Myers v. American Dental Ass'n

OPINION OF THE COURT ROSENN, Circuit Judge. This interlocutory appeal poses the question whether a dentist practicing in the Virgin Islands may properly bring suit in that jurisdiction alleging antitrust violations under the Sherman Act, 15 U.S.C. § 1 et seq., and the Virgin Islands Anti-Monopoly Law, 11 V.I.C. § 1501 et seq., against the American Dental Association (ADA) and certain nonresident individual defendants. The plaintiff, Dr. Donald R. Myers, challenges a rule promulgated by the ADA and subsequently implemented by the Virgin Islands Dental Association (VIDA) which requires a dentist who announces an area of specialization to limit his practice to that area. Defendants moved to dismiss the action on several grounds, including lack of personal jurisdiction over the individual defendants and improper venue as to all of the defendants. The district court granted the motion to dismiss as to several of the individual defendants but denied the motion as to ADA and Dr. Joseph P. Cappuccio, a past president of the ADA. The court certified for appeal under 28 U.S.C. § 1292(b) the question of personal jurisdiction and venue and this court granted leave to appeal. We affirm the district court as to ADA but reverse in part as to Dr. Cappuccio. I. ADA, organized as an Illinois not-for-profit corporation, is a professional associa — 719 — tion of dentists. It has its principal place of business in Chicago and an office in Washington, D.C. ADA has no offices or employees in the Virgin Islands. VIDA is a constituent society of the ADA. Although the record is sparse1 as to the precise nature of the relationship between ADA and VIDA, and as to the activities engaged in by the two organizations, several points emerge. Defendants represent that VIDA is largely autonomous from its parent organization. Nonetheless, certain bonds link the two organizations. Under ADA’s by-laws, members of a constituent society such as VIDA must also be dues paying members of ADA. By virtue of that relationship, VIDA was required to adopt the Principles of Ethics and Code of Professional Conduct (Code) promulgated by ADA and was prohibited from adopting any local rules inconsistent with the Code. At the core of this case is dissatisfaction with one of the Code’s provisions. Plaintiff, a dentist licensed in the Virgin Islands, Puerto Rico, and Massachusetts, objects to a provision of the Code which states: A dentist who chooses to announce specialization ... shall limit the practice exclusively to the announced special area(s) of dental practice.... Complaining that practitioners in areas with small populations cannot develop an adequate practice if limited solely to their area of specialization, plaintiff seeks to hold himself out both as a general dentist and as an oral surgeon. He commenced the instant lawsuit in federal district court alleging violations of federal and Virgin Islands antitrust law and seeking injunctive relief, declaratory relief, and damages. Service was accomplished on the individual defendants while they were attending the annual meeting of VIDA in the Virgin Islands. Dr. Cappuccio and the other individual defendants were served under Fed.R.Civ.P. 4(d)(1) by the United States Marshal serving summons and complaint on each of them in the Virgin Islands. Service on ADA was effectuated by similarly serving Dr. Kerr in his capacity as the president of ADA under Fed.R.Civ.P. 4(d)(3). Defendants moved to dismiss, primarily on the ground of improper venue. The district court granted the motion to dismiss, which it treated as a motion for summary judgment, against the individual defendants Pomeranz, Kirshner, Kerr, and Chavoor; the court denied the motion to dismiss with respect to ADA and individual defendant Cappuccio. II. A. On appeal, both Dr. Cappuccio and ADA challenge the district court’s exercise of personal jurisdiction over them. An initial question posed only by ADA’s jurisdictional challenge concerns whether ADA timely raised its defense of lack of personal jurisdiction before the district court. Our review of the pleadings before the district court leads us to conclude that ADA has waived its right to assert the defense. In response to the complaint in this action defendants filed a pleading entitled “Motion to Dismiss for Improper Venue.” The motion requests that the action be dismissed against the individual defendants on three grounds: improper venue, lack of (personal) jurisdiction, and failure to state an actionable claim. As to ADA, however, the motion requests dismissal only on the ground of improper venue. This division of defenses is mirrored in defendants’ memorandum of law supporting their motion to dismiss. In their next pleading to the district court, “Reply Memorandum in Support of Defendant American Dental Association’s Motion to Dismiss for Improper Venue,” defendants again fail to raise the question of lack of personal jurisdiction over ADA. And in their subsequent pleading, “Motion of Defendant American Dental Association to Strike Plaintiff’s Opposition to Defendant’s Motion and Accompanying Affidavits, or, in the Alternative, Response in Support — 720 — of Defendant American Dental Association’s Motion to Dismiss for Improper Venue,” their last pleading prior to the district court’s decision on their motion, defendants make only a passing reference to the issue of personal jurisdiction, a reference which appears to concede jurisdiction with respect to plaintiff’s federal antitrust claim.2 It is only in their motion to have the district court’s decision certified for interlocutory appeal, “Motion of Defendants American Dental Association and Dr. Cappuecio to Amend Order Denying Motions to Dismiss in Order to Certify for Appeal Pursuant to 28 U.S.C. § 1292(b),” that defendants for the first time raise as a defense lack of personal jurisdiction over ADA.3 Plaintiffs did not object, however, to this untimely injection of the jurisdictional defense. The district court thereafter certified, and we granted leave to appeal, the questions of venue and personal jurisdiction. At oral argument we requested the parties to file supplemental briefs addressing whether ADA waived its right to raise the defense of lack of personal jurisdiction. The starting point of our analysis is Fed.R.Civ.P. 12(g) & (h), quoted in the margin.4 The aim of Rule 12 “is to afford an easy method for the presentation of defenses but at the same time prevent their use for purposes of delay.” 2A J. Lucas & J. Moore, Moore’s Federal Practice )[ 12.02, at 2225 (2d ed. 1982). To effectuate that goal, Rule 12(g) requires a party who raises a defense by motion prior to answer to raise all such possible defenses in a single motion. They cannot be raised in a second, pre-answer motion. Rule 12(h) imposes a higher sanction with respect to the failure to raise the specific defenses of lack of personal jurisdiction, improper venue, insufficiency of process, and insufficiency of service of process. If a party files a pre-answer motion but fails to raise one of the defenses enumerated above, the party waives the omitted defense and cannot subsequently raise it in his answer or otherwise. 2A J. Lucas & J. Moore, supra, U 12.23. Defendants maintain that their second pleading, Motion to Strike Plaintiff’s Opposition to Defendants’ Motion and Accompanying Affidavits, or, In the Alternative, Response in Support of American Dental Association’s Motion to Dismiss for Improper Venue, “expressly broadened [their] earlier motion to dismiss to include lack of personal jurisdiction over ADA.” They argue that the second pleading should be treated as amending the initial motion to dismiss and conclude that Rule 12(g) was therefore not violated. Defendants point to several cases which they represent as permitting such amendments. Neifeld v. Steinberg, 438 F.2d 423 (3d Cir.1971); Sunrise Toyota, Ltd. v. Toyota Motor Co., 55 F.R.D. 519 (S.D.N.Y.1972); Roller Derby — 721 — Associates v. Seltzer, 54 F.R.D. 556 (N.D.Ill. 1972); Martin v. Lain Oil & Gas Co., 36 F.Supp. 252 (E.D.Il.1941); Mutual Life Insurance Co. v. Egeline, 30 F.Supp. 738 (N.D. Cal.1939). Defendants’ contention regarding the state of the pleadings is erroneous. As noted above, defendants’ second pleading does not raise the question of lack of personal jurisdiction over ADA with respect to plaintiff’s federal antitrust claims.5 Nor are the cases cited by defendants helpful. All of them involved situations where a pre-answer motion was amended or supplemented prior to argument before the district court. In the present case, by contrast, the defense of personal jurisdiction was not raised before the district court until after argument and after the court rendered its decision on the motion. Defendants also note that plaintiff joined the issue of personal jurisdiction over ADA and did not raise the issue of their waiver of the defense before the district court. Defendants thereby argue, in effect, that plaintiff waived his right to raise the issue of defendants’ waiver. A similar situation was addressed in Pila v. G.R. Leasing & Rental Corp., 551 F.2d 941 (1st Cir.1977). In Pila, the defendant failed to raise before the district court the defense of insufficiency of service of process, which, like the defense of lack of personal jurisdiction, is controlled by the stringent waiver provision of Rule 12(h). On appeal to the First Circuit, the court concluded that under Rule 12(g) & (h) the failure to raise the defense below was “a fundamental and incurable matter,” 551 F.2d at 943, and rejected the defendant’s argument that the objection to the waiver was itself waived because not raised below. Accord, Lockett v. General Finance Loan Co., 623 F.2d 1128, 1132 n. 5 (5th Cir.1980). We believe that the course adopted by Judge Campbell in Pila for defenses that are subject to 12(h) waiver is the proper one. The federal rules single out four defenses which must be raised by the defendant’s initial responsive pleading in order to be preserved. Such a rule reflects a strong policy against tardily raising defenses that go not to the merits of the case but to the legal adequacy of the initial steps taken by the plaintiff in his litigation, namely his service of process on the defendant and his choice of forum for the action. Unless the defendant objects on those grounds at the outset, he forfeits his right later to raise them as a defense. The rule benefits the court as well as the opposing party by requiring a litigant to raise certain technical objections, the basis of which should be apparent from the outset of the action, before the litigation has moved forward. Unlike the situation where a court on its own raises a defense which Rule 12 requires a party to raise in its initial responsive pleading, see Zelson v. Thomforde, 412 F.2d 56 (3d Cir.1969), it may sometimes be appropriate for an appellate court to enforce sua sponte the waiver provisions of Rule 12. In the case at bar, ADA’s motion to dismiss proceeded before the district court solely on the basis that venue was improper. The defense of lack of personal jurisdiction over ADA was raised only after the district court had ruled on defendant’s motion to dismiss. Accordingly, we hold that under Rule 12(g) & (h), notwithstanding plaintiff’s failure to object in the district court, ADA by its failure timely to include in its motion to dismiss an objection to the court’s exercise of personal jurisdiction over it has waived its right to challenge the district court’s exercise of personal jurisdiction. B. Defendants did timely raise the defense of lack of personal jurisdiction over the individual defendants, including Dr. — 722 — Cappuccio, the sole individual defendant not dismissed from the case by the district court. Before this court defendants renew their claim that personal jurisdiction does not exist over Dr. Cappuccio. Reduced to its essence, defendants' argument is that the sole basis for personal jurisdiction over Dr. Cappuccio was the service of process on him during his transitory presence within the forum, a basis which defendants argue is inadequate under current Supreme Court decisions, Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980); WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 580, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); and International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). We find defendants’ argument unpersuasive. Regardless of whether, as defendants maintain, the “power” theory of jurisdiction, which recognizes a state’s power to affect the legal relations of property or persons within its borders, is so discredited that the mere transient physical presence of a defendant within a jurisdiction will not support a court’s exercise of personal jurisdiction over him, we have no difficulty in concluding that on the facts of this case the assertion of personal jurisdiction over Dr. Cappuccio is fully consistent with the “minimum contacts” standard as it has been refined by the Supreme Court.6 Dr. Cappuccio’s presence in the Virgin Islands at the time of service of process was not a mere fortuity. Rather, according to plaintiff’s second affidavit, Dr. Cappuccio had for some eight years been an ADA trustee for the Virgin Islands and as such regularly participated in the annual meetings of VIDA. At these meetings Dr. Cappuccio endeavored to carry out ADA policy with VIDA. Furthermore, it is alleged that Dr. Cappuccio came to the Virgin Islands to urge adoption of the Code of Ethics which is at the center of the dispute underlying this action. Having purposefully entered the district to advance the interests of the ADA in the Virgin Islands, Dr. Cappuccio rendered himself subject to the jurisdiction of the Virgin Islands’ courts at least with respect to disputes related to his presence there. The instant litigation is one such lawsuit. We therefore hold that the district court may assert personal jurisdiction over Dr. Cappuccio, who, properly served, had intentionally entered within its territory for the purpose of engaging in an activity upon which the lawsuit is predicated. III. Defendants also object that venue does not lie in the District of the Virgin Islands. A private antitrust plaintiff bringing federal antitrust claims has at his disposal two statutory sources of venue. The general venue statute, 28 U.S.C. § 1391(b), permits an action not based on diversity of citizenship to be brought either in the judicial district where all defendants reside, or in the district in which the claim arose. In addition, Section 12 of the Clayton Act, 15 U.S.C. § 22, provides that an action against a corporation under the antitrust laws 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.” We proceed to evaluate plaintiff’s choice of venue with respect to his federal claim under these two alternatives. We also evaluate plaintiff’s choice of venue with respect to his Virgin Islands anti-monopoly claim under the relevant insular statute. A. The district court held that venue before it was appropriate under 28 U.S.C. § 1391(b), concluding that “[t]he restraint of trade caused injury in the Virgin Islands and therefore the cause of action arose here.” The court also held that with respect to plaintiff’s claims under Virgin Is — 723 — lands law, venue was appropriate under the court’s Article I jurisdiction. Defendants argue that laying venue in the Virgin Islands for plaintiff’s federal antitrust claim is precluded by the Supreme Court’s decision in Leroy v. Great Western United Corp., 443 U.S. 173, 99 S.Ct. 2710, 61 L.Ed.2d 464 (1979). We agree that venue under section 1391(b) is barred. The Court in Leroy examined the purposes of section 1391(b) and concluded that “[i]n most instances, the purpose of statutorily specified venue is to protect the defendant against the risk that a plaintiff will select an unfair or inconvenient place of trial.” Id. at 183-84, 99 S.Ct. at 2716-2717 (footnote omitted). It therefore rejected the notion that Congress intended in providing for venue “where the claim arose” to lay venue at the place of plaintiff’s residence. Rather, as the Court noted, the provision for venue where a claim arises was added to close a “venue gap” that had sometimes existed when a plaintiff sought to sue multiple defendants who did not reside in the same district. At most, the Court concluded, the broadest interpretation of the language of § 1391(b) that is even arguably acceptable is that in the unusual case in which it is not clear that the claim arose in only one specific district, a plaintiff may choose between those two (or conceivably more) districts that with approximately equal plausibility — in terms of the availability of witnesses, the accessibility of other relevant evidence, and the convenience of the defendant (but not of the plaintiff) — may be assigned as the locus of the claim. Id. at 185, 99 S.Ct. at 2717 (footnote omitted). See also Caribe Trailer Systems, Inc. v. Puerto Rico Maritime Shipping Authority, 475 F.Supp. 711, 719 (D.D.C.1979) (“To hold that a cause of action necessarily arose in the district in which the plaintiff was injured is a ‘simplistic rationale to which antitrust actions are not susceptible.’ ”). In the case at bar the district court erroneously concluded that an antitrust claim, in essence a form of tort alleging business injury, can be brought under section 1391(b) where the injury occurs, i.e. at the plaintiff’s residence. Defendants’ affidavits establish that none of its potential witnesses are located in the Virgin Islands, and that the deliberations that led up to adoption of the Code did not take place there. Under Leroy, Chicago and not the Virgin Islands is the proper situs for a venue based on where the cause of action arose. We therefore conclude that venue does not lie in the Virgin Islands by virtue of 28 U.S.C. § 1391(b). Accordingly, because no other statutory source of venue exists with respect to the federal antitrust claims against Dr. Cappuccio, the district court’s denial of defendants’ motion to dismiss the complaint as to him for improper venue is reversed. As to plaintiff’s Virgin Islands anti-monopoly claims, however, his choice of venue with respect to his claim against Dr. Cappuccio is sustainable. 4 V.I.C. § 78(a) provides in relevant part: “All civil actions shall be initiated in the judicial division where the defendant resides or where the cause of action arose or where the defendant may be served with process.” Thus, the Virgin Islands general venue statute offers the plaintiff the option of laying venue wherever the plaintiff is able to assert jurisdiction with respect to his Virgin Islands anti-monopoly claim. We conclude that exercising its Article I jurisdiction as a local court, the district court can hear plaintiff’s local law claim against Dr. Cappuccio. B. The second statutory source of venue for federal antitrust actions is section 12 of the Clayton Act, 15 U.S.C. § 22. The district court, having found venue under section 1391(b), did not discuss section 22 in its memorandum opinion. Similarly, the parties on appeal did not focus their attention on this section. In dissenting as to this issue, Judge Garth believes it is improper for us to decide whether section 22 provides an alternative basis for venue in this case without remanding to the district court for findings of fact. In this connection, he also asserts the burden of proof of venue is upon the plaintiff. — 724 — (D Preliminarily, we note that subject matter jurisdiction is undisputed in this case, and we have concluded, see supra p. 721, that the court has personal jurisdiction over the American Dental Association. The venue issue, therefore, unlike the jurisdictional issue, is not whether the court has authority to hear the case but simply where the case may be tried.7 Because federal courts are courts of limited jurisdiction, a presumption arises that they are without jurisdiction until the contrary affirmatively appears. Tanzymore v. Bethlehem Steel Corp., 457 F.2d 1320 (3d Cir.1972); United States ex rel. Gittlemacker v. Philadelphia County, 413 F.2d 84 (3d Cir.1969), cert. denied, 396 U.S. 1046, 90 S.Ct. 696, 24 L.Ed.2d 691 (1970). By contrast, a motion to dismiss for improper venue is not an attack on jurisdiction but only an affirmative dilatory defense. Because of the nature of the motion, “it is not necessary [as contrasted with jurisdiction] for the plaintiff to include allegations showing the venue to be proper.” Fed.R.Civ.P. Form 2, Advisory Committee note 3. It logically follows therefore that o'n a motion for dismissal for improper venue under Rule 12 the movant has the burden of proving the affirmative defense asserted by it. United Rubber, Cork, Linoleum & Plastic Workers v. Lee Rubber & Tire Corp., 269 F.Supp. 708, 715 (D.N.J.1967), aff’d, 394 F.2d 362 (3d Cir.), cert. denied, 393 U.S. 835, 89 S.Ct. 108, 21 L.Ed.2d 105 (1968).8 In dissenting, Judge Garth asserts, however, that when a venue objection is raised by the defendant, the plaintiff has the burden to establish proper venue. Although he cites cases to support this view, these cases confuse jurisdiction with venue or offer no reasons to support their position. Aro Manufacturing Co. v. Automobile Body Research Corp., 352 F.2d 400 (1st Cir.1965), cert. denied, 383 U.S. 947, 86 S.Ct. 1199, 16 L.Ed.2d 210 (1966), relied on in the dissent, is a case involving territorial jurisdiction and not venue.9 Cases that hold the burden of establishing venue is upon the plaintiff reach this result without distinguishing between jurisdiction and venue.10 We agree with — 725 — Professor Moore that this view is “unsound” and that the defendant should ordinarily bear the burden of showing improper venue in connection with a motion to dismiss. See 1 J. Moore, Moore’s Federal Practice H 0.140[1], at 1319-20 (2d ed.1982).11 The special antitrust venue statute, 15 U.S.C. § 22, provides that in an action against a corporation under the antitrust laws, venue will lie, inter alia, in any district where a corporation “transacts business” or “may be found.” 12 The motion to dismiss for improper venue was predicated on both this section and on section 1391(b).13 Judge Garth asserts that both in the district court and on appeal the plaintiff resisted this challenge to venue in the Virgin Islands on the basis of section 1391(b) and that language of section 22 relating to being “found” in the Virgin Islands but not on the basis that ADA “transacts business” in the Virgin Islands. There is no doubt, however, that all of section 22 was brought to the attention of the district court. Defendant’s reply memorandum, in support of its motion in the district court to dismiss for improper venue, specifically noted that “[t]he primary statute governing venue in federal antitrust matters” is 15 U.S.C. § 22. Defendant devoted considerable attention in its written brief to the district court to an analysis of the facts and law in support of its contention “that ADA does not transact business in the Virgin Islands.” Although the district court concluded erroneously that venue was proper under section 1391(b), and Myers naturally focused on vindicating the district court’s view on appeal, we are not precluded from affirming the order of the district court if it has reached the right result, although for a wrong reason.14 Because the burden is — 726 — upon the movant (and not, as the dissent repeatedly urges, upon the plaintiff) to show that venue is improper under any permissible theory, we must consider whether the district court’s decision in plaintiff’s favor may be affirmed on the ground that the ADA transacted business in the Virgin Islands. (2) The Supreme Court first construed the phrase “transacts business” of 15 U.S.C. § 22 in Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927). As the Court noted, the purpose of the statute was to expand the fora in which venue would lie for antitrust actions by providing for venue not only in those jurisdictions where the corporation’s continuous presence would support a conclusion that it was “found” there, but also in those districts where “in fact, in the ordinary and usual sense, it ‘transacts business’ therein of any substantial character.” Id. at 373, 47 S.Ct. at 403. This construction, the Court observed in United States v. Scophony Corp. of America, 333 U.S. 795, 68 S.Ct. 855, 92 L.Ed. 1091 (1948), “gave the words ‘transacts business’ a much broader meaning for establishing venue than the concept of ‘carrying on business’ denoted by ‘found’ under the preexisting statute and decisions.” Id. at 807, 68 S.Ct. at 861. Eastman Kodak and Scophony were decided in the context of suits against ongoing businesses organized for profit. The instant litigation, however, involves a suit against a not-for-profit professional membership organization. We must therefore decide under what circumstances such an organization may be said to “transact business” so as to render it subject to the venue provision of the Clayton Act. Professional associations are commonly devoted to the advancement and enforcement of standards of conduct and competence for their members. Common sense suggests that such an organization is transacting business when it engages in activities on a significant scale which further the association’s purposes and objectives. In particular, when a national professional organization, such as the American Dental Association, polices the qualifications of members residing in a judicial district, or sets standards which it attempts to enforce that directly pertain to the dental practice of its members and the treatment of their patients, the organization’s activities should provide a basis for venue in the district in which they occur. A number of courts have grappled with the applicability of the “transacts business” component of 15 U.S.C. § 22 to various membership organizations. The decisions have not been uniform in approach or result.15 Nonetheless, a review of the deci — 727 — sions reveals that a number of courts have found venue to be proper on the basis of conduct by the organization intended to implement its professional objectives. For example, in Bogus v. American Speech & Hearing Association, 389 F.Supp. 327 (E.D. Pa.1975), rev’d on other grounds, 582 F.2d 277 (3d Cir.1978), the court held that the defendant association transacted business in the district by virtue of its practice of accrediting its members for practice, its evaluation of academic and clinical service programs, and its holding of accreditation workshops. The workshops, certification, and accreditation are the means by which defendant attempts to fulfill its goal of maintaining high standards for professionals providing speech and hearing services and are sufficient to meet the venue requirement that defendant “transacts business” in this District. Id. at 330 (footnote omitted). The court reached its conclusion notwithstanding that the defendant had represented that only 1.4% of its current membership resided in the district, and only one representative of any of its accreditation units had been in the district in the last four years. Id. at 329. Similarly, in Levin v. Joint Commission on Accreditation of Hospitals, 354 F.2d 515 (D.C.Cir.1965), the court of appeals reversed the district court’s dismissal for improper venue. The court concluded that whether the Joint Commission transacted business in the District of Columbia was not to be determined by a comparison of the volume of its activities in one place with its total operations — “considerably less than one percent of the Joint Commission’s total activities” took place in the District of Columbia — but upon whether the Commission’s field inspection of hospitals in the district furthered its objective of establishing and enforcing standards for hospital operation. See also Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Association, 344 F.2d 860, 865 (9th Cir.1965) (activity of the association’s representatives in implementing in California licensing standards that were established in Tennessee for the raising of horses contributed to a finding that the defendant association transacted business so as to be subject to suit in California); Sherman College of Straight Chiropractic v. American Chiropractic Association, 534 F.Supp. 438 (N.D. Ga.1982) (sponsorship of three or four seminars over a five-year period to fulfill goal of maintaining high standards for professionals constitutes transacting business under 15 U.S.C. § 22).16 Conversely, some of the cases in which membership organizations were held not to be transacting business in the district in which their members resided emphasize that the defendant organizations exercised little or no control over the activity of their members in the forum district. Thus in Midwest Fur Producers Association v. Mutation Mink Breeders Association, 102 F.Supp. 649 (D.Minn.1951), the activity of the trade association sued by plaintiff was primarily limited to contracting with magazines of national circulation to place advertisements and to contracting to sell members’ products for a set commission. All of the association’s activity was conducted outside of the forum state, the sole connection with it being the benefits that accrued to — 728 — the members. And in Friends of Animals, Inc. v. American Veterinary Medical Association, 310 F.Supp. 620 (S.D.N.Y.1970), the court refused to ascribe to a national association the membership activities of a constituent local society in determining whether the national transacted business in the district where members of the local society were not required to be members of the national and the local society was not required by the national to adopt particular bylaws. The activities of the national itself in the district were found to be so insubstantial as not to render it amenable to suit there. In the face of a Congressional statute that has expanded the venue provisions under the antitrust laws, the dissent has laboriously endeavored to construct a theory that would inexplicably undo Congress’ liberalizing intentions by narrowly construing the “transacts business” language of the statute. Judge Garth asserts that in the not-for-profit associational context, the cases that have held the association transacted business within the meaning of section 22 did so on the basis of facts “which established a continuing licensing, accreditation or qualitative evaluation function on the part of the Association.” Cone. & diss. op. at 740 (emphasis in original). We believe such a standard is neither soundly conceived nor necessarily supported by an objective reading of the cases. We fail to see why the statutory phrase “transacts business” would restrict venue over nonprofit corporate businesses to the performance of a “licensing, accreditation or qualitative evaluation function.” It is true that in some cases where venue was held to be proper, the defendant association has been involved in accreditation or evaluation. See, e.g., Levin v. Joint Commission on Accreditation of Hospitals, supra, 354 F.2d at 517. But we are not convinced that activities of this nature are a prerequisite to a finding that the association transacts business. Indeed, in the Levin case, supra, the court’s decision that venue was proper in the District of Columbia did not turn on the specific nature of the Commission’s business (i.e., accreditation). The relevant factor was that the field inspections performed in the district were “an essential aspect” of the Commission’s business and furthered its purposes. Id. at 517. Likewise, in Courtesy Chevrolet, supra, relied on by the dissent, the court’s decision was not predicated upon the registration activity of the Tennessee Walking Horse Association, but upon whether the totality of acts gave evidence of activity in the district implementing “an essential objective of the Association.” 344 F.2d at 865. Health Care Equalization Committee of the Iowa Chiropractic Society v. Iowa Medical Society, 501 F.Supp. 970 (S.D.Iowa 1980), is also cited by the dissent to support its theory. But we believe this case actually supports the majority’s construction of section 22. In Health Care Equalization Committee, the court held that venue in Iowa was proper under 15 U.S.C. § 22 as to defendant American Medical Association, even though the court found that AMA itself was not involved in accreditation or evaluation. The court’s view was that various activities of the AMA’s Committee on Quackery in the forum state constituted the transacting of business of “substantial character” within the district in the “ordinary and usual sense. The nature of the contacts, their direct relationship to plaintiff’s cause of action, and the fact that it is alleged the AMA made the practice of chiropractic a target, made it reasonable to subject the AMA to suit here” by the Chiropractic Society. Id. at 983 (citations omitted). Thus, these cases do not support the theory that an Association “transacts business” only when engaged in “a continuing licensing, accreditation, or qualitative evaluation function.” Cone. & diss. op. at 740 (emphasis in original). On the contrary, these cases reflect a common sense construction of the phrase “transacts business” predicated upon an analysis of the “essential objective” of the association and the occurrence — 729 — of business activity in furtherance of that objective.17 Judge Garth’s theory of “transacting business” not only narrows Congress’ expansive policy for venue in antitrust cases, but would render the proceedings judicially inefficient and costly to the parties. He would deny a readily available forum to an aggrieved citizen of the Virgin Islands in a court that clearly has jurisdiction over the parties and the subject matter. The plaintiff, on basically the same operative facts, would be compelled to proceed on his local anti-monopoly claims in the Virgin Islands and on his federal claims separately in Illinois, a district far removed from the place of ADA’s legislative target — certain dentists practicing in the Virgin Islands. This is a case touching on the livelihood of the dentists in the Virgin Islands where the plaintiff is not engaged in forum shopping. There is no sound reason, when the local court has jurisdiction over the parties and the subject matter, to split the trial proceedings into two and try one in a distant point on the mainland where the local community can learn of it only by report. “There is a local interest in having localized controversies decided at home.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1946). The dissent also urges that “[i]n the section 22 context, ... the district court’s failure to furnish findings or reasons is fatal.” Cone, and diss. op. at 738 (footnote omitted). For the proposition, it cites to FTC v. British Oxygen Co., 529 F.2d 196, 200 (3d Cir.1976) (in banc).18 British Oxygen, however, involved an application for an interlocutory injunction where Fed. R.Civ.P. 52(a) specifically requires the trial court to set forth the findings of fact and conclusions of law constituting the grounds of its action. Rule 52(a), however, also provides that these requirements “are unnecessary on decisions of motions under Rules 12 or 56.” Rule 12(b)(3) involves motions raising the defense of improper venue. Therefore, findings of fact are not required in this situation. See Mitchell v. Occidental Insurance, Medicare, 619 F.2d 28, 30 (9th Cir.1980); B.J. Semel Associates, Inc. v. United Fireworks Manufacturing Co., 355 F.2d 827, 830 n. 3 (D.C.Cir.1965).19 Thus, — 730 — the suggestion of Judge Garth that “at the very least, a remand to the district court to correct this fault, is essential,” cone. & diss. op. at 738, is without foundation. Not only does the Rule not require a remand, but no purpose would be served by so doing when, as here, the facts are in affidavit form and there is no controversy concerning the facts applicable to section 22.20 (3) Against this background, we conclude that although the record before us is sparse, it supports the conclusion that the activity undertaken by ADA to bring about acceptance of and compliance with its professional code of ethics in the Virgin Islands constitutes the transaction of business of sufficiently substantial character to support the plaintiff’s choice of venue there. Plaintiff’s affidavits establish that certain officers of ADA came to the Virgin Islands to attend the business meeting of VIDA, among other reasons, to ensure that VIDA adopted ADA’s newly promulgated Code of Professional Conduct. Moreover, as noted above plaintiff-affiant has averred that as ADA trustee of the Virgin Islands and Puerto Rico, Dr. Cappuccio regularly participated in VIDA’s annual meetings for eight consecutive years to ensure that VIDA took no action inconsistent with ADA policy. The maintenance of high professional standards within the dental profession by adopting and enforcing a code of conduct is at the heart of the type of business transacted by this professional membership organization. Plaintiff claims that the damaging impact of this objective was directly felt in the Virgin Islands and was visited upon him personally there. The plaintiff was a direct target of ADA’s Code of Conduct. These allegations are undisputed. We therefore hold that ADA’s direct, continual supervision in the Virgin Islands of VIDA to ensure enforcement of ADA’s professional Code made it reasonable to subject ADA to plaintiff’s choice of venue in the District of the Virgin Islands with respect to plaintiff’s federal antitrust claim. We also hold that, — 731 — as with Dr. Cappuccio, plaintiffs choice of venue is proper with respect to his Virgin Islands anti-monopoly claim against ADA. IV. In summary, the order of the district court denying defendants’ motion to dismiss the complaint as to Dr. Cappuccio will be reversed as to the federal antitrust claim and will be affirmed as to the Virgin Islands anti-monopoly claim. The order will be affirmed as to the district court’s denial of the motion to dismiss ADA as a defendant for improper venue. The case will be remanded to the district court for further proceedings not inconsistent with this opinion. Footnotes [1] Defendants have moved to strike certain portions of plaintiff’s brief on the ground that it raises certain matters not of record. By separate order we grant defendants’ motion. [2] In a section of the Memorandum entitled “Venue Is Not Proper Under Local Law” defendants observe, “Plaintiff cannot even assert jurisdiction absent his federal claim.” [3] Defendants attempted to anticipate objections to their tardiness in raising the jurisdictional question by pointing out in their motion that “the question of venue is interwoven with that of personal jurisdiction. ... It should be emphasized that the motions of ADA and Dr. Cappuccio are for dismissal for improper venue and lack of jurisdiction.” We reject as bootstrap their representation that the motions pertaining to venue expressly or implicitly raised the issue of jurisdiction. [4] Fed.R.Civ.P. 12(g) & (h) provides in pertinent part: (g) Consolidation of Defenses in Motion. A party who makes a motion under this rule may join with it any other motions herein provided for and then available to him. If a party makes a motion under this rule but omits therefrom any defense or objection then available to him which this rule permits to be raised by motion, he shall not thereafter make a motion based on the defense or objection so omitted, except a motion as provided in subdivision (h)(2) hereof on any of the grounds there stated. (h) Waiver or Preservation of Certain Defenses. (1) A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course. [5] In their supplemental brief, filed at this court’s request, defendants cite to the district court’s opinion appearing at pages 68 and 76-78 of the appendix as raising the defense of lack of personal jurisdiction over ADA. Those citations are unavailing. The first involves a plain reference not to ADA but to the individual defendants; the second incorporates a section in which defendants concede that personal jurisdiction exists with respect to plaintiff’s federal antitrust claim. See supra note 2. [6] We therefore need not decide whether International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny would ever bar a state’s exercise of jurisdiction over a transient defendant where jurisdiction has been initiated by proper service of process upon him in its territory and a reasonable opportunity to be heard. [7] In an effort to find some basis for imposing the burden on the plaintiff to prove proper venue, the dissent in this case attempts to analogize venue with jurisdiction. See cone. & diss. op. at 732. But the cases reiterate that “[¡jurisdiction and venue are not to be confused. The former connotes the power to decide a case upon the merits; the latter connotes locality — the place where the suit should be heard.” Standard Stoker Co. v. Lower, 46 F.2d 678, 683 (D.Md.1931). Stated in other terms, venue concerns not the authority of the court to hear and adjudicate the case but relates to the convenience of the litigants, Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 324 U.S. 635, 639, 65 S.Ct. 821, 823, 89 L.Ed. 1241 (1945), and to the proper place where the power to adjudicate may be exercised. See United States ex rel. Rudick v. Laird, 412 F.2d 16, 20 (2d Cir.), cert. denied, 396 U.S. 918, 90 S.Ct. 244, 24 L.Ed.2d 197 (1969); Farmers Elevator Mutual Insurance Co. v. Austad & Sons, Inc., 343 F.2d 7, 11 (8th Cir.1965). See generally C. Wright, Handbook of the Law of Federal Courts § 42, at 149 (2d ed. 1970). As Judge Craven has noted, “The distinction between jurisdiction and venue is of hornbook importance and cannot be overemphasized.” Wheatley v. Phillips, 228 F.Supp. 439, 440 (W.D.N.C.1964). Any attempt, therefore, to shift the burden of proof to the plaintiff on this basis is without merit or authority. [8] See also United States v. Orshek, 164 F.2d 741, 742 (8th Cir.1947); United States v. Aetna Casualty & Surety Co., 38 F.R.D. 418, 421 (N.D.Cal.1965); Goldberg v. Wharf Constructors, 209 F.Supp. 499, 505 (N.D.Ala.1962). [9] Likewise, Bartholomew v. Virginia Chiropractic Ass’n, 612 F.2d 812 (4th Cir. 1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980), cited by the dissent, also relies, although indirectly, on Aro. Grappone, Inc. v. Subaru of America, Inc., 403 F.Supp. 123 (D.N.H.1975), directly relies on Aro, the jurisdiction case. [10] There is no doubt that when a defendant’s motion to dismiss raises a question concerning the court’s power to entertain the action (i.e., jurisdiction), the burden of proof with respect to that issue falls on the plaintiff. See, e.g., McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936) (jurisdictional amount); Adams v. American Bar Association, 400 F.Supp. 219, 222 (E.D.Pa.1975) (service of process). But with those dilatory defenses that do not concern the court’s authority to adjudicate, the defendant bears the burden of proof. This is true with respect to motions to dismiss for forum non conveniens, see Aigner v. Bell Helicopters, Inc., 86 F.R.D. 532, 543 (N.D.Ill.1980); — 725 — failure to join an indispensable party, see Meyerding v. Villaume, 20 F.R.D. 151, 153 (D.Minn. 1957); failure to exhaust remedies, see Dorn v. Meyers Parking System, 395 F.Supp. 779, 786 (E.D.Pa.1975); and failure to state a claim, see Canty v. City of Richmond, Virginia, Police Department, 383 F.Supp. 1396, 1402 (E.D.Va. 1974), aff’d, 526 F.2d 587 (4th Cir.1975), cert. denied, 423 U.S. 1062, 96 S.Ct. 802, 46 L.Ed.2d 654 (1976). [11] Judge Garth, citing to 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3826 (1976), urges that the “better view” is that “in venue, as in jurisdiction, the plaintiff must bear the burden of proving proper venue.” Cone. & Diss. op. at 733. The “better view” referred to in Wright, Miller & Cooper, however, is a quotation from a district court opinion, Ryan v. Glenn, 52 F.R.D. 185, 192 (N.D.Miss.1971), and that opinion, like other cases relied on by the dissent, offers no reasons to support its view. [12] 15 U.S.C. § 22 provides in pertinent part: “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 .... ” ADA is neither an inhabitant of, nor is found in, the Virgin Islands. A corporation is an inhabitant of its state of incorporation, in this case Illinois. Amateur-Wholesale Elecs, v. R.L. Drake Co., 515 F.Supp. 580, 583 (S.D.Fla.1981). And to be found in a district, a corporation must by the carrying on of business by its officers or agents be present there in a continuous and systematic way. Grappone, Inc. v. Subaru of America, Inc., 403 F.Supp. 123, 128 (D.N.H.1975). ADA’s activities in the Virgin Islands do not rise to this level. To be “found” within the jurisdiction requires more contact than to transact business. Stern Fish Co. v. Century Seafoods, Inc., 254 F.Supp. 151 (E.D.Pa.1966); Amateur-Wholesale Elecs, v. R.L. Drake Co., 515 F.Supp. 580 (S.D.Fla.1981). The “transacts business” term in the venue provision of the Clayton Act has a much broader meaning than the “doing business” language of the general venue statute. Sherman College v. American Chiropractors Ass’n, 534 F.Supp. 438, 440 (N.D.Ga.1982). We note in passing that ADA, in its motion to dismiss, did not object to service of process on the basis that it violated 15 U.S.C. § 22 for failure to serve in Chicago or wherever ADA “may be found.” [13] In its memorandum opinion dismissing the ADA’s venue motion, the district court stated: “The ADA and VIDA contend that venue cannot lie in the Virgin Islands in the case at bar. They base their assertions on 15 U.S.C. § 22 and 28 U.S.C. § 1391(b).” (Footnotes omitted.) [14] “In the review of judicial proceedings the rule is settled that if the decision below is correct, it must be affirmed, although the lower court relied upon a wrong ground or gave a wrong reason.” Helvering v. Gowran, 302 U.S. 238, 245, 58 S.Ct. 154, 157, 82 L.Ed. 224 (1937). See also Bernitsky v. United States, 620 F.2d 948, 950 (3d Cir.) (“[I]t is well established that we are free to affirm the judgment of the district court on any basis which finds sufficient — 726 — support in the record.”), cert. denied, 449 U.S. 870, 101 S.Ct. 208, 66 L.Ed.2d 90 (1980); PAAC v. Rizzo, 502 F.2d 306, 308 n. 1 (3d Cir.1974), cert. denied, 419 U.S. 1108, 95 S.Ct. 780, 42 L.Ed.2d 804 (1975). [15] Compare Levin v. Joint Comm. on Accreditation of Hosps., 354 F.2d 515 (D.C.Cir.1965); Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Ass’n, 344 F.2d 860 (9th Cir.1965); Sherman College of Straight Chiropractic v. American Chiropractic Ass’n, 534 F.Supp. 438 (N.D.Ga.1982); Health Care Equalization Comm. v. Iowa Medical Soc’y, 501 F.Supp. 970 (S.D.Iowa 1980); Bartholomew v. Virginia Chiropractors Ass’n, 451 F.Supp. 624 (W.D.Va.1978), rev’d, 612 F.2d 812 (4th Cir.1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980); Bogus v. American Speech & Hearing Ass’n, 389 F.Supp. 327 (E.D.Pa.1975), rev’d on other grounds, 582 F.2d 277 (3d Cir.1978) (membership organizations held to be transacting business within district sufficiently to support venue under 15 U.S.C. § 22), with Bartholomew v. Virginia Chiropractors Ass’n, 612 F.2d 812 (4th Cir.1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980); cf. Golf City, Inc. v. Wilson Sporting Goods Co., 555 F.2d 426 (5th Cir.1977); Academy of Ambulatory Foot Surgery v. American Podiatry Ass’n, 516 F.Supp. 378 (S.D.N.Y.1981); Friends of Animals, Inc. v. American Veterinary Medical Ass’n, 310 F.Supp. 620 (S.D.N.Y.1970); Wentling v. Popular Science Publishing Co., 176 F.Supp. 652 (M.D.Pa.1959); Elizabeth Hospital, Inc. v. Richardson, 167 F.Supp. 155 (W.D.Ark. 1958), aff’d, 269 F.2d 167 (8th Cir.), cert. denied, 361 U.S. 884, 80 S.Ct. 155, 4 L.Ed.2d 120 (1959); Midwest Fur Producers Ass’n v. Mutation Mink Breeders Ass’n, 102 F.Supp. 649 (D.Minn.1951) (membership organizations held not to be transacting business under 15 U.S.C. § 22). [16] Not all courts have embraced this analysis. See, e.g., Bartholomew v. Virginia Chiropractors Ass’n, 612 F.2d 812 (4th Cir.1979), cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980); Academy of Ambulatory Foot Surgery v. American Podiatry Ass’n, 516 F.Supp. 378 (S.D.N.Y.1981). To the extent that they are not factually distinguishable from the case at bar we find these latter decisions unpersuasive. Both evaluate the activity of membership organizations inter alia by reference to the amount of commercial activity engaged in by the organizations, and by comparing the relative number of members within the district to the organization’s total membership. Whether a professional membership organization is transacting business in a district should be determined with reference to its purposes — including the assurance of professional standards of conduct — and not by reference to commercial standards. And this court has in another context highlighted the fallacy of using a ratio test to evaluate the substantiality of a national corporation’s activity in a particular district. See Hendrickson v. Reg O Co., 657 F.2d 9, 12-13 (3d Cir.1981). [17] In such a construction we are reminded that the phrase “is not to be given a technical or legalistic meaning.” Stern Fish Co. v. Century Seafoods, Inc., 254 F.Supp. 151, 153 (E.D.Pa.1966). [18] Of the other cases cited in the dissent, three involved trial by the court on the merits without a jury. United States v. Ohio Barge Lines, Inc., 607 F.2d 624 (3d Cir.1979); Pepi, Inc. v. Helcar Corp., 458 F.2d 1062 (3d Cir.1972); O’Neill v. United States, 411 F.2d 139 (3d Cir.1969). A fourth, Kreda v. Rush, 550 F.2d 888 (3d Cir.1977), involved a motion to disqualify counsel for conflict of interest. None of the cases involved a motion to dismiss for improper venue under Fed.R.Civ.P. 12(b). [19] Although the dissent acknowledges that it can find no case to support its position that the district court must find facts or discuss its reasons for its choice of section 22 venue, it suggests that “in analogous circumstances this court has uniformly imposed such a requirement so that appellate review would be possible.” Cone. & diss. op. at 736. We disagree. First, unlike the cases to which Judge Garth refers, there is no “factual controversy” here about the facts relevant to venue. ADA itself provided detailed affidavits describing its activities in the forum and did not dispute the affidavits Myers offered. Second, the administrative agency cases to which Judge Garth points, unlike the procedural dispute now before us, were resolved on the merits by the agencies involved. Furthermore, in administrative agency cases we must, under our scope of appellate review, ascertain whether substantial evidence supports the agency’s findings, Cotter v. Harris, 642 F.2d 700 (3d Cir.1981) or, with respect to certain agencies, whether the agency’s review board has discharged its obligation to determine whether the administrative law judge’s initial decision was supported by substantial evidence, Sun Shipbuilding & Dry Dock Co. v. McCabe, 593 F.2d 234 (3d Cir.1979). With respect to disability matters, we have noted that both the Administrative Procedure Act governing administrative adjudication generally and regulations applicable to decisions of ALJ’s in disability matters “require that the administrative law judge specify the reasons or basis for the decision.” Cotter v. Harris, supra, 642 F.2d at 705. The dissent also points to cases dismissed under Rule 37 or settled and dismissed under Rule 23 of the Federal Rules of Civil Procedure. These cases also involve a final determination of the disputes and not a purely procedural issue as we have here. For instance, in Quality Prefabrication, Inc. v. Daniel J. Keating Co., — 730 — 675 F.2d 77, 81 (3d Cir.1982), we required some articulation on the record of the bases for the district court’s decision to dismiss a complaint with prejudice under Fed.R.Civ.P. 37(b) for failure to provide discovery. It was the severity of the “ultimate sanction” of a dismissal with prejudice that led us to require a statement of reasons. Similarly, we have required such an explanation when a district court approves a class action settlement and dismisses the complaint, see Bryan v. Pittsburgh Plate Glass Co., 494 F.2d 799, 804 (3d Cir.), cert. denied, 419 U.S. 900, 95 S.Ct. 184, 42 L.Ed.2d 146 (1974). In these cases, a statement of reasons was deemed essential to permit us to review a final order denying the plaintiff his day in court. By contrast, the instant case involves an interlocutory appeal denying a motion to dismiss for improper venue and the effect of this decision is hardly of the same consequence. The dissent also discusses Interspace Corp. v. City of Philadelphia, 438 F.2d 401, 404 (3d Cir.1971), but glosses over the precise holding of that case: that a statement of reasons is not required when a district court rules on a motion for class certification under Rule 23. Similarly, in Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756 (3d Cir.1973), involving a motion under 28 U.S.C. § 1404(a) for transfer of venue, although we advised that “it would be helpful” if the district court provided a statement of explanation, we declined to require such a statement. Furthermore, in Plum Tree, venue was possible in either of two jurisdictions, and a statement of reasons was helpful in reviewing the decision to transfer the case to the alternate forum. No transfer is involved here. Finally, Allis Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d 360 (3d Cir.1975), cited by the dissent, involves the court’s appellate jurisdiction. We required reasons for a district court’s Rule 54(b) certification in order to ascertain whether the appeal before us was from a final or interlocutory order and thus whether we had jurisdiction. We considered that a statement of reasons was vital for a jurisdictional determination. Here, we have no question of jurisdiction. [20] Judge Garth would require “an extensive factual basis” for the venue determination. Cone. & diss. op. at 742. No authority is offered for such a position. Rather, courts have stated that “only one act may be enough to fulfill the venue requirements of the statute.” Courtesy Chevrolet, Inc. v. Tennessee Walking Horse Ass’n, 344 F.2d 860, 865 (9th Cir.1965). See Golf City, Inc. v. Wilson Sporting Goods Co., 555 F.2d 426, 437 (5th Cir.1977) (“Certainly the conducting of a golf tournament by a corporation in a particular judicial district would constitute the transaction of business in that district within the meaning of the Clayton Act.”) (dictum). The extensiveness of the factual record is unimportant if the substantial character of the transaction is established.