Petition — Arpeja-California, Inc. v. Cohane

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IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

ARPEJA-CALIFORNIA, INC.,

Petitioner,

JARRET N. COHANE,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE DISTRICT OF COLUMBIA COURT OF APPEALS

DAVID REIN

REIN, DREW, GARFINKLE

& DRANITZKE

1712 N Street, N.W.

Washington, D.C. 20036

Attorney for Petitioner.

Washington, 0.C. + THIEL PRESS + (202) 638-4521

(t)

TABLE OF CONTENTS a. 3

IS far uh 2s, at We tev 6 bee eA Se 0 OR 2

Se a — 2

re er ee er 2

CONSTITUTIONAL PROVISION AND

oe a a a hy a eee WOO See 2

ecw enneebssseeucese 3

1. The Proceedings in the

eG ee Sd a 46'S a dake dw 8 we oe Sk 3

2. The Proceedings in the

ee a a a ce ave eh 6 a Ree eae 6

REASONS FOR ALLOWING THE WRIT ............... 8

ES a Be a Ee Bm 13

TABLE OF AUTHORITIES

Cases:

Carmack v. Chemical Bank New York

Trust Co., 536 P.2d 897 (Okla. 1975)... cee eee eee 9

District Realty Title Insurance Corp.

v. Goodrich, 328 A.2d 93 (D.C.Ct.

ae een ae eRe ek Sea a ow Ree 3

Envir. Res. Inst. Inc. v. Lockwood

Greene Eng. Inc., 355 A.2d 808

en ee dew wei be wid © am wh ole © oe 8

Forsythe v. Overmyer, 576 F.2d 779

RS ee as weg ca ne eae ee wes oe we ee 11

Frost v. Peoples Drug Stores Incor-

_ porated, 327 A.2d 810 (D.C.Ct.

eae 6 barack an hake 6 ea ee bee ho Wes wees 3

Hanson v. Denckla, 357 U.S. 235 (1958)... .......24.. 7,10

International Shoe v. Washington, 326

EE hed ae 2G de ae owe O 6 WK oo re OO 7,9, 11

(it)

Cases, continued: Page

Kulko v. Superior Court of California,

436 U.S. pO BU BOUM oc sieevevcbarees 8

Lindley v. St. Louts-San Francisco

Railway Company, 407 F.2d 639

Se, CS Gre De Goal aes 6-hna-t kk Ae ae ee ew ae 11

McGee v. International Life Ins. Co.,

ke, eee rarer arenes Se eee 7,10

Nee v. Dillon, 99 U.S. App. D.C. 332,

OR ere ee a eee eee ee ae 3

Palmore v. United States, 411 U.S. 389

rE oie oe wes oe ia aed ode bk os bole elke we 2

Pickens v. Hess, 573 F.2d 380 (6th

a Saab eh eb. ek bk SN TROD CRO ON eS 8, 11

Precision Polymers Inc. v. Nelson,

ge OS, errr rrr eT err errr ese 11

L. D. Reeder Contractors of Arizona

v. Higgins Industries Inc., 265 F.2d

oy ae eer ae 11

Scott Paper Company v. Scott’s

Liquid Gold, Inc., 374 F. Supp.

oe a a kn ee ek eo Oe tebe eae 11

Shaffer v. Heitner, 433 U.S. 186

6k 0's ke Se a ee ek eae ewe ep oe 8, 10

Southern Idaho Pipe & Steel v. Cal-

Cut Pipe, 567 P.2d 1246 (Idaho

1977), cert. den. 434 U.S. 1056

U-Anchor Advertising Inc. v. Burt,

553 S.W.2d 760 (Texas 1977),

COR, re ee POs 65 56 0 ve bd ber eee OeS 8,9

Welsh v. Crescent Hill Co., 134 A.2d

fa eS APEC e eT TCC LETTCecerTeTc. . 3

Statutes: —_

eS NG inka Go xd Were d Woh ek Bias ea Ae hie acer 2

ood 5s dl 5 Wks 6 bee's be Boe hans Sy

Uniform Interstate and Interna-

Ne ols Gna eck' hs 6 dine o-o'0 66 04.08 88D 8

Texts:

Coen Lewemmetnee, VOR 1D 1. cece eter c ee eves 8

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1978

No.

ARPEJA-CALIFORNIA, INC.,

Petitioner,

JARRET N. COHANE,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE DISTRICT OF COLUMBIA COURT OF APPEALS

Arpeja-California, Inc. petitions for a writ of certiorari

to review a judgment of the District of Columbia Court of

Appeals upholding the jurisdiction of the Superior Court

of the District of Columbia over petitioner under the Dis-

trict of Columbia Long-Arm statute. The District of

Columbia Court of Appeals rejected petitioner’s conten-

tion that the exercise of jurisdiction violated the Due Pro-

Cess Clause of the Constitution.

l

2

OPINION BELOW

The findings of fact and opinion of the Superior Court

is reproduced at pp. 4-6 infra. The opinion of the

Court of Appeals is reported at 385 A.2d 153. It is repro-

duced in Appendix A hereto.

JURISDICTION

The judgment sought to be reviewed was entered on

March 17, 1978. (Appendix B.) A timely petition for re-

hearing was denied on May 17, 1978 with two judges

dissenting (Appendix C). The jurisdiction of the Court is

conferred by 28 U.S.C. §1257(3).!

QUESTION PRESENTED

Whether a non-resident foreign corporation which does

business in a state is, under the Due Process Clause,

subject to suit in that state with respect to transactions

that are unrelated to any business done in the forum

State.

CONSTITUTIONAL PROVISION AND

STATUTE INVOLVED

The Fifth Amendment to the Constitution provides in

pertinent part that ‘No person shall be . . . deprived of

life, liberty, or property, without due process of law...”

D.C. Code §13-423 (the District of Columbia’s long-

arm statute) provides in pertinent part:

' The District of Columbia Court of Appeals is included with-

in the term “highest court of a State” as used in 28 U.S.C. § 1257.

Although the petition draws into question the validity of a pro-

vision of the District of Columbia Code as interpreted by the Dis-

trict of Columbia Court of Appeals, review may be had in this

Court only by certiorari, and not by appeal. Palmore v. United

States, 411 U.S. 389 (1973)

3

(a) A District of Columbia court may exercise

personal jurisdiction over a person, who acts directly

or by any agent, as to a claim for relief arising from

the person’s...

“(1) transacting any business in the District of

Columbia.

* * * * *

“(b) When jurisdiction over a person is based

solely upon this section, only a claim for relief aris-

ing from acts enumerated in this section may be

asserted against him.”’

STATEMENT OF THE CASE

I,

THE PROCEEDINGS IN THE SUPERIOR COURT.

The present proceeding was commenced by a com-

plaint filed in the Superior Court of the District of

Columbia by the respondent, a salesman resident in Dela-

ware, against the petitioner, a California corporation, for

alleged loss of commissions. The cause of action was

based on a contract of employment whereby petitioner

employed respondent to sell petitioner’s merchandise in

the states of Pennsylvania, Delaware, Maryland, and the

District of Columbia. The complaint made no allegation

with respect to the place of the signing of the contract;

the trial court subsequently found that the contract was

negotiated in Dallas, Texas and executed in Wilmington,

Delaware, but that no negotiations or transactions with

respect to the contract took place in the District of

Columbia (infra p. 5). The complaint alleged that the

petitioner did business in the District of Columbia, but it

did not allege that any of the damages allegedly suffered

by respondent occurred as the result of any business

transacted by the petitioner in the District of Columbia.

+

Petitioner filed a motion to dismiss the complaint on

the grounds that on the face of the complaint the trial

court lacked personal jurisdiction over the petitioner and

that, in any event, the District of Columbia was an in-

appropriate forum. The trial court denied petitioner’s

motion and subsequently denied a motion to reconsider

petitioner’s contention that the court did not have

jurisdiction.

The case came to trial on September 28, 1976. At the

opening of the trial, counsel for petitioner renewed his

contention that the court lacked jurisdiction and that the

case should not be tried in the District of Columbia be-

cause of the nonresidency of the parties and the lack of

any meaningful relationship between the parties, the sub-

ject matter and the District of Columbia. Respondent-

plaintiff was then called to the stand and testified for

approximately two hours.

Shortly before the conclusion of respondent’s direct

examination, the trial court recessed the trial and shortly

thereafter dismissed the case on the ground of forum non

conveniens. Through inadvertence, no transcript was

made of the trial proceedings. The trial court subsequent-

ly made, pursuant to an order of the District of Columbia

Court of Appeals, the following findings of fact and con-

clusions of law (emphasis supplied):

“Findings of Fact

“1. Appellant? is a resident of Wilmington,

Delaware.

“2. Appellee is a corporation organized under

the laws of the State of California with its principal

place of business in Los Angeles, California.

* Appellant is the respondent here and Appellee is the peti-

tioner.

5

“*3. Neither of the parties maintained an office

in the District of Columbia.

“4. The original written contract was negotiated

between the parties in Dallas, Texas but was exe-

cuted in Wilmington, Delaware by Appellant and

mailed to Appellee in Los Angeles. The original con-

tract submitted in Dallas, Texas had been modified

and/or clarified by discussions between the parties

accomplished by long distance telephone from Wil-

mington, Delaware to Los Angeles, California.

“5. The contract was for personal services to be

performed by the Appellant in Pennsylvania, Dela-

ware, Maryland and the District of Columbia and

the supplying by Appellee of goods to retail outlets

in those jurisdictions.

“6. The relationship established by the contract

and the parties thereto and its performance by the

parties with the District of Columbia was minimal or

insignificant.

“7, The contentions of the Appellant would

necessitate examination of and comparison with

voluminous records of Appellee physically present

in the court contained in large cartons, likely to

require reference to the Auditor Master of the Court

or some other form of accounting procedures.

“8. Appellant’s case, as described in the opening

statement of counsel, was to include the presenta-

tion of his own testimony and that of a witness

from Baltimore, Maryland and the utilization of his

own records and those of Appellee. The Appeilee’s

- presentation was to include the testimony of two

officers of the corporation and the records of the

corporation, both officers being residents of Los

Angeles, California.

“9. Though the record reveals that Appellee had

previously filed a motion to dismiss and to quash

6

service, which included a reliance upon the statute

providing for the application of the doctrine of

forum non conveniens in the District of Columbia,

the principal thrust of that mction was directed to

the issue of lack of jurisdiction. The previous judge,

the Honorable DeWitt Hyde, passing upon said

motion and denying same, did not have before him

the total factual picture as developed early in this

trial and found as factors hereinabove at the time of

his ruling.

*‘Conclusions of Law

“I. By reason of the Findings of Fact numbered

1 through 4, the lack of any significant relationship

between the District of Columbia and the parties

and the subject matter of this litigation, the nature

of the contract, the necessity of applying foreign

law (Contrac: & Damages) to litigation requiring

extensive examination of and computation of

records and with judicial knowledge of the calendar

in the overburdened Superior Court and giving re-

cognition to the rights of citizens of the District of

Columbia to have primary access to the court, the

court concludes the Doctrine of Forum Non Con-

veniens should be applied and the case dismissed.

“II. Though this court had jurisdiction, as

previously determined by the denial of Appellee’s

motion to dismiss, the court was not foreclosed by

the Law of the Case Doctrine from dismissing on

Forum Non Conveniens under the totality of the

circumstances herein.”’

II.

THE PROCEEDINGS IN THE COURT OF APPEALS.

Respondent appealed the trial court’s dismissal to the

District of Columbia Court of Appeals. In its brief urging

affirmance of the dismissal by the trial court, petitioner

7

contended that the trial court lacked jurisdiction under

the District of Columbia long-arm statute, since respond-

ent had failed to allege or show that he had lost commis-

sions as the result of sales in the District of Columbia,

and the long-arm statute expressly required that any

claim for relief must arise from the transaction of busi-

ness in the District. Petitioner further contended that any

other interpretation of the statute would violate the

standards of due process as laid down by this Court in

International Shoe v. Washington, 326 U.S. 310 (1945);

McGee v. International Life Ins. Co., 355 U.S. 220

(1957); and Hanson v. Denckla, 357 U.S. 235 (1958).

The Court of Appeals reversed the judgment below

finding that the trial court had abused its discretion in

dismissing the case on the ground of forum non con-

veniens after the trial had begun.* The court also rejected

petitioner’s jurisdictional argument holding that, since

respondent alleged that sales were made in the District of

Columbia, it was not necessary that the respondent also

allege that the claim for relief arise from those sales (see

Appendix A p. 13a). The court also expressly held that

the “exercise of jurisdiction in the present case does

not offend due process” (Appendix A p. 13a).

Petitioner filed a timely petition for rehearing in which

it contended that the exercise of jurisdiction violated due

3 This ruling was in direct conflict with a decision of the

United States Court of Appeals in Nee v. Dillon, 99 U.S. App. D.C.

332, 239 F.2d 953 (1956) to the effect that a trial court had a

duty to dismiss on forum non conveniens ground where facts

adduced at trial showed that this was proper. This doctrine,

enunciated in the Nee case, was subsequently reaffirmed by the

District of Columbia Court of Appeals in Welsh v. Crescent Hill

Co., 134 A.2d 653, 654 (D.C. Ct. App. 1957); Frost v. Peoples

Drug Stores Incorporated, 327 A.2d 810, 813 (D.C. Ct. App.

1974); and District Realty Title Insurance Corp. v. Goodrich,

328 A.2d 93, 94-95 (D.C. Cir. App. 1974).

8

process (1) because the complaint failed to allege that

any commissions were lost as the result of any transac-

tions in the District of Columbia and (2) in light of the

express finding of the trial court that “The relationship

established by the contract and the parties thereto and

its performance by the parties with the District of Colum-

bia was minimal or insignificant” (supra p. 5). The peti-

tion tor rehearing was denied by an en banc court with

two judges dissenting (Appendix C).

REASONS FOR ALLOWING THE WRIT

1. This case is another in the series of cases which have

reached this Court in recent terms testing the issue of the

due process limitations on the jurisdiction of state courts

over non-residents. Shaffer v. Heitner, 433 U.S. 186

(1977); Kulko v. Superior Court of California, 436 U.S.

, decided May 15, 1978; U-Anchor Advertising Inc.

v. Burt, 553 S.W.2d 760 (Texas 1977), cert. den. 434

U.S. 1063 (1978); Southern Idaho Pipe & Steel v. Cal-Cut

Pipe, 567 P.2d 1246 (Idaho 1977), cert. den. 434 U.S.

1056 (1978). The present case is particularly significant

since it involves an interpretation and application of the

Uniform Interstate and International Procedures Act,

popularly known as the “‘long-arm”’ statute, which has

been adopted in practically every state. See Vol. 13

Uniform Laws Annotated p. 285 §1.03.

2. Practically all jurisdictions which have adopted

“long-arm”’ statutes have interpreted these statutes as

granting jurisdiction to state courts to the ‘outer limits”’

permitted by the Due Process Clause. See e.g., Pickens v.

Hess, 573 F.2d 380 (6th Cir. 1978, interpreting Tennes-

sce statute); Envir. Res. Inst. Inc. v. Lockwood Greene

Eng. Inc., 355 A.2d 808 (D.C. Ct. App. 1976, stating

that this is the rule in Maryland, Virginia and the District

9

of Columbia); Carmack v. Chemical Bank New York

Trust Co., 536 P.2d 897 (Okla. 1975); U-Anchor Adver-

tising Inc. v. Burt, supra (Texas); Southern Idaho Pipe &

Steel v. Cal-Cut Pipe, supra (Idaho). Accordingly, al-

though the decision below involves an interpretation and

application of a provision of the D. C. Code, unless

reviewed by this Court, the decision will stand as a prece-

dent for the permissible constitutional application of the

long-arm statutes in states throughout the country.

The District of Columbia long-arm statute, like the

Uniform Act, has built within it two provisions which are

designed to keep the application of the statute within

the constitutional limits of the due process requirements

as set out by this Court. Paragraph (a) of the statute

limits jurisdiction to a claim for relief arising from a

person’s transacting any business in the District of

Columbia and paragraph (b) states expressly that (empha-

sis supplied):

“When jurisdiction over a person is based solely

on this section, only a claim for relief arising from

acts enumerated in this section may be asserted

against him.”’

These limitations on jurisdiction as written into the

statute are obviously required by the decisions of this

Court permitting jurisdiction over non-residents under

circumstances where the non-resident comes into the

foreign jurisdiction. Thus, this Court stated in /nterna-

tional Shoe, supra at 319 (emphasis supplied):

“But to 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 ubligations

arise out of or are connected with the activities

within the state, a procedure which requires the

10

corporation to respond to a suit brought to enforce

them can, in most instances, hardly be said to be

undue.”

The rule was stated as follows in McGee v. Interna-

tional Life Ins. Co., supra at 223: “It is sufficient for pur-

poses of due process that the suit was based on a contract

which had substantial connection with that State.” In

Hanson v. Denckla, supra, the Court elaborated as follows

on the trend to expand jurisdiction over non-residents (at

251-252 emphasis supplied):

“But it is a mistake to assume that this trend

heralds the eventual demise of all restrictions on the

personal jurisdiction of state courts. ... Those re-

strictions are more than a guarantee of immunity

from inconvenient or distant litigation. They are a

consequence of territorial limitations on the power

of the respective States. However minimal the bur-

den of defending in a foreign tribunal, a defendant

may not be called upon to do so unless he has had

the ‘minimal contacts’ with that State that are a pre-

requisite to its exercise of power over him.

* * * * *

“The cause of action in this case is not one that

arises out of an act done or transaction consum-

mated in the forum State. In that respect, it differs

from McGee v. International Life Ins. Co. . . . Con-

sequently, this suit cannot be said to be one to en-

force an obligation that arose from a privilege the

defendant exercised in Florida.”

.

And in Shaffer v. Hettner, supra, this Court repudiated

its earlier doctrine that the presence of property in a for-

eign jurisdiction can serve as the basis of jurisdiction,

holding that that fact alone cannot serve as the basis of

jurisdiction unless the property is the subject matter of

the litigation or in some way relates to the underlying

cause of action.

11

Thus, it is plain that the language of the statute limit-

ing jurisdiction to claims that are related to business done

in a forum state is a constitutional requirement and can-

not be read out of the statute as a mere matter of statu-

tory interpretation. Accordingly, the lower court’s inter-

pretation of the statute so as to permit the exercise of

jurisdiction over claims for relief that did not arise from

transactions in the District of Columbia is in conflict with

the due process requirements for jurisdiction over a non-

resident as laid down by this Court.

3. The decision below conflicts with the decisions of

courts from other jurisdictions construing their long-arm

statutes. These courts have consistently held that the

statutes confer jurisdiction only with respect to claims

arising from transactions in the forum state. See e.g.,

L.D. Reeder Contractors of Arizona v. Higgins Industries,

Inc., 265 F.2d 768 (9th Cir. 1959, applying California

Law); Forsythe v. Overmeyer, 576 F.2d 779 (9th Cir.

1978, California law); Pickens v. Hess, supra (applying

Tennessee law); Lindley v. St. Louis-San Francisco Rail-

way Company, 407 F.2d 639 (7th Cir. 1968, applying

Illinois law); Precision Polymers Inc. v. Nelson, 512 P.2d

811 (Okla. 1973), Scott Paper Company v. Scott’s Liquid

Gold, Inc., 374 F. Supp. 184 (D. Delaware, 1974).

4. The importance of this issue to enterprises such as

petitioner’s is manifest. Petitioner is a California cor-

poration that manufactures clothes and sells merchan-

dise to retail establishments throughout the country.

Under the reasoning of International Shoe and its prog-

eny, petitioner recognizes that, when it sells merchandise

in the District of Columbia or any state, it enjoys privi-

leges granted by the laws of that state and as a conse-

quence subjects itself to the jurisdiction of the courts

of that state with regard to any cause of action arising

12

out of its activities in that state. It is unreasonable, how-

ever, to hold that by selling merchandise in the District

of Columbia, petitioner subjects itself to the jurisdiction

of the District of Columbia with respect to causes of

action that arise from its selling merchandise in Penn-

sylvania, Maryland, Delaware or any state other than

the District of Columbia. Petitioner sells its merchan-

dise in most states of the Union. The logic of the holding

below would permit petitioner to be sued in any state

where it sold merchandise even though the claim for

relief had no relation to the sales made in that jurisdic-

tion.

Nor is there anything in the facts of the present case

that can justify this unwarranted expansion of jurisdic-

tion. The complaint against petitioner did not allege that

any damage resulted to the respondent as a consequence

of anything that petitioner did in the District of Colum-

bia; it alleged only that petitioner contracted with respon-

dent to solicit orders in the District of Columbia and in

fact made sales to stores in the District. Further, the

trial court expressly found that “The relationship estab-

lished by the contract and the parties thereto and its per-

formance by the parties with the District of Columbia

was minimal or insignificant.” * To subject petitioner,

under these circumstances, to the jurisdiction of the

District of Columbia courts for alleged loss of commis-

sions as the result of sales in Pennsylvania, Maryland

and Delaware is clearly unreasonable and not in con-

formance with the due process requirements as laid down

by this Court.

+ The trial court also found that there was a “‘lack of any

significant relationship between the District of Columbia and the

parties and the subject matter of this litigation’’ (supra p. 6).

13

CONCLUSION

Certiorari should be granted and the judgment below

should be reversed with directions to dismiss the com-

plaint for lack of jurisdiction.

Respectfully submitted,

DAVID REIN

REIN, DREW, GARFINKLE

& DRANITZKE

1712 N Street, N.W.

Washington, D.C. 20036

Attorney for Petitioner.

APPENDIX

Ms

es 2

la

APPENDIX A

DISTRICT OF COLUMBIA COURT OF APPEALS

No. 11611

JARRET N. COHANE, APPELLANT,

V.

ARPEJA-CALIFORNIA, INC., APPELLEE.

Appeal from the Superior Court of the

District. of Columbia

(Hon. William E. Stewart, Jr., Trial Judge)

(Argued September 28, 1977 Decided March 17, 1978)

Arnold Rochvarg with whom Philip L. Cohan was on

the brief, for appellant.

David Rein for appellee.

Before KELLY, YEAGLEY and MACK, Associate Judges.

YEAGLEY, Associate Judge: This appeal is from an

order of the trial court dismissing a breach of contract

action in midtrial on forum non conveniens grounds.’ We

find that under the circumstances of this case, dismissal

was inappropriate.

1 Because of the inability of the court reporter to supply a

transcript of the proceedings below, this court requested the

trial court to submit a statement of proceedings and evidence.

Our discussion of this case is based on that statement.

[446]

2 2a

Appellant Jarret N. Cohane, a salesman and resi-

dent of Delaware, brought suit against appellee Arpeja-

California, Inc., a California corporation engaged in the

business of manufacturing women’s apparel. Appellant

was employed by Arpeja-California as an independent

agent and assigned to travel the area of eastern Penn-

sylvania, Maryland, Delaware, and Washington, D.C.,

seliing the Young Edwardian line of Arpeja’s clothing.

He claimed that pursuant to his employment contract,

as orally modified, he was entitled to certain commis-

sions which appellee failed to pay.

On June 23, 1975, appellee filed a motion to dismiss the

complaint on the grounds? that the trial court did not

have personal jurisdiction over it and that the District

of Columbia was an inappropriate forum.’ Appellee’s

motion was denied after a hearing before the Superior

Court and a motion to reconsider was filed.* After addi-

tional argument, the court again denied the motion to

dismiss. Appellee did not appeal this ruling.

The parties then proceeded with discovery. Depositions

were taken in California and the District of Columbia,

* Appellee also claimed that dismissal was mandated by the

District of Columbia Statute of Frauds, D.C. Code 1973, § 28-

3502. That issue is not before us.

*The District of Columbia forum non conveniens statute,

D.C. Code 1978, § 13-425 provides:

When any District of Columbia court finds that in the

interest of substantial justice the action should be heard

in another forum, the court may stay or dismiss such civil

action in whole or part on any condition that may be just.

* Appellee did not raise the forum non conveniens argument

in the motion to reconsider, but contended only that the court

did not have jurisdiction over it under the District of Columbia

“long arm” statute, D.C. Code 1973, § 13-423.

[447]

3a . 8

and appellee submitted two sets of interrogatories to ap-

pellant. During the course of discovery, several motions

were filed with the Superior Court.

The parties were called to trial on September 27, 1976.

Cohane appeared with his counsel and a witness from

Baltimore, Maryland. Appellee appeared in the person

of its president and vice-president, both from California,

together with counsel. Both sides announced “ready” and

awaited assignment of a trial judge. Unfortunately, no

cases were assigned for trial that day. At 5 p.m., the

parties appeared before Judge William E. Stewart, Jr.,

who was sitting as motions judge. When Judge Stewart

learned of the circumstances of the case, he agreed to

try it himself at 8 a.m. the following morning.

On the morning of September 28, 1976, the witnesses,

parties and counsel appeared before Judge Stewart. In

his opening argument, counsel for appellee contended that

the court lacked jurisdiction and that the case should not

be tried in this jurisdiction because of the nonresidency

of the parties and the lack of any substantial relationship

between the parties, the subject matter, and the District

of Columbia. Cohane was then called to the stand and

proceeded to give testimony.

At approximately 10:30 a.m., the court interrupted the

direct examination of appellant and asked counsel for

appellant to state his contentions as to which jurisdic-

tion’s law governed the interpretation of the contract

and the claim for damages. Counsel’s response was that

he assumed the applicable principles to be the same in

every jurisdiction. After a short recess, the court made

oral findings of fact and conclusions of law which cul-

minated in the dismissal of the action on grounds of

forum non conveniens.

[448]

4 4a 5a

voluminous records of Appellee physically pres-

ent in the court contained in large cartons,

likely to require reference to the Auditor Master

Judge Stewart subsequently made, pursuant to an

order of this court, the following written findings of fact

and conclusions of law:

FINDINGS OF FACT

1. Appellant is a resident of Wilmington,

Delaware.

2. Appellee is a corporation organized under

the laws of the State of California with its prin-

cipal place of business in Los Ange’es, Cali-

fornia.

3. Neither of the parties maintained an office

in the District of Columbia.

4, The original written contract was negoti-

ated between the parties in Dallas, Texas but

was executed in Wilmington, Delaware by Ap-

pellant and mailed to Appellee in Los Angeles.

The original contract submitted in Dallas, Texas

had been modified and/or clarified by discus-

sions between the parties accomplished by long

distance telephone from Wilmington, Delaware

to Los Angeles, California.

5. The contract was for personal services to

be performed by the Appellant in Pennsylvania,

Delaware, Maryland and the District of Colum-

bia and the supplying by Appellee of goods to

retail outlets in those jurisdictions.

6. The relationship established by the con-

tract and the parties thereto and its perform-

ance by the parties with the District of Colum-

bia was minimal or insignificant.

7. The contentions of the Appellant would

necessitate examination of and comparison with

[449]

of the Court or some other form of accounting

procedures.

8. Appellant’s case, as described in the open-

ing statement of counsel, was to include the

presentation of his own testimony and that of a

witness from Baltimore, Maryland and the utili-

zation of his own records and those of Appellee.

The Appellee’s presentation was to include the

testimony of two officers of the corporation and

the records of the corporation, both officers be-

ing residents of Los Angeles, California.

9. Though the record reveals that Appellee

had previously filed a motion to dismiss and to

quash service, which included a reliance upon

the statute providing for the application of the

doctrine of forum non conveniens in the District

of Columbia, the principal thrust of that motion

was directed to the issue of lack of jurisdiction.

The previous judge, the Honorable DeWitt

Hyde, passing upon said motion and denying

same, did not have before him the total factual

picture as developed early in this trial and

found as factors hereinabove at the time of his

ruling.

CONCLUSIONS OF LAW

I. By reason of the Findings of Facts num-

_ bered 1 through 4, the lack of any significant

relationship between the -District of Columbia

and the parties and the subject matter of this

litigation, the nature of the contract, the neces-

sity of applying foreign law (Contract & Dam-

[450]

6 6a

ages) to litigation requiring extensive examina-

tion of and computation of records and with

judicial knowledge of the calendar in the over-

burdened Superior Court and giving recognition

to the rights of citizens of the District of Colum-

bia to have primary access to the court, the

court concludes the Doctrine of Forum Non

Conveniens should be applied and the case

dismissed.

II. Though this court had jurisdiction, as

previously determined by the denial of Appel-

lee’s motion to dismiss, the court was not fore-

closed by the Law of the Case Doctrine from

dismissing on Forum Non Conveniens under the

totality of the circumstances herein.

Be

Appellant contends that the trial court’s sua sponte

dismissal of this action was an abuse of discretion.

After careful analysis of the relevant factors, we find

that the trial court erred in ordering the midtrial dis-

missal of appellant’s claims on the grounds that the Dis-

trict of Columbia was an inappropriate forum.’

It is well settled in this jurisdiction that decisions on

questions of forum non conveniens are committed to the

sound discretion of the trial court and will be reversed

*In view of this disposition of the forum non conveniens

issue, we find it unnecessary to pass upon appellant’: conten-

tion that the trial court was foreclosed from dismissing the

case on this ground, because of the failure of defendant to

exercise his right under Frost v. Peoples Drug Store, Inc.,

D.C.App., 327 A.2d 810, 811-13 (1974), to appeal the order of

the motions court rejecting defendant’s origina! motion to

dismiss.

[451]

7a T

on appeal only upon a clear showing of an abuse of dis-

cretion. E.g., Florida Education Association v. Na-

tional Education Association, D.C.App., 354 A.2d 853,

854 (1976) ; Frost v. Peoples Drug Store, Inc., D.C.App.,

3827 A.2d 810, 813 (1974). This broad discretion is not

unlimited, however, and this court will examine the trial

court’s action in light of well established criteria for ap-

plying the doctrine. Carr v. Bio-Medical Applications of

Washington, Inc., D.C.App., 366 A.2d 1089, 1092 (1976) ;

Dorati v. Dorati, D.C.App., 342 A.2d 18, 20 (1975).

Foremost among those criteria is the principle that “un-

less the balance is strongly in favor of the defendant, the

plaintiffs’ choice of forum should rarely be disturbed.”

Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).

This court carefully analyzed the factors to be consid-

ered in determining whether an action should be dis-

missed on forum non conveniens grounds in Carr v. Bio-

Medical Applications of Washington, Inc., supra at 1092.

We said:

In the landmark case of Gulf Oil Corp. v. Gil-

bert, the Supreme Court identified two separate

interests which must be considered in assessing

a motion to dismiss for forum non conveniens—

the private interest of the litigant, and the

public interest. Factors relevant to the private

interest concern the ease, expedition, and ex-

pense of the trial, and include the relative ease

of access to proof; availability and cost of com-

pulsory process; the enforceability of a judg-

ment once obtained; evidence of an attempt by

the plaintiff to vex or harass the defendant by

his choice of the forum; and other obstacles to

a fair trial. . . . Likewise, the public interest

is a relevant consideration in applying the doc-

[452]

8 8a

trine. Factors related to the public interest

include administrative difficulties caused by local

court dockets congested with foreign litigation;

the imposition of jury duty on a community

having no relationship to the litigation; and the

inappropriateness of requiring local courts to in-

terpret the laws of another jurisdiction.

Usually when we review a forum non conveniens dis-

missal, the trial court’s ruling has come in response to a

pre-answer motion to dismiss. In such a case, the parties

have not been put to the expense of discovery and the

witnesses have not been brought to the forum for trial.

Therefore, the appropriateness of dismissal is determined

merely by weighing the factors outlined in Carr. See

Dorati v. Dorati, supra. When, however, the parties and

the court have expended their time, effort and money

preparing for trial, other considerations enter the picture

and the Carr factors are no longer dispositive. Thus in

Wilburn v. Wilburn, D.C.App., 192 A.2d 797 (1963), we

reversed when the trial court dismissed on forum non

conveniens grounds 16 months after concluding a two-day

trial. We said:

It is not helping to relieve congested court cal-

endars by holding the precise trial which the

doctrine in part seeks to avoid, and then claim-

ing inconvenience. We find that the trial court

abused its discretion when after months of prep-

aration, motions, pre-trial, and a full hearing

consuming two days’ time, it sua sponte dis-

missed the complaint on the ground of forum

non conveniens. [Id. at 801.]

Wilburn emphasized the significance which must be given

to the timing of a forum non conveniens motion.

[453]

9a 9

In this case, the trial court dismissed in midtrial. As

in Wilburn, the dismissal came after months of prepara-

tion, motions, and pre-trial proceedings. The witnesses

were in the courtroom prepared to proceed.

Of course, we recognized in Wilburn that situations

would arise occasionally in which dismissal on forum non

conveniens grounds would be appropriate even at the

trial stage. Those, however, will be rare cases arising

only where the public and private interest, as defined in

Carr, weigh overwhelmingly in favor of dismissal. We

find that this is not such a case.

Here, the private interest was not clearly served by

dismissal. Continuation of the trial would not have been

difficult or expensive.* Only four witnesses were sched-

uled to testify and appellant had already completed part

of his testimony. Moreover, this is not a case in which

access to proof or the availability of compulsory process

was a problem. All of the witnesses, records and docu-

ments were present in the courtroom. Finally, there did

not appear to be any problem of enforcing the judgment,

nor was there any indication that the suit was brought

in the District of Columbia in order to harass appellee.

Whether the public interest was served by dismissing

this action is a more complex question. On the one hand,

the trial court noted that appellant’s claims would require

examination and comparison of voluminous records and

perhaps reference to the Auditor Master of the court.

* Appellee argues in its brief that the trial would have been

extremely difficult. Appellee’s position is that the trial would

have been spread out piecemeal and interspaced between the

trial judge’s other duties and could have taken a week or more.

We note that the trial judge did not mention this factor in his

findings and conclusions of law.

[454]

10 10a

This would have taken court time and added to the back-

logged civil calendar in the Superior Court. Also, there

was the likelihood that the trial court would be faced

with the task of applying foreign law. On the other hand,

the public interest is not served when an action which

already has utilized a substantial amount of court time

is aborted in midtrial.

Under the circumstances, we find that the Carr factors

did not overwhelmingly favor dismissal in midtrial and

hence that the trial court abused its discretion.

II.

Appellee argues that even if the trial court abused

its discretion in dismissing on forum non conveniens

grounds, the dismissal was appropriate because the court

lacked jurisdiction over it.

Before a court may properly assert personal jurisdic-

tion over a nonresident defendant, service of process over

the nonresident must be authorized by statute and be

within the confines of the due process clause of the

United States Constitution. International Shoe Co. v.

Washington, 326 U.S. 310 (1945). The District of

Columbia “long arm” statute provides:

§ 13-423. Personal jurisdiction based upon

conduct

(a) A District of Columbia court may exer-

cise personal jurisdiction over a person, who

acts directly or by an agent, as to a claim for

relief arising from the person’s—

(1) transacting any business in the District

of Columbia;

[455]

lla 11

(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.

Our cases have interpreted this statute as permitting

the exercise of personal jurisdiction over nonresident de-

fendants to the extent permitted by the due process

clause. E.g9., Environmental Research International, Inc.

v. Lockwood Greene Engineers, Inc., D.C.App., 355 A.2d

808, 810-11 (1976).

Under § 13-423(a) (1), less of a nexus between the de-

fendant and the District of Columbia is required for a

finding of jurisdiction than would be required under the

“doing business” test used to determine corporate pres-

ence. International Shoe Co. v. Washington, supra. All

that is required is some affirmative act by which the

defendant brings itself within the jurisdiction and estab-

lishes minimum contacts. Hanson v. Denckla, 357 U.S.

235 (1958). However, under § 13-423(a)(1) and the

doctrine of Internation=! Shoe, a finding that the de

fendant has “transacted business” in the District of

Columbia does not result in unlimited jurisdiction. In-

stead, jurisdiction is limited to claims arising from the

particular transaction of business which provides the basis

for jurisdiction. D.C. Code 1973, § 13-423(b). In other

words, the statute would not grant the Superior Court

jurisdiction over a nonresident defendant with respect

to a claim arising from a shipment of goods to a pur-

chaser in Pennsylvania, solely on the ground that the

defendant had also shipped goods to purchasers in the

District.

In the present case, appellant was a salesman for ap-

pellee with a territory covering eastern Pennsylvania,

Maryland, Delaware and the District of Columbia. Ap-

[456]

12 12a

pellee concedes that by shipping goods to the District of

Columbia, it may have subjected itself to a suit in the

Superior Court by appellant for the loss of commissions

arising from the District of Columbia sales. Appellee

contends, however, that appellant’s present claim of lost

commissions arises out of his activities in Pennsylvania,

Maryland and Delaware as well as the District of Colum- .

bia. Appellee further argues that since appellant failed

to allege specifically in his complaint, or otherwise show,

that some of the commissions he lost were a result of

sales in the District of Columbia he did not carry his

burden of setting forth jurisdictional facts which would

support jurisdiction under the provisions of § 13-423.

In our view, appellee’s contentions are based on an

erroneous interpretation of § 13-423. The limitation in

§ 13-423(b) that the claim for relief must arise from the

transaction of business in the District of Columbia is

meant to prevent “the assertion of claims in the forum

state that do not bear some relationship to the acts in the

forum state relied upon to confer jurisdiction.” Malinow

v. Eberly, 322 F. Supp. 594, 599 (D.Md. 1971). Once,

however, the claim is related to acts in the District,

§ 13-423 does not require that the scope of the claim be

limited to activity within this jurisdiction.

This view is supported by the legislative history of

§ 13-423. The District of Columbia “long arm” statute is

modeled after the Uniform Interstate and International

Procedure Act. See Founding Church of Scientology,

Etc. v. Verlag, 175 U.S.App.D.C. 402, 405, 5386 F.2d 429,

432 (1976). The note of the Commissioners on Uniform

State Laws states in reference to the Uniform Act coun-

terpart of § 13-423:

The concept of cause of action or claim for

relief should be broadly construed to cover an

[457]

|

}

‘

13a 13

entire transaction so that, when possible, the en-

tire dispute may be settled in a single litigation.

Subdivision (b) is designed to prevent assertion

of independent claims unrelated to any activity

described in subdivision (a) of $103. [13

U.L.A. §103 at 288 (1975) (emphasis sup-

plied ).]

In the present case, appellant alleged in his complaint

that appellee sold to clothing stores in the District of

Columbia and received payment for those sales. Appellee

also contracted with appellant to solicit orders and sell

goods here. In the affidavit filed in support of appellee’s

motion to dismiss, appellee did not deny that appellant’s

claim arose, in part at least, out of sales in the District

of Columbia. We find that appellant alleged sufficient

facts to support jurisdiction under § 13-423. Mosley v.

Nationwide Purchasing, Inc., 485 F.2d 418 (Temp. Emer.

Ct. App. 1973).

Finally, we find that our exercise of jurisdiction in the

present case does not offend due process. As the Supreme

Court indicated in McGee v. International Life Insur-

ance Co., 355 U.S. 220, 228 (1957), “i]t is sufficient for

purposes of due process that the suit was based on a

contract which had substantial connection with that

state.” See generally Shaffer v. Heitner, 97 S.Ct. 2569

(1977).

Accordingly, the judgment below is

Reversed and remanded for

proceedings consistent with

this opinion.

[458]

l4a

APPENDIX B

[ Filed March 17, 1978]

DISTRICT OF COLUMBIA COURT OF APPEALS

No. 11611

JANUARY TERM, 1978

JARRET N. COHANE,

Appellant,

v.

ARPEJA-CALIFORNIA, INC.,

Appellee.

APPEAL FROM THE SUPERIOR COURT OF

THE DISTRICT OF COLUMBIA, CIVIL DIVISION

BEFORE: Kelly, Yeagley and Mack, Associate Judges.

JUDGMENT

This cause came on to be heard on the transcript of

the record from the Superior Court of the District of

Columbia, and was argued by counsel.

ON CONSIDERATION WHEREOF, it is now here

ordered and adjudged by this Court that the judgment

on appeal is reversed and this cause is remanded for

further proceedings consistent with the opinion filed

this date.

ee

l5a

PER CURIAM.

For the Court:

/s/ Hugh E. Kline

Hugh E. Kline.

Chief Deputy Clerk.

Dated: March 17, 1978

Opinion per Associate Judge J. Walter Yeagley.

ne en a ee ne a a

16a 17a

APPENDIX C = Copies to:

Honorable William E. Stewart, Jr.

[Filed May 17, 1978]

Clerk, Superior Court

DISTRICT OF COLUMBIA COURT OF APPEALS Philip L. Cohan, Esquire

a Amold Rochvarg, Esquire

No. 11611 1700 Pennsylvania Avenue NW, 20006

David Rein, Esquire

733 15th Street, NW, 20005

JARRET N. COHANE,

Appellant,

v.

ARPEJA-CALIFORNIA, INC.,

Appellee.

CA 4653-75

BEFORE: *Kelly, Kem, Gallagher, Nebeker, *Yeag-

ley, Harris, *Mack, and Ferren, Associate

Judges.

ORDER

On consideration of appellee’s petition for rehearing

en banc, and it appearing that a majority of the judges

of this Court having voted to deny the petition, it is

ORDERED that appellee’s petition is denied.

PER CURIAM.

*Associate Judges Nebeker and Harris would vote to

grant the petition.