Hughes v. A.H. Robins Co., Inc.

• Citation: 490 A.2d 1140
• Decision Date: 18 April 1985
• Docket Number: No. 83-1298.,83-1298.
• Parties: Patricia M. HUGHES, Appellant, v. A.H. ROBINS COMPANY, INC., Appellee.
• Court: Court of Appeals of Columbia District

490 A.2d 1140

Patricia M. HUGHES, Appellant, v. A.H. ROBINS COMPANY, INC., Appellee.

No. 83-1298.

District of Columbia Court of Appeals.

Argued May 30, 1984.

Decided April 18, 1985.

COPYRIGHT MATERIAL OMITTED

Quentin R. Corrie, Falls Church, Va., with whom Jay R. Goldman, Silver Spring, Md., was on the brief, for appellant.

William J. Cassidy, Jr., Washington, D.C., with whom George W. Miller and Paul J. Larkin, Jr., Washington, D.C., were on brief, for appellee. Kevin N. Whitney, Washington, D.C., also entered an appearance for appellee.

Before NEBEKER, BELSON, and TERRY, Associate Judges.

TERRY, Associate Judge:

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 of the Fifth Amendment prohibits the assertion of in personam jurisdiction over it in this case. Therefore, we affirm the trial court's order on that ground without reaching the forum non conveniens issue.

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 Dalkon Shield, an intrauterine device manufactured and sold by Robins. Four months later the physician removed the Dalkon Shield from Mrs. Hughes, again in his Virginia office. Mrs. Hughes alleged that, as a consequence of using the Dalkon 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 personam 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, 24 L.Ed. 565 (1877). A non-resident may not be required to defend a suit in a forum which is not constitutionally "reasonable, in the context of our federal system of government. . . ." International Shoe Co. v. Washington, 326 U.S. 310, 317, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The Due Process Clause³ prevents the imposition of two separate burdens on a corporate defendant in a forum where it does not engage in any significant activity: first, the inconvenience resulting from a trial "away from [the corporation's] `home' or principal place of business," and second, the risk of having to defend against claims arising under unfamiliar legal systems, which is inconsistent with the "fair and orderly administration of the laws. . . ." Id. at 317, 319, 66 S.Ct. at 159.

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., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 90 L.Ed. 95 (1957). The second, however, remains a matter of judicial concern. The Supreme Court has consistently held that the Constitution protects non-resident defendants from being unknowingly subjected to the unfamiliar laws of states in which they are not doing business:

The Due Process Clause, by ensuring the "orderly administration of the laws," International Shoe Co. v. Washington, 326 U.S. at 319 , 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, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed. 490 (1980). The critical issue in any case involving a non-resident defendant is whether "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id.; see Kulko v. Superior Court, 436 U.S. 84, 97-98, 98 S.Ct. 1690, 1699-1700, 56 L.Ed.2d 132 (1978); Shaffer v. Heitner, 433 U.S. 186, 216, 97 S.Ct. 2569, 2586, 53 L.Ed.2d 683 (1977). In this area of the law, the courts have long recognized that "few answers will be written `in black and white. The greys are dominant and even among them the shades are innumerable.'" Kulko v. Superior Court, supra, 436 U.S. at 92, 98 S.Ct. at 1696 (citation omitted).

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, 38 U.S. (13 Pet.) 519, 588, 10 L.Ed. 274 (1839). Dissatisfaction with this view grew rapidly with the expansion of the national economy in the nineteenth century and the concomitant increase in out-of-state corporate activity. Courts began searching for theories of jurisdiction which would support a suit against a foreign corporation doing business in the forum state.

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, 106 U.S. 350, 356, 1 S.Ct. 354, 359, 27 L.Ed. 222 (1882). Problems soon arose, however, because the consent was implied from the corporation's activities within the forum state; it thus became difficult to establish jurisdiction when the cause of action did not arise from those activities. See Smolik v. Philadelphia & Reading Coal & Iron Co., 222 F. 148 (S.D.N.Y.1915) (L. Hand, J.).

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, 234 U.S. 579, 589, 34 S.Ct. 944, 947, 58 L.Ed. 1479 (1914). This view of jurisdiction, however, was discarded as conclusory by the Supreme Court in International Shoe Co. v. Washington, supra: "[T]he terms `present' or `presence' are used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process." 326 U.S. at 316-317, 66 S.Ct. at 158 (citation omitted). The Court held that the critical issue was whether the foreign corporation had "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. at 316, 66 S.Ct. at 158 (citations omitted). It is these contacts which should cause a non-resident defendant "reasonably [to] anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, supra, 444 U.S. at 297, 100 S.Ct. at 567 (citations omitted).

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 forum⁶ and the derivation of significant revenue from the forum⁷ 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. ___, 104 S.Ct. 1473, 1481, 79 L.Ed.2d 790 (1984).⁸ Finally, although...