Gatewood v. Fiat S. P. A., 78-1578

• Citation: 617 F.2d 820,199 U.S.App.D.C. 238
• Decision Date: 24 January 1980
• Docket Number: No. 78-1578,78-1578
• Parties: Wyllie GATEWOOD, Appellant, v. FIAT, S. p. A., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 820

617 F.2d 820

199 U.S.App.D.C. 238

Wyllie GATEWOOD, Appellant, v. FIAT, S. p. A., et al.

No. 78-1578.

United States Court of Appeals District of Columbia Circuit.

Argued May 8, 1979.

Decided Jan. 24, 1980.

Appeal from the United States District Court for the District of Columbia (D.C. Civil Action No. 78-0277).

Gerard E. Mitchell, Washington, D. C., for appellant.

R. Kenly Webster, Washington, D. C., for appellee.

Before BAZELON, Senior Circuit Judge, and McGOWAN and ROBB, Circuit Judges.

Opinion for the Court filed by Circuit Judge McGOWAN.

McGOWAN, Circuit Judge:

This appeal is from the dismissal of a diversity suit arising out of an automobile accident in the District of Columbia. Appellant Gatewood is a Maryland resident. He sued Fiat, S.p.A. (Fiat), an Italian auto manufacturer, and Fiat Motors of North America, Inc. (Fiat Motors), Fiat's United States distributor. The District Court dismissed the action because it found that the District of Columbia's "long-arm" statute did not permit personal jurisdiction over the defendants and, in any event, that the District of Columbia could not exercise jurisdiction over the defendants without violating constitutional due process requirements. We reverse.

I

Appellant in 1976 purchased a used Fiat automobile from a Virginia resident. On October 23, 1976, appellant drove the car to visit his son, who lives in the District. While in the District, appellant's car collided with another automobile. Because of an alleged defect in the Fiat's latch system, the door flew open and appellant was thrown from the car. Gatewood was taken by ambulance to a hospital in the District where he was treated for serious injuries.

Appellant sued Fiat and Fiat Motors ¹ in the District Court under theories of strict liability, breach of implied warranty, and negligence. Fiat is an Italian corporation. It manufactures and sells its automobiles in Italy to Fiat Motors, a New York corporation, which has its principal place of business in New Jersey. Fiat Motors imports the cars and sells them to American franchised dealers, which in turn sell to consumers. Neither Fiat nor Fiat Motors has offices, agents, or franchised dealers in the District of Columbia proper, ² but fourteen Fiat sales or service agencies are located nearby.

Appellant asserted that both Fiat and Fiat Motors were subject to suit in the District Court under the District of Columbia "long-arm" statute. ³ Both Fiat and Fiat Motors moved to dismiss the action for lack of personal jurisdiction.

Appellant meanwhile served interrogatories on the appellees concerning their advertising and sales of automobiles in the Washington, D.C., area. The appellees answered most of the questions, but said they did not have enough information at hand immediately to answer questions about recent Fiat advertising. Before appellees answered the latter questions, the District Court dismissed the complaint as to each defendant for lack of personal jurisdiction. ⁴

The District Court noted, with respect to the District of Columbia "long-arm" statute:

(I)t is not at all clear to the Court that defendants have the requisite relationship with the District of Columbia so as to come within the ambit of § 13-423(a)(4). . . .

(T)his Court is not persuaded on the record before it that in terms of number of transactions, amount of revenue earned, or percentage of sales, defendants' revenue from goods used in the District of Columbia is "substantial."

Gatewood v. Fiat, S.p.A., No. 78-0277, mem. op. at 2-3 (D.D.C. April 21, 1978).

The District Court further held that defendants' contacts with the District of Columbia were insufficient to satisfy constitutional due process requirements:

(D)efendants' ties with the District of Columbia are insubstantial, the District of Columbia has no governmental interest to enforce the obligations asserted by plaintiff, and . . . subjecting defendants to service of process and personal jurisdiction herein would not be reasonable and just according to traditional concepts of fair play and substantial justice. International Shoe Co. v. State of Washington, 326 U.S. 310, 320 (, 66 S.Ct. 154, 90 L.Ed. 95) (1945).

Id. at 3.

We first determine whether the District of Columbia "long-arm" statute permits the exercise of jurisdiction over appellees. If so, we then inquire whether the exercise of jurisdiction over appellees comports with constitutional due process requirements. Forsythe v. Overmyer, 576 F.2d 779, 782 (9th Cir.), cert. denied, 439 U.S. 864, 99 S.Ct. 188, 58 L.Ed.2d 174 (1978).

II

In asserting that the District of Columbia had jurisdiction over Fiat and Fiat Motors, appellant invoked the District's "long-arm" statute, quoted in full in note 3 supra. Relevant here is the following provision:

(a) A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's

(4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia(.)

(b) When jurisdiction over a person is based solely upon this section, only a claim for relief arising from acts enumerated in this section may be asserted against him.

D.C.Code § 13-423 (1973). ⁵

Appellees argue that section 13-423(b) prevents the District of Columbia from exercising jurisdiction in this case. They contend that subsection (b) requires that the injury prompting the lawsuit result from (1) the actual solicitation of business, (2) persistent course of conduct, or (3) derivation of substantial revenue, in the District.

There is no merit to this reading of the statute. One who invokes section 13-423(a)(4) need not show that the injury in the District was directly related to the actual business solicitation, course of conduct, or derivation of revenue. Where jurisdiction is based on subsection (a)(4), subsection (b) requires only that the claim for relief arise out of an injury occurring in the District.

Both the legislative history of the statute, and cases decided under it, make this plain. We examine each in turn.

A

Congress derived section 13-423 from the Uniform Interstate and International Procedure Act. See H.R.Rep.No.907, 91st Cong., 2d Sess. 61 (1970); S.Rep.No.405, 91st Cong., 1st Sess. 35 (1969). The Commissioner's Note accompanying the Uniform Act states that

the regular solicitation of business or the persistent course of conduct required by section 1.03(a)(4) (D.C.Code § 13-423(a)(4)) need have no relationship to the act or failure to act that caused the injury.

13 Uniform Laws Ann. 285, 287 (Master ed. 1975) (emphasis added).

We are inclined to give considerable weight to the intentions of the Uniform Act drafters, because the Uniform Act was the genesis of the District's statute. Lest there remain doubt about the matter, however, we next consider how courts have interpreted section 13-423.

B

Principles of federalism bind us in diversity cases to follow the District of Columbia Court of Appeals' interpretation of the District of Columbia jurisdictional statute. ⁶ However, no decision of that court is on point.

Decisions of the federal courts applying the law of the District of Columbia are in accord with the Note accompanying the Uniform Act. The District Court in Aiken v. Lustine Chevrolet, Inc., 392 F.Supp. 883, 885 & n. 11 (D.D.C.1975), found it "abundantly clear" that the solicitation of business, persistent course of conduct, or derivation of substantial revenue, need have no relation to the injury. Id. at 885. See Margoles v. Johns, 157 U.S.App.D.C. 209, 483 F.2d 1212, 1215-16 (D.C.Cir.1973), aff'g 333 F.Supp. 942 (D.D.C.1971); Security Bank, N.A. v. Tauber, 347 F.Supp. 511, 515 (D.D.C.1972); Liberty Mutual Insurance Co. v. American Pecco Corp., 334 F.Supp. 522 (D.D.C.1971).

We have discovered no case that leads us to believe that the District of Columbia courts would interpret subsection (a)(4) other than as the federal courts have done. ⁷ The District of Columbia Court of Appeals, in construing another section of the District's "long-arm" statute, acknowledged that the statute was based on the Uniform Act, and cited with approval the Commissioners' Note accompanying the Uniform Act. Cohane v. Arpeja-California, Inc., 385 A.2d 153, 159 (D.C.Ct.App.) (construing section 13-423(a)(1)), cert. denied, 439 U.S. 980, 99 S.Ct. 567, 58 L.Ed.2d 651 (1978).

We note, finally, that a recent case of the Superior Court of the District of Columbia has interpreted the requirements of subsection (a)(4) exactly as we interpret them today. Dallmus v. Fiat Motors of North America, Inc., ⁸ No. 6617-78 (D.C.Super.Ct. April 30, 1979). In Dallmus, Judge Ugast held: "(A) defendant may be subject to jurisdiction in the District of Columbia under § 13-423(a)(4) even though its contacts with the District bear no relation to the particular tort in issue." Id., mem. op. at 6. ⁹ We are not literally bound by decisions of lower District of Columbia courts. See Commissioner v. Estate of Bosch, 387 U.S. 456, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967); King v. Order of United Commercial Travelers, 333 U.S. 153, 161, 68 S.Ct. 488, 92 L.Ed. 608 (1948). We do, however, give "proper regard" to pertinent lower court decisions in determining the law of the District of Columbia. See Commissioner v. Estate of Bosch, 387 U.S. at 465, 87 S.Ct. 1776.

In light of (1) this interpretation of the District of Columbia law by a District of Columbia judge, (2) the legislative history of subsection (a)(4), and (3) federal court cases applying that subsection, we hold that a person alleged to have caused tortious injury by an act or omission outside the District is subject to jurisdiction in the District under subsection (a)(4), if the...