Opinion for the Court filed by Circuit Judge McGOWAN.
McGOWAN, Circuit Judge:
This appeal is from the dismissal of a diversity suit arising out of an automobile accident in the District of Columbia. Appellant Gatewood is a Maryland resident. He sued Fiat, S.p.A. (Fiat), an Italian auto manufacturer, and Fiat Motors of North America, Inc. (Fiat Motors), Fiat's United States distributor. The District Court dismissed the action because it found that the District of Columbia's "long-arm" statute did not permit personal jurisdiction over the defendants and, in any event, that the District of Columbia could not exercise jurisdiction over the defendants without violating constitutional due process requirements. We reverse.
Appellant in 1976 purchased a used Fiat automobile from a Virginia resident. On October 23, 1976, appellant drove the car to visit his son, who lives in the District. While in the District, appellant's car collided with another automobile. Because of an alleged defect in the Fiat's latch system, the door flew open and appellant was thrown from the car. Gatewood was taken by ambulance to a hospital in the District where he was treated for serious injuries.
Appellant sued Fiat and Fiat Motors
Appellant asserted that both Fiat and Fiat Motors were subject to suit in the District Court under the District of Columbia "long-arm" statute.
Appellant meanwhile served interrogatories on the appellees concerning their advertising and sales of automobiles in the Washington, D.C., area. The appellees answered most of the questions, but said they did not have enough information at hand immediately to answer questions about recent Fiat advertising. Before appellees answered the latter questions, the District Court dismissed the complaint as to each defendant for lack of personal jurisdiction.
The District Court noted, with respect to the District of Columbia "long-arm" statute:
Gatewood v. Fiat, S.p.A., No. 78-0277, mem. op. at 2-3 (D.D.C. April 21, 1978).
The District Court further held that defendants' contacts with the District of Columbia were insufficient to satisfy constitutional due process requirements:
Id. at 3.
We first determine whether the District of Columbia "long-arm" statute permits the exercise of jurisdiction over appellees. If so, we then inquire whether the exercise of jurisdiction over appellees comports with constitutional due process requirements. Forsythe v. Overmyer, 576 F.2d 779, 782 (9th Cir.), cert. denied, 439 U.S. 864, 99 S.Ct. 188, 58 L.Ed.2d 174 (1978).
In asserting that the District of Columbia had jurisdiction over Fiat and Fiat Motors, appellant invoked the District's "long-arm" statute, quoted in full in note 3 supra. Relevant here is the following provision:
D.C.Code § 13-423 (1973).
Appellees argue that section 13-423(b) prevents the District of Columbia from exercising jurisdiction in this case. They contend that subsection (b) requires that the injury prompting the lawsuit result from (1) the actual solicitation of business, (2) persistent course of conduct, or (3) derivation of substantial revenue, in the District.
There is no merit to this reading of the statute. One who invokes section 13-423(a)(4) need not show that the injury in the District was directly related to the actual business solicitation, course of conduct, or derivation of revenue. Where jurisdiction is based on subsection (a)(4), subsection (b) requires only that the claim for relief arise out of an injury occurring in the District.
Both the legislative history of the statute, and cases decided under it, make this plain. We examine each in turn.
Congress derived section 13-423 from the Uniform Interstate and International Procedure Act. See H.R.Rep.No.907, 91st Cong., 2d Sess. 61 (1970); S.Rep.No.405, 91st Cong., 1st Sess. 35 (1969). The Commissioner's Note accompanying the Uniform Act states that
13 Uniform Laws Ann. 285, 287 (Master ed. 1975) (emphasis added).
We are inclined to give considerable weight to the intentions of the Uniform Act drafters, because the Uniform Act was the genesis of the District's statute. Lest there remain doubt about the matter, however, we next consider how courts have interpreted section 13-423.
Principles of federalism bind us in diversity cases to follow the District of Columbia Court of Appeals' interpretation of the District of Columbia jurisdictional statute.
Decisions of the federal courts applying the law of the District of Columbia are in accord with the Note accompanying the Uniform Act. The District Court in Aiken v. Lustine Chevrolet, Inc., 392 F.Supp. 883, 885 & n. 11 (D.D.C.1975), found it "abundantly clear" that the solicitation of business, persistent course of conduct, or derivation of substantial revenue, need have no
We have discovered no case that leads us to believe that the District of Columbia courts would interpret subsection (a)(4) other than as the federal courts have done.
We note, finally, that a recent case of the Superior Court of the District of Columbia has interpreted the requirements of subsection (a)(4) exactly as we interpret them today. Dallmus v. Fiat Motors of North America, Inc.,
In light of (1) this interpretation of the District of Columbia law by a District of Columbia judge, (2) the legislative history of subsection (a)(4), and (3) federal court cases applying that subsection, we hold that a person alleged to have caused tortious injury by an act or omission outside the District is subject to jurisdiction in the District under subsection (a)(4), if the defendant:
and if the claim arises out of an injury occurring in the District.
We will focus our inquiry on whether Fiat and Fiat Motors derived substantial revenue from the sale of goods used in the District of Columbia, and therefore are subject to jurisdiction in the District under section 13-423(a)(4).
When Judge Ugast for the District of Columbia Superior Court recently adjudicated precisely this issue, he held that both Fiat and Fiat Motors were subject to jurisdiction in the District. Dallmus v. Fiat Motors of North America, Inc., No. 6617-78 (D.C.Super.Ct. April 30, 1979); see section II-B supra. Our examination of the record before us, especially in light of the deference
Fourteen Fiat dealerships and service agencies ring the Washington, D.C., area. The record reveals that somewhat less than 2% of Fiat Motors' revenue was produced by sales in the Washington area,
These sales totals are more than adequate to support the conclusion that appellees obtained "substantial revenue" from sales of automobiles used in the District of Columbia. Dallmus v. Fiat Motors of North America, Inc., No. 6617-78 (D.C.Super.Ct. April 30, 1979).
Other cases also make clear that the magnitude of Fiat auto sales in the Washington, D.C., area amply justify personal jurisdiction over appellees in the District. See Founding Church of Scientology v. Verlag, 175 U.S.App.D.C. 402, 406, 536 F.2d 429, 433 (D.C.Cir.1976) (revenue in excess of $26,000 for a ten-month period — approximately 1% of the company's total gross revenue — held to be "substantial"); Liberty Mutual Insurance Co. v. American Pecco Corp., 334 F.Supp. 522, 524 (D.D.C.1971) (yield from sale of one crane, out of the company's total annual production of 18 cranes, produced "substantial revenue"). It is also true that "a small percentage of the sales of a corporate giant may indeed prove substantial in an absolute sense." Ajax Realty Corp. v. J. F. Zook, Inc., 493 F.2d 818 (4th Cir. 1972) (emphasis added), cert. denied, 411 U.S. 966, 93 S.Ct. 2148, 36 L.Ed.2d 687 (1973). These and other precedents indicate that the Fiat automobiles sold and used in the District of Columbia area — worth more than $3 million annually, and constituting about 1.5% of the total volume of Fiat sales in the United States — do produce "substantial revenue."
Appellees, however, reject this analysis. They point out, correctly, that Fiat sells automobiles only in Italy, and that Fiat Motors sells no automobiles to dealers located in the District of Columbia proper. Appellees contend that sales by dealerships in the Washington, D.C., suburbs cannot justify jurisdiction over the manufacturer and distributor, because Fiat and Fiat Motors are only indirect sellers of the automobiles that find their way into the District.
That the sales are indirect is irrelevant, we think. The plain language of the statute makes this clear. The statute permits jurisdiction where the defendant "derives substantial revenue from goods used . . . in the District of Columbia." D.C.Code § 13-423 (a)(4) (1973) (emphasis added). The statute does not require that the goods be sold in the District of Columbia.
We hold, therefore, that jurisdiction over Fiat and Fiat Motors in the District of Columbia is permitted by the District's "long-arm" statute.
Appellees next rely on the District Court's holding that the District of Columbia constitutionally cannot assert jurisdiction in this case. Appellees point out that they have no offices in the District of Columbia, that appellant is not a resident of the District, and that the Fiat automobile at issue in this case is not registered here. We are told, therefore, that the District lacks a "manifest interest" in this litigation, Hanson v. Denckla, 357 U.S. 235, 252, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), and that assertion of jurisdiction under the District of Columbia "long-arm" statute thus violates the due process clause of the Constitution.
We hold that the exercise of jurisdiction in this case comports with due process. As we have seen, D.C.Code section 13-423 permits the exercise of jurisdiction in cases such as this if two conditions are fulfilled. First, the injuries must have occurred in the District. Second, defendant's conduct must reveal certain ties to the District, based on, inter alia, solicitation of business or production of revenue. See note 3 supra. The requirement that the injury must have occurred in the District recognizes the District's interest in preventing defective products from crossing its borders and causing
Some cases support the view that a state constitutionally might be able to assert jurisdiction in tort actions even when the tortious injury that is the subject of the litigation is the defendant's only contact with the forum state. See Ajax Realty Corp. v. J. F. Zook, Inc., 493 F.2d 818, 822 (4th Cir. 1972), cert. denied, 411 U.S. 966, 93 S.Ct. 2148, 36 L.Ed.2d 687 (1973); Reilly v. Phil Tolkan Pontiac, Inc., 372 F.Supp. 1205 (D.N.J.1974); Duignan v. A. H. Robins Co., 98 Idaho 134, 559 P.2d 750 (1977); State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889 (Mo.1970); Comment, In Personam Jurisdiction Over Nonresident Manufacturers in Product Liability Actions, 63 Mich.L.Rev. 1028, 1031-32 (1965). But see Uppgren v. Executive Aviation Services, Inc., 304 F.Supp. 165 (D.Minn.1969); Pellegrini v. Sachs & Sons, 522 P.2d 704 (Utah 1974).
We need not pronounce on that broad principle, however. This case, as we have seen, is not one in which jurisdiction is based only on the occurrence of a tortious injury within the District of Columbia. Appellees have contacts with the District independent of the accident. Fiat and Fiat Motors each knew that many of the automobiles they sold would be used in the District of Columbia, and they derived substantial revenue from sales of those automobiles. Under these circumstances the exercise of jurisdiction in this case undoubtedly comports with due process.
We reverse because the District Court erred in dismissing the action for lack of personal jurisdiction over Fiat and Fiat Motors. The case is remanded to the District Court for further proceedings consistent with this opinion.
It is so ordered.
The District of Columbia "long-arm" statute, D.C.Code § 13-423 (1973), provides:
AT YOUR PARTICIPATING WASHINGTON, D.C. FIAT DEALERS
In addition to this textual material, the advertisement contained the following emblem:
Washington Post, September 2, 1979, at A6, cols. 4-6.