316 F.2d 393
MUTUAL INTERNATIONAL EXPORT CO., Appellant,
NAPCO INDUSTRIES, INC., Appellee.
United States Court of Appeals District of Columbia Circuit.
Argued January 3, 1963.
Decided March 7, 1963.
Mr. Robert F. Rolnick, Washington, D. C., with whom Mr. Marshall E. Miller, Washington, D. C., was on the brief, for appellant.
Mr. Alan L. Wurtzel, Washington, D. C., with whom Mr. Max M. Kampelman, Washington, D. C., was on the brief, for appellee.
Before EDGERTON, FAHY and WRIGHT, Circuit Judges.
The question presented by this appeal is whether the appellee, Napco Industries, Inc., an Indiana corporation with its principal place of business in Minneapolis, Minnesota, is "doing business" in the District of Columbia within the intendment of 13 D.C.Code § 103. The facts show generally that Napco is engaged in the business of trading with various foreign governments through their representatives in the District of Columbia and maintains a full-time agent there for this purpose. The alleged tortious breach of contract which is the basis of this action also occurred in the District. Thus Mueller Brass Co. v. Alexander Milburn Co., 80 U.S.App.D.C. 274, 152 F.2d 142 (1945), is distinguishable. Also here, unlike Mueller Brass, the "doing business" is with governments other than our own. Under the circumstances, we conclude that Napco was properly served in the District of Columbia.
WRIGHT, Circuit Judge (concurring).
Appellant brought an action against the Alpana Corporation and Napco charging Alpana with breach of contract and Napco with tortiously inducing the breach. The District Court dismissed the action as to Napco after granting its motion to quash the service on its resident agent in the District of Columbia. The motion to quash alleged that Napco had not qualified to do, and was not doing, business in the District. The complaint filed in the District Court does not allege a jurisdictional basis. It does appear, however, that the action was cognizable in the District Court as a federal court and as a local trial court of general jurisdiction. Consequently, if the action and the parties were properly before the court in either capacity, it should not have been dismissed.
Mutual, Napco and Alpana are foreign corporations in the business of trading with various foreign governments through their representatives in Washington. Alpana, as agent for appellant Mutual but in its own name, obtained a contract with the Government of Iraq for the sale of automotive military equipment. Before the contract was performed, appellee Napco's executive vice president came to Washington and entered into a contract with Alpana under which Alpana diverted its contract with the Iraqi Government from Mutual to Napco. The record further shows that appellee maintains a resident agent, styled its "District Sales Manager," in the District of Columbia for the purpose of obtaining contracts, on a commission basis, with foreign governments. It is on this resident agent, whose sales for Napco aggregate more that $500,000 annually, that service was made.
The parties both rely on a local statute of the District of Columbia providing for service of process on corporations "doing business" or "transacting business" in Washington. Each cites various cases from this court interpreting this statute in support of its position. As I view the instant case, however, it is not necessary to refer to this local statute, passed in 1901, or to the interpretations of this court with respect thereto. Since this case comes within the diversity jurisdiction of the District Court, since, as shown infra, the venue requirements of 28 U.S.C. § 1391(a) have been satisfied, and since service was made on a "managing agent" of the appellee in the District pursuant to Rule 4(d) (3), F. R.Civ.P., the motion to quash service on the appellee should have been denied and this case should not have been dismissed.
Much confusion exists as to whether, in diversity cases, local or federal law is to be the guide in determining the amenability of a foreign corporation to the service of process of a federal court. Many of the cases have failed to note the difference between Rule 4(d) (3), providing a federal manner of service, and Rule 4(d) (7), providing for service pursuant to state law, as well as the various considerations which arise from that difference. If a state statute is to be relied on under Rule 4(d) (7) in effecting service on a foreign corporation, then, presumably, state law may, within the limits of due process, furnish a guide to interpretation of that statute. On the other hand, if a state statute is not used, then no reason appears why the application of Rule 4(d) (3) should be restricted by state law.
Unlike most state service of process statutes which combine the two, the federal requirements of venue are found in the Judicial Code and the manner of making service is provided by Rule. Both must be satisfied before a party is properly before the court. In diversity cases, venue is satisfied under the provisions of 28 U.S.C. § 1391(a), while Rule 4 provides for the manner and place of making service. If venue in a diversity case is satisfied through the residence of the plaintiff, then an individual defendant, not a resident of the district or the state but personally served under Rule 4(d) (1) while sojourning therein, may be properly before the court. Likewise, a foreign corporation doing business in the district under 28 U.S.C. § 1391(c), in addition to satisfying the requirement of venue, is sufficiently present under Rule 4(f) to be properly served under Rule 4(d) (3). In interpreting "doing business" under § 1391(c), we do not look to local law. Guaranty Trust Co. of New York v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945), and its progeny have taken us well down the road to conformity, substantive and procedural, in diversity cases, even at the expense of the Federal Rules, but no case has yet suggested that we look to state law for the meaning of a federal statute. We do know that the Seventh Amendment to the Constitution cannot be sacrificed on the altar of conformity. Byrd v. Blue Ridge Rural Electric Cooperative, 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958); Simler v. Conner, 372 U.S. 221, 83 S.Ct. 609, 9 L.Ed.2d 691 (1963). We think that the due process cases, beginning with International Shoe, supra, Note 6, furnish the touchstone for interpretation of "doing business" under § 1391(c).
Here Napco clearly was "doing business" in the District under 28 U.S.C. § 1391(c). Its resident agent was in the District on a permanent, full-time basis, maintaining an office for appellee and doing appellee's business, which, incidentally, was substantially more than mere solicitation of contracts from government agencies. Compare International Shoe Co. v. Washington, supra, Note 6, 326 U.S. 316-319, 66 S.Ct. 158-159. Moreover, the incident in suit, the tortious breach of contract, occurred here. Under the circumstances, service on the resident agent satisfies the "managing agent" requirement of Rule 4(d) (3) since service on an agent in charge of business of a company sufficient to satisfy the requirements of 28 U.S.C. § 1391(c) is service on a "managing agent" under Rule 4(d) (3).
The venue requirements of 28 U.S.C. § 1391(a) and (c) having been satisfied and appellee having been properly served under Rule 4(d) (3), Napco's motions to quash and to dismiss should have been denied.