Norman Williams v. Romarm, SA , 756 F.3d 777 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 24, 2014 Decided July 1, 2014
No. 13-7022
NORMAN WILLIAMS AND DIANE HOWE, AS LEGAL
REPRESENTATIVE OF J.H.,
APPELLANTS
v.
ROMARM, SA AND DOES COMPANY DISTRIBUTORS,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:12-cv-00436)
Daniel M. Wemhoff argued the cause and filed the briefs
for appellants.
Anthony M. Pisciotti argued the cause for appellees.
With him on the brief were Jeffrey M. Malsch and James W.
Porter III.
Before: BROWN, Circuit Judge, and EDWARDS and
SILBERMAN, Senior Circuit Judges.
Opinion for the court filed by Circuit Judge BROWN.
2
BROWN, Circuit Judge: The choppy waters of the
Supreme Court’s “stream of commerce” doctrine have
plagued lower courts for years. The three competing opinions
in Asahi Metal Industry Co., Ltd., v. Superior Court of
California, 480 U.S. 102 (1987), each offered conflicting
standards for exercising personal jurisdiction over a foreign
manufacturer in a suit alleging injuries caused by its products
in the forum state. Thankfully, we need not plumb those
currents today because the Supreme Court recently clarified
the minimum requirements applicable to the facts of this case.
In J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct.
2780 (2011), Justice Breyer’s narrow concurrence addressed
the precise issue we face today and concluded a foreign
corporation’s sale to a distributor, without more, is
insufficient to establish the minimum contacts necessary for a
court to exert personal jurisdiction over the corporation, even
if its product ultimately causes injury in the forum state.
Nicastro compels us to affirm.
I
In March 2010, J.H., the son of Appellants Norman
Williams and Diane Howe, was tragically murdered in a
drive-by shooting in the District of Columbia. Investigation
revealed the assault rifle used in the attack was manufactured
by Appellee National Company Romarm S.A. (“Romarm”).
Romarm is a foreign corporation and firearms manufacturer
owned by the Romanian government and located in
Bucharest, Romania. Romarm sells its products in Romania
to an American distributor that imports them into the United
States for sale. Assault weapons, like the one used to kill
J.H., are prohibited in the District of Columbia. D.C. CODE §
7-2502.02(a)(6).
3
Two years after the shooting, Appellants filed a wrongful
death action on behalf of J.H in the United States District
Court for the District of Columbia. The complaint asserted
claims under the District of Columbia’s Wrongful Death
Statute, Survival Act, and Assault Weapons Manufacturing
Strict Liability Act, in addition to common law claims based
on negligence and public nuisance. Appellants argued the
court had personal jurisdiction over Romarm through the
District of Columbia’s long-arm statute and subject matter
jurisdiction through diversity of citizenship. Appellants also
alleged subject-matter jurisdiction was not divested through
the Foreign Sovereign Immunity Act, because of the
“commercial activity” exception.
Romarm subsequently moved to dismiss Appellants’
complaint under Federal Rules of Civil Procedure 12(b)(1) for
lack of subject-matter jurisdiction, 12(b)(2) for lack of
personal jurisdiction, and 12(b)(6) for failure to state a claim.
Appellants then filed a motion for extension of time to
respond, which the district court interpreted as a request for
jurisdictional discovery. In February 2013, the district court
denied Appellants’ discovery request and granted Romarm’s
motion to dismiss, finding Appellants “failed to allege
personal jurisdiction over ROMARM.” 1 Will. v. Romarm,
No. 1:12-cv-00436, slip op. at 17 (D.D.C. Feb. 4, 2013), ECF
No. 23.
1
The district court chose to address personal jurisdiction before
deciding whether it had subject-matter jurisdiction to hear the case.
J.A. 42. This approach is permitted, see Ruhrgas AG v. Marathon
Oil Co., 526 U.S. 574, 578 (1999) (“[T]here is no unyielding
jurisdictional hierarchy.”), and Appellants do not challenge it.
4
II
Appellants have raised three primary challenges to the
district court’s ruling: (A) Romarm is not a “person” entitled
to due process but is instead an agent of a foreign state; (B)
Romarm’s sales to the United States through a distributor
establish sufficient contact with the District to comply with
due process; and (C) the district court abused its discretion in
rejecting Appellants’ proposed limited jurisdictional
discovery requests. We reject each challenge and affirm the
district court.
A
First, like the district court, we must decide whether the
Due Process Clause applies to Romarm. If so, Appellants
would have to establish both statutory and constitutional
personal jurisdiction. The answer to this preliminary question
depends, in part, on how completely the Romanian
government controls the corporate entity—i.e., is the
corporation an inseparable part of the foreign state?
Under the Foreign Sovereign Immunities Act, “[p]ersonal
jurisdiction over a foreign state shall exist as to every claim
for relief over which the district courts have [subject matter]
jurisdiction . . . [and] where service has been made.” 28
U.S.C. § 1330(b). “In other words, under the [Act], subject
matter jurisdiction plus service of process equals personal
jurisdiction.” GSS Grp. Ltd. v. Nat’l Port Auth., 680 F.3d
805, 811 (D.C. Cir. 2012) (citing Price v. Socialist People’s
Libyan Arab Jamahiriya, 294 F.3d 82, 95 (D.C. Cir. 2002)).
And because a foreign state is not a “person” protected by the
Due Process Clause of the Fifth Amendment, minimum
contacts between the foreign state and the forum state are not
required for a court to constitutionally exert personal
5
jurisdiction over the state. See GSS Grp. Ltd., 680 F.3d at 813
(citing Price, 294 F.3d at 96). The Act itself defines “foreign
state” expansively to include any corporation that “is an organ
of a foreign state . . . or a majority of whose shares or other
ownership interest is owned by a foreign state.” 28 U.S.C. §
1603(b)(2). Despite this broad statutory definition, however,
constitutional protection will be accorded if a corporation
“does not act as an agent of the state, and separate treatment
would not result in manifest injustice[; if so, it] will enjoy all
the due process protections available to private corporations,”
which includes challenging the exercise of personal
jurisdiction for insufficient minimum contacts. GSS Grp.
Ltd., 680 F.3d at 815 (internal citations omitted); see also id.
at 813, 817. Only when the foreign sovereign exercises
control over the corporation to such a degree as to create a
principal–agent relationship is the corporation considered part
of the foreign state, rather than a “person” entitled to
constitutional due process protection. Id. at 815.
The district court found that Romarm “consistently”
represented itself as a separate entity from the Romanian
State, despite its state ownership, and it rejected Appellants’
arguments to the contrary. Williams v. Romarm, No. 1:12-cv-
00436, slip op. at 11 (D.D.C. Feb. 4, 2013), ECF No. 23.
Thereafter, the district court proceeded to the due process
minimum contacts analysis, and ultimately concluded the
alleged contacts were insufficient to justify jurisdiction.
At oral argument, Appellants primarily challenged the
district court’s conclusion that Romarm is juridically
independent from Romania and thus entitled to due process.
Specifically, Appellants pointed to a claimed “concession” by
Romarm that it is both owned and operated by Romania. This
concession, they say, establishes Romarm as a state entity that
is not entitled to due process.
6
However weighty this argument may be, we decline to
consider it because Appellants failed to raise it in their briefs.
Nowhere in their filings do Appellants cite to the document
containing the alleged “concession” by Romarm on which
they so heavily relied at oral argument. Nor do they ever
explain (or argue in their briefs) the import of such a
concession on personal jurisdiction. The majority of the
opening brief argues Romarm’s minimum contacts support
personal jurisdiction. No attempt is made to couch the
minimum contacts analysis as an alternative argument to the
primary contention that due process never applied. In fact,
Appellants’ opening brief is actually inconsistent with their
new argument, asserting “in its role as a ‘private actor,’
Romarm is granted due process guarantees . . . necessary for
the district court to assert personal jurisdiction.” Appellants’
Br. at 5–6; see also id. at 13–14 (“Personal jurisdiction must
satisfy: (1) District of Columbia’s long-arm statute, and (2)
the Due Process Clause.”). As Appellants conceded at oral
argument, their new argument renders the “vast majority of
the briefs . . . irrelevant,” including their own. Oral Arg.
Tape, No. 13-7022, at 14:08–14:20 (Feb. 24, 2014).
When we asked Appellants why this argument was not
raised in the briefs, Appellants claimed they “discovered”
Romarm’s concession after the briefing deadline. Oral Arg.
Tape, at 15:30–15:56. But this answer amounts to little, since
the “discovered” concession is contained in the district court
record that was always available to the parties. Additionally,
the district court made a clear ruling on the due process issue,
so Appellants easily could have challenged that issue in their
briefs.
Whether it was an intentional strategy or a simple case of
overlooking the record, Appellants cannot “sandbag”
Romarm. See Sitka Sound Seafoods, Inc. v. NLRB, 206 F.3d
7
1175, 1181 (D.C. Cir. 2000). Questions not presented and
argued by the parties in a sequence affording appropriate
consideration are forfeited, and we accordingly decline to rule
on the issue since it was not properly raised. See, e.g., Ark.
Las Vegas Rest. Corp. v. NLRB, 334 F.3d 99, 108 n.4 (D.C.
Cir. 2003); Parsipanny Hotel Mgmt. Co. v. NLRB, 99 F.3d
413, 418–19 (D.C. Cir. 1996); C.J. Krehbiel Co. v. NLRB,
844 F.2d 880, 883 n.1 (D.C. Cir. 1988); Carducci v. Regan,
714 F.2d 171, 177 (D.C. Cir. 1983); see also FED. R. APP. P.
28(a)(8)(A). 2
B
Because we must assume, for the purposes of this appeal,
the Due Process Clause applies to Romarm, we now address
2
Appellants conceivably made a fleeting reference to the issue in
their reply brief, where they cite the Act’s provision regarding
personal jurisdiction. See Reply Br. at 2. However, Appellants
discuss the statute in response to Romarm’s case summary of the
Appellants’ lower-court arguments, so it is not clear Appellants are
making any new argument with respect to it. Cf. Am. Wildlands v.
Kempthorne, 530 F.3d 991, 1001 (D.C. Cir. 2008) (holding that
merely discussing the factual basis for an argument is insufficient to
raise the claim). In fact, Appellants refer to the Act as granting
“statutory jurisdiction” and go on to say “due process is invoked as
if [Romarm were] a private actor.” Reply Br. at 2. Appellants’
point is unclear, and one must view the brief rather broadly with a
generous eye to spy its relation to their contentions at oral
arguments. Further, mere reference to an issue does not present it
properly for review. See Am. Wildlands, 530 F.3d at 1001; Sitka
Sound Seafoods, 206 F.3d at 1181. Nor would it have been proper
for Appellants to wait until their reply brief to make the argument.
See Am. Wildlands, 530 F.3d at 1001; Sitka Sound Seafoods, 206
F.3d at 1181.
8
whether the district court could properly exercise jurisdiction
over Romarm in accordance with due process.
This court reviews dismissals for lack of personal
jurisdiction de novo. GSS Grp. Ltd., 680 F.3d at 810–11.
Appellants’ claims against Romarm concern “specific”
jurisdiction, or jurisdiction that arises out of or in relation to
the defendant’s contacts with the forum. Nicastro, 131 S. Ct.
at 2788. 3 Because subject matter jurisdiction in this case is
based on diversity of citizenship, the forum “state” is that in
which the federal court sits—here, the District of Columbia.
See, e.g., Crane v. N.Y. Zoological Soc’y, 894 F.2d 454, 455–
56 (D.C. Cir. 1990).
For a court to assert personal jurisdiction over a
nonresident defendant, including a corporation, the defendant
must “have certain minimum contacts with [the forum] such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). The “defendant’s
conduct and connection with the forum State” must be “such
that [it] should reasonably anticipate being haled into court
there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980). For example, when a “corporation
3
In contrast, “general” jurisdiction gives the court jurisdiction over
the defendant to resolve both matters that originate within the
forum state and those based on activities and events elsewhere. The
Appellants wisely have never asserted general jurisdiction against
Romarm. To do so, they would have had to establish explicit
consent, presence within the forum at the time suit commences
through service of process, citizenship or domicile, or other
examples where the circumstances or Romarm’s course of conduct
revealed “an intention to benefit from” and thus “submit to the laws
of the forum State.” See Nicastro, 131 S. Ct. at 2787 (plurality
opinion).
9
purposefully avails itself of the privilege of conducting
activities within the forum State, it has clear notice . . . it is
subject to suit there.” Id. (internal citation and quotation
marks omitted).
Personal jurisdiction can also be premised on a
defendant’s participation in the “stream of commerce,” which
“refers to the movement of goods from manufacturers through
distributors to consumers.” Nicastro, 131 S. Ct. at 2788
(plurality opinion). However, “beyond that descriptive
purpose its meaning is far from exact.” Id. The Court’s
seminal stream-of-commerce case Asahi Metal Industry, for
example, resulted in three competing interpretations, none of
which garnered a majority. See 480 U.S. 102.
In Asahi, Justice Brennan, joined by three justices, would
have found personal jurisdiction under a stream-of-commerce
theory “[a]s long as a participant . . . is aware that the final
product is being marketed in the forum state.” 480 U.S. at
116–17 (Brennan, J., concurring in part and concurring in the
judgment). In other words, when a manufacturer places its
product into the stream of commerce, it should expect to be
brought into court wherever its products land in the regular
course of business. In contrast, Justice O’Connor, also joined
by three members of the Court, posited the “placement of a
product into the stream of commerce, without more, is not an
act of the defendant purposefully directed toward the forum
State.” Id. at 112 (plurality opinion). Rather, she would have
required some “[a]dditional conduct of the defendant
[indicating] an intent or purpose to serve the market in the
forum State.” Id. Simple awareness is not enough. Id.
Finally, Justice Stevens, joined by two justices, found “the
volume, the value, and the hazardous character” of the
product affects the “purposeful availment” determination. Id.
at 122 (Stevens, J., concurring in part and concurring in the
10
judgment). Since Asahi issued in 1987, “courts have sought
to reconcile the competing opinions.” Nicastro, 131 S. Ct. at
2789 (plurality opinion).
We take no position here on which Asahi theory should
prevail. Rather, we rely on Justice Breyer’s concurrence in
Nicastro that certain facts, without more, are insufficient for
personal jurisdiction. 131 S. Ct. at 2792; see Marks v. United
States, 430 U.S. 188, 193 (1977) (“When a fragmented Court
decides a case and no single rationale explaining the result
enjoys the assent of five Justices, the holding of the Court
may be viewed as that position taken by those Members who
concurred in the judgment on the narrowest grounds.”); King
v. Palmer, 950 F.2d 771, 781 (D.C. Cir. 1991) (en banc)
(“[O]ne opinion can be meaningfully regarded as ‘narrower’
than another . . . only when one opinion is a logical subset of
other, broader opinions.”). Specifically, six justices agreed
the forum state could not constitutionally assert personal
jurisdiction over the foreign manufacturer based on the
following facts: the distributor’s single sale to a customer in
the forum state; the manufacturer’s desire that the distributor
pursue customers throughout the United States; and the
manufacturer’s business-related contacts with various states
other than the forum state. Nicastro, 131 S. Ct. at 2790
(plurality opinion); id. at 2791 (Breyer, J., concurring in the
judgment).
As Justice Breyer points out, such a “single isolated sale”
from a distributor to a customer in the forum state has never
been sufficient to establish minimum contacts between the
manufacturer and the forum, under any stream-of-commerce
interpretation. See Nicastro, 131 S. Ct. at 2792 (Breyer, J.,
concurring). Thus, at a minimum, a plaintiff trying to
establish personal jurisdiction over a foreign corporation must
show a “regular flow or regular course of sales” in the forum
11
state, or some additional efforts directed toward the forum
state, such as “special state-related design, advertising,
advice, [or] marketing.” Id. 4
Appellants have the burden of establishing a factual basis
for the court’s exercise of personal jurisdiction over Romarm.
See Crane, 894 F.2d at 456. Appellants argue their burden is
met here because they alleged Romarm sold its products to an
American distributor, fully aware the distributor would sell
these products in the United States. Additionally, they insist
Romarm should have been aware criminals would traffic the
weapons into the District of Columbia, even though the
District prohibits assault rifles. To illustrate this contention,
Appellants point to police records showing that forty-one
weapons manufactured by Romarm were recovered within the
District during a four-year-period. Thus, Appellants argue it
was “highly foreseeable, if not probable, that [Romarm’s]
products [would], by [their] attractive nature to criminals and
others, crossover into forums, such as the District of
Columbia, where they are prohibited.” Appellants’ Br. at 7.
Nicastro makes clear that a manufacturer’s broad desire
to target the United States through a distributor will not
suffice. See 131 S. Ct. at 2791–92 (Breyer, J., concurring in
the judgment); see also id. at 2790 (plurality opinion) (“These
facts may reveal an intent to serve the U.S. market, but they
do not show that J. McIntyre purposefully availed itself of the
New Jersey market.”). Rather, Appellants must allege
4
We do not take a position on whether a plaintiff can establish
personal jurisdiction solely by showing a “regular flow of sales” to
the forum state, without more. We simply note the absence of such
sales, combined with the absence of additional efforts, will be fatal
to a plaintiff’s claim.
12
conduct specific to the forum in some way. Yet the only
District-specific information Appellants proffer is that some
Romarm-manufactured weapons have ended up in the District
through criminal trafficking. Here, we do not even have the
isolated sale that Nicastro found insufficient. Instead,
Appellants rely solely on the “mere unilateral” (and criminal)
activity of others—activity that takes place after the standard
chain of distribution is complete; this cannot satisfy due
process. See World-Wide Volkswagen Corp., 444 U.S. at 298;
see also Nicastro, 131 S. Ct. at 2792 (Breyer, J., concurring in
the judgment). Even under the broadest stream-of-commerce
theory, stream of commerce cannot mean “unpredictable
currents or eddies.” Asahi, 480 U.S. at 117 (Brennan, J.,
concurring in part and concurring in the judgment); see also
Nicastro, 131 S. Ct. at 2792 (Breyer, J., concurring in the
judgment). Absent facts showing Romarm targeted the
District or its customers in some way—which do not exist in
the record—due process will not permit the district court to
exercise its jurisdiction over Romarm. 5
C
Appellants claim they were stymied in their attempt to
show personal jurisdiction because the district court did not
permit limited discovery. We find no error.
We review a district court’s denial of jurisdictional
discovery for abuse of discretion. FC Inv. Grp. LC v. IFX
Markets, Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008). A
plaintiff “must have at least a good faith belief that such
discovery will enable it to show that the court has personal
5
Appellants contend numerous cases support personal jurisdiction
here. We reject these arguments as superseded by Nicastro.
13
jurisdiction over the defendant.” Id. at 1093–94. “[M]ere
conjecture or speculation” is not enough. Id. at 1094.
The district court found Appellants’ requests did not relate
to any specific connections between Romarm and the District
of Columbia and were instead requests for “general and far-
reaching discovery regarding Romarm’s business activities as
a whole.” Williams v. Romarm, No. 1:12-cv-00436, slip op.
at 20 (D.D.C. Feb. 4, 2013), ECF No. 23. Appellants claim
the “obvious aim of such discovery is to determine, exactly
what the volume of weapons sold by Romarm [is] in the US
market.” Appellants’ Br. at 13 (emphasis added). Which is
precisely the problem. Such broad-ranging questions lack
specificity to the District, or even the broader metro area; and
information about the U.S. market as a whole will be
insufficient, no matter the answers to the questions.
Additionally, even if Appellants learned about Romarm’s
knowledge of any thefts and its anti-theft precautions (if any),
our jurisdictional analysis is unlikely to change. “[E]ven if
[a] defendant places his goods in the stream of commerce,
fully aware (and hoping) that . . . a sale will take place” in the
forum, such an isolated sale will not constitute an adequate
basis for personal jurisdiction. See Nicastro, 131 S. Ct. at
2792 (Breyer, J., concurring in the judgment). The requested
discovery could not enable the Appellants to account for the
tenuous connection between Romarm’s sale to its distributor
and the sporadic, unilateral movement of its products into the
District by unrelated third persons. The district court did not
abuse its discretion. See Mwani v. bin Laden, 417 F.3d 1, 17
(D.C. Cir. 2005) (noting when this court does “not see what
facts additional discovery could produce that would affect our
jurisdictional analysis, [it] must conclude the district court did
not abuse its discretion in dismissing the action when it did”);
cf. Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 513
14
(D.C. Cir. 2002) (noting jurisdictional discovery should have
been granted because plaintiff demonstrated it could
“supplement its jurisdictional allegations through discovery”).
We will not reverse the district court in order to permit an
unwarranted fishing expedition about the general way
Romarm conducts its business, to support a broad-ranging
theory on Romarm’s culpability in not preventing thefts. See
FC Inv. Grp. LC, 529 F.3d at 1094 (finding no abuse of
discretion in disallowing discovery based on a theory of
“commuter jurisdiction”).
D
We are left with one last matter to address. After oral
argument, both parties submitted an extensive series of
dueling 28(j) letters and motions. Because the subject matter
of these letters relates to the previously unbriefed foreign
entity issue we decline to address today, the correspondence is
not relevant to our decision. The motions relating to this issue
are moot. We think it is worth noting the 28(j) process should
not be employed as a second opportunity to brief an issue not
raised in the initial briefs. The letters are more appropriately
used to cite new authorities released after briefing is complete
or after argument but before issuance of the court’s opinion.
All post-argument requests and motions are denied.
III
Appellants have failed to allege any conduct by Romarm
that was purposely directed toward the District of Columbia.
Nor could their discovery requests supply the missing
element. The district court appropriately dismissed the case
for lack of personal jurisdiction over Romarm.
15
For the foregoing reasons, the judgment of the district
court is
Affirmed.