Gorman, David J. v. AmeriTrade Hold Corp

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 14, 2002 Decided June 14, 2002

No. 01-7085

David J. Gorman, d/b/a Cashbackrealty.com,

Appellant

v.

Ameritrade Holding Corporation and Freetrade.com, Inc.,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 00cv01259)

John M. Shoreman argued the cause and filed the briefs

for appellant.

Brian D. Craig argued the cause for appellees. With him

on the brief was Robert S. Brennen.

Before: Henderson and Garland, Circuit Judges, and

Williams, Senior Circuit Judge.

Garland, Circuit Judge: In this case, we consider whether

the courts of the District of Columbia may assert general

jurisdiction over a defendant that is "doing business" in the

District through the medium of the Internet. We hold that

they may, although we ultimately affirm dismissal of the

complaint because service of process on the defendant was

insufficient.

I

Plaintiff David Gorman is the sole proprietor of Cashback-

realty.com, a real estate broker with its principal place of

business in McLean, Virginia. Defendant Ameritrade Hold-

ing Corporation is a securities broker-dealer licensed in the

District of Columbia with its principal place of business in

Omaha, Nebraska. Ameritrade provides online brokerage

services through its Internet site to individuals across the

country, including District residents. In November 1999,

Ameritrade acquired Freetrade.com, Inc., as well as its Inter-

net domain name, "Freetrade.com." Like Ameritrade, defen-

dant Freetrade has its principal place of business in Omaha.

Gorman alleges that he had an agreement with the prior

owner of Freetrade, under which Cashbackrealty.com was

entitled to a front-page link on the Freetrade.com website.

According to Gorman, although Ameritrade assumed the obli-

gations of this agreement when it acquired the Freetrade.com

domain name, it refused to provide a front-page link for

Cashbackrealty.com.

On June 2, 2000, Gorman filed a complaint in the United

States District Court for the District of Columbia, alleging

that Ameritrade and Freetrade (hereinafter referred to col-

lectively as "Ameritrade") were in breach of contract for

refusing to honor the front-page-link agreement. Without

permitting discovery, the district court dismissed Gorman's

complaint for lack of personal jurisdiction and insufficiency of

service of process. With respect to personal jurisdiction, the

court held that a "company that acts to encourage or maxim-

ize the use by District of Columbia residents of its website

does not establish the necessary 'minimum contacts' with this

forum through Internet accessibility," and does not "operate

so continuously and substantially within [the District] that it

is fair to allow anyone to sue the enterprise in [the District]

on any claim, without regard to where the claim arose."

Gorman v. Ameritrade Holding Corp., No. 00-1259, Mem.

Op. at 3 (D.D.C. Mar. 30, 2001) (internal quotation marks

omitted). The court further held that Gorman's service of his

complaint upon the Securities Director of the District of

Columbia was insufficient under District of Columbia law.

Id. at 2-3. We review the district court's grant of Ameri-

trade's motion to dismiss de novo, see Second Amendment

Found. v. United States Conference of Mayors, 274 F.3d 521,

523 (D.C. Cir. 2001), and we consider its two grounds for

dismissal in Parts II and III below.

II

The district court has subject matter jurisdiction in this

breach of contract action because of the diversity of citizen-

ship of the parties. 28 U.S.C. s 1332(a). In a diversity case,

the court's personal jurisdiction over nonresident defendants

depends upon state law, here the law of the District of

Columbia, the application of which is subject to the con-

straints of constitutional due process. See Crane v. Carr, 814

F.2d 758, 762 (D.C. Cir. 1987); 4 Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure s 1068.1,

at 592 & n.2 (3d ed. 2002). The requirements of due process

"are satisfied when in personam jurisdiction is asserted over

a nonresident corporate defendant that has 'certain minimum

contacts with [the forum] such that the maintenance of the

suit does not offend traditional notions of fair play and

substantial justice.' " Helicopteros Nacionales de Colombia,

S.A. v. Hall, 466 U.S. 408, 414 (1984) (quoting International

Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)) (additional

internal quotation marks omitted).

Under the District of Columbia's long-arm statute, local

courts may exercise so-called "specific jurisdiction" over a

person for claims that arise from the person's "transacting

any business" in the District. D.C. Code s 13-423(a)(1). See

generally Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-

73 & n.15 (1985); Crane, 814 F.2d at 763. However, because

Gorman's breach of contract claim against Ameritrade does

not arise out of any business transacted between the parties

in the District, this font of jurisdiction is unavailable.

District of Columbia law also permits courts to exercise

"general jurisdiction" over a foreign corporation as to claims

not arising from the corporation's conduct in the District, if

the corporation is "doing business" in the District. See D.C.

Code s 13-334(a); AMAF Int'l Corp. v. Ralston Purina Co.,

428 A.2d 849, 850 (D.C. 1981); see also Helicopteros, 466 U.S.

at 414 n.9; Crane, 814 F.2d at 763.1 Under the Due Process

Clause, such general jurisdiction over a foreign corporation is

only permissible if the defendant's business contacts with the

forum district are "continuous and systematic." Helicopteros,

466 U.S. at 415 (quoting Perkins v. Benguet Consol. Mining

Co., 342 U.S. 437, 438 (1952)); see El-Fadl v. Central Bank of

Jordan, 75 F.3d 668, 675 (D.C. Cir. 1996); see also Crane, 814

F.2d at 763 (describing the required contacts for general

jurisdiction as "continuous and substantial"); Hughes v. A.H.

Robins Co., 490 A.2d 1140, 1142, 1149 (D.C. 1985) (same).2

The District of Columbia Court of Appeals has indicated that

__________

1 D.C. Code s 13-334(a) provides:

In an action against a foreign corporation doing business in the

District, process may be served on the agent of the corporation

or person conducting its business, or, where he is absent and

can not be found, by leaving a copy at the principal place of

business in the District, or, where there is no such place of

business, by leaving a copy at the place of business or resi-

dence of the agent in the District, and that service is effectual

to bring the corporation before the court.

Although on its face s 13-334(a) appears only to specify proper

methods of service, the District of Columbia Court of Appeals has

held that compliance with the statute gives rise to personal jurisdic-

tion over a foreign corporation doing business in the District.

AMAF Int'l Corp., 428 A.2d at 850; see El-Fadl v. Central Bank of

Jordan, 75 F.3d 668, 673 n.7 (D.C. Cir. 1996).

2 See generally Metropolitan Life Ins. Co. v. Robertson-Ceco

Corp., 84 F.3d 560, 568 (2d Cir. 1996) (declaring that "[b]ecause

the reach of "doing business" jurisdiction under s 13-334(a)

is coextensive with the reach of constitutional due process.

See Hughes, 490 A.2d at 1148 ("[W]e may find jurisdiction if

[the defendant] ... has 'been carrying on in [the District] a

continuous and systematic, but limited, part of its general

business.' " (quoting Perkins, 342 U.S. at 438)); see also

Everett v. Nissan Motor Corp., 628 A.2d 106, 108 (D.C. 1993).

In his pleadings below, Gorman contended that Ameritrade

"sells securities and provides other online brokerage services

to residents of the District of Columbia on a continuous

basis," and is therefore "continuously doing business in the

District of Columbia." Pl.'s Opp'n to Mot. to Dismiss at 1-2.

He further argued that he was "[a]t the very least ...

entitled to jurisdictional discovery to determine the exact

nature of Ameritrade's contacts with the District." Id. at 5.

And although "[a]s a general matter, discovery ... should be

freely permitted, and this is no less true when discovery is

directed to personal jurisdiction," Edmond v. United States

Postal Serv. Gen. Counsel, 949 F.2d 415, 425 (D.C. Cir. 1991),

the district court granted Ameritrade's motion to dismiss

without permitting the plaintiff to undertake discovery.

Ameritrade contends that Gorman was not entitled to

discovery because there are no factual circumstances under

which the district court could have asserted personal jurisdic-

tion over Ameritrade. The defendant concedes that it en-

gages in "electronic transactions" with District residents, and

that "Ameritrade undoubtedly derives revenue from those

customers." Reply Mem. in Supp. of Defs.' Mot. to Dismiss

__________

general jurisdiction is not related to the events giving rise to the

suit, courts impose a more stringent minimum contacts test" than

for specific jurisdiction); 4 Wright & Miller s 1067.5, at 499-507

(noting that, although "[s]pecific jurisdiction ... may be asserted

when the defendant's forum contacts are isolated or sporadic, but

the plaintiff's cause of action arises out of those contacts with the

state," when "the cause of action sued on does not arise from the

defendant's contacts with the forum state, an assertion of general

jurisdiction must be predicated on contacts that are sufficiently

continuous and systematic to justify haling the defendant into a

court in that state").

at 6. But Ameritrade maintains that those transactions do

not occur in the District of Columbia. Rather, the firm

declares, Ameritrade's business is conducted "in the border-

less environment of cyberspace." Appellees' Br. at 5.

"Cyberspace," however, is not some mystical incantation

capable of warding off the jurisdiction of courts built from

bricks and mortar. Just as our traditional notions of personal

jurisdiction have proven adaptable to other changes in the

national economy,3 so too are they adaptable to the transfor-

mations wrought by the Internet. In the last century, for

example, courts held that, depending upon the circumstances,

transactions by mail and telephone could be the basis for

personal jurisdiction notwithstanding the defendant's lack of

physical presence in the forum.4 There is no logical reason

__________

3 Cf. Burger King Corp., 471 U.S. at 476 (holding that specific

jurisdiction "may not be avoided merely because the defendant did

not physically enter the forum State," since "it is an inescapable

fact of modern commercial life that a substantial amount of business

is transacted solely by mail and wire communications across state

lines, thus obviating the need for physical presence within a State in

which business is conducted"); World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 292-93, 294 (1980) (noting that the "limits

imposed on state jurisdiction by the Due Process Clause ... have

been substantially relaxed over the years ... largely attributable to

a fundamental transformation in the American economy," and that

" '[a]s technological progress has increased the flow of commerce

between the States, the need for jurisdiction over nonresidents has

undergone a similar increase' " (quoting Hanson v. Denckla, 357

U.S. 235, 250-51 (1958))); McGee v. International Life Ins. Co., 355

U.S. 220, 222-23 (1957) (noting a trend "expanding the permissible

scope of state jurisdiction over foreign corporations ... [i]n part

... attributable to the fundamental transformation of our national

economy over the years," including a "great increase in the amount

of business conducted by mail across state lines").

4 See Metropolitan Life Ins. Co., 84 F.3d at 572 (noting that a

defendant's mail-order sales to forum residents may satisfy the

"continuous and systematic" standard (citing Sollinger v. Nasco

Int'l, Inc., 655 F. Supp. 1385 (D. Vt. 1987))); Michigan Nat'l Bank

v. Quality Dinette, Inc., 888 F.2d 462, 466 (6th Cir. 1989) (holding

why the same should not be true of transactions accomplished

through the use of e-mail or interactive websites. Indeed,

application of this precedent is quite natural since much

communication over the Internet is still transmitted by ordi-

nary telephone lines. See AT&T Corp. v. City of Portland,

216 F.3d 871, 874 (9th Cir. 2000); Bell Atlantic Tel. Cos. v.

FCC, 206 F.3d 1, 4 (D.C. Cir. 2000). Accordingly, the test

that we will apply to determine whether the District has

general personal jurisdiction in this case is the traditional

__________

that, inter alia, appellees' "mail order solicitations of Michigan

businesses," and the fact that they "made at least one sale in

Michigan each and every month" for two years, "indicate that

appellees have conducted a 'continuous and systematic part of their

general business' in Michigan ... thereby warranting general per-

sonal jurisdiction"); cf. Quill Corp. v. North Dakota, 504 U.S. 298,

308 (1992) (holding that "[i]n 'modern commercial life' it matters

little that ... solicitation is accomplished by a deluge of catalogs

rather than a phalanx of drummers," that the "requirements of due

process are met irrespective of a corporation's lack of physical

presence in the taxing State," and that due process therefore

permits "the imposition of [a] collection duty on a mail-order house

that is engaged in continuous and widespread solicitation of busi-

ness within a State"); McGee, 355 U.S. at 223 (basing a finding of

specific jurisdiction on the mailing of an insurance contract into the

state and the mailing of premiums from the state); Travelers

Health Ass'n v. Virginia, 339 U.S. 643, 648 (1950) (holding that an

Omaha mail-order company, with no physical presence in Virginia,

was subject to Virginia regulation because it "did not engage in

mere isolated or short-lived transactions[;] [i]ts insurance certifi-

cates, systematically and widely delivered in Virginia ... , create

continuing obligations between the Association and each of the

many certificate holders in the state"); Neogen Corp. v. Neo Gen

Screening, Inc., 282 F.3d 883, 892 (6th Cir. 2002) (holding that a

defendant's "contact with Michigan customers through the mail and

the wires," where it "constitute[d] the doing of business there,

rather than simply the exchange of information," rendered the

assertion of specific jurisdiction consistent with due process); Neal

v. Janssen, 270 F.3d 328, 332 (6th Cir. 2001) (holding that "making

phone calls and sending facsimiles into the forum" may be sufficient

to confer specific jurisdiction); Oriental Trading Co. v. Firetti, 236

F.3d 938, 943 (8th Cir. 2001) (same).

one: Were Ameritrade's contacts with the District "continu-

ous and systematic"? See GTE New Media Servs. Inc. v.

Bell South Corp., 199 F.3d 1343, 1350 (D.C. Cir. 2000) ("We

do not believe that the advent of advanced technology, say, as

with the Internet, should vitiate long-held and inviolate prin-

ciples of federal court jurisdiction."); 4A Wright & Miller

s 1073.1, at 327-28.

For support of its claim that Internet-based transactions

are outside the jurisdiction of District of Columbia courts,

Ameritrade relies on our decision in GTE. Ameritrade mis-

reads the case. In GTE, we held that defendants who

operated Internet Yellow Pages websites accessible to D.C.

residents had insufficient contacts with the District to permit

the exercise of specific jurisdiction under the District's long-

arm statute. In reaching that conclusion, we emphasized that

District residents did not engage in business transactions

with the defendants. Rather, "[a]ccess to an Internet Yellow

Page site is akin to searching a telephone book--the consum-

er pays nothing to use the search tool, and any resulting

business transaction is between the consumer and a business

found in the Yellow Pages, not between the consumer and the

provider of the Yellow Pages." GTE, 199 F.3d at 1350. The

"mere accessibility of the defendants' websites," we held, does

not "establish[ ] the necessary 'minimum contacts' with this

forum." Id.5

__________

5 In GTE, we described Internet cases in which other courts of

appeals had dismissed complaints for lack of specific jurisdiction as

also involving "essentially passive" sites. See GTE, 199 F.3d at

1348 (describing Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414,

419-20 (9th Cir. 1997), as finding that an Arizona court lacked

personal jurisdiction over a Florida corporation where the corpora-

tion's website "was essentially passive," where the defendant did

not encourage Arizona residents to access the site, and where there

was no evidence that any part of the defendant's business was

sought or achieved in Arizona or that any Arizona resident other

than the plaintiff had ever visited the site); id. (citing Bensusan

Restaurant Corp. v. King, 126 F.3d 25, 29 (2d Cir. 1997), as holding

that New York's long-arm statute did not extend to the operator of

a Missouri jazz club whose website merely had a hyperlink to a

This case, however, is substantially different from GTE.

Ameritrade's contact with the District is not limited to an

"essentially passive" website through which customers merely

access information about the financial markets. GTE, 199

F.3d at 1348; see supra note 5. To the contrary, Ameritrade

concedes that District residents use its website to engage in

electronic transactions with the firm. See Reply Mem. in

Supp. of Defs.' Mot. to Dismiss at 6. The firm's customers

can open Ameritrade brokerage accounts online; transmit

funds to their accounts electronically; and use those accounts

to buy and sell securities, to borrow from Ameritrade on

margin, and to pay Ameritrade brokerage commissions and

interest. Using e-mail and web-posting, Ameritrade trans-

mits electronic confirmations, monthly account statements,

and both financial and product information back to its cus-

tomers. As a result of their electronic interactions, Ameri-

trade and its District of Columbia customers enter into

binding contracts, the customers become the owners of valu-

able securities, and Ameritrade obtains valuable revenue.6

__________

New York club of the same name); id. (quoting Mink v. AAAA

Dev. LLC, 190 F.3d 333, 337 (5th Cir. 1999), as declining to find

jurisdiction where the defendant's website was accessible to forum

residents, but where "[t]here was no evidence that [the defendant]

conducted business over the Internet by engaging in business

transactions with forum residents or by entering into contracts over

the Internet"); see also SOMA Med. Int'l v. Standard Chartered

Bank, 196 F.3d 1292, 1297 (10th Cir. 1999) (holding that a "passive"

website that merely makes information "available" is insufficient to

confer general jurisdiction); Bancroft & Masters, Inc. v. Augusta

Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000) (same).

6 See http://www.ameritrade.com/tell_me_more/tell_me_more.fht

ml; http://www.ameritrade.com/getting_started/html/apply_online.

html; http://www.ameritrade.com/getting_started/html/fund_ac

count.html; http://www.ameritrade.com/getting_started/html/login.

html; http://www.ameritrade.com/getting_started/forms/ATI_845_F.

pdf; http://www.ameritrade.com/getting_started/html/tc.html (form

contract at pp 26, 37, 38).

What may serve best to take the mystery out of the

process--and to demonstrate that nothing about the Ameri-

trade website need alter our traditional approach to personal

jurisdiction--is the fact that Ameritrade also offers its cus-

tomers the alternative of accomplishing virtually all of the

above-described transactions by ordinary mail or telephone.7

Indeed, if anything, Ameritrade appears susceptible to appli-

cation of the "doing business" test in a much more literal way

than a traditional brokerage firm. Ameritrade's website al-

lows it to engage in real-time transactions with District of

Columbia residents while they sit at their home or office

computers "in the District of Columbia." And by permitting

such transactions to take place 24 hours a day,8 the site

makes it possible for Ameritrade to have contacts with the

District of Columbia that are "continuous and systematic" to

a degree that traditional foreign corporations can never even

approach.

In short, on the record before this court, it is quite possible

that, through its website, Ameritrade is doing business in the

District of Columbia by continuously and systematically "en-

ter[ing] into contracts with residents of a foreign jurisdiction

that involve the knowing and repeated transmission of com-

puter files over the Internet." Zippo Mfg. Co. v. Zippo Dot

Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) (describ-

ing similar websites as ones where the defendant "clearly

does business over the Internet," in the context of a case

involving specific jurisdiction); see Mink v. AAAA Dev. LLC,

190 F.3d 333, 336 (5th Cir. 1999) (adopting the Zippo test for

assertions of general jurisdiction). Of course, determining

whether Ameritrade is actually "doing business" in the Dis-

trict requires an examination of the frequency and volume of

the firm's transactions with District residents. But those

facts are unavailable because Gorman was not permitted to

__________

7 See http://www.ameritrade.com/getting_started/html/apply_on

line.html; http://www.ameritrade.com/getting_started/html/check.

html; http://www.ameritrade.com/getting_started/html/login.html.

8 See http://www.ameritrade.com/services/ways_trade.fhtml.

undertake discovery. Because the plaintiff has "demon-

strate[d] that it can supplement its jurisdictional allegations

through discovery, ... jurisdictional discovery is justified"

and should have been afforded. GTE, 199 F.3d at 1351; see

El-Fadl, 75 F.3d at 676; Edmond, 949 F.2d at 425; Crane,

814 F.2d at 760, 764. Accordingly, were it not for the

conclusion of the following Part--that although dismissal on

personal jurisdiction grounds was unwarranted, dismissal for

insufficient service of process was justified--we would re-

mand the case for jurisdictional discovery.9

III

Even if there are sufficient contacts for a court to assert

personal jurisdiction over a defendant, it lacks power to do so

unless the procedural requirements of effective service of

process are satisfied. See Omni Capital Int'l, Ltd. v. Rudolf

Wolff & Co., 484 U.S. 97, 104 (1987). Federal Rule of Civil

Procedure 4(h)(1) provides that a foreign corporation may be

served

in a judicial district of the United States in the manner

prescribed for individuals by subdivision (e)(1), or by

delivering a copy of the summons and of the complaint to

an officer, a managing or general agent, or to any other

agent authorized by appointment or by law to receive

service of process and, if the agent is one authorized by

statute to receive service and the statute so requires, by

also mailing a copy to the defendant.

Subdivision (e)(1), in turn, permits individuals to be served

"pursuant to the law of the state in which the district court is

located ... for the service of a summons upon the defendant

in an action brought in the courts of general jurisdiction of

the State." Gorman contends that he perfected service of

__________

9 Because we affirm dismissal on other grounds, we need not

consider whether, in general jurisdiction cases, due process requires

not only that the defendant have "continuous and systematic"

contacts with the forum, but also that the assertion of personal

jurisdiction be "reasonable." Compare Metropolitan Life Ins. Co.,

84 F.3d at 567-69, with id. at 576-78 (Walker, J., dissenting).

process on Ameritrade in two ways that were consistent with

Rule 4.

First, Gorman mailed a copy of the summons and complaint

to Ameritrade's corporate headquarters in Omaha, Nebraska.

The plaintiff argues that this manner of service was effective

because it was "pursuant to the law of the state in which the

district court is located." Fed. R. Civ. P. 4(e)(1). Although

Rule 4(c)(4) of the D.C. Superior Court Rules of Civil Proce-

dure does appear to permit service upon corporations by mail,

the District of Columbia Court of Appeals has held that "Rule

4's general prescription for service of process cannot replace

the specific jurisdictional requirement of D.C. Code

s 13-334(a) that service be made in the District of Columbia."

Everett, 628 A.2d at 108. Where the basis for obtaining

jurisdiction over a foreign corporation is s 13-334(a), as it is

here, a plaintiff who serves the corporation by mail outside

the District is "foreclosed from benefitting from [the stat-

ute's] jurisdictional protection." Id.; see Gowens v. Dyncorp,

132 F. Supp. 2d 38, 42 (D.D.C. 2001) (following Everett).

Second, Gorman served the summons and complaint on the

Securities Director of the Public Service Commission of the

District of Columbia. This, he contends, constituted service

upon an "agent authorized by appointment or by law to

receive service of process," Fed. R. Civ. P. 4(h)(1), by virtue

of D.C. Code s 2-2615(f). At the time Gorman filed his

complaint, that D.C. Code section provided:

Any applicant for a license under this chapter shall file

with the Department ... an irrevocable consent appoint-

ing the Securities Director ... to receive service of any

lawful process in any noncriminal suit ... against him

... which shall arise under this chapter....10

Although Ameritrade did obtain a securities license in the

District, close attention to the wording of s 2-2615(f) makes

clear that it only requires Ameritrade's consent to receipt of

__________

10 Section 2-2615 was subsequently recodified as s 3-3615, and

then repealed. See Securities Act of 2000, s 804, 47 D.C. Reg.

7837, 7886.

service by the Securities Director in suits "which shall arise

under this chapter." Because the referenced "chapter" in-

cludes only the securities laws, see D.C. Code ss 2-2601 to

-2619 (1981), and because Gorman's breach of contract com-

plaint is unrelated to any securities transaction, the Director

was not an agent "authorized by appointment or by law to

receive service of process" in this case. Accordingly, deliver-

ing a copy of the complaint to the Director did not perfect

service of process.

Gorman further contends that, even if s 2-2615(f) does not

authorize the Securities Director to receive service of process

in a case like this, service upon the Director was nonetheless

consistent with District of Columbia case law and was there-

fore "pursuant to the law of the state in which the district

court is located" under Federal Rule 4(e)(1). In support,

Gorman cites District of Columbia cases that, he claims, stand

for the proposition that "service upon a foreign corporation

'doing business' in D.C. is valid if it gives reasonable assur-

ance that the defendant would be notified, even if service is

made upon an agent of the corporation otherwise not autho-

rized to accept service." Reply Br. at 4 (emphasis added).

Whether or not the above proposition is generally a fair

statement of District of Columbia case law, none of the cases

cited by Gorman suggests that it is applicable here. The

principal case upon which he relies, Key v. S.C. Johnson &

Son, Inc., 189 A.2d 361 (D.C. 1963), does not even support the

general proposition. In Key, the D.C. Court of Appeals did

hold that service of process in a private products liability case

was perfected by delivery of a complaint to the defendant's

"government liaison officer," located in the District, who dealt

solely with government officials. 189 A.2d at 362. But the

opinion is silent as to whether the liaison officer was autho-

rized to receive service of process for the company. Similarly

inapposite is Weinstein v. Ajax Distributing Co., 116 A.2d 580

(D.C. 1955), in which the court held that process was properly

served on a foreign corporation's "location supervisor" when

he was present in the District. The court did not hold that

such service was permissible regardless of whether the super-

visor was authorized to accept it; rather, the court rejected

the defendant's claim that the location supervisor was unau-

thorized and found that the record left "no doubt" that he was

present in the District "as agent or representative of defen-

dant company and was conducting its business." 116 A.2d at

583; see id. at 582.

Gorman's best case is District Grocery Stores, Inc. v.

Brunswick Quick Freeze Co., 106 A.2d 134 (D.C. 1954),

where, in the course of holding that service had been validly

made, the Court of Appeals said that "we need not here be

concerned with the precise character of the relationship be-

tween" the company and the person upon whom process was

served. 106 A.2d at 135. Indeed, the court declared that

"[w]hether, then, the person served with process may be

regarded as the agent of the defendant corporation is, in our

view, immaterial." Id. (internal alterations and quotation

marks omitted). But the scope of the recipient's agency was

immaterial in District Grocery Stores because it was clear

that he "was, at least, conducting the business which ... the

defendant was doing in the District of Columbia." Id. (inter-

nal quotation marks omitted). And as the court emphasized,

the District's "doing business" statute expressly authorizes

service upon a foreign corporation's "agent ... or person

conducting its business." Id. (quoting D.C. Code s 13-103,

the predecessor of the current s 13-334); see supra note 1.

In this case, however, it is clear that the recipient of

service, the Securities Director of the District of Columbia, is

not a person "conducting [the] business" of Ameritrade in the

District. Nor is he otherwise a company employee or agent

whose authority the company may or may not have circum-

scribed. Rather, the Securities Director is a government

official whose authority to receive service of process on behalf

of Ameritrade is created by, and expressly limited by, the

D.C. Code. See D.C. Code s 2-2615(f). This court is without

power to extend that authority beyond the scope granted by

the statute, and no District of Columbia court has ever found

service upon such an unauthorized official to be valid against

a foreign corporation. Accordingly, we conclude that service

upon the Director was ineffective to bring Ameritrade within

the jurisdiction of the district court.

Finally, Gorman urges that it would be unfair if a foreign

corporation, lawfully subject to the jurisdiction of the District

of Columbia because it does business here, could evade that

jurisdiction by keeping its agents out of the District and

hence beyond the range of effective service of process. If

such a loophole does exist, the legislature can, of course,

remove it by amending s 13-334 to provide an alternative

method of service. But we are not at all certain that legisla-

tive action is required. Section 29-101.99(e)(2) of the D.C.

Code, cited by neither party, provides that "[w]henever any

foreign corporation does not have an agent for service of

process ... the Mayor shall be the agent for service of

process for the corporation."11 Although on its face this

section appears to close the loophole identified by Gorman, we

need not determine whether service upon the Mayor would

have been sufficient to bring Ameritrade within the jurisdic-

tion of the district court because Gorman never attempted to

make such service.

IV

Ameritrade is quite wrong in treating "cyberspace" as if it

were a kingdom floating in the mysterious ether, immune

from the jurisdiction of earthly courts. Nevertheless, in this

case Ameritrade is saved from the jurisdiction of the district

court by a much more mundane problem: the plaintiff simply

failed to serve the corporation properly. For that reason,

and for that reason alone, the judgment of the district court is

Affirmed.

__________

11 The section further provides that "[i]n the event of service to

the Mayor, the Mayor shall immediately cause one of the copies to

be forwarded by certified or registered mail, addressed to the

foreign corporation at its principal office or at its last known

address." D.C. Code s 29-101.99(e)(2); see also id. s 29-101.108.