Opposition Brief — Shinchosha Co. v. Superior Court of California

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FILED

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I NOV1 199)

No. 91-478 a

IN THE x

Supreme Court of the Gnited States

OCTOBER TERM, 1991

SHINCHOSHA COMPANY,

Petitioner,

vs.

SUPERIOR COURT OF THE STATE OF

CALIFORNIA FOR THE COUNTY OF LOS ANGELES,

Respondent,

SHIGETO SHIMIZU,

Real Party in Interest.

PETITION FOR WRIT OF CERTIORARI

TO THE CALIFORNIA COURT OF APPEAL

SECOND APPELLATE DISTRICT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

PETER A. SCHEY

Counsel of Record

256 S. Occidental Boulevard

Los Angeles, California 90057

(213) 388-8693

Attorney for Real Party in Interest

SHIGETO SHIMIZU

Lawyers Brief Service * Appellate Bnef Printers * (213) 383-4457 * (714) 720-1510

QUESTION PRESENTED

1. Whether the trial court abused its discretion in

concluding that subject matter jurisdiction over plaintiff's

claims against defendant Shinchosha would not offend due

process where the trial court found that "[dJefendant's activities

in California are wide ranging," "Focus magazine, the subject

of this lawsuit, is sold in California,” defendant "does sell a

substantial number of publications in California,” it "does

business in California in a broad manner," it "sells its products

(albeit through intermediate distributors) in the usual stream of

business,” it "is aware of the world wide distribution of its

products," "[t]he subject article specifically concerned a

California resident," and "the accompanying photographs of

plaintiff [were] obviously taken in California ... by an agent or

representative of defendant [who defendant admits it paid]."

TABLE OF CONTENTS

QUESTION PRESENTED...................cccccceee ii

STATEMENT OF THE CASE........................ ]

SEARS CS PC iins. | -cccscsssavmsoieneue 4

Pe TG U BRIBES © svienssscssessinmsssctenssonnbninaainabiiens 14

I. NEITHER THE FACTS OF THIS CASE

NOR THE ISSUES PRESENTED

WARRANT PLENARY PRE-TRIAL

REVIEW BY THE SUPREME

CPE Fe cv ccensessismninentanmtniiiareetines 14

Il. THE SUPERIOR COURT CLEARLY

DID NOT ABUSE ITS DISCRETION

IN REFUSING TO QUASH

SERVICE OF THE SUMMONS AND

COMPLAINT IN THIS CASE............. 20

A. California Courts Possess Broad

Authority To Assert Jurisdiction Over

Foreign Defendants Whose Tortious

Conduct Results In Injury To A

RO cn ccnciscecsnendblanietsensineheonees 20

B. Defendant Is Subject To The

General Jurisdiction of California........ 20

C. Even If Defendant's Contacts Were

Insufficient To Sustain General Jurisdiction,

They Are Clearly Sufficient to Establish

Limited Jurisdiction........................ 22

De ERIN oceccecssssesensnrutevssaeateaee 29

-jvV-

TABLE OF AUTHORITIES

Cases

500 Motors, Inc v. Superior Court,

122 Cal.App.3d 827, 176 Cal.Rptr. 349 (1981)............

Asahi v. Metal Industry Co. v. Superior Court,

NE Dc cicesscssvestcsbesscossrssnrssessses

Bartlett v. Superior Court,

86 Cal.App.3d 72, 150 Cal. Rptr. 25 (1978) «0.0.0.0...

Buckeye Boiler Co. v. Superior Court, 71 Cal.2d 893,

80 Cal. Rptr. 113, 458 P.2d 57 (1969) oe.

Burrus v. Municipal Court, 36 Cal.App.3d 233 (1973)...

Cabral v. State Board of Control, 112 Cal.App.3d 1012,

I ME CE OUED cccccncrrcescecsssoococcossesesseeees

Calder v. Jones, 465 U.S. 781 (1984)..................0006.

Cornelison vy. Chaney, 16 Cal.3d 143 (1976)...............

Dermegerdich v. Rank, 151 Cal.App.3d 848 (1984).......

Evangelize China Fellowship, Inc. v. Evangelize

China Fellowship, 146 Cal.App.3d 468,

I REED Ri vscnccercnreressenescecoscessssscess

Helicopteros Nacionales de Columbia v. Hall,

466 U.S. 408, 414, 104 S.Ct. 1868, 1872 (1984)........

Irving v. Owens-Corning Fiberglass Corp.,

864 F.2d 383 (Sth Cir. 1989), cert. den.,

i i cicscesctenscsnerssvecicsesosccersesesoses

Jones v. Calder, 187 Cal.Rptr. 825 (1982)...

Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984)...

passim

Matter of Udagawa, 14 I&N Dec. 578, (BIA 1974).......

Morris v. SSE, Inc., 843 F.2d 498 (11th Cir. 1988).....

Regie Nationale Des Usines Renault v. Superior

Court, 208 Cal.App.2d 702, 703, 25 Cal.Rptr. 530.......

Rollins Burdick Hunter of S. Cal. Inc. v. Alexander

& Alexander Services, Inc., 206 Cal.App.3d 1,

ee I I irccsnasarcraccecbennatcissecicessess

Seagate Technology v. AJ Kogyo Co. Ltd.,

219 Cal.App.3d 703, 268 Cal.Rptr. 586 (1990).........

_ Secrest Machine Corp. v. Superior Court,

33 Cal.3d 664, 190 Cal.Rptr. 175 (1983)...

Shimizu v. Department of State, et al.,

Cv. No. 89-2741-WMB(Ex) (C.D. Cal.)...................

Sibley v. Superior Court, 16 Cal.3d 442, 128 Cal.

Rptr. 34 (1976), cert. den. 429 U.S. 826 (1976)............

Tiffany Records, Inc. v. M.B. Krupp Distributors, Inc.,

276 C.A.2d 610, 617, 81 Cal.Rptr. 320 (1969)..........

United States ex rel. Knauff v. McGrath,

October Term, 1949, printed in 96 Cong. Rec. A3750.....

World-Wide Volkswagen Corp. v. Woodson,

444 U.S. 286, 100 S.Ct. 559 (1980)..c..cccccccesecsseesee.

Ziller Electronics Lab GmbH vy. Superior Court,

206 Cal.App.3d 1222, 1233, 254 Cal.Rptr. 410 (1988)...

Other Authoriti

Address of Chief Justice Vinson before American

Bar Association, Sept. 7, 1949, 69 S.Ct. v, vi ............

California Constitution, Art. I, § 2.0.0.0... ee.

17

4,7

20,23

22,28

- Vi -

California Evidence Code § 1070......0....0cccccceeeeees 9

Gordon and Mailman, Jmmigration Law and Procedure,

Brits FG ee Seen eneneD 5

S.Rep.No. 1515, 81st Cong., 2d Sess. 563 (1950)...... 5

Mr. Justice Brennan, State Court Decisions and the

Supreme Court, 31 Penn. Bar Assn. Q. 393, 399-400

A. RRR a ear oer petri Netle vakge NOMS oh: dy tell Cenc 16

///

STATEMENT OF THE CASE

Defendant, already having delayed proceedings in the trial

court, California Court of Appeal and Supreme Court for one

and a half years by contesting jurisdiction on the basis of

meritless arguments that "minimum contacts" sufficient to

satisfy due process are absent in this case, now seeks the

issuance of an extraordinary order granting certiorari prior to

trial in the lower court.

Defendant Shinchosha is a Japanese corporation which

publishes books and magazines sold by the tens of thousands

in the United States. Defendant publishes, inter alia, a

sensationalist tabloid called Focus magazine which is sold in

the United States, including in California.

Plaintiff, a California resident, sued defendant Shinchosha

for libel. slander and defamation as a result of an article

published in Focus magazine which falsely states, inter alia,

that plaintiff was arrested and charged with staying illegally in

the United States with a forged passport and birth certificate,

was pursued in the United States by an "international police

dragnet" under suspicion of "swindling 20 million dollars,"

was rumored to have financial resources provided by an

employee of a corporation "affiliated with some gangster

organization," put the money that he illegally earned into real

estate in California, and attempted to assume Mexican

citizenship in California "with a forged Mexican birth

certificate." The article concludes by noting that "mak[ing] a bit

hit in speculation and hunt[ing] for real estate in overseas

markets is a crime which modern Japanese are likely to

conceive nowadays."

The California Superior Court, Court of Appeals and

Supreme Court have all rejected defendant Shinchosha's claim

that its contacts with the State of California are insufficient to

justify the assumption of jurisdiction over plaintiff's claims.

Associate Justice Sandra D. O'Connor denied defendant a stay

pending adjudication of its petition for certiorari. Defendant has

also recently filed in the trial court a motion to dismiss based on

forum non conveniens, and a motion to strike the complaint.

Both motions were denied. In neither case did defendant seek

appellate review. After denying these motions the Superior

Court ordered defendant to file an answer by October 12, 1991,

which it did.

This case does not raise the "questions presented" and

briefed by defendant Shinchosha in its petition for certiorari.

The trial court did not assert jurisdiction based solely on the

distribution of "40 copies of (defendant's] Japanese language

magazine ... in California," nor solely on the basis of

defendant's “placement of magazines into the stream of

commerce," as asserted in defendant's "Questions Presented"

and argued throughout the Petition. On the contrary, based on

the evidence of record (despite defendant's refusal to fully

respond to discovery regarding their California contacts), the

Superior Court held that "[djefendant's activities in California

are wide ranging." Ruling on Motion of Defendant Shinchosha

Co. to Quash Service of Summons, April 16, 1991 ("Ruling on

Motion to Quash"), p. 2.1 The Superior Court concluded, inter

alia, that

1 Exhibit A to Defendant's Application for Stay.

a

Focus magazine, the Subject of this lawsuit, is sold in

California ... [D]efendant does sell a substantial number

of publications in California ... [D]efendant does

business in California in a broad manner ... [Defendant]

sells its products (albeit through intermediate

distributors) in the usual stream of business ..

[Defendant] is aware of the world wide distribution of its

products ... It publishes and sells by using an apparent

systematic business process whereby its products are

distributed inside and outside of Japan ... The fact its

product reaches the bookstores in California is not

surprising and manifests its wide ranging business

activities ... The subject article specifically concerned a

California resident. The accompanying photograph of

plaintiff was obviously taken in California, presumably

by an agent or representative of defendant ... This is not

a situation where defendant's California activities are

occasional ...

Ruling on Motion to Quash, p. 1-2. Contrary to defendant's

claim, the Superior Court did not rule that defendant "conducts

no business activity in California," nor did it rule that

defendant's "placement of [Focus magazine] into the stream of

commerce," "without other action by the publisher," justified

the assertion of jurisdiction. Petition at p. i (Questions

Presented). In short, defendant appears--without ever saying

so--to really challenge the factual findings of the trial court,

while pretending to challenge its legal conclusions.

Defendant's brief is based entirely upon factual assertions

rejected by the trial court.

Defendant has now filed a verified answer. This case is

finally moving forward and defendant presents no meritorious

argument why this Court should now undertake the

extraordinary action of granting certiorari based upon

defendant's disagreement with the trial court's findings of fact

regarding subject matter jurisdiction.

STATEMENT OF FACTS

The verified complaint on file in this action alleges that

plaintiff is a businessman and resident of Los Angeles,

California since 1988. Complaint for Damages for Libel,

Slander and Defamation ("Complaint"), § 5; Opposition to

Defendant's Motion to Quash, Exhibit 1, Declaration of

plaintiff Shigeto Shimizu ("Shimizu Dec. I") 4 1. He is a

~ single parent and the sole provider for his five year old United

States citizen daughter who lives with him in Los Angeles.

Further Supplement to Plaintiff's Opposition to Defendant's

Motion to Quash, Exhibit 1, Dec. of Shigeto Shimizu

(“Shimizu Dec. II") § 2. Plaintiff Shimizu possesses a valid

investor's visa and pursuant thereto has made substantial

investments in the United States.2 Under the Immigration and

Nationality Act, unlike most non-immigrants, the investor "E"

visa (which plaintiff possesses) does not require that the alien

2 See Plaintiff's Reply Memorandum in Support of Plaintiffs Cross-

Motion for Summary Judgment pp. 18-19, filed in Shimizu v. Department

of State, INS, Cv. No. 89-2741-WMB (C.D. Cal.), attached as Exhibit E

to Defendant's Reply to Plaintiff's Opposition to Motion to Quash Service

of Summons, filed in this case April 10, 1991.

enter the United States "temporarily." Gordon and Mailman,

Immigration Law and Procedure, § 12.03{c] at page 12-16.3

In any event, numerous courts have held that California

resident status has little to do with federal immigration status.4

Plaintiff is a taxpayer and owns the home in which he and his

five-year old daughter reside. Shimizu Dec. II at ¥ 3. Plaintiff

has enjoyed a good reputation generally and in his occupation.

Id.

Defendant Shinchosha claims to be resident in Japan. It is

the publisher of Focus magazine. Focus is a sensationalist

tabloid which uses large photographs (therefore the name

Focus") to expose its subjects. A recent survey of awards for

libel in Japan found 21 reported decisions between 1980 and

1989. Of these 21 decisions, five (about 1/4 of all reported

libel and defamation awards in Japan) involved defendant's

Focus magazine. /d. In short, Focus magazine is Japan's

3 "E” visa holders “need not show that they are coming to the United

States for a specific, limited period of time.” S.Rep.No. 1515, 81st

Cong., 2d Sess. 563 (1950); Matter of Udagawa, 14 1&N Dec. 578, 581

n. 3 (BIA 1974); Immigration Law and Procedure, supra, § 17.08 at page

17-46.

4 See, e.g., Cabral v. State Board of Control, 112 Cal.App.3d 1012,

1016-17, 169 Cal.Rptr. 604 (1980) (undocumented aliens considered

"residents of the State” for purposes of victim of violent crime benefits);

Dermegerdich v. Rank, 151 Cal.App.3d 848 (1984) (undocumented aliens

considered residents for purposes of certain medical benefits under the

Califomia Welfare and Institutions Code).

"National Inquirer," and is admittedly distributed to and read by

the Japanese community world-wide.

On May 26, 1989, defendant published and circulated an

article in Focus magazine regarding plaintiff which is libelous

on its face, slanderous and defamatory. The article recklessly,

negligently, intentionally and falsely states inter alia that:

Plaintiff was arrested and charged with staying illegally

in the United States with a forged passport, forged

permanent residence certification card, and forged birth

certificate ... Plaintiff was pursued in [in the United

States by] an international police dragnet under suspicion

of swindling 20 million dollars ... Plaintiff conducted a

stock trading manipulation on a massive scale on the

Osaka Stock Exchange in 1985 ... Plaintiff was rumored

to have financial resources provided by an employee of a

corporation affiliated with some gangster organization ...

Plaintiff put the money that he earned [from the alleged

stock manipulation] into real estate [in California] ...

Plaintiff attempted to assume Mexican citizenship [in

California] with a forged Mexican birth certificate.

Complaint 9 6-7. The article also states that plaintiff “entered

{the United States] at Los Angeles on [a] tourist visa and put

the money he earned [allegedly through a stock "swindle"] into

real estate [in Los Angeles], that "among the properties he

invested in [in California] were a residential palace ... in Palos

Verdes [readers are then referred to a photograph of plaintiff's

"palace"], a condo [readers are again referred to a photograph

of the condo], [and] Yoro-no-Taki restaurant [readers are

referred to a photograph of the Los Angeles restaurant]." /d.

a

Readers are then told for the second time that plaintiff

"attempted to assume a [sic] Mexican citizenship with a forged

Mexican birth certificate [in California] ... but upon the request

made by the Japanese Police authorities, the U.S. Immigration

and Naturalization Service and Los Angeles Police Department

finally arrested him as shown in the photograph." Complaint,

Exhibit 1, pp. 3-4 (English translation of article). Readers are

referred to a page-size unauthorized photograph of plaintiff in

leg chains and handcuffs taken while plaintiff was in INS

custody in a supposedly secure area of the Los Angeles federal

building. The article concludes that "[m]ak[ing] a big hit in

speculation and hunt[ing] for real estate in overseas markets is a

crime which modern Japanese are likely to conceive

nowadays.” /d. p. 4

Plaintiff was arrested by the INS (not the Los Angeles

police Department) and briefly detained, but it was for

overstaying a visitor's visa, a relatively minor charge later

withdrawn by the INS,> not for possessing "a forged passport,

5 In Shimizu v. Department of State, et al., Cv. No. 89-2741-WMB(Ex)

(C.D. Cal.) the district court issued summary judgment in favor of Mr.

Shimizu by order dated July 30, 1990. The order required the ‘epartment

of State to reissue to Mr. Shimizu an "investors" visa improperly revoked

during a brief trip Mr. Shimizu took to Canada in 1988. Mr. Shimizu was

permitted to return to the United States on a "visitors’ visa to wrap up his

affairs after his investor visa was revoked. He returned on the visitor's visa

and overstayed. After his arrest, the subject of the Focus magazine article,

plaintiff successfully challenged the revocation of his investor visa. In

compliance with the district court order, Mr. Shimizu's investor's visa has

forged permanent residence certification card, and forged birth

certificate." Nor was plaintiff Shimizu "pursued in an

international police dragnet." Nor has plaintiff ever had

"financial resources provided by an employee of a corporation

affiliated with some gangster organization." Nor has plaintiff

"put the money that he earned [from illegal acts] into real estate

{in California].”

As any reasonable person could foresee, the article

"exposed plaintiff to hatred, contempt, and ridicule," Complaint

47. It is "false because plaintiff did not engage in the actions

stated in the article." Jd. § 8. With "ordinary and reasonable

care defendant could have discovered that the article was false

and grossly libelous.” Jd. § 10.

It is undisputed that this issue of Focus magazine was

distributed, sold and read in California. As a proximate result

of the above-described publication, plaintiff suffered damage in

California to his reputation and business. Jd. 9/§ 15-16.

The declaration of Masahide Nogi, an employee of

defendant and a Focus magazine reporter, states that he wrote

the article in question. Motion to Quash Service of Summons,

Declaration of Masahide Nogi ("Nogi Declaration"), § 1.6 He

asserts that other than "a few" telephone calls with the

been returned to him and the deportation hearing administratively

terminated.

© Without explaining the basis for his claim, he states that when he wrote

the article he “believed . . . that its contents were true and correct...” /d.

Defendant has refused to respond to discovery which would explain the

basis for this self-serving, untested assertion.

photographer in California who took the photographs

accompanying the article, all of his "research" was done in

Japan. Id. 4 3. He does not explain what that "research"

involved, nor would defendant explain the scope of the writer's

"research" in response to plaintiff's discovery requests.

Defendant asserts that Mr. Nogi obtained "information" and the

photographs published from a "photographer in Los Angeles,"

id. 4 7, but refused to disclose the identity of the Los Angeles

“photographer,” or provide any details about their relationship

with him, improperly citing on his behalf a "newsmen's

privilege" under Cal. Evid. Code § 1070.7 Defendants

7 Defendant improperly asserted what they dubbed a “newsman’s privilege”

in refusing to disclose, inter alia, (1) the name, address and telephone

number of the "photographer" who provided, for a fee, the information used

to write the article (Form Interrog. 12.2); (2) the time, date and place of

surveillance of plaintiff (Form Interrog. 13.1); (3) whether the

photographer is an agent or independent contractor for defendants (Interrog.

4); (4) all documents to or from the photographer (Request for Production

#1). Article 1, § 2 of the Cal. Constitution and Cal. Evid. Cede § 1070

prevent a publisher from being “adjudged in contempt ... for refusing to

disclose the source of any information procured ... for publication” when

obtained from "a confidential source.” Defendant publishers are not granted

a "privilege" in damage actions to hide the names of their own reporters,

photographers, agents or representatives. And even when a defendant in a

civil action refuses to provide information about a bona fide informant, he

"may be subject to a variety of other sanctions, including the entry of

judgment against him. Neither Evidence Code § 1070 nor article I, section

2 protects a party against such sanctions." Mitchell v. Superior Court

10

similarly refused to provide other information relevant to the

"minimum contacts" inquiry in response to plaintiff's discovery

requests. Plaintiff filed a motion to compel further responses

on the jurisdictional matters. Defendant was not required to

more fully respond to discovery because the superior court

denied defendant's jurisdictional challenge based on the

evidence of record at the time.

Defendant's second declaration is executed by defendant

Akio Goto, a director of defendant Shinchosha Co. and editor

of Focus magazine. Motion to Quash Service of Summons,

Declaration of Akio Goto ("Goto Declaration"), § 1. He

declares that Shinschosa publishes books and magazines,

including the works of "American authors." Jd. at 76, § 2.8

Mr. Goto declares that defendant "sells or consigns”" its

magazines to "three independent Japanese distributors” who in

turn distribute the product around the world, including in

California. /d. 46. Mr. Goto claims that he is "informed and

believes" that only "40 (forty)" issues of Focus are delivered by

(1984) 37 Cal.3d 268, 208 Cal.Rptr. 152, 154. Defendant's assertion of

what it called the "newsman’s” privilege was completely without legal

justification. Even were this Court to grant certiorari, and conclude that

the record did not support the Superior Court's exercise of discretion, the

matter would likely be remanded for further proceedings on plaintiffs

motion to compel discovery on issues relevant to the minimum contacts

analysis.

8 Defendant's summary responses to plaintiff's discovery requests fail to

explain what "American authors” are published by defendant Shinchosha, or

the nature of defendant's agreements with these American authors.

11

defendant's distributors to bookstores in California. Jd. This

inadmissible hearsay statement?--allegedly obtained from

unknown persons associated with defendant's independent

distributors--are rebutted by the personal observations of two

declarants. A random check of three bookstores in Los

Angeles uncovered about one hundred and ten (110) issues of

Focus magazine available for purchase weekly (or about 473

per month or 5,676 per year). 10 While defendant Shinchosha

repeatedly asserts that only "forty (40) copies of [Focus

magazine] ... are distributed in California by [defendant's]

independent distributors," Petition at i, 3, 10, 13, the Superior

Court, citing plaintiffs declarations, which are "based upon

personal observations at Los Angeles bookstores," agreed that

defendant sells "a substantial number of publications in

California, including Focus magazine." Ruling on Motion to

Quash, p. 1 (emphasis added).

9 Plaintiff objected to their admissibility for purposes of determining

subject matter jurisdiction. Supp. to Plaintiffs Opposition to Def.'s

Motion to Quasn, filed April 11, 1991, at 2. Mr. Goto fails to identify the

persons who provided him with the information, nor does he state how or

from whom they purportedly obtained the information.

10 Opposition to Motion to Quash, Exhibit 1, Declaration of Attorney

Anne Inoue, filed Feb. 15, 1991 ("Inoue Declaration"); Supplement to

Plaintiffs Opposition to Defendant's Motion to Quash, filed April 11,

1991, Exhibit 2, Declaration of Robert Rikimaru ("Rikimaru Declaration” )

at ¢ 6 (Mr. Rikimaru observed forty-five [45] issues of Focus magazine in

one bookstore alone).

12

Furthermore, however many copies of Focus magazine are

sold or otherwise distributed in California, defendant has said

little about but has not disputed that thousands of its

publications are sold in the State of California. On February

11, 1991, K. Anne Inoue, an attorney, visited a book store in

Los Angeles and, inter alia, found an entire section of

"Shinchosha Bunko," paperback fictions published by

defendant Shinchosha. /d. In all she counted approximately

70 shelves carrying books published by defendant Shinchosha,

for a total of approximately 4,200 books in one bookstore.

Inoue Declaration at J 3. See also Rikimaru Declaration at 4

4-5 (Mr. Rikimaru visited one book store and observed over

2,500 books and magazines published by defendant).!1

In the face of these facts, Mr. Goto claims that defendant

"derives no income from California." /d. 45. Defendant's

books are not being given away in California. If defendant

"derives no income from California" from the sale of thousands

of its publications, it offers no explanation as to who is

pocketing its profits.

Defendant never explained how its profits from the sales of

its books in California are received. It claimed that it "sells or

consigns" magazines, including Focus, to "three independent

Japanese distributors" who in turn distribute the product in

California. Goto Dec., ] 6. Defendant failed to provide any

11 Defendant never addresses how many copies of Focus magazine or its

other publications are distributed and sold in other states in the United

States. All of those sales would further support jurisdiction in California,

the state of plaintiff's residence and where he experienced the injury.

13

details regarding the terms of such alleged sales or

consignments, and refused to elaborate in its response to

discovery sought by plaintiff on defendant's claim of

insufficient contacts with California.

Defendant's oft-repeated but unsupported assertion that

only 40 issues of Focus magazine are available in California is

based solely on an untested, inadmissible hearsay statement.

In summary, defendants’ limited responses to discovery

and defendant Goto's declaration concede at least the following

contacts with California:

1. A person in Los Angeles defendant refuses to identify

(frivolously claiming a "newsman's" privilege) was

paid by defendant for unauthorized photographers he

had taken of plaintiff while in INS custody and for

other "information" about plaintiff used in the article

which is the subject of this case. Goto Declaration § 7.

2. Defendant Shinchosha entered into at least one contract

with an actor in California to do a tape-recording for

defendants and sent an employee to California to make

the recording with the actor (Gregory Peck).

Defendant's Responses to Interrogatories, Response 4.

3. Defendant Shinchosha sent two employees -- a reporter

and a photographer -- to Los Angeles to do research for

at least one book published by defendant. /d.

4. Defendant Shinchosha directly sends 24 magazines to

subscribers in California. /d. Response No. 6.

a At the time of the publication of the article at issue

defendant Shinchosha was aware that "some" issues of

14

Focus magazine were sold in the State of California.

Response to Request for Admission No. 6.

7. Defendant Shinchosha accepted an advertisement for a

“condominium complex in California" in one of its

magazines. /d. at Response No. 12.

8. Defendants’ responses to discovery and declarations

provide no rebuttal to the evidence filed by plaintiff that

thousands of defendants’ publications are available for

purchase in Los Angeles book stores.

9. The article in question concerns plaintiff who is a

resident of California, falsely charging a variety of

illegal acts in California.

ARGUMENT

I. NEITHER THE FACTS OF THIS CASE NOR

THE ISSUES PRESENTED WARRANT

PLENARY PRE-TRIAL REVIEW BY THE

SUPREME COURT

It is well established law in the courts of California that

absent extraordinary reason, "the parties must await a review

by appeal from the final judgment." Burrus v. Municipal

Court, 36 Cal.App.3d 233, 236 (1973). Defendant has failed

to demonstrate an extraordinary reason justifying the

intervention of the United States Supreme Court in the pre-trial

proceedings now moving forward in the California trial court in

this case. Defendant simply argues what any other defendant

could claim after denial of a motion to quash service -- namely

that, without the extraordinary intervention of the Supreme

15

Court, they will be required to proceed to trial. This is the

same claim that could be made by every party who fails to

succeed on a pre-trial dispositive motion. There is nothing

extraordinary about defendants petition at all. "If reviewing

courts made themselves routinely available to intervene [in trial

court proceedings] whenever a litigant claimed a mistake has

been made in a law-and-motion department, trials would be

delayed, litigants would be vexed with multiple proceedings,

and judgment appeals would be kept waiting." Burrus, 36

Cal.App.3d at 236.

In a similar vein, Chief Justice Vinson noted in 1949 :

The function of the Supreme Court is . . . to resolve

conflicts of opinion on federal questions that have

arisen among the lower courts, to pass upon questions

of wide import under the Constitution, laws, and

treaties of the United States, and to exercise

supervisory power over lower federal courts. If we

took every case in which an interesting legal question

is raised, or our prima facie impression is that the

decision below is erroneous, we could not fulfill the

Constitutional and statutory responsibilities placed

upon the Court.

Address of Chief Justice Vinson before American Bar

Association, Sept. 7, 1949, 69 S.Ct. v, vi (emphasis added).

This is not a case involving a federal issue. The issue of

subject matter jurisdiction arises under California law -- the

primary issue being whether the assertion of jurisdiction

violates state notions of fundamental fairness and due process.

Defendant's primary focus throughout has been on California's

a EE aor

16

due process limitation on subject matter jurisdiction. Mr.

Justice Brennan has pointed out that "[c]rucial to the exercise of

our certiorari jurisdiction is whether the controlling issue in the

state court case is a federal issue, that is, an issue arising under

the United States Constitution or under federal laws or

treaties." Mr. Justice Brennan, State Court Decisions and the

Supreme Court, 31 Penn. Bar Assn. Q. 393, 399-400 (1960).

Nor does this case involve a state court ruling in which the

validity of a state statute is drawn into question on the ground

of its being repugnant to federal law. The sole issue presented

for review at this early stage of the case is the discretion

exercised by a California state court judge, based upon findings

of fact with which defendant disagrees, to deny a motion to

quash service of a summons and complaint on the ground of

insufficient minimum contacts.

Defendant argues this case "deserves attention" to clarify

what was "left open" in Asahi v. Metal Industry Co. v.

Superior Court, 480 U.S. 102 (1987) and Keeton v. Hustler

Magazine, 465 U.S. 770 (1984). Petition at 15. The issue

defendant claims "left open" in Asahi and Keeton is "how much

contact with the [forum] state is enough to assert jurisdiction."

Id. This is precisely the issue addressed by this Court in

Asahi, Keeton and other "minimum contacts" cases (discussed

infra). “How much" contact is required cannot be answered in

one case. This Court has established the standards for lower

courts to follow, and whether or not sufficient minimum

contacts exist is generally a factual case-by-case determination.

Defendant entirely fails to explain how Supreme Court review

in this case, in which the facts are not yet fully developed

17

because defendant opposed discovery and defendant disagrees

with the facts found by the trial court, the Court could in any

meaningful way advance the law on minimum contacts for

jurisdictional purposes. On the facts as determined by the trial

court, rather than as presented in defendant's Petition, no

current authority would disagree that the assumption of

jurisdiction was proper. See generally Irving v. Owens-

Corning Fiberglass Corp., 864 F.2d 383, 384 (Sth Cir. 1989),

cert. den., 110 S.Ct. 83 (1989); Morris v. SSE, Inc., 843

F.2d 498, 493 (11th Cir. 1988). In fact, the law governing

this case is clearly set forth in Calder v. Jones, 465 U.S. 781,

104 S.Ct. 1482 (1984) (personal jurisdiction over employees

of out-of-state magazine proper where they should have

recognized the effect of their article would damage a California

resident).

In Asahi this Court unanimously decided that jurisdiction

over the alien defendant would be "unreasonable and unfair."

Id. at 116. The Court divided on the issue whether the

placement of manufactured goods in the "stream of commerce"

alone was sufficient to establish a basis for minimum contacts

and therefore jurisdiction. Three Justices felt the analysis was

unnecessary given the Court's decision that jurisdiction was

unreasonable. Justice O'Connor, writing for four justices

concluded that "mere placement" of goods in the stream of

commerce was insufficient to establish minimum contacts. /d.

at 112. Ard Justice Brennan, writing for four Justices,

concluded that jurisdiction premised on the placement of a

product into the stream of commerce "is consistent with the Due

Process Clause." /d. at 117.

18

However, as we have already pointed out, this case does not

raise the same issue whether "defendant's mere awareness of

distribution" in the "stream of commerce” gives rise to

jurisdiction. Petition at 16. As the Superior Court found,

based on more than sufficient evidence, defendant has "wide

ranging” business ties to California making jurisdiction proper

over its publication of a highly defamatory article about a

California resident and events that allegedly took place in

California. In short, this is not a "stream of commerce" case,

but a libel and defamation action. As discussed below, this

Court has adopted a different approach to minimum contacts in

the context of libel actions versus the transportation of other

goods across state or national boundaries.

Furthermore, this case does not present "an opportunity" to

address the questions posed by defendant because the lower

court did not rule on the questions briefed by defendant. 12 On

the contrary, based on the evidence of record (despite

defendant's refusal to fully respond to discovery regarding their

12 Defendant repeats its erroneous assertion regarding what the Superior

Court ruled throughout its Petition. See, e.g. Petition at i (Questions

Presented), 5 (jurisdiction assumed "by virtue of [defendant's] published

products being sold in California”), 7 (jurisdiction was based "solely on

defendant's awareness that its products may reach the forum state through

the ‘stream of commerce’"), 10 (defendant's “only conceivable ‘contact’ with

California was its potential knowledge that a small number of its

publications reached the state"). As defendant must surely know, and as a

review of the Superior Court order clearly indicates, none of these

Statements are accurate.

19

California-contacts), the Superior Court held that "[dJefendant's

activities in California are wide ranging." Ruling on Motion to

Quash, p. 2. As noted in the Statement of Facts, supra, the

Superior Court concluded, inter alia, that (1) Focus magazine,

the subject of this lawsuit, "is sold in California," (2)

"[DJefendant does sell a substantial number of publications in

California, (3) "[D]efendant does business in California in a

broad manner,” (4) "[Defendant] sells its products (albeit

through intermediate distributors) in the usual stream of

business," (5) "[Defendant] is aware of the world wide

distribution of its products,” (6) "[Defendant] publishes and

sells by using an apparent systematic business process whereby

its products are distributed inside and outside of Japan, (7)

"The fact [defendant's] product reaches the bookstores in

California is not surprising and manifests its wide ranging

business activities," (8) "The subject article specifically

concerned a California resident," (9) "The accompanying

photograph of plaintiff was obviously taken in California,

presumably by an agent or representative of defendant," (10)

"This is not a situation where defendant's California activities

are occasional ." Ruling on Motion to Quash, p. 1-2. Contrary

to defendant's repeated assertions to this Court, the Superior

Court's order clearly did pot rule that minimum contacts

sufficient to satisfy due process existed "solely" based on "the

defendant's awareness that its products reach the forum state

through the stream of commerce.”

Therefore, even if this Court believed the question posed by

defendant (whether jurisdiction is proper based "solely" on

defendant's "awareness that its products reach the forum state

20

through the ‘stream of commerce’’) was worthy of plenary

review, the question is plainly not presented for review in this

case.

A petition for certiorari is in substance a request for the

Court to exercise its discretionary power to review the case, a

request which may be denied because the Court does not regard

the points raised as sufficiently important for it to review.

There is no reason to believe that this case raises the kind of

important issues to which the Court limits its grant of petitions

for certiorari.

Il. THE SUPERIOR COURT CLEARLY DID

NOT ABUSE ITS DISCRETION IN

REFUSING TO QUASH SERVICE OF THE

SUMMONS AND COMPLAINT IN THIS

CASE

A. CALIFORNIA COURTS POSSESS

BROAD AUTHORITY TO ASSERT

JURISDICTION OVER FOREIGN

DEFENDANTS WHOSE TORTIOUS

CONDUCT RESULTS IN INJURY TO

A RESIDENT

California Code of Civil Procedure § 410.10 provides that

"[a] court of this state may exercise jurisdiction on any basis

not inconsistent with the Constitution of this state or of the

United States." California has "chosen to provide the broadest

possible form of jurisdiction to its courts,” 500 Motors, Inc v.

Superior Court, 122 Cal.App.3d 827, 176 Cal.Rptr. 349

(1981) (emphasis added), properly "limited only by

constitutional considerations." Rollins Burdick Hunter of S.

Cal. Inc. v. Alexander & Alexander Services, Inc., 206

21

Cal.App.3d 1, 5, 253 Cal.Rptr. 338 (1988), citing Sibley v.

Superior Court, 16 Cal.3d 442, 445, 128 Cal. Rptr. 34, 36

(1976), cert. den. 429 U.S. 826 (1976). A plaintiff need only

establish by a "preponderance of the evidence that all necessary

jurisdictional criteria are met.” Ziller Electronics Lab GmbH v.

Superior Court, 206 Cal.App.3d 1222, 1233, 254 Cal.Rptr.

410 (1988) (citations omitted).

B. DEFENDANT IS SUBJECT TO THE

GENERAL JURISDICTION OF CALIFORNIA

Regardless of whether defendant sells one or one thousand

copies of Focus magazine in the state of California, the courts

may assert "general" jurisdiction over defendant in light of its

significant contacts with the state. It is unrebutted that

defendant's products, primarily books and magazines, are

widely distributed in California. In one book store alone in Los

Angeles plaintiff has identified over four thousand books

published by defendant. Inoue Declaration at § 3. In addition,

defendant has accepted advertisements from California, has

entered into contracts in California, and has sent employees to

California to research books.

When a defendant has sufficiently extensive contacts with

the forum state, it may be subject to suit there on all claims

wherever they arise. Helicopteros Nacionales de Columbia v.

Hall, 466 U.S. 408, 414, 80 L.Ed.2d 404, 411, 104 S.Ct.

1868, 1872 (1984); Secrest Machine Corp. v. Superior Court,

33 Cal.3d 664, 669, 190 Cal.Rptr. 175, 600 P.2d 399 (1983)

(when nonresident's activities are extensive or wide-ranging, or

substantial, continuous and systematic, there is a

22

constitutionally sufficient relationship to warrant jurisdiction for

all causes of action asserted against him).

Through the wide sale of its publications in the State of

California, defendant's forum-related activity reaches such

extensive proportions "as to make the defendant sufficiently

‘present’ in the forum state to support jurisdiction over it..."

Tiffany Records, Inc. v. M.B. Krupp Distributors, Inc., 276

C.A.2d 610, 617, 81 Cal.Rptr. 320 (1969).

C. IF DEFENDANT'S CONTACTS ARE

INSUFFICIENT TO SUSTAIN GENERAL

JURISDICTION, THEY ARE CLEARLY

SUFFICIENT TO ESTABLISH LIMITED

JURISDICTION

Defendant has repeatedly argued that its Focus magazine is

sold in California by independent distributors and therefore

defendants should be permitted to avoid jurisdiction in this

State. Petition at 4, 11, 15, 17, etc. All modern authority

rejects this argument. In World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 100 S.Ct. 559 (1980), this Court

made clear that "if the sale of a product of a manufacturer or

distributor . . . is not simply an isolated occurrence, but arises

from the efforts of the manufacturer or distributor to serve

directly or indirectly the market for its product in other states, it

is not unreasonable to subject it to suit in one of those States if

its allegedly defective merchandise has there been the source of

injury..." 100 S.Ct. at 567 (emphasis added). !3

13 See also Buckeye Boiler Co. v. Superior Court, 71 Cal.2d 893, 80

Cal. Reptr. 113, 458 P.2d 57 (1969) ("A manufacturer's economic

23

Indeed, "[a] state has power to exercise judicial jurisdiction

over an individual who causes effects in the state by an

al — i! . acti

arising from these effects..." Sibley v. Superior Court, 16

Cal.3d 442, 446, 546 P.2d 322, 324, 128 Cal. Rptr. 34, 36

(1976), cert. den. 429 U.S. 826 (1976).(emphasis added). !4

The "effects test,” which defendant chooses to ignore, was

upheld by this Court in Calder v. Jones, 465 U.S. 781, 104

S.Ct. 1482 (1984), the most recent Supreme Court case dealing

with "minimum contacts” in a libel action.

In Calder actress Shirley Jones, a professional entertainer,

filed suit for libel and defamation against the National Enquirer,

Jain Calder, editor of the magazine, John South, the reporter

who wrote the article in question, and a California distributor.

relationship with a state does not necessarily differ in substance, nor should

its amenability to jurisdiction necessarily differ, depending on whether it

deals directly or indirectly with residents of the state"). The indirect manner

in which products might be distributed in the state "effect[s] little, if any,

[question] of the jurisdictional situation.” Regie Nationale Des Usines

Renault v. Superior Court, 208 Cal.App.2d 702, 703, 25 Cal.Rptr. 530,

531.

14 See also Bartlett v. Superior Court, 86 Cal.App.3d 72, 150 Cal. Rptr.

25 (1978) ("One of the recognized bases for jurisdiction in California arises

when the defendant has caused an ‘effect’ in the State by an act or omission

which occurs elsewhere"); Seagate Technology v. AJ Kogyo Co. Lid., 219

Cal.App.3d 703, 268 Cal.Rptr. 586, 589 (1990) ("where [foreign

defendants} are alleged to have engaged in intentional tortious activity,

directed at a California resident, jurisdiction over them is proper.")

24

Only Smith and Calder challenged the jurisdiction on the

California courts, arguing they had no contacts in California.

In granting the motion to quash, the Superior Court used

language remarkably similar to that found in defendants’

Petition, noting that neither Calder nor Smith "maintained any

residence or business office within California. Editor Calder

‘id Californi ell i

state during his work on the article. Reporter Smith made a

few telephone calls into California . . . The totality of such

contacts, in thi; Court's view, are [sic] insubstantial." See

Jones v. Calder, 187 Cal.Rptr. 825 (1982) (emphasis added).

However, the California Court of Appeals reversed,

holding that jurisdiction was proper because the "effects" of

defendants’ libelous article were felt in California. Jd. Calder

and Smith appealed to this Court, which affirmed the California

Court of Appeal's decision. This Court held:

The fact that the actions causing the effects in California

were performed outside the State did not prevent the

State from asserting jurisdiction over a cause of action

arising out of those effects... The Court of Appeals

further suggested that petitioner's South's .. .

numerous telephone calls to California, formed an

independent basis for an assertion of jurisdiction over

him in this action. In light of our approval of the

"effects" test employed by the California court, we find

it unnecessary to reach this alternative ground . . . [The]

jurisdiction. Here, the plaintiff is the focus of the

activities of the defendants out of which the suit arises .

25.

. . The alleged libelous story concerned California

activities of a California resident. It impugned the

professionalism of an entertainer whose television

career was centered in California. The. . . brunt of the

harm, in terms both of respondent's emotional distress

and the injury to her professional reputation, was

suffered in California . . . Jurisdiction over petitioners

refore pr iforni "effects"

of their Florida conduct in California . . . An individual

injured in California need not go to Florida to seek

redress from persons who, though remaining in

Florida, knowingly cause the injury in California... .

104 S.Ct. at 1485-1487 (emphasis added).

Similarly in this case, (1) "[t]he fact that the actions causing

the effects in California were performed outside the State [does]

not prevent the State from asserting jurisdiction over a cause of

action arising out of those effects," (2) "the plaintiff is the

focus of the activities of the defendants out of which the suit

arises," (3) "[t]he alleged libelous story concerned California

activities of a California resident." 15 (4) the challenges article

"impugned the professionalism” of the plaintiff whose work is

“centered in California,” and (5) the “brunt of the harm, in

terms both of respondent's ernotional distress and the injury to

[his] professional reputation, was suffered in California."

Under these circumstances, jurisdiction over petitioners is

proper in California. As this Co »ct has warned, under these

15 Defendants repeatedly argue that plaintiff is only a "temporary" resident

of California. This is not true. See footnote 3 and accompanying text.

26

circumstances defendants must "reasonably anticipate being

haled into court . . . to answer for the truth of the statements

made in their article." Calder v. Jones, 104 S.Ct. at 1487.

The cases relied upon by defendants are out-dated and/or

inapposite to the issue decided by the Superior Court.

Defendants cite Cornelison v. Chaney, 16 Cal.3d 143 (1976),

at length for the proposition that a defendant's actions in the

forum state must be "w‘de ranging" for jurisdiction to attach.

Cornelison is a pre-Calder case, and, in any event, involves

products liability, not a libel.

As it did before the Superior Court, defendant also relies on

Evangelize China Fellowship, Inc. v. Evangelize China

Fellowship, 146 Cal.App.3d 468, 194 Cal.Rptr. 240 (1983).

Petition at 13. Evangelize China Fellowship is a pre-Calder

case which is cited by defendants because it focused on the low

"number" of issues of the allegedly libelous article circulated in

the forum state. /d. at 444. However, both Calder and Keeton

v. Hustler Magazine, Inc., 465 U.S. 770 (1984) (both

decisions were issued on the same day) cast significant doubt

on the continued vitality of earlier holdings that relatively small

levels of circulation are insufficient minimum contacts to

support jurisdiction. Defendant ignores this Court's holding

that:

[rlespondent's regular circulation of magazines in the

forum state is sufficient to support an assertion of

jurisdiction in a libel action based on the contents of the

magazine.

Hustler Magazine, Inc., 104 S.Ct. at 1478. Jurisdiction was

considered proper in New Hampshire, where neither plaintiff

27

nor defendant resided, "even though only a small portion of

| Hihelous] : Resttinand in Sees il hire"

104 S.Ct. at 1479 (emphasis added). Similarly, in Calder,

defendants Calder and South, sued in their personal capacities,

circulated no magazines in California at all -- they only worked

for a company which did.

Finally, the Court may consider the interests of the plaintiff,

defendants and the state in the assertion of jurisdiction in

California. Here, in their own words, defendant is the

"largest" publishing house in Japan. It obviously has vast

resources compared with plaintiff and has retained one of the

largest law firms in the country to represent it in these

proceedings. Defendant has not argued that it is without the

resources to litigate this case in California where the material

for the article at issue originated, the subject of the article (the

plaintiff) resides, the circumstances giving rise to the article

(plaintiff's arrest by the INS) took place, the photograph

published was taken and where the injury to plaintiff's

reputation was felt.

On the other hand plaintiff is without the resources to

litigate this case in Japan, and, in any event, could not presently

travel to Japan without jeopardizing his resident status in the

State of California. Plaintiff does not have the resources

necessary to litigate this case in Japan, and plaintiff's witnesses

regarding the injury to his reputation caused by defendant's

libelous publication are all located in California.

28

Finally, "the state always has an interest in providing a

forum for its residents." Tiffany Records, Inc.v. M.B. Krupp,

276 C.A.2d 610, 619, 81 Cal.Rptr. 320 (1969). 16

In Keeton the Supreme Court recently stressed the interest

of the state in providing a remedy for libelous publications by

non-forum publishers:

"A state has an especial interest in exercising judicial

jurisdiction over those who commit torts within its

territory. This is because torts involve wrongful

conduct which a state seeks to deter, and against which

it affords protection, by providing that a tortfeasor shall

be liable for damages which are the proximate result of

his tort." [Citation omitted] . . . False statements of fact

harm both the subject of the falsehood and the readers

of the statement. [The states] may rightly employ

[their] libel laws to discourage the deception of [their]

16 The state clearly has a strong interest in providing a forum to its

residents who are libelled in publications made available to purchasers and

readers in the state. See Restatement (2d) Conflict of Laws, quoted in the

Judicial Council's Comments to Code of Civil procedure section 410.10,

Comment a to section 37 ("A state has a natural interest in the effects of an

act within its territory even though the act itself as done elsewhere"). See

also Kaiser Aetna v. Deal, 86 Cal.App.3d 896, 901, 150 Cal.Rptr. 615

(1978) ("A state has a special interest in exercising jurisdiction over those

who commit tortious acts within its territory. Therefore, it is reasonable

that a state should exercise jurisdiction over those who commit or cause to

be committed in the state what is claimed to be a tortious act").

29

citizens. There is 'no constitutional value in false

statements of fact.' [Citation omitted].

Keeton, 104 S.Ct. at 1479 (emphasis added).

CONCLUSION

The law does not and should not contemplate that foreign

companies have a free hand to injure California residents

through slanderous and libelous publications because their

publications reach readers only through independent

distributors. Were that the rule, foreign publications could

promote their products over domestic publications through

uninhibited public defamations and sensationalism without

regard to the harmful consequences of their tortious conduct.

As much as defendant may wish it were so, thankfully such is

not the law in this country.

The Superior Court's order denying defendants’ motion to

quash service was clearly not an abuse of discretion.

Defendant has now filed a verified answer and this case should

proceed to trial.

Plaintiff respectfully requests that this Court deny

defendant's petition.

Respectfully submitted,

PETER A. SCHEY

Attorney for

Shigeto Shimizu

Real Party in Interest

October 29, 1991