Hughes v. AH Robins Co., Inc.Hughes v. AH Robins Co., Inc.
Appellant seeks reversal of an order of the Superior Court dismissing her complaint for lack of
in personam
jurisdiction, and alternatively on the ground of
forum non conveniens.
Because the non-resident defendant’s contacts with the District of Columbia were not continuous and substantial, we hold that the Due Process Clause
I
Patricia Hughes, a Virginia resident who is employed in the District of Columbia, brought suit in the Superior Court of the District of Columbia against A.H. Robins, Inc. (“Robins”), a manufacturer of pharmaceutical products. Her complaint stated that in May 1973 she visited her physician in his Virginia office, where he inserted into her a Daikon Shield, an intrauterine device manufactured and sold by Robins. Four months later the physician removed the Daikon Shield from Mrs. Hughes, again in his Virginia office. Mrs. Hughes alleged that, as a consequence of using the Daikon Shield, she developed severe medical problems which left her unable to have children. The complaint sought compensatory and punitive damages from Robins in the sum of two million dollars.
Robins is a Virginia corporation with its principal place of business in Richmond, Virginia. It is the twelfth largest pharmaceutical company in the United States and sells its products throughout this country as well as abroad. Robins is not licensed to do business in the District of Columbia, and it does not maintain a registered agent in the District to accept service of process. It has no sales office in the District and makes no direct sales here; rather, it sells its products only to wholesalers outside the District. 1 It does, however, send representatives into the District once every two or three weeks to promote its products. 2 In addition, Robins advertises on District of Columbia television stations and in periodicals and newspapers that are published and circulated in the District of Columbia. Robins derives some economic benefit from the sale of its products in the District of Columbia; in 1982 its sales in the District amounted to $3,236,800, about 0.7 percent of its total sales worldwide.
Robins also maintains an office in the District of Columbia, staffed by a biologist and a secretary, for the purpose of monitoring congressional legislation affecting the pharmaceutical industry. In the past Robins has negotiated some contracts with the federal government, but it has done so outside of the District.
In its answer to the complaint, Robins asserted in part that the court lacked in personam jurisdiction over it. After filing the answer, it also filed a motion to dismiss Mrs. Hughes’ complaint for lack of in per-sonam jurisdiction or, alternatively, on the ground of forum non conveniens. Mrs. Hughes opposed the motion, arguing that Robins was “doing business” within the meaning of D.C.Code § 13-334(a) (1981), and therefore was subject to the jurisdiction of the District of Columbia courts. In addition, she maintained that dismissal on forum non conveniens grounds was unwarranted because no other forum was available, the Virginia statute of limitations having expired.
After a hearing, the trial court took the motion to dismiss under advisement. A week later it entered an order granting the motion on both alternative grounds. Mrs. Hughes now appeals from that order.
II
The constitutional doctrine of due process limits the power of a state court to assert
in personam
jurisdiction over a nonresident defendant.
Pennoyer v. Neff,
95 U.S. (5 Otto) 714,
The first of these burdens has lost much of its significance over time because “modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity.”
McGee v. International Life Insurance Co.,
The Due Process Clause, by ensuring the “orderly administration of the laws,” International Shoe Co. v. Washington,326 U.S. at 319 [66 S.Ct. at 159 ], gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.
World-Wide Volkswagen Corp. v. Woodson,
The . issue of whether a state court may assert
in personam
jurisdiction over a foreign corporation, in particular, has been a troublesome one for many decades. Originally, corporations were deemed artificial persons which existed and could be sued only in the state where they were created.
Bank of Augusta v. Earle,
The first such theory was that the corporation gave its implied consent to be sued in the forum state by conducting its business there.
E.g., St. Clair v. Cox,
The second theory developed by the courts deemed a corporation “present” within the forum for jurisdictional purposes whenever it carried on business there.
E.g., International Harvester Co. v. Kentucky,
In general, “contacts” are those activities of a defendant which form a nexus between it and the forum state.
4
Common among the types of corporate business activities which constitute contacts is the solicitation of sales by corporate agents in the forum.
5
Advertising in the forum
6
and the derivation of significant revenue from the forum
7
are also factors which must be weighed in any assessment of the defendant’s contacts. In addition, as the Supreme Court has recently observed, the “plaintiff's residence in the forum may, because of defendant’s relationship with the plaintiff, enhance defendant’s contacts with the forum.”
Keeton v. Hustler Magazine, Inc.,
— U.S. -,
The weight accorded to these contacts varies greatly with the circumstances of each case. As the Supreme Court explained in
International Shoe,
there are two fundamentally different types of contacts: those which are related to the cause of action, and those which are not. This distinction is critical because contacts of the former kind are entitled to be given substantially more weight; even one such contact may be sufficient to support
in personam
jurisdiction over a non-resident defendant.
[T]o the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations, and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.
Id.
at 319,
In sum, whether a court may constitutionally assert
in personam
jurisdiction over a non-resident defendant depends upon “the relationship among the defendant, the forum, and the litigation....”
Shaffer v. Heitner, supra,
[T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.
World-Wide Volkswagen Corp. v. Woodson, supra,
Ill
In this case the cause of action is not related in any way to the activities carried on by the non-resident defendant corporation in the District of Columbia. Therefore, the exercise of
in personam
jurisdiction over the defendant Robins would violate the Due Process Clause unless Robins’ activities in the District are “continuous” and “substantial.” There are only two Su
In
Perkins
the Court held that the Due Process Clause did not prohibit the exercise of
in personam
jurisdiction by an Ohio court over a Philippine corporation which had been “carrying on in Ohio a continuous and systematic, but limited, part of its general business.”
In the more recent case of Helicópteros Nacionales de Colombia, S.A. v. Hall, supra, the Court held that the Due Process Clause prohibited the exercise of in per-sonam jurisdiction by a Texas court over a Colombian corporation. The case was a wrongful death action arising from a helicopter crash in Peru unrelated to the defendant’s activities in Texas. The plaintiffs, representatives of the four crash victims, as well as the victims themselves, were all non-residents of Texas.
After reciting the facts of Perkins v. Benguet Consolidated Mining Co., supra, the Court described the contacts of the corporate defendant with Texas. It noted that the defendant was not licensed to do business in Texas and had no place of business there. The defendant’s only contacts with Texas had consisted of sending its chief executive officer to negotiate a contract in Houston, accepting checks drawn on a Houston bank, purchasing equipment from a Fort Worth manufacturer, and sending its personnel to that manufacturer’s facilities in Fort Worth for training.
The Court then considered each contact in turn. First, it concluded that the one trip to Texas for the purpose of negotiating a contract could nqt be regarded as “conti
The instant case falls somewhere between
Perkins
and
Helicópteros.
Robins’ contacts with the District of Columbia are surely less substantial than those of the defendant in
Perkins,
but greater than those in
Helicopteros.
In
Helicopteros
the principal contact was the continuous purchasing of goods and training services from Texas; in this case, however, the primary contact relied upon by appellant is Robins’ solicitation of sales in the District. The solicitation of sales, unlike the purchasing of goods and services, can alone be sufficient to support
in personam
jurisdiction.
12
Thus we may find jurisdiction if Robins, through its solicitation of sales, has “been carrying on in [the District] a continuous and systematic, but limited, part of its general business.”
Perkins v. Benguet Consolidated Mining Co., supra,
IV
Although Robins makes no direct sales in the District, it does actively solicit the sales of its products here, principally through its use of detail men. Once every two or three weeks over the last ten years, Robins has sent about six detail men into the District. These detail men promote Robins products by visiting doctors, answering their questions, and supplying them with samples and scientific studies. Robins also advertises its products sporadically on television in the District and in local periodicals and trade journals, and it mails promotional literature from time to time to potential purchasers of its products. On one occasion, in an attempt to reach every obstetrician, gynecologist, internist, family practitioner, and osteopath in the District, Robins mailed “Dear Doctor” letters to District practitioners to promote the use of Daikon Shields. At least in part as a result of these promotional efforts, Robins derives substantial revenue from the sale of its products in the District of Columbia. In 1982, for example, its total sales in the District amounted to $3,236,800, which was nearly double its 1981 total, and five times its 1980 total.
With regard to Robins’ use of detail men to solicit sales, we look for guidance to the Supreme Court decision in
International Shoe Co. v. Washington, supra.
In that case the defendant corporation, like Robins, had no office in the forum state, entered into no contracts, and maintained no stock of its products there. Unlike Robins, however, the corporation had at least eleven salesmen who actually resided in the forum state. They used samples to promote the products, sometimes by renting permanent “sample rooms,” and solicited orders from prospective purchasers at prices fixed by the corporation. The Supreme Court held that these activities were “systematic and continuous” and therefore provided “sufficient contacts or ties with the state of the forum to make it reasonable and just ... to permit the state to enforce
the obligations which appellant has incurred there.”
A very recent case supports our reading of
International Shoe.
In
Keeton v. Hustler Magazine, Inc., supra,
Hustler was sued for libel in connection with the sale of its magazine in New Hampshire. The Supreme Court noted that Hustler sold approximately 10,000 to 15,000 copies of its magazine each month in New Hampshire, the forum state.
Of all the cases cited to us by the parties,
Ratliff v. Cooper Laboratories, Inc., supra
note 5, and
Seymour v. Parke, Davis & Co., supra
note 5, are closest to this one on their facts. Both involved pharmaceutical manufacturers who were being sued for damages caused by allegedly defective products. In each case the product was purchased and used, and the injury occurred, in a state other than the forum. The activities of the corporate defendants in the respective forum states were no more extensive than the activities of Robins in the District of Columbia. Both courts, following
International Shoe,
held that due process forbade the exercise of jurisdiction by the courts of the forum states.
16
In
Ratliff,
in particular, the court
Significant in the instant factual setting is the lack of a “rational nexus” between the forum state and the relevant facts surrounding the claims presented.... If “plaintiff’s injury does not arise out of something done in the forum state, then other contacts between the corporation and the state must be fairly extensive before the burden of defending a suit there may be imposed upon it without offending ‘traditional notions of fair play and substantial justice.’ ”
To support her argument that Robins’ activities in the District of Columbia are substantial in the constitutional sense, appellant relies on
Ramamurti v. Rolls-Royce, Ltd.,
Finally, we turn to the $3,236,800 in revenue which Robins derived in 1982 from the sales of its products in the District. Three million dollars is a lot of money, even though it represents less than one percent of Robins’ total sales. We hold, however, that it cannot sustain the exercise of
in personam
jurisdiction in this case. Although the Supreme Court in
Keeton v. Hustler Magazine, Inc., supra,
did not specify the amount of revenue Hustler derived from the sales of its magazines in New Hampshire, there can be no doubt that it was considerable; nevertheless, the Court plainly intimated that it might not be “substantial” enough in the constitutional sense to support a cause of action unrelated to those sales.
Robins’ advertising in the District adds little to the case. As a contact advertising is significant only when it is pervasive or when the cause of action arises in the forum.
See, e.g., Wilkerson v. Fortuna Corp., supra
note 6.
20
Here, however, the advertising is only intermittent, and the cause of action has nothing to do with the forum. The mailing of the “Dear Doctor” letters is not a weighty factor either, since it was not continuous.
See Ratliff v. Cooper Laboratories, Inc., supra
note 5,
V
Because Robins’ activities in the District of Columbia have not been both substantial and continuous, we hold that Robins has not had the minimum contacts with the District which have been constitutionally required as a basis for in person-am jurisdiction ever since the Supreme Court decision in International Shoe. The Due Process Clause of the Fifth Amendment therefore prohibits any exercise of such jurisdiction over Robins in this case by the courts of the District of Columbia.
Affirmed.
Notes
. However, a Robins representative testified in his deposition that ‘‘[i]n an isolated case, if the wholesaler should be out of the product, it might be brought in to D.C. General [Hospital].”
. There are six of these representatives, who are known as "detail men.” All six work out of their own homes. None is a resident of the District of Columbia.
. Most of the decisions dealing with the issue presented here are based on the Due Process Clause of the Fourteenth Amendment and its effect on state court jurisdiction. In the District of Columbia the Fourteenth Amendment does not apply because the District is not a state. However, the Fifth Amendment, which does apply, also contains a Due Process Clause, and its reach is at least as great as that of its Fourteenth Amendment twin.
See Bolling v. Sharpe,
. In the District of Columbia, however, those activities which are conducted here solely for the purpose of gathering information from the federal government are not "contacts” within the meaning of
International Shoe
and its progeny.
Mueller Brass Co. v. Alexander Milburn Co.,
.
See, e.g., Ratliff v. Cooper Laboratories, Inc.,
.
See, e.g., Wilkerson v. Fortuna Corp.,
.
See World-Wide Volkswagen Corp. v. Woodson, supra,
. The fact that the
plaintiff
is not a resident of the forum state does not defeat jurisdiction if the
defendant
has the necessary minimum contacts.
Keeton v. Hustler Magazine, Inc., supra,
. In this case, of course, the District of Columbia has no "interest in adjudicating the dispute." Although the District has a general concern with protecting its residents from defective consumer products, it has no reason to add to its crowded court dockets a suit by a Virginia plaintiff against a Virginia defendant on a cause of action which arose entirely in Virginia.
. "[T]here have been instances in which the
continuous
corporate operations within a state were thought so
substantial
and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities."
International Shoe Co. v. Washington, supra,
. There are four other Supreme Court cases involving the assertion of jurisdiction over a non-resident defendant for a cause of action arising outside of the forum. Two of them, however, deal with
quasi in rem
jurisdiction, not
in personam
jurisdiction.
Rush v. Savchuk,
. This distinction between buying and selling has been criticized, yet it persists. See Developments in the Law: State-Court Jurisdiction, supra note 5, 73 Harv.L.Rev. at 931.
.
Perkins, supra,
.
International Shoe, supra,
. The Court of Appeals’ opinion in
Keeton
reveals that Hustler regularly sent its magazines into New Hampshire, to be distributed there by independent dealers.
Keeton
v.
Hustler Magazine, Inc.,
. Ratliff was a consolidated appeal in two separate cases, in which Florida and Indiana residents filed suit in a federal court in South Carolina against two Delaware drug manufacturers on causes of action arising out of the ingestion of their drugs in Florida and Indiana, respectively. One of the manufacturers had solicited business in South Carolina through the use of five detail men, all of whom were South Carolina residents. The other merely engaged in mail solicitation of dealers and wholesalers and the mailing of promotional literature to doctors. The Fourth Circuit held that these activities were insufficient to vest in personam jurisdiction over the defendants in the South Carolina court.
Seymour
is identical to
Ratliff
on its material facts. In
Seymour
an action was brought by a Massachusetts resident in a federal court in New Hampshire against a Michigan drug manufacturer on a cause of action arising out of the ingestion of its drugs in Massachusetts. The
. The court in
Ramamurti
described Rolls-Royce’s activities in the District as “substantial commercial relations with the federal government acting in its proprietary capacity."
. Although there is no mention of corporate revenues in the Ratliff opinion, the court surely must have been aware that one of the two defendants, Sterling Drug Company, was one of the leading drug manufacturers in the nation and undoubtedly derived considerable revenue from sales of its products in South Carolina (probably at least as much as Robins derives from sales in the District of Columbia).
. For this reason we need not decide whether
Ramamurti
is inconsistent with our own decision in
Weisblatt v. United Aircraft Corp.,
. In
Wilkerson
a Texas resident sued a New Mexico race track owner in a federal court in Texas on a cause of action arising in New Mexico. The Fifth Circuit upheld the assertion of
in personam
jurisdiction over the defendant, noting that Texas prohibited parimutuel horse racing and that the defendant’s race track was built as close to Texas as New Mexico law would allow. The defendant "saturated El Paso with its substantial advertising activity to attract Texans [to take] a short step across [the state] line.... In summary, [it] was designed and operated as a two-state venture.”