asserted claims for the wrongful death of her husband. Mrs. Mouton settled the claims against PHI, the helicopter company, and Forest Oil Corporation on March 9, 1984 for $600,000.00.

On June 17, 1985 this suit was filed by Emma Francis, individually, and as the tutrix and guardian of Joseph and Andrea Francis and Jonathan and Troy Daigle. Plaintiffs allege claims under 33 U.S.C. § 905(b), the Longshore and Harbor Workers’ Compensation Act, 46 U.S.C. § 688, the Jones Act, the general maritime law and Louisiana law.

Defendant, PHI, asserts that if plaintiffs have a cause of action against PHI it would be under the Death on the High Seas Act, 46 U.S.C. § 761, et seq. (“DOHSA”). This Court is in agreement with this assertion. The facts reveal that the accident occurred more than three miles off the coast of Louisiana. The proper remedy is under DOHSA. This Court will allow plaintiffs leave to amend their complaint to add a DOHSA claim against PHI.

Defendant, PHI, next contends that the plaintiff lacks standing to bring a DOHSA claim. Under DOHSA, 46 U.S.C. § 761, the proper party plaintiff is the personal representative of the decedent. The personal representative is the person designated by a court as an administrator of the estate. C.f. Marcano v. Offshore Venezuela, 497 F.Supp. 204 (E.D.La.1980). Mrs. Mouton was appointed administrator by the Fifteenth Judicial District Court of Louisiana and therefore she was the proper party plaintiff; however, this rule is not without exception. The Fifth Circuit has allowed an intervention in a Jones Act death case by a party whose interest could not be adequately represented by the personal representative. Smith v. Clark Sherwood Oil Field Contractors, 457 F.2d 1339 (5th Cir.1972). This reasoning should apply equally to a DOHSA claim.

In Smith, the decedent’s brother was the personal representative. His interests were aligned with the illegitimate daughter of Mr. Smith. Mrs. Smith sought to intervene on behalf of herself, individually and on behalf of her children. The district court denied her intervention and the brother settled the claim. The Fifth Circuit stated that since “the widow was not a party to the negotiations nor did she sign the settlement agreement or accept the court’s judgment,” Mrs. Smith should have been allowed to intervene. The Court reversed the district court’s approval of the settlement and remanded the case with instruction that Mrs. Smith be allowed to intervene and participate as a party to any proposed settlement.

In this case, the settlement agreement states that Sandra Mouton filed suit against PHI as the administratrix of the Succession of Bradley Mouton, Jr., the personal representative of the deceased, the natural tutrix of Bradley Mouton, III and “on behalf of any and all heirs, survivors, beneficiaries, and relatives of the deceased.” The release states that Mrs. Mouton accepted the settlement and released PHI from all claims arising out of the injuries to and death of Mr. Mouton. She represented in the release that she and her son were the sole surviving dependents of Bradley Mouton, Jr. and that no person other than herself and her son sustained any pecuniary loss as a result of his death.

Although this case differs from Smith in that no intervention was filed before the settlement was effected, this Court holds that the same principles should apply. The illegitimates may not have known about the lawsuit in time to file an intervention. If they had a right to intervene they should also have a right to file suit. Plaintiffs contend that Mrs. Mouton knew of their existence. Regardless of knowledge of their existence, Mrs. Mouton could not adequately represent the interests of the four illegitimate children. To say that their interests would be adverse to her and her son’s is to state the obvious. We hold that Mrs. Mouton did not effect a settlement of the illegitimates’ claims under DOHSA for the death of their father. These children have a right to prove that they were dependent on Mr. Mouton and the amount of support they would have received from him in the future. The terms of the settlement agreement reveal that Mrs. Mouton did not represent these claims.

We are without authority to declare the settlement null and void as to the claims of Mrs. Mouton and her son as that issue is not before us. However, we conclude that the settlement agreement did not compromise the claims of Mr. Mouton's illegitimate children. Although PHI will now be exposed to claims it did not contemplate, we note that they will have a right of recourse against Mrs. Mouton. On page 5 of the release she agrees to “indemnify, hold harmless and defend,” PHI for any claims asserted by any party “whatsoever in any way arising out of, or resulting from the injuries or death of Bradley Joseph Mouton, Jr____”

This Court notes that Emma Francis does not have a claim of her own under DOHSA. DOHSA is limited to the decedent’s wife, husband, parent, child, or dependent relative. Ms. Francis does not fit within any of these classifications. Hamilton v. Canal Barge Co., Inc., 395 F.Supp. 978, 987 (E.D.La.1975). In order to proceed on behalf of her minor children she must prove that she has been qualified as tutrix by a Louisiana court. Evidence of this appointment as tutrix should be reflected in the record.

Defendant asks that the claims be dismissed due to the passage of one year from date of death. The applicable statute of limitations in a DOHSA claim is found in 46 U.S.C. § 763a. The claim must be commenced within three years. This suit was filed within three years and therefore is not time-barred.

Finally, defendant asks that we dismiss the case as being an improper collateral attack on a state court ruling, namely an order by the Fifteenth Judicial District Court, Parish of Lafayette, State of Louisiana. This order authorizes Mrs. Mouton, administratrix of the succession to enter into a compromise with PHI for the claims for the death of Bradley J. Mouton. We do not agree with defendant’s contention. As stated above, Mrs. Mouton could not validly represent the interests of the four illegitimate children who had claims adverse to Mrs. Mouton and her son. Furthermore, the illegitimates are riot mentioned by name or by a general reference in this order.

This Court concludes that the wrongful death claims of Mr. Mouton’s four acknowledged illegitimate minor children were not validly compromised and they have a right to proceed against PHI through a properly appointed tutor.

Accordingly, defendant’s motion for summary judgment is DENIED.


author: OWENS, Chief Judge.

text:
    Kenneth SALADIN, et al., Plaintiffs, v. CITY OF MILLEDGEVILLE, Defendant.
    Civ. A. No. 83-187-1-MAC.
    United States District Court, M.D. Georgia, Macon Division.
    Feb. 20, 1986.
    Ralph S. Goldberg, Atlanta, Ga., for plaintiffs.
    Charles A. Mathis, Jr., Milledgeville, Ga., for defendant.
   ORDER

OWENS, Chief Judge.

The Supreme Court of the United States discussed the requirement of standing in its 1982 decision in Valley Forge Christian College v. Americans United for Separation of Church and State:

Article III of the Constitution limits the “judicial power” of the United States to the resolution of “cases” and “controversies.” ...
As an incident to the elaboration of this bedrock requirement, this Court has always required that a litigant have “standing” to challenge the action sought to be adjudicated in the lawsuit. The term “standing” subsumes a blend of constitutional requirements and prudential considerations, and it has not always been clear in the opinions of this Court whether particular features of the “standing” requirement have been required by Art III ex proprio vigore, or whether they are requirements that the Court itself has erected and which were not compelled by the language of the Constitution.
A recent line of decisions, however, has resolved that ambiguity, at least to the following extent: at an irreducible minimum, Art III requires the party who invokes the court’s authority to “show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,” and that the injury “fairly can be traced to the challenged action” and “is likely to be redressed by a favorable decision.” In this manner does Art III limit the federal judicial power “to those disputes which confiné federal courts to a role consistent with a system of separated powers and which are traditionally thought to be capable of resolution through the judicial process.”

Valley Forge Christian College v. Americans United For Separation of Church and State, Inc., 454 U.S. 464, 471-72, 102 S.Ct. 752, 757-58, 70 L.Ed.2d 700 (1982) (citations and footnote omitted).

The defendant City of Milledgeville, Georgia, contends that the court is without jurisdiction of this dispute because the plaintiffs lack standing. Defendant relies principally upon Valley Forge Christian College. Plaintiffs in their response urge that because some of the plaintiffs are municipal taxpayers, they have standing to complain of the defendant City expending tax revenue to promote the allegedly unconstitutional city seal. Alternatively, plaintiffs rely upon American Civil Liberties Union of Georgia v. Rabun County Chamber of Commerce, Inc., 698 F.2d 1098 (11th Cir.1983), and suggest that that decision is controlling. They argue that “the spiritual, value-laden beliefs of the plaintiffs” are sufficient to give them standing in the context of an Establishment Clause claim. Id. at 1102.

The Dispute

The dispute that plaintiffs contend they have standing to litigate in this court is over the use of the word Christianity in the seal of the City of Milledgeville, Georgia. Since at least 1912 the City of Milledgeville has used a seal to emboss and thereby authenticate documents. In recent years the seal has been printed on city stationery, painted on the doors of some city vehicles (mainly garbage trucks), and painted on the city water tank. However, the word Christianity is not recognizable on the seal printed on the City’s stationery. The seal was painted on the city water tank after this lawsuit commenced. As embossed on documents the seal is fairly described as follows:

The embossing seal is circular, measuring 1%-inches from edge to edge. The seal is surrounded by a braided border. The top three-quarters of the seal carries the words “City of Milledgeville” in block capital letters followed by a period. The bottom lk of the seal caries [sic] the date 1836 (1856?) also followed by a period with two small five-pointed stars separating the date from the inscription. The device used in the center of the seal is a winged figure of a woman sitting on an eagle in flight. The figure is wearing a covering on the upper part of the body and a short, pleated skirt extending halfway down the thigh. The figure is holding a staff surmounted by a liberty cap as appeared on the U.S. half cents of 1794-1797 and large cents of 1794-1796 where it is sometimes shown as being supported by a pole (Handbook of United States Coins, by R.S. Yoeman, 22on edition, Whitman Publishing Company, pp. 11, 19, 24). Extending from the staff shown on the seal is a banner on which are inscribed the words “liberty” on the top with the word “Christianity” beneath with both words in block capital letters.

Deposition of William Hovey Smith at Exhibit D-l. A photograph of the seal as it appears on city vehicles is attached to this order as Addendum 1.

Plaintiffs contend that the use of the word Christianity on the city seal violates the Establishment Clause of the Constitution of the United States and that the court should enjoin the defendant City from such further use.

The Plaintiffs

Plaintiffs Kenneth Saladin and Clara Saladin — husband and wife — reside in Baldwin County, Georgia, outside the city limits of Milledgeville. They moved to Baldwin County in 1977; he is an associate professor of biological environmental sciences at Georgia College and she is a registered nurse at Baldwin County Hospital. Professor Saladin says he first saw the seal on a mural painted on the outside of a privately owned warehouse building. However, he and his wife first observed it being used by the defendant City on the door of a garbage truck, at least some four years before they commenced this lawsuit. Professor Saladin explained that he did not raise his complaints earlier because he had not yet attained tenure at Georgia College. Their grievance is based upon their being offended by observing the city seal.

Plaintiff Thelma Guaetta, who was added as a party plaintiff, resides in the City of Milledgeville and pays city taxes. Prior to hearing of this lawsuit, she had not really looked at the city seal. She claims that since she has now seen it, she believes its use violates the Constitution. She objects to her tax money being spent to paint the seal on the city water tower.

Plaintiff Frampton K.C. Smith moved to the City of Milledgeville about seven years ago. After hearing of this lawsuit and seeing the seal on a garbage truck, he telephoned Professor Saladin and asked to be added as a plaintiff. He says he believes in the separation of church and state and objects to Christianity being promoted by the city seal.

Standing

The issue before the court is whether the plaintiffs have shown (1) that they have been personally injured as a result of the putatively illegal conduct, (2) that their injury fairly can be traced to the challenged action, and (3) that their injury is likely to be redressed by a favorable decision of this court. Valley Forge Christian College, 454 U.S. at 472, 102 S.Ct. at 758. If the defendant limited its use of the city seal to embossing documents, this court would be of the considered opinion that such use could not possibly injure any plaintiff sufficiently to give the required standing. To complain of such limited use would be, speaking colloquially, “a whole lot to do about nothing.”

Unfortunately, the defendant has not limited its use of the city seal to embossing documents: The City paints the seal on the doors of city vehicles, and since this lawsuit began has painted the seal on the city water tank. Although it is legally necessary to emboss documents signed for the City of Milledgeville to evidence the authority of those signing in behalf of the City, it is not legally necessary to paint the seal on the doors of city motor vehicles. The city seal in no way contributes to the operation of the city vehicles or the water tank. Because the seal was painted on the water tank after this lawsuit was filed, the court can only conclude that the defendant was unnecessarily flaunting the seal.

Some of the plaintiffs are city residents and taxpayers. Their status is comparable to that of the plaintiffs in Lynch v. Donnelly, 465 U.S. 668, 104 S.Ct. 1355, 79 L.Ed.2d 604 (1984), who complained of a city’s inclusion of a creche, or nativity scene, in its annual Christmas display. By deciding that case subsequent to Valley Forge Christian College and without questioning or even discussing standing, the Supreme Court of the United States implicitly found standing. The Eleventh Circuit’s decision in American Civil Liberties Union of Georgia v. Rabun County Chamber of Commerce, Inc., 698 F.2d 1098 (11th Cir.1983), also supports plaintiffs’ contention that they have standing. The plaintiffs in that case, two of whom were campers, were found to have standing to challenge the erection of an illuminated 26 feet by 35 feet latin cross on a structure in Black Rock Mountain State Park. The Eleventh Circuit held:

[T]he Supreme Court has made it clear that no minimum quantitative limit is required to establish injury under either a constitutional or prudential analysis:
“Injury in fact” ... serves to distinguish a person with a direct stake in the outcome of a litigation — even though small — from a person with a mere interest in the problem. We have allowed important interests to be vindicated by plaintiffs with no more at stake ... than a fraction of a vote, see Baker v. Carr, 389 U.S. 186 [82 S.Ct. 691, 7 L.Ed.2d 663], a $5 fine and costs, see McGowan v. Maryland, 366 U.S. 420 [81 S.Ct. 1101, 6 L.Ed.2d 393], and a $1.50 poll tax, Harper v. Virginia Bd. of Education, 383 U.S. 663 [86 S.Ct. 1079, 16 L.Ed.2d 169].
United States v. SCRAP, 412 U.S. 669, 689 n. 14, 93 S.Ct. 2405, 2416 n. 14, 37 L.Ed.2d 254 (1973). Thus, we find that plaintiffs Guerrero and Karnan have sufficiently demonstrated particular and personalized noneconomic injury to distinguish them from the general citizenry who may be as equally offended on a philosophical basis but who are not as specifically or perceptibly harmed, consistent with both the prior precedent defining noneconomic injuries in general and the decision in Valley Forge, to provide them with a “personal stake in the controversy.” Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962).

Id. at 1108.

The injury suffered by the plaintiffs is caused by the display of the seal on the City’s vehicles and the City’s water tower. The individual plaintiffs who reside in and pay taxes to the City of Milledgeville unquestionably have a direct stake in the outcome of this litigation that gives them standing to challenge the defendant’s use of its city seal. It is unnecessary to decide whether or not every plaintiff has standing.

Accordingly, the defendant’s motion to dismiss is hereby DENIED.

As explained above, if the City limited its use of the seal to embossing documents and printing it on city stationery, the plaintiffs would not have the requisite standing to challenge its constitutionality. Therefore, the defendant City of Milledgeville is hereby granted two weeks to advise the court as to whether it wishes to keep the present seal and confine its use to embossing documents and printing it on the city stationery, or whether it wishes to continue to display the seal on the city vehicles and water tank and risk having the seal found unconstitutional.

      . The complaint in this case named five plaintiffs: Kenneth Saladin, C. Diane Saladin, William H. Lamb, Jr., Barbara Lynch, and Clyde Tipton. The complaint was amended on June 2, 1983, to dismiss Lamb and Tipton as party plaintiffs. The complaint was amended a second time to dismiss Lynch and to add Thelma Guaetta and Frampton K.C. Smith as party plaintiffs. There are now four named plaintiffs in this case: the Saladins, Guaetta, and Smith.


author: McMILLAN, District Judge.

text:
    WIENER KING SYSTEMS, INC., Plaintiff, v. Thomas C. BROOKS, d/b/a Wiener King, Defendant.
    No. C-C-85-445-M.
    United States District Court, W.D. North Carolina, Charlotte Division.
    Feb. 20, 1986.

      Melvin L. Watt, Jonathan Wallas and John T. Nockleby, Ferguson, Watt, Wallas & Adkins, Charlotte, N.C., for plaintiff.
    Bentford E. Martin, Cannon, Kline & Blair, Charlotte, N.C., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

McMILLAN, District Judge.

The defendant has moved to dismiss for lack of personal jurisdiction. A hearing was held on the motion on December 16, 1985. By order filed December 19, 1985, the defendant’s motion to dismiss was denied. Since additional litigation is anticipated between Wiener King Systems, Inc., and current franchisees using the Wiener King trademark, it appears appropriate to enter findings of fact and conclusions of law setting forth the reasons why the defendant’s motion to dismiss is denied.

FINDINGS OF FACT

1. Plaintiff, Wiener King Systems, Inc. is incorporated under the laws of Pennsylvania. It offers franchises to restaúrants to operate under the trade name “Wiener King.”

2. Wiener King Corporation, previously incorporated in North Carolina, no longer exists.

3. Plaintiff is the successor in interest of Wiener King Corporation, having been assigned the assets of Wiener King Corporation by Richard E. Dennis who purchased Wiener King Corporation’s assets, including the franchise agreement at issue herein, from Wiener King Corporation in a sale approved on or about March 16, 1983, by the United States Bankruptcy Court for the Western District of North Carolina (Dennis Aff. ¶ 2).

4. Defendant, Thomas C. Brooks, is a resident of Alexandria, Louisiana. Defendant Brooks operates a “Wiener King” franchise restaurant in Alexandria, Louisiana.

5. At some time prior to August, 1976, defendant Brooks visited the headquarters (and only office) of Wiener King Corporation in Charlotte, North Carolina, to discuss Brooks’ interest in a franchise arrangement with Wiener King Corporation (Brooks Aff. ¶ 5). The parties apparently reached tentative agreement, and Brooks left Charlotte with a proposed franchise agreement to discuss with his attorney. Thereafter, defendant signed and mailed the franchise agreement to Charlotte and, on August 10, 1976, the Wiener King Corporation Franchise Agreement was executed by Wiener King Corporation in Charlotte (Agreement, ¶ 4.10). A copy of the franchise agreement is attached to the complaint.

6. The franchise agreement established a detailed relationship between Wiener King Corporation and defendant with Wiener King Corporation’s Charlotte office serving as the location from which goods and services were made available to defendant and to which defendant corresponded when seeking assistance or paying fees. Specifically, the franchise agreement stated that:

(a) It was made in Charlotte, North Carolina and that Wiener King Corporation’s principal office was in Charlotte (p. !)•
(b) The franchisee recognized the special good will that had been developed in the name “Wiener King” as well as the “advantages of the skill and knowhow of franchisor” (p. 1).
(c) The franchisor undertook certain obligations including approval of outlet sites, approval of equipment and floor plans, making available goods and equipment to the defendant, training of defendant’s personnel, conducting inspections and providing a field consultant to work with the defendant, assistance in advertising campaigns and the right to determine standards of quality, service, production, merchandising and advertisement of all products sold by franchisee (section two of the agreement).
(d) The defendant, as franchisee, obligated himself to purchase certain products from the franchisor, to meet various established standards and rules, to maintain insurance at certain levels, to maintain certain books and records and to pay certain advertising and franchise fees (section three of the agreement).
(e) The franchise had a ten-year life, and the obligations of the franchisee to make its fee payments and otherwise to deal with the franchisor in North Carolina were to continue throughout the life of the contract (agreement, 111.4).
(f) The franchise agreement stated: “This contract comes into existence upon execution and acceptance by Franchisor in the State of North Carolina, and its terms and provisions shall be construed in accordance with and governed by the laws of the State of North Carolina ” (emphasis added) (agreement, II 4.10).
(g) The franchise agreement acknowledged that there would be a continuing relationship between franchisor and franchisee to insure that all who displayed the “Wiener King” name utilized uniform procedures, techniques and printed matter (p. 1).
(h) The franchise agreement stated that it would “bind and inure to the benefit of the parties hereto, their heirs, personal representatives, successors and assigns” (agreement, U 4.15).

7. The relationship between Wiener King Corporation and the defendant continued for a number of years. The company provided various goods and services to the defendant. Such goods and services were provided to the defendant from Wiener King Corporation’s Charlotte, North Carolina, office. Defendant corresponded regularly with Wiener King Corporation in Charlotte, and sent to Charlotte the pertinent franchise and other fees owed to Wiener King Corporation under the franchise agreement. Such fees were sent on a monthly basis. Thus, the franchise agreement contemplated (and this in fact occurred) that defendant would, on a monthly basis, send information and money to Wiener King Corporation in Charlotte. The franchisor maintained no satellite offices and all the dealings of the parties were to and from Charlotte (Dennis Aff. TIU 4, 5 and 7).

8. In addition to the continuing business relationship between the franchisor’s Charlotte office and the defendant’s Louisiana restaurant, the defendant and his wife attended a training session in Charlotte, North Carolina, conducted for at least four days by Wiener King Corporation’s director of training in about March, 1977 (Boone Aff.). The defendant also became a member of the Wiener King Corporation’s Franchise Advisory Council. On several occasions, Wiener King Corporation’s Charlotte-based employees traveled to Louisiana to assist defendant with his operations (Dennis Aff.).

9. In 1978, Wiener King Corporation filed a bankruptcy petition. During the pendency of the bankruptcy action, defendant continued to send payments of the pertinent fees required in the franchise agreement to the bankruptcy receiver, James Wall, in Charlotte, North Carolina.

10. On March 16, 1983, Richard E. Dennis purchased the assets of Wiener King Corporation, including the franchise agreement at issue in this litigation (Dennis Aff.Ex. A). On the same day, Dennis reassigned to plaintiff his rights to all franchise agreements (Dennis Aff.).

11. At the time Wiener King Systems became the successor in interest to Wiener King Corporation, there were only about twenty franchises still in existence in the Wiener King system. Some of these franchises have since gone out of business (Dennis Aff.Ex. A).

12. The defendant continued to pay its franchise fees to Wiener King Systems for a number of months after March, 1983. About August 1983, defendant ceased to pay his franchise fees but continued to operate as a Wiener King restaurant utilizing the name and trademarks then owned by plaintiff. Wiener King Systems has no office in North Carolina; its only present office is in Pennsylvania.

13. From the terms of the franchise agreement and the subsequent actions taken both by franchisor and franchisee, the defendant purposefully directed his activities to North Carolina residents. Defendant had fair notice that an action for alleged breach of the franchise agreement might be brought in North Carolina. By signing and executing the franchise agreement, as well as by his subsequent actions, defendant established a voluntary substantial connection with North Carolina.

CONCLUSIONS OF LAW

1. This is a diversity case. The court has jurisdiction over the subject matter of the action.

2. In order for the plaintiff to establish personal jurisdiction over defendant, plaintiff must demonstrate (a) that the franchise agreement between Wiener King Corporation and defendant and the other pertinent contacts between franchisor and franchisee are such that courts of the State of North Carolina would assume jurisdiction over defendant under North Carolina’s “long arm” statute and (b) that there had been contacts between defendant and the State of North Carolina sufficient that North Carolina’s exercise of personal jurisdiction over defendant would not offend due process.

3. In this case, of course, Wiener King Systems is the assignee of the interests of Wiener King Corporation. As the assignee of the interests of Wiener King Corporation, plaintiff assumes the assign- or’s place in the contract and can assert those North Carolina contacts that defendant had with Wiener King Corporation to establish North Carolina’s jurisdiction over the person of the defendant. See generally, Strong’s North Carolina Index 3d, Assignments, 11114 and 4.1.

4. Under N.UG.S. § 21-57, all actions must be brought by the real party in interest. Plaintiff as assignee of the franchise agreement is the real party in interest here. Morton v. Thornton, 259 N.C. 697, 131 S.E.2d 378 (1963). Plaintiff has acquired the right to enforce the contract against the defendant. Atlantic and N.C.R. Co. v. Atlantic and N.C. Co., 147 N.C. 368, 61 S.E. 185, 191 (1908). Plaintiff, of course, takes on the contract cum on-ere, with its burdens as well as its benefits. The defendant can assert any defenses it may have against the assignor.

5. The State of North Carolina has determined that its courts should be available for certain suits. Given the nature of defendant’s contacts with the state, North Carolina’s interest is the same whether the action is brought by the assignor (Wiener King Corporation) or by plaintiff assignee. Under North Carolina law, the assignee “stands in the shoes” of the assignor for all purposes. If defendant had contacts with North Carolina sufficient that jurisdiction in North Carolina would be proper for Wiener King Corporation, defendant cannot complain if an action is brought in this state by the assignee (the plaintiff here).

6. The North Carolina “long-arm” statute, N.C.G.S. 1-75.4, reads in pertinent part, as follows:

A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) or Rule 4(jl) of the Rules of Civil Procedure under any of the following circumstances:
(5) Local Services, Goods or Contracts.

—In any action which:

a. Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to perform services within this State or to pay for services to be performed in this State by the plaintiff; or
b. Arises out of services actually performed for the plaintiff by the defendant within this State, or services actually performed for the defendant by the plaintiff within this State if such performance within this State was authorized or ratified by the defendant; or
c. Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant to deliver or receive within this State, or to ship from this State goods, documents of title, or other things of value; or
d. Relates to goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction; or
e. Relates to goods, documents of title, or other things of value received by the plaintiff in this State from the defendant through a carrier without regard to where delivery to the carrier occurred.

7. Cases arising under the North Carolina long arm statute indicate that the purpose of the statute is to assert in personam jurisdiction over non-resident defendants to the full extent permitted by the due process clause of the United States Constitution. United Buying Group, Inc. v. Coleman, 296 N.C. 510, 251 S.E.2d 610 (1979); First Citizens Bank and Trust Company v. McDaniel, 18 N.C.App. 644, 197 S.E.2d 556 (1973); Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977); Pope v. Pope, 38 N.C.App. 328, 248 S.E.2d 260 (1978). The statute is to be liberally construed in favor of finding personal jurisdiction, subject to the mandates of the due process clause.

8. Applying the pertinent North Carolina statute to the facts of this case, it is clear that North Carolina courts would assert jurisdiction over the franchise agreement at issue. The franchise agreement, by its terms and as performed by franchisor and franchisee, required that the defendant pay for services performed in North Carolina by the franchisor. These services included training, preparation and distribution of advertising and similar materials, and assistance by Wiener King Corporation personnel in the establishment and fine tuning of defendant’s business. The franchise agreement specifically states that it comes into existence in North Carolina when executed by the franchisor and is to be governed by North Carolina law.

9. In Harrelson Rubber Company v. Dixie Tire and Fuels, 302 S.E.2d 919 (N.C.App.1983), the North Carolina Court of Appeals found that personal jurisdiction existed against an out-of-state defendant under N.C.G.S. § 1-75.4(5)(a) and (b) even though the uncontroverted evidence indicated that the defendant had never physically been in North Carolina and all of the defendant’s business dealings with the plaintiff had been in the State of South Carolina. The Harrelson court held that (a) since the franchise agreement was executed in North Carolina; (b) since it became effective when executed by the plaintiff in North Carolina; (c) since the agreement expressly was to be governed by North Carolina law; and (d) since all services rendered by the plaintiff and all goods manufactured and shipped to the defendant came from North Carolina, there were sufficient contacts under the North Carolina statute and the United States Constitution to provide in personam jurisdiction over the defendant.

10. In this case, the franchise agreement specifically stated it was made and éxecuted in North Carolina and was to be governed by North Carolina law. Moreover, the defendant not only agreed to pay for services to be performed in North Carolina by the franchisor under an ongoing ten-year contract, but such services in fact were provided. Further, the defendant personally appeared in North Carolina to take advantage of training provided pursuant to the franchise agreement. For all of these reasons, the court concludes that North Carolina courts would entertain jurisdiction over the defendant.

11. Even if the pertinent state statute provides a basis for in personam jurisdiction, the exercise of such jurisdiction cannot stand, of' course, unless the defendant had sufficient minimum contacts with the foreign state to meet the mandates of the due process clause of the Fourteenth Amendment. Exactly what constitutes sufficient contacts for the purpose of due process has been the basis for frequent litigation at least since International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 955 (1945).

12. In the last term, the Supreme Court addressed the issue of minimum contacts in the franchise agreement milieu. In Burger King Corporation v. Rudzewicz, 471 U.S. —, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), the Supreme Court held that defendant Rudzewicz, who had entered into a franchise agreement similar to the one at issue here, had sufficient contacts with the State of Florida to allow that state to exercise personal jurisdiction over him even though he had never visited that state. The Court held that by entering into a franchise agreement and agreeing to a variety of continuing obligations which were due to the franchisor in Florida, the defendant had directed his activities sufficiently and pur7 posefully to that forum, making him subject to suit there. Id., 471 U.S. at —, 105 S.Ct. at 2186, 85 L.Ed.2d at 545. Factors which the Supreme Court relied upon to find personal jurisdiction included the facts that the franchise agreement itself stated (a) that the contract would become effective when executed in Florida, (b) that it would be deemed made and entered into by the parties in the State of Florida; and (c) that it would be construed under Florida law. Id., 471 U.S. at —, 105 S.Ct. at 2187-90, 85 L.Ed.2d at 546-50. In addition, the Court found that defendant entered into a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts with Burger King in Florida, and Burger King imposed exacting regulations on defendant from its Florida office. These provisions provided a sufficient basis to meet the constitutional test.

13. Since the defendant’s contacts with the State of North Carolina in this case are significantly greater than Mr. Rudzewicz’s contacts with the State of Florida in the Burger King case, the court concludes that North Carolina can constitutionally exercise jurisdiction over defendant. There is no reason to treat the franchise agreement here differently than the one in Burger King. Both of the agreements are complex, multi-year contractual obligations. Both franchise agreements indicate that they would go into effect when signed in the home state of the plaintiff/franchisor; both indicate that the contracts were made in the franchisor’s home state; both recite that the law of the franchisor’s home state would apply in the event of any controversy; and both indicated that regulations will be imposed on the business by the home office of the plaintiff. Thus, from the outset, defendant Brooks, just like defendant Rudzewicz, was given fair notice when he entered into the franchise agreement and accepted'the benefits of the agreement that he might be sued in North Carolina if dispute arose over the contract. The franchise agreement “envision(ed) continuing and wide-reaching contacts” with Wiener King in North Carolina. See Burger King, supra, 471 U.S. at —, 105 S.Ct. at 2185, 85 L.Ed.2d at 545. The franchisor provided its name and trademarks, its expertise in the restaurant business, training, merchandise and equipment and a variety of other services and goods all emanating from its Charlotte, North Carolina, main office. Conversely, franchisee Brooks was required by the agreement to pay moneys to Wiener King Corporation in Charlotte and to provide copies of records to Wiener King’s Charlotte-based operation in a number of particulars relating to the methods by which defendant’s restaurant was to be operated. Not only were such obligations contained in the franchise agreement, but for a number of years the defendant had periodic contacts with Wiener King in Charlotte and sent the prescribed fees, etc., to the Charlotte office until Wiener King Corporation was purchased by Wiener King Systems, located in Pennsylvania. Compare Monroe Hardware Co. v. Robinson, 621 F.Supp. 1166, 1169 (W.D.N.C.1985) (extensive and systematic business relationship involving repeated dealings in North Carolina made or should have made defendant aware that he would be subject to suit in this state).

14. Although, as Burger King makes clear, physical presence is not necessary to establish sufficient due process contacts, here defendant Brooks met with Wiener King corporation officials in Charlotte prior to August, 1976, to discuss his franchise, returned to Charlotte about March, 1977, for at least one and perhaps two weeks of Wiener King training, and may have also attended various conventions and franchise meetings thereafter in Charlotte. Brooks thus availed himself of Wiener King’s Charlotte training facilities and personnel and had additional physical contacts with the forum state beyond those evident in the Burger King case.

15. The defendant contends, however, that since Wiener King Systems is the assignee of Wiener King Corporation and is a Pennsylvania corporation with no office in North Carolina that the State of North Carolina has lost its power to entertain litigation over the franchise agreement. Defendant asserts that after Wiener King Systems became the successor in interest to Wiener King Corporation, defendant’s contacts have been with Wiener King Systems in Pennsylvania and that suit is thus constitutionally impermissible in North Carolina. Defendant’s arguments are not persuasive. The pertinent inquiry is whether defendant’s contacts with the State of North Carolina concerning this contract are sufficient to permit North Carolina courts to exercise jurisdiction over the defendant in a dispute concerning this contract. The court finds that such minimum contacts have been well established. North Carolina’s power to adjudicate disputes with defendant over this contract did not disappear merely because the contract was purchased and assigned to a third party.

Moreover, jurisdiction, once established, did not evaporate simply because the franchisor/assignee moved its office out of North Carolina. Nor did North Carolina’s power over defendant Brooks disappear merely because the contract has been assigned to Wiener King Systems.

16. North Carolina has an interest in seeing that its law is interpreted in North Carolina. There is a further interest in having any litigation over this franchise agreement and similar franchise agreements made with other franchisees being heard in one forum, where consistent applications of North Carolina law may be expected. North Carolina courts, both state and federal, are in a better position than courts in other states to find and apply North Carolina law. It is thus in the public interest that this lawsuit and similar lawsuits be brought in North Carolina.

17. Weighing all the various factors, the court concludes that North Carolina is a fair and appropriate site for litigation over the particular franchise agreement and defendant’s motion to dismiss should be denied.