Petition for Writ of Certiorari — Mobil Land Development Development Development Corp. v. Spann (Nos. 90-201, 90-202)

Supteme Court, U

FILED.

90-2 02 a

JOSEPH F. SPANIOW, JR.

No CLERK

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1990

MosiL LAND DEVELOPMENT CORPORATION,

Petitioner,

V.

GIRARDEAU A. SPANN, the METROPOLITAN WASHINGTON

PLANNING & HOUSING ASSOCIATION, INC., and the

FaIR HOUSING COUNCIL OF GREATER WASHINGTON,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

REUBEN B. RoBERTSON, III

Dow, LOHNES & ALBERTSON

1401 Sixteenth Street, N.W.

Washington, D.C. 20036

Telephone (202) 232-1015

Counsel of Record for Petitioner

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTION PRESENTED

May the specific requirements of Fed.R.Civ.P. 4 for

service of original process be disregarded, and are

federal courts accordingly empowered to exercise in

personam jurisdiction over a nonconsenting corporate

defendant which has not been served directly, based

solely upon that defendant’s awareness of the liti-

gation and the fact that its wholly-owned subsidiary

was served and appeared as a defendant in the liti-

gation?

il

PARTIES IN THE COURT OF APPEALS

The parties below were Colonial Village, Inc. and

Mobil Land Development Corporation, the defendants

in Civil Action No. 86-2917 in the district court and

appellees in No. 88-7257 in the court of appeals; Mar-

vin J. Gerstin and Marvin Gerstin Associates, Inc.,

defendants in Civil Action No. 86-3196 and appellees

in the consolidated case in the court of appeals, No.

88-7260; and Girardeau Spann, the Metropolitan

Washington Planning and Housing Association, Inc.,

and the Fair Housing Council of Greater Washington,

plaintiffs in both district court cases and appellants

in both court of appeals cases.

Petitioner Mobil Land Development Corporation is

a wholly-owned subsidiary of the Mobil Corporation,

a publicly-held corporation, and it owns all of the

stock of Colonial Village, Inc.

iil

TABLE OF CONTENTS

Page

IE STUIINEIEID .....- secccneceecncesnecnccescancanustans i

PARTIES IN THE COURT OF APPEALS .....ccccccccocceceeee ii

TABLE OF CONTENTS ...... PRN IT AEE fe OTRO iil

See GN PRRIMININUTING. ......coconncoccecscacceocsocecceoscecences iv

SLA RN RT LO CA l

JURISDICTION OF THIS COURT ........cccoccococeccoccecocccees l

STATUTORY PROVISIONS AND RULES INVOLVED ....... 2

I GO UE CR nn ccccndenccacencddacececcceccs 6

REASONS FOR GRANTING THE WRIT ........cccccccccescocee 12

The Lower Courts’ Rulings Conflict With De-

cisions of this Court and Other Circuits On

An Important Question of Federal Jurisdic-

tion, and Their Assertion of In Personam

Jurisdiction Over a Defendant Not Served in

Compliance With Rule 4 Represents a De-

parture From Accepted Practice Warranting

Exercise of this Court’s Power of

i ORE ee A A 12

a IE i a A 20

TABLE OF AUTHORITIES

Cases

Armco, Inc. v. Penrod-Stauffer Building Systems,

Inc., 733 F.2d 1087 (4th Cir. 1984) ......0.000...

Bally Export Corp. v. Balicor, Ltd., 804 F.2d 398

PUES UTTID stidnicusssidachiniiepccacansanasannsaceiniepuniaains

Brown v. Flowers Industries, Inc., 688 F.2d 328

(5th Cir. 1982), cert. denied, 460 U.S. 1023

SERINE ccsscsheccadacabsihicdptacbancasinenies otingliebeabdapanedeagutmanndstes

Burnham v. Superior Court of California, 109

L.Ed.2d 631, 110 S.Ct. 2105 (1990) ...............

Cohen v. Newsweek, Inc., 312 F.2d 76 (8th Cir.

SRSA Ragen ob i BE re ee SARA ae RAE AP

Combs v. Nick Garin Trucking, 825 F.2d 437 (D.C.

ge. | RAMs AR Mi cst ttt IR

Datskow v. Teledyne, Inc., 899 F.2d 1298 (2d Cir.

I niiiccuilisisnnsaisinits nicissasibsdidencosngndeeoabunataaminipiiiasaan

Delong Equipment Co. v. Washington Mills Abrasive

Co., 840 F.2d 843 (11th Cir. 1988) ................

Ecclesiastical Order of the Ism of Am, Ine. v.

Chasin, 845 F.2d 113 (6th Cir. 1988) .............

Echevarria-Gonzales v. Gonzales-Chapel, 849 F.2d

Be Se GG IID totepncednneeacescteiecsninsnintbtnennnieane

Escude Cruz v. Ortho Pharmaceutical Corp., 619

ee Te CE EE “ID cashecctecedncesscinesetiancseres

Gianna Enterprises v. Miss World (Jersey) Ltd.,

551 F.Supp. 1348 (S.D. N.Y. 1982) ................

Gottlieb v. Sandia American Corp., 452 F.2d (3rd

Cir.), cert. denied, 404 U.S. 938 (1971) ..........

Hutchinson v. United States, 677 F.2d 1322 (9th

Ae IRI ENED SE eRe oe UN

International Shoe C ation v. Washington, 326

U.S. 310, 90 L.Ed. 95, 66 S.Ct. 154 (1945) ..

Jackson v. Hayakawa, 682 F.2d 1344 (9th Cir.

IE csces thaseaesaecolcainislddana cassaananenanaaneammamamaieoess

Pages

14

18

11

13

13

14

13

11

14

13

11,18

15

16,18

14

10

14

Table of Authorities Continued

LeDonne v. Gulf Air, Inc., 700 F.Supp. 1400 (E.D.

Vik. SETUP snnscsscsnisissocssiechausébumseumediamekamundias 15,16,17

Mennonite Board of Mission v. Adams, 462 U.S.

791, 77 L.Ed.2d 180, 103 S.Ct. 2706 (1983) .. 13

Mississippi Publishing Corp. v. Murphree, 326 U.S.

438, 90 L.Ed. 185, 66 S.Ct. 242 (1946) ......... 13

Omni Capital International v. Rudolf Wolff & Co.,

484 U.S. 97, 98 L.Ed.2d 415 (1987) ............ 12,13,19

Robertson v. Railroad Labor Board, 268 U.S. 619,

69 L.Ed. 1119, 45 S.Ct. 621 (1925) ............... 13

Schiavone v. Fortune, 477 U.S. 21, 91 L.Ed.2d 18,

SOG BCE, Bee Cree miticcvenrettecchastsnes 16

Sieg v. Karnes, 693 F.2d 803 (8th Cir. 1982) ....... 14

Stranahan Gear Co. v. NL Industries, Inc., 800 F.2d

SS Glo Cae: TIRED kscissssecccsdccsc aces 13

Torres v. Oakland Scavenger Co., 487 U.S. 312, 101

L.Ed.2d 285, 108 S.Ct. 2405 (1988) ........0...... 16

Tryforos v. Icarian Development Co., S.A., 518 F.2d

1258 (7th Cir. 1975), cert. denied, 423 U.S.

ROU E COP OEP ccnnsvienssctacitiabaddeesiceiasadieee 14

Varnes v. Local 91, Glass Bottle Blowers Assoc., 674

em ia: Be RR RRR on 14

Village of Bellwood v. Dwivedi, 895 F.2d 1521 (7th

CA. TERI cicssisccecsavevasenseciieansintbiacmaeadianmaantan 2

Way v. Mueller Brass Co., 840 F.2d 303 (5th Cir.

REID. cnbinsiousassessactesiiassssmeneadiaeiadaeateae 14

Statutes

, RAR Fee "| \ RSD DMN ORAM ET ne Pom 0 l

BB ET iss TE ‘ccitnsoscsnccnssccsmintsntesabaeenedaece 9

BD RI FRAG. GID ctreccnacavsocncissstociastanimnisisntadneii 6

SB UE TREE: GREE ancttccinscdavccinpinapbisicncemianetieanee 6

BE UDA. CRI ccsccnsccinisncscccitakibniaieiehaaos 6

vi

Table of Authorities Continued

7 Page

BB UBikse GO ccccesccisccctenscierteenmataee 6

Civil Rights Act of 1866,

4B UBC. GRRGGE, BOS ccccccesessecccnsasetstssnimmenes 6,9,10

Fair Housing Act, Title VIII of Civil Rights Act of

one

ec. 804, 42 U.S.C. §3604(C) ...ccecceccessessessees 2.6

Sec. 812{a), 42 U.S.C. SBC 1Bla) ....ccccccccccccccecss 2.6

Fair Housing Amendments Act of 1988, Pub.L. 100-

30

See 8(2), 42 U.S.C. $3613 ..ccccceccceesseessseesseeeen 2

OC. REGRD, RG TURE. BGS ccceccsccscscczescanscteneasess 2

Federal Rules of Civil Procedure Amendments Act

of 1982,

Pub.L. 97-462, 96 Stat. 2527 .........cccccoscccccseees 3,6

Foreign Sovereign Immunities Act,

BS UdiAce GEC CEIIEED ccsccccsecccctensenennsesientantenects 17

Court Rules

Federal Rules of Civil Procedure,

BOOED © ccassscsciisenimeticmeniedintioniaanaaaee passim

BUD GORD cccrncesesstssssessnsvientbeenaneaaad 3

BRUNO GD. cnsncsavessenisinincaroeaadaaae 3,15,19

kt 3,6,7,8,15,19

BUTD GEER cctccscicscsssciacccssatebiaaaae 4,14,15,19

BRD GOOD cccencssectscmnstceseanscémeenicietasaanananameasanal 5

TD GOED vccvccsesecrstntsciskineceenetnniaianeee 5

BD BD cccscnccusnsavctineee 5,7,9,11,18

Rein GOED cerececcsirercstaannabescstnnteeneie 9

Table of Authorities Continued

Page

Other Authorities

C. Wright & A. Miller, FEDERAL PRACTICE AND

PROCEDURE: CIVIL

aS AE III pei nis ietcitccnsettaccnsehaaeememeernteeienaeneeins 1]

a Or ha ED Ee ee 1Y

IN THE

Hupreme Court of the Gnited States

OCTOBER TERM, 1990

Mosit LAND DEVELOPMENT CORPORATION,

Petitioner,

We

GIRARDEAU A. SPANN, the METROPOLITAN WASHINGTON

PLANNING & HousinGc ASSOCIATION, INC., and the

FaiR Houstinc CouNcIL OF GREATER WASHINGTON,

Respondents.

Mobil Land Development Corporation petitions for

a writ of certiorari to review a judgment of the United

States Court of Appeals for the District of Columbia

Circuit.

OPINIONS BELOW

The opinion of the court of appeals, reproduced in

the separately-bound appendix, App. A at pages la-

2la, is reported at 899 F.2d 24. The May 22, 1987

opinion of the district court is reported at 662 F.Supp.

541 and reproduced at App. F, pp. 29a-41la, and its

October 13, 1988 opinion is reported at 124 F.R.D.

1 and reproduced at App. H, pp. 45a-49a.

JURISDICTION OF THIS COURT

This Court’s jurisdiction is invoked under 28 U.S.C.

§1254(1). The judgment of the court of appeals was

entered on March 13, 1990, and rehearing was denied

on May 3, 1990.

STATUTORY PROVISIONS AND RULES INVOLVED

Section 804(c) of the Fair Housing Act, Title VIII

of the Civil Rights Act of 1968, 42 U.S.C. §3604(c),

as amended, makes it unlawful:

To make, print, or publish, or cause to be

made, printed, or published any notice, state-

ment, or advertisement, with respect to the

sale or rental of a dwelling that indicates any

preference, limitation, or discrimination based

on race, color, religion, sex, handicap, fam-

ilial status, or national origin, or an intention

to make any such preference, limitation, or

discrimination.

Section 812(a) of the Fair Housing Act, in effect

at the time the original complaint was filed and cod-

ified at 42 U.S.C. §3612(a), provided in relevant part

as follows:!

The rights granted by sections 3603, 3604,

3605, and 3606 of this title may be enforced

by civil actions in appropriate United States

district courts without regard to the amount

in controversy and in appropriate State or

local courts of genera! jurisdiction.

‘The provisions of section 812 were amended by section 8(2)

of the Fair Housing Amendments Act of 1988, Pub. L. 100-430,

102 Stat. 1633, and replaced by a new section 813, now codified

at 42 U.S.C. §3613, which became effective on March 12, 1989.

See Pub. L. 100-430, sec. 13(a); Village of Bellwood v. Dwivedi,

895 F.2d 1521, 1527 (7th Cir. 1990).

Rule 4 of the Federal Rules of Civil Procedure, as

amended by section 2 of the Federal Rules of Civil

Procedure Amendments Act of 1982, Pub. L. 97-462,

96 Stat. 2527 (Jan. 12, 1983), provides in relevant

part as follows:

(a) Summons: Issuance. Upon the filing of

the complaint the clerk shall forthwith issue

a summons and deliver the summons to the

plaintiff or the plaintiff's attorney, who shall

be responsible for prompt service of the sum-

mons and a copy of the complaint. Upon re-

quest of the plaintiff separate or additional

summons shall issue against any defendants.

(b) Same: Form. The summons shall be

signed by the clerk, be under the seal of the

court, contain the name of the court and the

names of the parties, be directed to the

defendant, state the name and address of the

plaintiff's attorney, if any, otherwise the

plaintiff’s address, and the time within which

these rules require the defendant to appear

and defend, and shall notify the defendant

that in case of the defendant’s failure to do

so judgment by default will be rendered

against the defendant for the relief de-

manded in the complaint. ...

x* * *

(c) Service.

(2) * * *

(C) A summons and complaint may be

served upon a defendant of any class referred

to in paragraph (1) or (8) of subdivision (d)

of this rule—

(i) pursuant to the law of the State in

which the district court is held for the service

of summons or other like process upon such

defendant in an action brought in the courts

of general jurisdiction of that State, or

(ii) by mailing a copy of the summons

and of the complaint (by first-class mail, pos-

tage prepaid) to the person to be served, to-

gether with two copies of a notice and

acknowledgment conforming substantially to

form 18-A and a return envelope, postage

prepaid, addressed to the sender. If no ac-

knowledgment of service under this subdivi-

sion of this rule is received by the sender

within 20 days after the date of mailing, ser-

vice of such summons and complaint shall be

made under subparagraph (A) or (B) of this

paragraph in the manner prescribed by sub-

division (d\(1) or (dX8).

x* * *

(d) Summons and Complaint: Person to

be Served. The summons and complaint shall

be served together. The plaintiff shall furnish

the person making service with such copies

as are necessary. Service shall be made as

follows:

* * *

(3) Upon a domestic or foreign corpora-

tion. . ., by delivering a copy of the summons

and of the complaint to an officer, a man-

aging or general agent, or to any other agent

authorized by appointment or by law to re-

ceive 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.

* * *

(e) Summons: Service Upon Party Not

Inhabitant of or Found Within State. ...

Whenever a statute or rule of court of the

state in which the district court is held pro-

vides (1) for service of a summons, or of a

notice, or of an order in lieu of summons

upon a party not an inhabitant of or found

within the state, or (2) for service upon or

notice to such a party to appear and respond

or defend in an action by reason of the at-

tachment or garnishment or similar seizure

of the party’s property located within the

state, service may in either case be made

under the circumstances and in the manner

prescribed in the statute or rule.

(f) Territorial Limits of Effective Ser-

vice. All process other than a subpoena may

be served anywhere within the territorial lim-

its of the state in which the district court is

held, and, when authorized by a statute of

the United States or by these rules, beyond

the territorial limits of that state. ...

* * *

(j) Summons: Time Limit for Service. If

a service of the summons and complaint is

not made upon a defendant within 120 days

after the filing of the complaint and the party

on whose behalf such service was required

cannot show good cause why such service

was not made within that period, the action

shall be dismissed as to that defendant with-

out prejudice upon the court’s own initiative

with notice to such party or upon motion.

STATEMENT OF THE CASE

Respondents Girardeau Spann, et al. (‘‘plaintiffs’’)

filed suit against petitioner Mobil Land Development

Corporation (‘““MLDC’’) and its wholly-owned subsid-

iary Colonial Village, Inc. (‘‘Colonial’’) in the United

States District Court for the District of Columbia on

October 23, 1986, invoking federal subject matter ju-

risdiction under 28 U.S.C. §§1331, 1337, 1343(4) [sic],

2201 and 42 U.S.C. §3612. The complaint alleged that

MLDC and Colonial were engaged in racially pref-

erential and discriminatory advertising for the Colon-

ial Village residential condominiums in Arlington,

Virginia, and it sought damages, equitable and dec-

laratory relief under the Fair Housing Act, 42 U.S.C.

§§3604, 3612, and the Civil Rights Act of 1866, 42

U.S.C. §§1981, 1982.

On November 6, 1986, the plaintiffs obtained a sum-

mons directed to Colonial from the clerk of the dis-

trict court. This summons, a copy of the complaint

and a properly completed and verified Form 18-A

(‘“Notice and Acknowledgment for Service by Mail’’),

naming Colonial as the “‘person to be served’’ in ac-

cordance with Fed. R. Civ. P. 4(cX2\C\ii), were

mailed to counsel for Colonial on November 10, 1986.?

By arrangement with plaintiffs’ counsel, and with his

2Form 18-A was prescribed by Congress in section 3 of the

Federal Rules of Civil Procedure Amendments Act of 1982, Pub.

L. 97-462 (Jan. 12, 1983).

client’s authorization, Colonial’s attorney executed the

acknowledgment of service form on behalf of Colonial

and returned it to plaintiffs’ counsel on November 14,

1986, thereby completing service of process on Co-

lonial pursuant to Rule 4(cX2\C\ii).? (App. I, 55a). On

December 9, 1986, plaintiffs filed the Form 18-A in

the district court as proof of service on Colonial, al-

though Colonial by that time had already answered

the complaint. Colonial thereafter filed a dispositive

motion on February 24, 1987.

On March 8, 1987, plaintiffs filed a purported proof

of service by personal delivery to MLDC in New York.

Three days later, MLDC appeared specially and moved

the district court to dismiss the action pursuant to

Fed. R. Civ. P. 4(j) for failure to make service of

process upon it within 120 days, or to quash the out-

of-state service as improper and unauthorized. That

motion and a supporting affidavit by Dennis H.

Bloomquist, then the general counsel of MLDC, dem-

onstrated that service had not been accomplished un-

der Rule 4 procedures and could not be accomplished

under District of Columbia long-arm provisions be-

cause of MLDC’s lack of relevant contacts with that

forum. (App. I, 53a).

The Bloomquist affidavit, which plaintiffs made no

effort to traverse, established that MLDC was a Del-

aware corporation, having its principal place of busi-

ness in New York (subsequently moved to Virginia in

3 Colonial’s attorney was also asked by plaintiffs’ counsel if

he would accept service of process for MLDC. He declined to

do so because MLDC had not authorized him to receive service

on its behalf. Consequently, no summons or Form 18-A directed

to MLDC was ever sent to the attorney for Colonial. (App. I,

54a-55a).

|

1989), with no place of business and no agents or

employees in the District of Columbia; that MLDC

did not have an interest in, use or possess real prop-

erty nor regularly transact or solicit business in the

District of Columbia, and was not qualified te do busi-

ness there; that MLDC did not engage in any meet-

ings or activities in the District of Columbia relating

to the subject matter of the complaint; and that

MLDC did not own or manage the Colonial Village

condominium development in Virginia and had no in-

volvement in the advertising for that project. (App.

I, 53a). The affidavit in addition established that Co-

lonial was a separate Delaware corporation, having

its own distinct board of directors and officers who

were responsible for Colonial’s management and op-

eration. (App. I, 54a). None of this was disputed.

In response to MLDC’s motion, plaintiffs argued

that they had attempted to serve MLDC four times,

once by mail to a Virginia address pursuant to

Fed.R.Civ.P. 4(c2\C\ii), twice by mail to New York

under the same rule, and once by hand delivery in

New York. Although the Form 18-A acknowledge-

ment of receipt forms were not signed and returned,

plaintiffs contended that these efforts were sufficient

under the federal rules or the District of Columbia

long-arm statute. Plaintiffs urged that MLDC should

not be permitted to refuse to acknowledge out-of-state

service, despite its lack of contacts with the District

of Columbia and the absence of any legal basis for

making such service.

The district court on May 22, 1987, granted sum-

mary judgment in favor of Colonial on the Fair Hous-

ing Act claims, holding that ‘‘there was no conceivable

violation ... during any period not barred by the

statute of limitations.” (App. F, 39a). The claims un-

der §§1981 and 1982 were dismissed for failure to

state a claim upon which relief could be granted. (App.

F, 41a). The district court, however, did not deal with

the Rule 44) motion of MLDC.

After an initial appeal by plaintiffs was dismissed

for lack of a final order under Fed.R.Civ.P. 54(b) and

28 U.S.C. §1291, the district court addressed MLDC’s

motion to dismiss in a memorandum and order issued

on October 13, 1988. Noting that there is no federal

statute or rule generally authorizing extraterritorial

service in actions under the 1866 Civil Rights Act or

the Fair Housing Act, the district court agreed with

MLDC that all of plaintiffs’ attempts to accomplish

out-of-state service by mail and personal delivery to

MLDC were ineffective, but nonetheless denied its

Rule 4(j) motion. (App. H, 47a-48a). The court held

that service of process directly on MLDC was not

actually required to obtain jurisdiction:

{MLDC] concedes that service was effective

on Colonial Village, Inc., its wholly-owned

subsidiary. Plaintiffs contend that since Co-

lonial Village holds itself out to the public as

‘“‘a Mobil company,”’ that service on it ef-

fected service on [MLDC]. They are correct.

*_ * *

It is quite obvious that the parent company

[MLDC] had actual notice of this action, as

it concedes at this point. Consequently, ser-

vice was properly effected on [MLDC]}.

(App. H, 47a-48a). Thus, because “‘the proper service

made on MLDC’s co-defendant and wholly-owned sub-

sidiary, Colonial Village, sufficed to draw in MLDC

10

as well” (App. A, 17a), compliance with Rule 4 as to

MLDC was found to have been wholly unnecessary.

On that basis, MLDC’s Rule 4(j) motion to dismiss or

quash service of process was denied by the district

court. (App. H, 47a-48a).

In response to plaintiffs’ appeal on the merits,

MLDC argued that dismissal of the case should be

affirmed as to it, first because proper service of proc-

ess had not been made, and second, because MLDC

lacked sufficient minimum contacts with the forum to

sustain jurisdiction under International Shoe Corpo-

ration v. Washington, 326 U.S. 310, 90 L.Ed. 95, 66

S.Ct. 154 (1945), and its progeny. Plaintiffs elected

not to respond to these points, asserting that they

could only be raised by means of a cross-appeal.‘ In-

itially the court of appeals refused to consider the

issue of personal jurisdiction, on grounds that MLDC

had not taken a cross-appeal, but later reconsidered

and ruled that the service of process and minimum

contacts issues had not been waived and were prop-

erly before it. (App. A, 15a-16a).

On the merits, the court of appeals on March 13,

1990 reversed the district court’s award of summary

judgment for Colonial on the Fair Housing Act claims

and affirmed its dismissal of the §§1981 and 1982

claims. (App. A, 18a-21a). On the issue of MLDC’s

contacts with the forum, it found the “thin materials”

in the record inadequate for intelligent appellate re-

view—ignoring the undisputed Bloomquist affidavit

and the rule that plaintiffs have the burden to es-

‘ Plaintiffs did not appeal the district court’s determination

that none of their efforts to make service directly on MLDC in

Virginia and New York had been effective.

1]

tablish a sufficient basis for personal jurisdiction®—

and remanded “for further airing’. (App. A, 17a-18a).

The district court’s holding that service of process on

Colonial could suffice as a matter of law to bring

MLDC before the court was left standing, albeit with

a suggestion that additional development of the fac-

tual record would be appropriate to determine the

propriety in this case of having served Colonial as an

agent for MLDC. (App. A, 18a).

a oe

It is petitioner’s contention that, absent waiver or

consent to jurisdiction, service of process in compli-

ance with the specific and detailed requirements of

Fed.R.Civ.P. 4 is a threshold prerequisite for federal

courts to assert in personam jurisdiction over any

defendant. Failure to make such service within 120

days compels dismissal under Rule 4(j), absent a show-

ing of good cause. Since Rule 4 contains no provision

for substituted or “‘subsidiary”’ service, as allowed by

the district court, the court of appeals should have

required that the complaint against MLDC be dis-

missed in accordance with Rule 4(j). By failing to

order dismissal and allowing the district court’s le-

gally incorrect ruling on service of process to stand,

the court of appeals ignored a fundamental limitation

on federal jurisdiction.

* See Delong Equipment Co. v. Washington Mills Abrasive Co..

840 F.2d 843 (11th Cir. 1988); Brown v. Flowers Industries.

Inc., 688 F.2d 328 (5th Cir. 1982), cert. denied, 460 U.S. 1023

(1983); Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d

902, 904 (1st Cir. 1980); 4A C. Wright & A. Miller, FEDERAL

PRACTICE AND PROCEDURE: CIVIL §1083, at 12 (1987).

12

REASONS FOR GRANTING THE WRIT

THE LOWER COURTS’ RULINGS CONFLICT WITH

DECISIONS OF THiS COURT AND OTHER CIRCUITS

ON AN IMPORTANT ISSUE OF FEDERAL JURISDIC-

TION, AND THEIR ASSERTION OF IN PERSONAM

JURISDICTION OVER A DEFENDANT NOT SERVED

IN COMPLIANCE WITH RULE 4 REPRESENTS A DE-

PARTURE FROM ACCEPTED PRACTICE WARRANT-

ING EXERCISE OF THIS COURT'S POWER OF

SUPERVISION.

Correctly ruling that plaintiffs’ three efforts to obtain

out-of-state service of process by mail and one effort

by personal delivery were unavailing, the district court

then erroneously proceeded to hold that service on

MLDC was not necessary in the first place. This at-

tempt to soften the consequences of plaintiffs’ inability

to obtain service of summons conforming to the Fed-

eral Rules of Civil Procedure has created significant

confusion as to how and when federal courts may as-

sert their powers over a defendant. The court of

appeals, evidently impatient with what it viewed as a

merely technical hindrance to the federal jurisdiction

necessary to adjudicate plaintiffs’ civil rights test case

against MLDC in this forum, made matters worse by

failing to correct the district court’s error.

In Omni Capital International v. Rudolf Wolff &

Co., 484 U.S. 97 (1987), the Court emphasized that

service of process in accordance with the governing

rules is the only means by which federal courts may

assert compulsory jurisdiction over any defendant:

Before a federal court may exercise personal

jurisdiction over a defendant, the procedural

requirement of service of process must be

satisfied. ... [T]here must be more than no-

aE —

13

tice to the defendant and a constitutionally

sufficient relationship between the defendant

and the forum. There also must be a basis

for the defendant's amenability to service of

summons. Absent consent, this means there

must be authorization for service of summons

on the defendant.

Id., 484 U.S. at 104; accord, Mississippi Publishing

Corp. v. Murphree, 326 U.S. 438, 444-445, 90 L.Ed.

185, 66 S.Ct. 242 (1946) (“service of process is the

procedure by which a court having venue and juris-

diction of the subject matter ... asserts jurisdiction

over the person of the party served’); Robertson v.

Railroad Labor Board, 268 U.S. 619, 622-623, 69

L.Ed. 1119, 1121-1122, 45 S.Ct. 621 (1925)

(‘‘defendant in a civil suit can be subjected to [district

court] jurisdiction in personam only by service” of

the writ of summons); Cohen v. Newsweek, Inc., 312

F.2d 76, 77 (8th Cir. 1963) (‘‘service goes directly to

the question of jurisdiction of the court.’’).*

Virtually all other federal appellate courts have

agreed that service in accordance with the federal

rules is a prerequisite to exercise of federal jurisdic-

tion over a non-consenting defendant. Echevarria-

Gonzales v. Gonzales-Chapel, 849 F.2d 24, 28 (1st Cir.

1988); Datskow v. Teledyne, Inc., 899 F.2d 1298,

1303(2d Cir. 1990); Stranahan Gear Co. v. NL In-

dustries, Inc., 800 F. 2d 53, 56-58 (3rd Cir. 1986);

*The issue of whether notice of litigation given under state

long arm and service of process rules is constitutionally sufficient

is not involved in this case. See, ¢.g., Burnham v. Superior Court

of California, 109 L.Ed.2d 631, 110 S.Ct. 2105 (1990); Mennonite

Board of Mission v. Adams, 462 U.S. 791, 77 L.Ed.2d 180, 103

S. Ct. 2706 (1983).

14

Armco. Inc. v. Penrod-Stauffer Building Systems, Inc.,

733 F.2d 1087, 1089 (4th Cir. 1984); Way v. Mueller

Brass Co., 840 F.2d 303 (5th Cir. 1988); Ecclesiastical

Order of the Ism of Am, Inc. v. Chasin, 845 F.2d 113,

116 (6th Cir. 1988); Tryforos v. Icarian Development

Co.. S.A., 518 F.2d 1258 (7th Cir. 1975), cert. denied,

sub nom. Manta v. Tryforos, 423 U.S. 1091 (1976);

Sieg v. Karnes, 693 F.2d 803 (8th Cir. 1982); Jackson

v. Hayakawa, 682 F.2d 1344 (9th Cir. 1982); Hutch-

inson v. United States, 677 F.2d 1322, 1328 (9th Cir.

1982): Varnes v. Local 91, Glass Bottle Blowers Assoc.,

674 F.2d 1365, 1368-1369 (11th Cir. 1982). Indeed,

prior to its decision in the instant case the District

of Columbia Circuit had itself emphasized the neces-

sity of service of process in strict accordance with

Rule 4 in order to exercise personal jurisdiction.

Combs v. Nick Garin Trucking, 825 F.2d 437, 442-

443 (D.C. Cir. 1987).

There is no dispute that in some circumstances a

subsidiary corporation may be deemed an agent of its

parent for service of process under Fed.R.Civ.P.

4(dX3). But such agency is only a secondary issue

which need not be resolved in this case. Even assum-

ing that discovery on remand could somehow show

Colonial to have been an agent of MLDC in fact or

by operation of law, more fundamental defects in the

form and service of process still would preclude any

assertion of personal jurisdiction over MLDC.

For example, both the proof of service and the

Form 18-A which plaintiffs filed in December, 1986,

show on their face that Colonial was served only for

itself and not as agent for MLDC. That service was

not made directly upon Colonial but, by special ar-

rangement, was sent to and received by Colonial’s

ee

15

outside attorney, who specifically informed plaintiffs

that he was not authorized to receive service of proc-

ess for MLDC. (App. I, 54a). Thus the service cannot

have been valid as to MLDC under Fed.R.Civ.P.

4(dX3), which specifies how service may be made on

a corporate defendant. The fact that no Form 18-A

acknowledgement was returned on behalf of MLDC

also prevents the service through Colonial’s attorney

from being effective as to MLDC under Fed.R.Civ.P.

4(cX2KC\Xii).

Fed.R.Civ.P. 4(b) specifies the form of the summons

to be served, which must “be directed to the

defendant,”’ must state the time within which “the

defendant” must appear and defend, and must notify

“the defendant” that judgment by default will be en-

tered against it, if it fails to do so. Obviously the

words “‘the defendant” in this context must refer to

the particular party sought to be brought within the

court's jurisdiction, not some other defendant in the

case. The only summons served on Colonial was its

own—not one directed to MLDC or purporting to no-

tify MLDC of the important matters set out in Rule

4(b). This could not be regarded as an insubstantial

or merely technical deficiency in the form of the sum-

mons, but goes to the essence of the summons. See

Gianna Enterprises v. Miss World (Jersey) Ltd., 551

F.Supp. 1348, 1358 (S.D. N.Y., 1982) (failure of un-

signed and unsealed summons to comply with Rule

4(b) warrants quashing of service); LeDonne v. Gulf

Air, Ine., 700 F.Supp. 1400, 1414 (E.D. Va. 1988)

(incorrect name of defendant shown on summons is

material defect and renders service invalid). This

Court has also emphasized in recent cases that in-

correct or incomplete specification of parties in ac-

16

cordance with governing procedural rules is material

and may be fatal to the right of action or appeal.

Torres v. Oakland Scavenger Co., 487 U.S. 312, 101

L.Ed.2d 285, 108 S.Ct. 2405 (1988) (failure to specify

name of appellant in notice was jurisdictional bar to

his appeal); Schiavone v. Fortune, 477 U.S. 21, 91

L.Ed.2d 18, 106 S.Ct. 2379 (1986) (failure to name

correct defendant in complaint prior to expiration of

limitations period required dismissal of action). The

prejudicial effect of the misnomers on the summons

and Form 18-A is demonstrated by the uncontrov-

erted evidence that Colonial’s attorney would not have

accepted service had those papers indicated that the

service was intended for MLDC as well as Colonial.

(App. I, 55a).

The situation here is closely analogous vo the facts

in Gottlieb v. Sandia American Corp., 452 F.2d 510

(8rd Cir.), cert. denied, sub nom. Wechsler v. Gottlieb,

404 U.S. 938 (1971). In that case, efforts to serve

the defendant corporation directly had been ineffec-

tual, and service on a controlling shareholder and ne-

gotiating agent for the corporation was held

insufficient, because the person served ‘“‘was not

served as an agent of the corporation, but as an in-

dividual defendant.” Jd., 452 F.2d at 514. That is also

what happened here, but with the opposite outcome.

The D.C. Circuit’s and the district court’s decisions

to disregard all deficiencies in the summons and ser-

vice as to MLDC are squarely in conflict with the

Third Circuit’s decision in Gottlieb.

In LeDonne v. Gulf Air, Inc., supra, decided only

a month after the district court’s service of process

ruling in this case, the district court for the Eastern

District of Virginia dealt with an agent-service ar-

17

gument identical to that applied by the district court

here, but with opposite result. In that case. seeking

enforcement of an Illinois state court default judg-

ment against a foreign airline, the plaintiff claimed

that service had been accomplished on the airline in

accordance with the Foreign Sovereign Immunities

Act, 28 U.S.C. §1608(b\2), through service of the

summons and complaint on a corporate co-defendant

as the airline’s putative agent. This contention was

rejected without ever reaching the agency question,

based on the absence of a proper summons ‘“‘directed

to” the airline:

The record clearly reveals that plaintiff made

no attempt to serve a summons for Gulf Air

on Aviation Services or even for Aviation

Services as an agent of Gulf Air. The only

successful service on Aviation Services oc-

curred ... after the entry of an order of

default. That process was directed to Aviation

Services as a defendant in plaintiff's suit, not

to Aviation Services as agent for Gulf Air,

a second defendant in the same suit.

Id,, 700 F.Supp. at 1414 (emphasis added). As the

LeDonne decision demonstrates, the forma] require-

ments for the summons and its proper service should

be strictly enforced and applied according to their

plain meaning, even if the court thereby loses per-

sonal jurisdiction over a party.

Contrary to these authorities, the decision of the

court of appeals in this case allows the assertion of

federal jurisdiction, without service of process ever

having been made directly upon MLDC and without

any showing that such service was even authorized

18

by statute or rule, simply on the grounds that service

was made on MLDC’s co-defendant subsidiary.’ The

confusion engendered by this departure affects not

only the defendants in this case but other national

and international corporations, as well as their own-

ers, corporate parents and subsidiaries, many of which

attempt to structure their business affairs and rela-

tionships with a view to where they may be subjected

to suit; the predictability afforded by consistent en-

forcement of the federal service of process require-

ments is an important component of that corporate

planning and structuring process. In addition to con-

travening the plain language and substance of Rule

4, the assertion of federal jurisdiction over MLDC

and rejection of its Rule 4(j) dismissal motion in of-

ficially reported decisions has broader ramifications

beyond the territorial confines of the District of Co-

lumbia, no doubt heightened by the special eminence

7Some courts have held that separate service on a parent

corporation is unnecessary where there is no separate corporate

existence, and the subsidiary is nothing more than a sham or

an alter ego for the parent. See, e.g., Bally Export Corp. v.

Balicor, Ltd., 804 F.2d 398, 405 (7th Cir. 1986). Whether such

a departure from Rule 4 can be justified where the pleadings

give notice that an alter ego theory is being asserted is not at

issue here, since the plaintiffs themselves sued Colonial and

MLDC as distinct corporate entities. The undisputed Bloomquist

affidavit also specifically verified the separate existence and sta-

tus of the two corporations. (App. I, 54a). Plaintiffs have never

contended that either one of the defendants is a sham corpo-

ration or a mere alter ego for the other, nor have they made

any effort to overcome the “presumption of corporate sepa-

rateness’’ that exists between a parent and its wholly owned

subsidiary. See Escude Cruz v. Ortho Pharmaceutical Corp., 619

F. 2d 902, 905 (1st Cir. 1980); Gottlieb v. Sandia American

Corp., supra, 452 F.2d at 514.

19

and prestige broadly accorded the federal courts sit-

ting in the District of Columbia, all of which under-

scores the need for review by this Court.

As the record clearly shows, plaintiffs failed to carry

their burden of establishing service of process and

personal jurisdiction over MLDC.® There were at least

three defects that preclude plaintiffs’ service on Co-

lonial Village, Inc. from being used to acquire juris-

diction over MLDC, none of which are trivial: the

Colonial summons failed to identify MLDC or to spec-

ify that it was directed to Colonial as agent for MLDC

in accordance with Rule 4(b); it was mailed to an

attorney known by plaintiffs’ counsel not to be au-

thorized to receive service for MLDC under Rule

4(d\3); and the Form 18-A acknowledgment was not

returned on behalf of MLDC as required by Rule

4(cK2\C\ii). |

In ignoring these defects, the lower courts have

indulged in precisely what this Court strongly cau-

tioned against in Omni Capital International—in-

venting and applying a common law method for

service of process not provided for anywhere in the

Federal Rules of Civil Procedure or by statute. Their

approach would open the door for nationwide federal

service of process on a parent corporation from vir-

tually any district where a subsidiary is amenable to

service, which existing rules do not permit. As in

Omni, creation of such a common law procedure for

service should be rejected as “‘unwise, even if it were

within [the courts’] power’’. 98 L.Ed.2d at 428.

*“‘The party on whose behalf service is made has the burden

of establishing its validity.”” 5A C. Wright & A. Miller, FED-

ERAL PRACTICE AND PROCEDURE: CIVIL §1353, at 283

(1990) (citations omitted); see also citations at n. 5 supra.

20

CONCLUSION

For the foregoing reasons, a writ of certiorari

should be issued to review the judgment of the court

of appeals.

Respectfully submitted,

REUBEN B. ROBERTSON, III

Dow, LOHNES & ALBERTSON

1401 Sixteenth Street, N.W.

Washington, D.C. 20036

(202) 232-1015

Counsel Of Record For Petitioner

Mobil Land Development Corporation