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Shoppers Food Warehouse v. Moreno

February 17, 2000

SHOPPERS FOOD WAREHOUSE, APPELLANT,
V.
ASUNCION MORENO, APPELLEE



Before Wagner, Chief Judge, Terry, Steadman, Schwelb, Farrell, Ruiz and Reid, Associate Judges.

The opinion of the court was delivered by: Reid, Associate Judge

Appeal from the Superior Court of the District of Columbia

(Hon. Stephanie Duncan-Peters, Motions Judge) (Hon. Linda Turner Hamilton, Trial Judge)

ON REHEARING EN BANC

Reargued En Banc May 5, 1999

Opinion for the court by Associate Judge Reid.

Dissenting opinion by Chief Judge Wagner at page .

Dissenting opinion by Associate Judge Schwelb at page .

The main issue presented by this case is whether the trial court had personal jurisdiction over appellant, a Maryland corporation which extensively advertised its grocery stores in the District of Columbia's major circulation newspaper and other communications media, where appellee, a District resident, alleged in a negligence "slip and fall" lawsuit that she suffered personal injuries in one of appellant's Maryland stores located near the District's borders. The trial court concluded that it had personal jurisdiction over appellant, and a jury awarded appellee damages for her injuries. A majority panel of this court affirmed the trial court in an opinion issued on July 16, 1998, Shoppers Food Warehouse v. Moreno, 715 A.2d 107 (D.C. 1998) (Moreno I). The panel's opinion was vacated and Shoppers' petition for rehearing en banc was granted on January 4, 1999. 722 A.2d 845 (D.C. 1999). After rehearing en banc, which we granted only to consider the jurisdictional issue,*fn1 we reaffirm the trial court's judgment. We hold that the trial court properly exercised personal jurisdiction because appellant, through its extensive advertising activity in a major District of Columbia newspaper, purposefully solicited District residents as customers for its nearby Maryland and Virginia stores and thus transacted business in the District; and further, because Ms. Moreno's claim had a discernible relationship to its advertising, Shoppers could have reasonably anticipated being haled into court to defend against a personal injury suit brought by a District resident.

I.

FACTUAL SUMMARY

A District of Columbia jury found that on November 20, 1993, appellee Asuncion Moreno slipped and fell on okra in a grocery store owned by appellant Shoppers Food Warehouse, a Maryland corporation ("Shoppers"), and as a result of Shoppers' negligence, sustained back and hand injuries. She was awarded damages in the amount of $197,307 for past and future medical expenses, mental anguish, and pain and suffering. From the beginning of Ms. Moreno's lawsuit, Shoppers argued that, contrary to Ms. Moreno's position, the trial court lacked personal jurisdiction over it under D.C. Code § 13-423 (a)(4) (1995) (causing tortuous injury in the District of Columbia).*fn2 Later, Ms. Moreno claimed that even if jurisdiction were not based on subsection (a)(4), it rested on § 13-423 (a)(1) (transacting any business in the District of Columbia). She pointed out that Shoppers placed extensive ads in The Washington Post, a major District of Columbia newspaper, soliciting customers to its stores in Maryland and Virginia. Indeed, the record on appeal is replete with pages of weekly Shoppers' advertisements in The Washington Post between the period October 6, 1993 and December 1, 1993, including November 20, the date on which Ms. Moreno alleged that she fell. The ads for Shoppers' Maryland and Virginia stores contained pictures and prices of produce, meats, canned goods, beverages, candies and other packaged goods.*fn3 The Shoppers' store where Ms. Moreno was injured is located in Takoma Park, Maryland, within two miles of her home in the District of Columbia.

Shoppers maintained that § 13-423 (a)(4) did not apply because no tortious injury took place in the District. Furthermore, Shoppers argued that Ms. Moreno failed to show the applicability of § 13-423 (a)(1) which, it asserted, must be read in conjunction with § 13-423 (b). It also pointed out that Shoppers is a Maryland Corporation having its principal place of business in Maryland; the store in which Ms. Moreno shopped is located in Maryland; and Ms. Moreno provided no affidavit showing that she actually saw the Washington Post advertisements.

In its order of June 22, 1994, the motions court agreed with Shoppers that subsection (a)(4) was inapplicable because Ms. Moreno's injury occurred in Maryland, not the District. However, the court concluded that there was personal jurisdiction under subsection (a)(1) for the following reasons:

First, it is reasonable to require the Defendant to defend this suit in the District of Columbia. . . . The Defendant owns numerous stores in Maryland and Virginia, several of which are located within a few miles of the District of Columbia border. . . . The Defendant contracts with and advertises in [T]he Washington Post, thereby targeting and soliciting customers in the District of Columbia area . . . . Furthermore, the Defendant has failed to "show that it [is] at a 'severe disadvantage' in being required to defend in [the District of Columbia];" Tom Brown & Co. v. Francis, 608 A.2d 148, 152 (D.C. 1992) (quoting Electronic Media Int'l v. Pioneer Comm[unications], Inc., 586 A.2d 1256, 1258 (Me. 1991)[)]. Since the Plaintiff resides in the District, she has a strong interest in litigating this suit here. Second, the Defendant, by contracting with Washington based businesses (i.e., The Washington Post, the District of Columbia Yellow Pages) for adverti[s]ing purposes, has transacted business in the District of Columbia. Thus, the Defendant purposefully and voluntarily availed itself of the privileges and protections of the District of Columbia. . . . Finally, the Defendant's contacts with the forum state were of such quality and nature that it is reasonable for the Defendant to reasonably anticipate being haled into court in the District of Columbia. It is reasonable to conclude that the Defendant derives a substantial portion of its revenue from District of Columbia residents -- it specifically targets with advertisements that demonstrate how the Defendant's prices compare favorably with the prices in supermarkets.

Although the motions court did not explicitly mention § 13-423 (b) in its June order, it referenced a prior trial court opinion, Daniels v. Kanof, 116 Daily Wash. L. Rptr. 2053, 2057 (Super. Ct. 1988), involving an advertisement in the District by a nonresident corporation. That opinion stressed "the foreseeability of injury to District of Columbia plaintiffs as a result of defendant's actions and the consequences of its actions by soliciting and advertising for business in the District of Columbia."*fn4 Accordingly, the trial court "conclude[d] that there are enough contacts with the District of Columbia in this case to satisfy the minimum contacts requirement."

II.

ANALYSIS

Personal Jurisdiction

This court has never determined whether newspaper and other advertisements in the District by a nonresident corporation owning a chain of stores, some of which are located in very close proximity to the District's borders, are sufficient to meet the minimum contacts requirement of the District's long-arm statute, and whether the advertising constitutes a sufficient nexus for the District's exercise of personal jurisdiction over a nonresident defendant in a personal injury lawsuit where the injury took place in a store in a neighboring jurisdiction. Trial courts in the District that have examined this issue have disagreed. Judges in both the Superior Court of the District of Columbia and the United States District Court for the District of Columbia have expressed different views at different stages of cases involving Shoppers as a defendant.*fn5

Survey of Supreme Court Decisions and Past Decisions of this Court

Our consideration of this difficult matter begins with a review of past Supreme Court decisions and the past decisions of this court which have interpreted §13-423 (a)(1) and (b). The review will assist us in determining whether the trial court's exercise of personal jurisdiction in this case satisfies the "minimum contacts" requirement of the due process clause, and whether the requirement of § 13-423 (b) - that a claim for relief under § 13-423 (a)(1) must "aris[e] from acts enumerated [in § 13-423 (a)] - has been met.

In the early years after § 13-423 was enacted, decisions in our cases were guided both by Supreme Court precedent and also by then existing Maryland and Virginia law. We look first at early Supreme Court cases that shaped our initial decisions under § 13-423 (a)(1). International Shoe Co. v. Washington, 326 U.S. 310 (1945), the seminal decision, held that, in keeping with "`traditional notions of fair play and substantial justice,'" there must be "minimum contacts" between the defendant and the forum state before personal jurisdiction can be exercised consistently with due process.*fn6 Id. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). At the same time, International Shoe emphasized that when a defendant seeks and "enjoys the benefits and protection of the laws" of the forum state, the defendant may face "obligations [which] arise out of or are connected with the [defendant's] activities within the [forum] state." Id. at 319 (citations omitted). Under these circumstances, requiring a defendant "to respond to a suit . . . [in the forum state] in most instances, hardly [can] be said to be [an] undue [burden]." Id.

Hanson v. Denckla, 357 U.S. 235 (1958), further refined the required nexus. A plaintiff's unilateral activity in relation to a defendant cannot alone sustain personal jurisdiction under the "minimum contacts" theory. Id. at 253. Rather, the Court held, "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State . . . ." Id. In Shaffer v. Heitner, 433 U.S. 186 (1977), a shareholder's derivative action, and Kulko v. Superior Court of California, 436 U.S. 84 (1978), a domestic relations matter, the Supreme Court reiterated the "fairness" and "reasonableness" theme sounded in International Shoe. One of the indices of "fairness" and "reasonableness" of the exercise of personal jurisdiction by the forum state is whether the defendant "`purposefully availed [itself]' of the `benefits and protections'" of the forum state's laws, Kulko, supra, 436 U. S. at 94 (citing Shaffer, supra, 433 U.S. at 216 (footnote omitted)), and thus, "could reasonably have anticipated being `haled before a . . . court'" in that jurisdiction. Id. at 97-98 (quoting Shaffer, supra, 433 U.S. at 216 (footnote omitted)). Kulko also examined whether there was a "sufficient connection" between the defendant and the forum state by determining "whether the `quality and nature' of the defendant's activity is such that it is `reasonable' and `fair' to require him to conduct his defense in that State." Id. at 92. Part of the answer depended on whether the defendant "purposefully derive[d] benefit from any activities relating to the [forum state]." Id. at 96.

The first of our significant cases decided under § 13-423 (a)(1), Environmental Research Int'l, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808 (D.C. 1976) (en banc), not only articulated the aforementioned principles from Supreme Court cases, but also demonstrated that Congress intended the District's long-arm statute, like the corresponding statutes in Maryland and Virginia, to be coextensive in reach with the exercise of personal jurisdiction permitted by the due process clause. Specifically, we stated that:

[t]he legislative history of [the District's long-arm statute] makes it clear that it was Congress' intent to provide the District with a long-arm statute equivalent in scope to those already in effect in Maryland and Virginia. . . . In interpreting their statutes, the courts of both Maryland and Virginia have concluded that they permit the exercise of personal jurisdiction over nonresident defendants to the extent permitted by the due process clause of the United States Constitution. Id. at 810-11 (footnotes omitted).

We then stated: "We reach a similar conclusion as to our statute." Id. at 811. We "note[d] the trend toward liberalization of jurisdictional limitations" and the fact that "[e]ven a small amount of in-jurisdiction business activity is generally enough to permit the conclusion that a nonresident defendant has transacted business here." Id.*fn7

Although our earliest cases did not focus much on § 13-423 (b), we had occasion to interpret that provision in Cohane v. Arpeja-California, Inc., 385 A.2d 153 (D.C.), cert. denied, 439 U.S. 980 (1978), where we explained:

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 ...


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