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Holder v. Haarmann & Reimer Corporation

August 16, 2001

DAVID W. HOLDER, APPELLANT
v.
HAARMANN & REIMER CORPORATION, APPELLEE



Before Schwelb and Ruiz, Associate Judges, and Belson, Senior Judge.

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

Appeal from the Superior Court of the District of Columbia (Hon. Gregory E. Mize, Trial Judge)

Argued June 18, 2001

David W. Holder appeals from a trial court order dismissing for lack of personal jurisdiction a class action brought by Holder against Haarmann & Reimer Corporation (H & R) under the District's Antitrust Act of 1980, D.C. Code §§ 28-4501 et seq. (1996 & Supp. 2000). On appeal, Holder contends that H & R transacts business in the District and that, contrary to the trial judge's finding, H & R is therefore amenable to suit in the Superior Court. Holder bases his jurisdictional theory solely on the following asserted contacts between H & R and the District: H & R conspired with other manufacturers, outside the District, to fix the price of citric acid; H & R then sold citric acid at an artificially inflated price to manufacturers outside the District; the manufacturers integrated the citric acid into various end products; the manufacturers then sold the end products directly or indirectly to retailers; the retailers subsequently sold the end products to consumers throughout the country; an unknown number of these consumers purchased, in the District, end products, some unknown quantity of which was alleged to have contained citric acid manufactured by H & R. According to Holder, these asserted contacts constitute transacting business in the District of Columbia within the meaning of our long-arm statute, D.C. Code § 13-423 (a)(1) (1995 & 2001).

If Holder's jurisdictional theory were correct, then, for purposes of our long-arm statute, H & R would be "transacting business" in the District of Columbia and, by extension, perhaps also in every jurisdiction in this country, and even the world, regardless of how minimal an amount of citric acid sold by it reached the respective jurisdiction, and in spite of the absence of any other contact between H & R and the jurisdiction. In other words, H & R would be deemed to be transacting business anywhere that a product containing any amount of citric acid produced by H & R was ultimately sold to a consumer. Such a definition of transacting business recognizes no sensible limiting principle and would require H & R to anticipate being haled into court virtually anywhere in the world on the theory that it transacts business everywhere. The logic of Holder's argument appears to assume that, as the seller of a chattel, H & R has effectively transacted business in the District by "appoint[ing] the chattel [its] agent for service of process; [H & R's] amenability to suit [on a transaction of business theory] would travel with the chattel." World-Wide Volkswagen v. Woodson, 444 U.S. 286, 296 (1980) (punctuation altered). For the reasons set forth below, we decline to adopt Holder's far-reaching notion of transacting business, and we affirm the judgment of the trial court.

I. PROCEDURAL BACKGROUND

On February 8, 1999, Holder instituted the instant suit on his own behalf and as the representative of a class of similarly situated consumers in the District of Columbia. *fn1 The complaint alleges that H & R violated the District's Antitrust Act by participating in a national and international criminal conspiracy with other manufacturers to fix the price of the citric acid that H & R produced. According to the plaintiff, H & R's citric acid was then sold to manufacturers who, in turn, integrated it into a variety of end products *fn2 which were sold to retailers and then ultimately to consumers, inter alia, in the District of Columbia.

The present suit had its origins in the criminal prosecution of H & R for conspiring to fix the price of citric acid in violation of federal antitrust laws. On January 29, 1997, pursuant to a plea agreement, H & R entered a plea of guilty in the United States District Court for the Northern District of California to criminal violations of the Sherman Antitrust Act, 15 U.S.C. §§ 1 et seq. (1994 & Supp. V 1999). The unlawful conduct embraced by the plea occurred over a period that began in early 1991 and continued through mid-1995. The violation of the District's Act alleged by Holder in this case was premised on the price-fixing conspiracy that was the subject of the federal prosecution. Specifically, Holder alleges that, during the time period in which the federal violations were occurring, he and the other potential class members "purchased in the District of Columbia beverages, foods and other consumer goods containing citric acid manufactured or distributed by [H & R]," and that he and the other potential plaintiffs "sustained damages arising from the overpayment for consumer goods containing citric acid as a result of [H & R's] violations of the District of Columbia antitrust laws."

On April 5, 1999, pursuant to Super. Ct. Civ. R. 12 (b)(2), H & R filed a motion to dismiss Holder's complaint for lack of personal jurisdiction. H & R asserted that it had not transacted business in the District of Columbia and that the company did not have the required minimum contacts with the District which would permit the Superior Court to exercise personal jurisdiction over H & R. H & R's motion was accompanied by an affidavit by Susan I. Baer, H & R's corporate secretary, in which she represented, inter alia, that H & R had no office in the District of Columbia and that the company had not engaged in any business within this jurisdiction. *fn3 On July 9, 1999, following a hearing on this motion, the trial judge dismissed the complaint for lack of personal jurisdiction. In the judge's view, "[t]here is a lack of sufficient contact [between H & R and] this jurisdiction to make further proceeding against Haarmann & Reimer fair, just and legal." This timely appeal followed.

II. LEGAL PRINCIPLES AND FACTUAL BACKGROUND

Throughout this litigation, the focus of Holder's argument has been that the Superior Court has authority to exercise personal jurisdiction over H & R because, and only because, the corporation has transacted business in the District of Columbia. See D.C. Code § 13-423 (a)(1). *fn4 In fact, when Holder's attorney was asked during oral argument before this court, whether he was relying on any subsection of the District's long-arm statute other than D.C. Code § 13-423 (a)(1), counsel answered unequivocally in the negative. Holder has thus conceded, for purposes of this appeal, that H & R's alleged transaction of business in the District constitutes the only basis for the exercise by the Superior Court of personal jurisdiction over H & R. In other words, Holder's concession means that if the company did not transact business in the District, the trial court's judgment must be affirmed, and our inquiry is confined accordingly. We take the case as presented to us, and we limit our analysis to the question whether the Superior Court had personal jurisdiction over H & R pursuant to D.C. Code § 13-423 (a)(1).

A. Applicable Legal Principles.

As an initial matter, we note that Holder, as the plaintiff, has the burden of establishing that the trial court had personal jurisdiction over H & R, the sole remaining defendant in the litigation. E.g., Parsons v. Mains, 580 A.2d 1329, 1330 (D.C. 1990) (per curiam). In this case, the facts relevant to the jurisdictional analysis are not in dispute, see infra Part II. B, and we review de novo the application of the relevant legal principles to those facts. Cf., e.g., Shoppers Food Warehouse v. Moreno, 746 A.2d 320, 330-32 (D.C.) (en banc), cert. denied, 530 U.S. 1270 (2000).

These legal principles may be summarized as follows: First, "[a] court may assert personal jurisdiction over a nonresident defendant where service of process is authorized by statute and where the service of process so authorized is consistent with due process." Mouzavires v. Baxter, 434 A.2d 988, 990 (D.C. 1981) (en banc) (per curiam) (plurality opinion) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316-17 (1945)). Because the "transacting business" prong of the District's long-arm statute is coextensive with the Due Process Clause, e.g., Shoppers Food Warehouse, supra, 746 A.2d at 329; Mouzavires, supra, 434 A.2d at 993, our personal jurisdiction analysis in this case merely requires us to consider whether any business transacted by H & R in the District was sufficient to permit the court to conclude that "the assertion of personal jurisdiction comports with due process." Mouzavires, supra, 434 A.2d at 993 (citation omitted). In other words, we must determine whether, through its "business contacts within [the District of Columbia,]" H & R had such "minimum contacts with [the District] that the maintenance of [Holder's] suit does not offend traditional notions of fair play and substantial justice." Shoppers Food Warehouse, supra, 746 A.2d at 330, 331 (citations and quotation marks omitted); see also, e.g., Keeton v. Hustler Magazine, Inc., 465 U.S. 770, ...


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