Appellants Brief — Calder v. Jones

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Office - Supreme Cor, U.S.

FILED

jum 17 1985

Ne. 63-1608 ALEXANDER L. STEVAS,

—_—_—_—_—_ -__«__ ama EE

IN THE js

Supreme Court of the United States

OCTOBER TERM, 1982

IAIN CALDER and JOHN SOUTH,

Appellants,

Vv.

SHIRLEY JONES,

Appellee.

On Appeal from the California Court of Appeal,

Second Appellate District

BRIEF FOR APPELLANTS

JOHN G. KESTER *

AUBREY M. DANIEL, III

Hill Building

Washington, D.C. 20006

(202) 331-3069

Attorneys for Appellants

Of Counsel:

WILLIAMS & CONNOLLY

Hill Building

Washington, D.C. 20006

* Counsel of Record

WILSON - Eras Printing Co.. Inc. - 789-0096 - WASHINGTON. D.C. 20001

QUESTIONS PRESENTED

1. Do the First and Fourteenth Amendments and the

Commerce Clause permit a California court to assert per-

sonal jurisdiction over a Florida editor and reporter

solely on the ground that they worked in Florida, on an

article published by their Florida employer, which al-

legedly libeled a California resident?

2. In determining whether the Fourteenth Amend-

ment permits personal jurisdiction over an out-of-state

reporter and editor in a libel case, is it improper to give

weight to the First Amendment?

(i)

TABLE OF CONTENTS

ot yy 8) 6 | yy | | ee

I REF RE accccensencckarnsmvecnenenschstvistanisaninns

IE BUEN sseersiesskncendevscieibemesndbstinésininettancltnctiiiass

NTI clich sccncnncasiseesiindseicestolissoeysinhicoustiabcinmassthoessstbes

STATUTE AND CONSTITUTIONAL PROVISIONS

IIIT dah cc cracuieov ai sadsceiptacomscenaums vicibckahasiosizeieetaiiel

B. The Superior Court’s Ruling 0.000000.

C. The Court of Appeal’s Reversal ....0.....00000000000....

SUMMARY OF ARGUMENT ......0.0........csscssssssssessseneseees

IN ach casetcticeacstienas velalplecsdevasadeencituounnsctooiinshisasenaae

I. CALIFORNIA’S ASSERTION OF EXTRATER-

RITORIAL JURISDICTION OVER THESE

FLORIDA INDIVIDUALS VIOLATES THE

DUE PROCESS CLAUSE OF THE FOUR-

TEENTH AMENDMENT ...................-c0cecscccsesoee

A. The Contacts of Appellants With California

Were Too Slight To Satisfy the Test Applied

for Foreign Corporations .00000.0000.00.00.ccccccccceee

1. Calder’s Lack of Contacts .....0000000000000000...

2. South’s Telephone Calls ..00.00.0.00000000ccccc

8. South’s Visits on Other Business ............

. Neither Appellant Purposefully Availed

Himself of a Privilege Granted by Cali-

ERAS ICED CLs eee

(iii)

TABLE OF CONTENTS—Continued

Page

B. The Contacts of Appellants With California

Were Too Slight To Satisfy the Higher

Standard That Must Be Met for Extraterri-

torial Jurisdiction Over Individuals ............... 23

Cc. An Employee Cannot Be Subjected to Extra-

territorial Jurisdiction for Acts Performed

Solely for the Employee ..............ccc-ccccccssseessees 25

D. Alleging a Non-Physical Effect in the Forum

State Is Not Sufficient for Extraterritorial

FID: oniiciecisscsesticabscnizectinetiommaaamiaaicindian 29

II. THE COURT OF APPEAL ERRED IN RE-

FUSING TO GIVE WEIGHT TO THE FIRST

ATTIRE icssitincsnitichnsheteennsceossrinntahagll lacuna loaaiiin 33

A. Constitutional Policies Cannot Be Ignored in

Jurisdictional Analysis ..................::c-:ssecceeeseee

B. California’s Assertion of Extraterritorial

Jurisdiction Over a Florida Editor and Flor-

ida Reporter Unconstitutionally Burdens Ac-

tivity Protected by the First Amendment ........ 37

C. The Objective of Punishing Speech Is Not

Sufficient To Support Extraterritorial Juris-

diction Over a Publisher’s Employees ............ 44

III. CALIFORNIA’S ASSERTION OF EXTRATER-

RITORIAL JURISDICTION OVER THESE

FLORIDA INDIVIDUALS UNCONSTITU-

TIONALLY BURDENS INTERSTATE COM-

MERCE ........ Mics ateitinsonciniateinesbickaceiavaemedeadamemiaade 46

IV. THIS COURT’S JURISDICTION ON APPEAL

| i . RS eee rk oe 49

CI aise cctcinavcsncetncrettsaenrsetackekedsabiae aan 50

I ain ciishccis cn ie chcisceteinteleudlisadelabcetedicacniniacimataiiala la

A. Constitutional ProviSions ...........................000..00 la

B. Excerpt from Deposition of John Robert Lucas,

Decenfber 14, 1981 ....... 3a

| a

TABLE OF AUTHORITIES

Cases:

Abney Vv. United States, 431 U.S, 651 (1977)...........

Abrams v. United States, 250 U.S. 616 (1919)....

Allstate Insurance Co. Vv. Hague, 449 U.S. 302

Anselmi Vv. Denver Post, Inc., 552 F.2d 316 (10th

Cir.), cert. denied sub nom, Times Mirror Co. V.

Anselmi, 482 U.S. 911 (1977) .........cc.cccccceccseeeeees

Ashton V. Kentucky, 384 U.S. 195 (1966) ...............

Associated Press v. United States, 326 U.S. 1

it ccsccccnncecvovecccees

Atchison, T. & S.F. Ry. v. Wells, 265 U.S. 101

ot 0

Babcock v. Jackson, 12 N.Y.2d 473, 191 N.E.2d

i. sconensocsncceccce

Bradlee Management Services, Inc. V. Cassels, 249

Ga. 614, 292 S.E.2d 717 (1982) ........ A ae

Brotherhood of R.R. Trainmen V. Virginia ex rel.

Virginia State Bar, 8377 U.S. 1 (1964) ................

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

EEC RUIED .....ccccceccccccsccccccceccecnecseces

Buckley v. New York Post Corp., 373 F.2d 175 (2d

rn ccceteseuseceoccesore

Bulova Watch Co. v. K. Hattori & Co., 508 F. Supp.

I .. .ccsccnensesecensoces

Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S.

i sscenpeoneconsesocs

Carroll v. President and Commissioners, 398 U.S.

a easnecencapsensvccees

Chem Lab Products, Inc. v. Stepanek, 554 F.2d 371

i scveenensnbannennonse

Church of Scientology v. Adams, 584 F.2d 893 (9th

a . endovcntescatecsooccecs

City Products Corp. v. Globe Indemnity Co., 88

Cal. App. 3d, 151 Cal. Rptr. 494 (1979) ..............

City of Newport v. Fact Concerts, Inc., 458 U.S.

a encusupanvocscecece

Cohen v. California, 403 U.S. 15 (1971) ................

Connecticut General Life Ins. Co. Vv. Johnson, 308

27, 31

TABLE OF AUTHORITIES—Continued

Cornelison v. Chaney, 18 Cal. 3d 148, 545 P.2d 264

CII ices cicccin nes spetesuhig phe beaiantint ecasinahdiain tial ctededs

Cox Enterprises, Inc. Vv, Holt, 678 F.2d 936, 961

Pe GRD CAR Crile HED ccccsmntcarscsensntrtienccttcccnis

Crandall v. Nevada, 6 Wall. 85 (1868) ..............0...

Curtis Pub. Co. v, Butts, 8388 U.S. 180 (1967) ........

Dahnke-Walker Milling Co. Vv. Bondurant, 257 U.S.

BRR SEM icccossnecacceucictasncchsnepesenenasanicncthaenstatsas

Davis v. Farmers Co-operative Equity Co., 262

RR My RED aT ES Sate SPR SAE eats Oisew

Denver & R.G.W.R.R. v. Terte, 284 U.S. 284

CI re

Dombrowski Vv. Eastland, 387 US. 82 (1967) .........

Dombrowski v. Pfister, 380 U.S. 479 (1965) ..........

Donner V. Tams-Witmark Music Library, Inc., 480

ae Om: OR

Edgar v. Mite Corp., 457 U.S. 624 (1982) ..............

Edwards vy. Associated Press, 512 F.2d 258 (5th

Fs . HITE <x: ocsnnscsncesnedeeendeassancteiebanalbecnctiesibecieanentin

Edwards vy. California, 314 U.S. 160 (1941) .........

Erlanger Mills, Inc, Vv. Cohoes Fibre- Mills, Inc.,

289 F.2d 602 (4th Cir. 1966) .............cccccccccssocsssese

Escude Cruz v. Ortho Pharmaceutical Corp., 619

ef Bf Ee hs Se SRA einen eee sneer

Flerner Vv. Farson, 248 U.S. 289 (1919) .................

Forsythe v. Overmyer, 576 F.2d 779 (9th Cir.),

cert. denied, 489 U.S. 864 (1978) .........cccccceceeeee

Foster v. Leggett, 484 S.W.2d 827 (Ky. 1972) ........

Franchise Realty Interstate Corp. v. San Francisco

Local Joint Executive Board, 542 F.2d 1076

(9th Cir, 1976), cert. denied, 430 U.S. 940

COTY wekiictloshcicsibicensickatacsttaceicenveicsandslineniadenibabaalate lasses

Froning & Deppe, Inc. Vv. Continental Illinois Bank

& Trust Co., 695 F.2d 289 (7th Cir. 1982) ..........

General Building Contractors Ass'n Vv. Pennsyl-

qenmeies, BOB Be: SUG CIGD occ cecsdccecncetenscscecensrectes

Gertz v. Robert Welch, Inc., 418 U.S, 323 (1974)... 32, 37,

Gibbons v. Ogden, 9 Wheat. 1 (1824) ...........c0cc00

Gitlow v. New York, 268 U.S. 652 (1925) ............ -

40, 45

vii

TABLE OF AUTHORITIES—Continued

Page

Gonzales Vv. Atlanta Constitution, 4 Media L. Rptr.

a i OUI ck. dic cincnisae ches hclanindehnadupeeicicatacnias 38, 39

Grant Vv. Reader’s Digest Ass’n, 151 F.2d 733 (2d

Cir, 1945), cert. denied, 326 U.S. 797 (1946)...... 41

Gray V. American Radiator & Standard Sanitary

Corp., 22 Ill.2d 482, 17 N.E.2d 761 (1961)....29, 31, 48

Green V. Advance Ross Electronics Corp., 86 I1).2d

431, 427 N.E.2d 1208 (1981) ....... ESA 11, 21, 31, 41

Grosjean V, American Press Co,., 297 U.S. 233

pI ais tle nl aeRO PO PODS EA IS Sana Aer 36

Gulf Oil Corp. v. Gilbert, 830 U.S. 501 (1947) . 39

Hale v. Henkel, 201 U.S. 48 (1906) .............ccccceceee 24

Hall vy. May Department Stores, 292 Ore, 131, 637

SI i ee 45

Hall v, University of Nevada, 8 Cal. 3d 522, 503

I I I inert en ee 21

Hanson V. Denckla, 357 U.S, 235 (1958) ...... 11, 13, 14, 19,

20, 22, 26, 35

Helstocki v. Meanor, 442 U.S, 500 (1978) .00.0........ 47

Henry L. Doherty & Co, Vv. Goodman, 294 U.S. 623

(el LER Peas eS De SDS toda ee Mee ASPIRE 25, 35, 49

Hess V, Pawloski, 274 U.S. 852 (1927)........... 19, 25, $2, 34

Hopt v. Utah, 110 U.S. 574 (1884) 200. 46

Hurletron Whittier, Inc. v. Barda, 82 Ill. App.3d

448, 402 N.E.2d 840 (1980) 0.0... ccccccccseeeeeseeees 28

Hutchinson v. Chase & Gilbert, Inc., 45 F.2d 139

GI Is SINE scticaccciaichs) cnnceetecntncosecsetdannidibtiealealibapabhcs 24

Hutchinson v. Proxmire, 443 U.S, at 111 (1979)... 41,47

Idaho Potato Comm’n v. Washington Potato

Comm’n, 410 F. Supp. 171 (D. Ida. 1976) ........ 26, 28

International Brotherhood of Electrical Workers

W, Pete, GER TI, Ge CATO) asic. neccnscccscessnssicnes 45

International Harvester Co. v. Kentucky, 234 U.S.

aes 46

International Milling Co. v. Columbia Transp. Co.,

ora 46

International Shoe Co, v. Washington, 326 U.S. 310

( 1945) paasatiadiadias tadivyakddemsbidessaiies deeeubetemostebeekies 11, passim

viii

TABLE OF AUTHORITIES—Continued

Page

Japan Line, Ltd. v. County of Los Angeles, 441

Ni Ae CD vrneeiiaceuirccconscsevictnanniqdemiondmtniedensiitn 49

Kulko v. Superior Court, 19 Cal. 8d 514, 564 P.2d

853 (1977), reversed, 486 U.S. 84 (1978) ........... 22

Kulko v. Superior Court, 486 U.S. 84 (1978) ..... 6, 14, 19,

80, 33, 34, 49

Lakeside Bridge & Steel Co. Vv. Mountain State

Construction Co., 597 F.2d 596 (7th Cir. 1979),

cert, denied, 445 U.S. 907 (1980) ..............cccceeeeeee 17, 30

Layne Vv. Tribune Co., 71 F.2d 223 (App. D.C.),

cert, denied, 298 U.S. 572 (1984) ............cccceeeeeeres 19

Lehigh Valley Industries, Inc. Vv, Birenbaum, 389

F, Supp. 798, aff'd, 527 F.2d 87 (2d Cir. 1975).. 28

Margoles Vv. Johns, 333 F. Supp. 942 (D.D.C. 1971),

aff'd, 488 F.2d 1212 (D.C, Cir. 1978) «0.0.00... 88, 39

Margoles V. Johns, 483 F.2d 1212 (D.C, Cir. 1912).. 19, 28

Marine Midland Bank vy. Miller, 664 F.2d 899

ERR ne ARR Re a SIE etc CR 28

Marshall Egg Transp. Co. v, Bender-Goodman Co.,

275 Minn, 534, 148 N.W.2d 161 (1967) .............. 17

May Vv. Anderson, 345 U.S. 528 (1958) ........00..00..... 25, 34

McCabe v. Kevin Jenkins & Associates, Inc., 531

F. Supp. 648 (E.D. Pa. 1982) ..................ccccscsereees 38

McGee V. International Life Insurance Co., 355

ch Ey BREAN PL Selo oO ee 85, 40

McHale v. Lake Charles American Press, 390 So.2d

556 (La. App. 1980), cert. denied, 452 U.S. 941

IIT Sols iinet sccieis aos Sade sles testa biddantcintesaluensiiaaaamemeaasentn 45

McNutt v. General Motors Acceptance Corp., 298

Bi TI MIE, a5 Second iniicabseensentaniandoamebaii 16, 31

Mellk v. Sarahson, 49 N.J, 226, 229 A.2d 625

a 22

Michigan C.R.R. v. Miz, 278 U.S. 492 (1929) ......... 43, 46

Minneapolis Star & Tribune Co. v. Minnesota Com-

missioner of Revenue, 108 S.Ct. 1865 (1988)....... 36

Near v. Minnesota ex rel. Olson, 2838 U.S. 697

Rann Pa, 5 SORE, 2 cabana oa ey Tenner 35

Nebraska Press Assa’n v. Stuart, 427 U.S. 589

INT ciihin, cocadetiadsyalveiicadaindiak tiledndtnes toiaaeennieimiil 44

TABLE OF AUTHORITIES—Continued

Nevada V. Hall, 440 U.S. 410 (1979) .............000 23

New York Times Co. Vv. Connor, 365 F.2d 567

I I I ian 88

New York Times Co. Vv, Sullivan, 876 US. 254

(| A a AA TR ETT SO CRE SION 16, 35, 36, 45

Nippert v. City of Richmond, 327 U.S, 416 (1946).. 18, 47

Ohio Vv, Wyandotte Chemicals Corp., 401 U.S. 493

“1 pet SESS ae EK Cae ee 33

Olberding V. IUinois C.R.R., 346 U.S. 338 (1953). 35

Palko v. Connecticut, 302 U.S. 319 (1987) ............. 37

Pennoyer Vv. Neff, 95 U.S. 714 (1878). =e 13, 47

People v. Consolidated Edison Co., 42 Misc. 2d 422,

SE a EE TE. IIE cencricccsnctensaccaselensoctecsoszes 24

Pittsburgh Press Co, Vv. Pittsburgh Comm'n on

Human Relations, 418 U.S. 3876 (1973) ............... 44

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367

ag 35

Rosenberg Bros, & Co. V. Curtis Brown Co., 260

I a eipbinienenanionl 18

Rosenbloom v. Metromedia, Inc., 408 U.S. 29

ge RE ie Se AS a EE Se ee ee air eae ce 36, 44

Rush v. Savchuk, 444 U.S. 320 (1980) .............. 16, 20, 21

Shaffer v. Heitner, 483 U.S. 186 (1977) .......... 16, 18, 23,

25, 31

Sibley v. Superior Court, 16 Cal. 8d 442, 546 P.2d

$22, cert. denied sub nom. Carlsberg Mobile

Home Properties, Ltd.—’72 v. Sibley, 429 U.S.

BE CIGD» cenitncentsnelctenbancecenpnseninintnaaamemenierpecs 9

Singer v. Walker, 21 App. Div.2d 285, 250 N.Y.S.2d

NTT 82

Speiser Vv. Randall, 857 U.S. 518 (1958) dagstannensetans ~ 86

Sprouse Vv. Clay Communication, Inc., 211 S.E.2d

674 (W.Va.), cert. denied, 423 U.S. 882 (1975).. 44, 45

State v. Luv Pharmacy, Inc., 118 N.H. 398, 388

iT) \ 7206S eee 6

State oo V. Internal Energy Management

Corp., N.W.2d 707 (Ia. 1982) 0... v7, 28

Steaks Unlimited, Inc. v. Deaner, G23 F.2d 264

(Sd Cir. 1980) ....... » ©¢

TABLE OF AUTHORITIES—Continued

Page

Stone Vv. Essex County Newspapers, Inc., 367 Mass.

We SB OS EE EE 45

Taskett v. KING Broadcasting Co., 86 Wash. 2d

PB ee EE 45

Texas V. New Jersey, 37@ US. 674 (1965) .......... . 34,39

Thos. P. Gonzalez Corp. Vv. Consejo Nacional de

Produccion, 614 F.2d 1247 (9th Cir. 1980) ......... 17

Time, Inc. v. Firestone, 424 U.S, 448 (1976) ........ 41

Trustees of Dartmouth College v. Woodward, 4

Ne a dts 24

United Mine Workers v. Illinois State Bar Ass'n,

I III cic. cieeserestbitsaescldnompescaniensante 36

United States v. Associated Press, 52 F. Supp. 362

(S.D.N.Y. 1943), aff'd, 326 U.S. 1 (1945) ........ 48

United States v. Scophony Corp., 383 U.S. 795

|) SSUES Dali ae 8 ete ei aan ee 24

United States v, White, 322 U.S. 694 (1944) ......... 24

Vanderbilt v. Vanderbilt, 354 U.S. 416 (1957) ....... 25

Walker v, Savell, 335 F.2d 536 (5th Cir. 1964) ....... 38

Ward v. Maryland, 12 Wall. 418 (1871) ................. 19

Warren Vv. Dynamics Health Equipment Mfg. Co.,

483 F. Supp. 788 (M.D. Tenn, 1980) ................... 17

Weller v. Cromwell Oil Co., 504 F.2d 927 (6th Cir.

a ee 28

Willner Vv. Thompson, 285 F. Supp. 394 (E.D.N.Y.

| AR eae RTS a cea Rar ate ae AR RC Vee! 28

Wilshire Oil Co. v. Rife, 409 F.2d 1277 (10th Cir.

ae A“ anne anes mend ee 28

Wolf v. Colorado, 938 Fg BR) |RSS 37

Wolfson Vv. Houston Post Co., 441 F.2d 735 (5th

EO AROS AS raat AARC ees REE 38

Wolston Vv. Reader’s Digest Ass’n, 443 U.S. 157

‘ (OO eee Oe Sa A Sa 40

World-Wide Volkswagen Corp. v. Woodson, 444

U.S. 286 (1980).............. ‘......6, 11, 18-15, 17, 19, 20, 22,

: 27, 80, 32, 40

Wright v. Yackley, 459 F.2d 287 (9th Cir. 1972)... 34

TABLE OF AUTHORITIES—Continued

Constitutional Provisions: Page

U.S, CONSTITUTION,

pS REE REE warner 8, 46-48, la

3, RES

FN OA) ie

pA RR Reena 3, passim, la

Fourteenth Amendment ..................6000. 8, passim, la

Statutes:

CALIFORNIA CODE OF CIVIL PROCEDURE § 410.10... 2,

passim

eS a ccacenbenenabeian 2, 49, 50

28 U.S.C. § 2108 .............. punicahlenssstabblenbebcentoita ies 50

Miscellaneous:

AMERICAN TELEPHONE & TELEGRAPH Co., 1982 AN-

I ee III > cctinchcctvticennseccceecehstetenzacctbastatencbe 17

Anderson, Libel and Press Self-Censorship, 58

TEXAS L. REV. 422 (1975) o....cccccccns, bedlivbdern 39, 43

Carrington & Martin, Substantive Interests and

the Jurisdiction of State Courts, 66 MICH. L.

Ie ME MTIPINELD cccotssenteebicaviteocabonolotchioneiocesatiaaantaisata 34, 39

R, FreLtp & B. KAPLAN, CIVIL PROCEDURE (temp. 2d

NR ey Sa Se Bee 25

8A W. FLETCHER, CYCLOPEDIA OF THE LAW OF PRI-

VATE CORPORATIONS (rev. perm. ed. 1975) ............ 27

Hand, Address, 3 ASSOCIATION OF THE BAR OF THE

City oF NEw YorK, LECTURES ON LEGAL Topics

Rs RSS RRRe nite £8 St SE vis |S SE Se 41

Jackson, Full Faith and Credit: The Lawyer's

Clause of the Constitution, 45 Cotum. L. Rev. 1

(| EE aN eee trae 2 NA 2 ome Be 23, 24

Kamp, Beyond Minimum Contacts: The Supreme

Court’s New Jurisdictional Theory, 15 Ga. L.

RE CE 43

Kurland, The Supreme Court, the Due Process

Clause, and the In Personam Jurisdiction of State

Courts, 26 U. Cut. L. Rev. 569 (1968) ............... 39

xii

TABLE OF AUTHORITIES—Continued

Page

Leflar, Conflict of Laws, 36 N.Y.U.L. REv. 36

(1961) ....... a cassneentocs 39

Louis, The Grasp of Long Arm Jurisdiction Finally

Exceeds Its Reach: A Comment on World-Wide

Volkswagen Corp. v. Woodson and Rush v.

Savehuk, 58 N.C.L. Rev. 407 (1980) .................... 20

Martin, Constitutional Limitations on Choice of

Law, 61 CORNELL L. REv. 185 (1976) ................ 23

Monaghan, First Amendment “Due Process,” 83

NT Or 34

Note, 92 Harv. L. Rev. 1227 (1979) .........000.0000..... 24

Note, Developments in the Law—State-Court Juris-

diction, 73 Harv. L. REv. 909 (1960) 2.00000. 43

Note, Jn Defense of Truth in Defamation Law, 88

Ne cscanccceecs 44

Oakes, Proof of Actual Malice in Defamation Ac-

tions; An Unsolved Dilemma, 7 HorsTrRa L. REv.

Tee nnn nececeéscovece 44

Ottonello, California’s Convenience-Oriented Ap-

proach to Personal Jurisdiction: A Critical Re-

view, 18 LINCOLN L. REV. 21 (1982) .................. 22, 42

Reese, Legislative Jurisdiction, 78 CoLUM. L. REV.

I ee OF Aa 34

RESTATEMENT (2D), CONFLICT OF LAws (1971)... 25, 30,

Scott, Jurisdiction Over Non-Resident Motorists,

$9 Harv. L. REV. 568 (1926) ..................-c00cc0-ec0ee-- 32

Silberman, Commentaries on Shaffer v. Heitner,

58 N.Y.U.L. Rev. 33 (1978) .................... ERA aS 23

Stone, Fifty Years’ Work of the United States

Supreme Court, 8 Ore. L. Rev. 248 (1929) ........ 46

Weinstein, Trends in Civil. Practice, 62 Co_um. L.

A Oe Te 39

4c, Waeee & A. Maia, Pee Fhaorics a9p é

PROCEDURE (Supp. 1980) ......... a 2B

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

No. 82-1401

IAIN CALDER and JOHN SOUTH,

- Appellants,

SHIRLEY JONES,

Appellee.

On Appeal from the California Court of Appeal,

Second Appellate District

BRIEF FOR APPELLANTS

OPINIONS BELOW

The opinion of the Court of Appeal (J.A, 107)’ is

reported officially at 138 Cal. App. 3d 128 an cially

at 187 Cal. Rptr. 825. The order of the Supreme Court

of California denying hearing (J.A. 122) is unreported.

The opinion of the Superior Court of the State of Cali-

fornia for the County of Los Angeles (J.A. 93) oie is

unreported.

JURISDICTION

The judgment of the California Court of Appeal was

entered December 15, 1982. J.A. 107. The Supreme

Court of Calffornia denied a timely petition for bearing

on February 10, 1983. J.A. 122. Notice of appeal to

Gouss tae tind en Petvcnur 98. 100n OA en one te

appeal docketed February 22, 1963. On April’ 18, 1983,

' Citations to “J.A.” refer to the Joint Appendix filed herein.

this Court entered its order postponing further considera-

tion of the question of jurisdiction to the hearing of the

case on the merits. J.A. 125. This Court has jurisdic-

tion under 28 U.S.C. § 1257(2), as is further discussed

at pp. 49-50, infra.

STATUTE AND CONSTITUTIONAL

PROVISIONS INVOLVED

California Code of Civil Procedure § 410.10 provides:

“A court of this state may exercise jurisdiction on

any basis not inconsistent with the Constitution of

this state or of the United States.”

Pertinent constitutional provisions are reproduced in Ap-

pendix A.

STATEMENT

A. Facts.

Appellee is a professional entertainer, J.A. 9, public

figure, J.A. 8-9, and resident of California. With her

husband, Mr. Marty Ingels, she brought this action for

libel and related torts against the National Enquirer,

Inc., publisher of a national weekly newspaper, and also

its local distributing company and the two Appellants,

Iain Calder and John South. The claim was based on an

article that appeared in the Enquirer’s October 9, 1979

issue. The article stated that Appellee’s husband “has

terrorized his staff, cheated stars, outraged advertisers

and scandalized Hollywood,” and that Appellee “Has been

driven to drink by his bizarre behavior.” J.A. 11. f

The complaint alleged that the. two plaintiffs were pub-

lie figures.? It did not allege any damage to reputation,

but did claim emotional] distress. J.A. 9. The plaintiffs

sought general damages of $10,000,000.00 and punitive

2“(W ell known and well recognized by numerous and diverse

.,. es

damages of an additional $10,000,000.00. J.A. 10. After

maintaining that the article was untrue, J.A. 14, 78, Ap-

pellee’s husband filed a voluntary dismissal of his com-

plaint on the morning of his deposition. Appellee has con-

continued to pursue the litigation on her own behalf.*

The complaint stated that both Appellants “in doing the

acts herein alleged were acting within the course and

scope of their employment.” J.A. 8.

Appellant Calder is employed as editor and president

of the Enquirer. Appellant South is employed by the En-

quirer as a reporter, and his byline appeared on the ar-

ticle. Both Appellants are and were at all relevant times

residents of Florida. J.A. 17, 19.*

Both appellants were served with process by mail in

Florida in accordance with the California “long-arm”

statute, under the jurisdictional provisions of Cal. Code

of Civil Procedure § 410.10. They caused special ap-

pearances to be entered on their behalf and moved to

quash service of process, challenging the constitutionality

under the First and Fourteenth Amendments of the ap-

plication of § 410.10 to them. J.A. 15-16, 80-85.°

The evidence before the tria] court was entirely undis-

puted, and consisted wholly of affidavits and extracts of

*On May 81, 1983, this Cogrt entered an order dismissing the

appeal as to Appellee’s husband. Appellee has continued to demand

damages of $20,000,000.00, the same amount she and her husband

had sought collectively.

* The complaint alleged that Appellants “were acting by virtue

of their own motives as individuals and also were the agents and

employees of defendant National Enquirer, Inc.” J.A. 8.

5 The Enquirer, which is a Florida corporation with principal

place of business in Florida, did not contest the California court’s

jurisdiction and answered the nt. J.A. 93. The distributing

company also answered and made no objection to the jurisdiction.

In the Court of Appeal Appellant# argued also, as they had pointed

out in the trial court, J.A. 83, that jurisdiction over employees in

such circumstances would unconstitutionally burden interstate com-

merce. J.A. 106.

deposition testimony. Without any contradiction it showed

the following:

As to Appellant Calder: He edits the newspaper and

exercises general supervision of its editorial activities.

J.A. 24. He is the second ranking person in the organ-

ization J.A. 24, 75, and “oversee[s] just about every

function of the Enquirer.” J.A. 24. He has no other busi-

ness activity. J.A. 17. He resides and Has his office in

Florida. J.A. 17, 75. He has never had an office or place

of business in California nor conducted business there.

J.A. 17. He has never owned property, obtained credit,

or had bank accounts in California. Jbid. He had visited

California only once during the three to four years pre-

ceding 1980, a purely pleasure trip. J.A. 30. Later he

visited California once in 1981, after the publication of

the article in question, for the purpose of attending and

testifying as a witness in an unrelated trial.* With re-

spect to the article in question, he had no participation

in its investigation, research or writing except for routine

editorial services. J.A. 17. He had no knowledge of the

source of the story, had never read the reporter’s copy

of it, and had no dealings with the story except to review

an initial evaluation of the subject and, he assumed,’

routinely to see it in final page proof form. J.A. 27-28.

After it was published he decided not to print a retrac-

tion, J.A. 29, because “we stand by the article and as far

as I’m concerned the story is true,” ibid. All his activi-

ties regarding the article took place at his office in Flor-

ida. J.A. 17. All were performed as part of his duties as

an employee of his employer, and not in a personal ca-

pacity. [bid.

* Although Appellee’s attorneys were present in the courtroom

at that 1981 trial and say that they observed Appellant Calder’s

presence,” J.A. 46, they made no attempt to serve him personally

with process in California. “

™“I would imagine I saw that. I don’t specifically recollect

seeing it, but I would have seen it.” J.A. 28.

As to Appellant South: He is a reporter employed by

the Enquirer. Like Calder, he is a Florida resident and

his office is at the Enquirer newsroom in Florida. J.A.

19. He never has had an office in California, nor has he

ever engaged in any business activity in California in

his personal capacity, nor owned assets, obtained credit,

nor maintained a bank account there. J.A. 19, 34. All of

South’s services in connection with the article, according

to his uncontradicted affidavit, took place in Florida.

J.A. 19.

South researched and wrote the first draft of the ar-

ticle, and his byline appears on it. J.A. 13. Normally

after a draft is turned in, the final article is prepared

by a rewrite editor. J.A. 60, 63. It was uncontradicted

that South did not travel to California in connection with

the article. J.A. 19, 90-91. The record shows that he

made three long-distance telephone calls from Florida to

California in connection with research for the article,

two to an Enquirer stringer, Ms. Dayzhun Jane Chesis,

one to a Ms. Betty Hager. J.A. 50, 56-57, 65, 69-70, 74.

He may have made others." The only other contact with

California by Appellant South that related in any way

to the article was an additional long-distance telephone

call from Florida to Appellee’s husband Mr. Ingels, to

read him the draft article so that he might comment

upon it. J.A. 71.° All of South’s activities regarding the

article Were performed as part of his duties for his em-

ployer, and not in an iftdividual capagity. J.A. 19.

commune

* The exact number does not appear in the materials submitted

for the record by Appellee. Although it was not part of the record

before the courts below, Mr. John Robert Lucas in a subsequent

deposition testified that there was one additional investigative long-

distance telephone call to him. See Appendix B; cf. J.A. 35-36.

* Mr. Ingels denied the truth of the article, and his denia] was

included in the final version as published. J.A. 18. According to the

article, J.A. 18, and to Appellant South’s description as recounted

to a witness, Mr. Ingels in the conversation’ was “amused” and said

he was “flattered” and to “print it.” J.A. 71. According to Mr.

Ingels, he became ill and upset. J.A. 78.

‘

Regarding contacts with California unrelated to the

article, Appellant South stated that in the course of his

employment during a four-year period he had visited Cali-

fornia more than twenty times in total. J.A. 32.° On

two occasions prior to the article’s publication he had met

with Mr. John Robert Lucas, a sometime source in Cali-

fornia. J.A. 34. Those visits concerned a number of ar-

ticles, ibid., but not the one about Appellee, J.A. 19.

South also telephoned Mr. Lucas frequently. J.A. 35-36.

B. The Superior Court’s Ruling.

Based on the evidence submitted, all of which was

documentary, the trial court found:

“From the record in this case, it appears that neither

South nor Calder maintained any residence or busi-

ness office within California. Editor Calder did not

enter California nor even make telephone calls into

the state during his work on the Ingels article. Re-

porter South made a few telephone calls into Cali-

fornia, including one in which he read the substance

of the article to plaintiff Ingels shortly before its

publication. In addition, it may fairly be inferred

from the record before the Court that Reporter South

visited California at least once for purposes relating

to the article. The totality of such contacts, in this

Court’s view, are insubstantial.” J.A. 94.%

The trial court concluded that “as the U.S. Supreme Court

has made abundantly clear in its World-Wide Volkswagen

and Kulko opinions,” J.A. 95-96, the motion to quash serv-

ice should be granted. J.A..98, 99. It observed that the

conclusion might be different had this been a case “in

which a defendant ships a dangerous and defective

10 Ms. Chesis estimated that South came to California more than

six, but less than a dozen times per year. J.A. 66. All his trips

were on his employer’s business. J.A. 33, 66.

1! Appellants emphasized to the trial court that there was no

basis in the record to support an inference that South had visited

California in connection with the article, and that his affidavit that

he had not done so, J.A. 19, was uncontradicted. J.A. 90-91. See

note 19, infra.

product into the state, which leads to an accident within

the state.” J.A. 94. But that, the court emphasized, was

not this case:

“The question presented by this case is whether fur-

ther consideration is required because the case in-

volves First Amendment freedom of expression and

because the defendants sought to be brought into this

jurisdiction are employees of the publisher. . .°.

[T]he cases seem to be in agreement that First

Amendment considerations should be weighed in the

balance of fundamental fairness in resolving whether

a state can compel a nonresident defendant to appear

and defend an action.” J.A. 95-96.

The court observed that “if reporters and editors are

required to appear in remote jurisdictions and defend

‘against claims for punitive damages, it is foreseeable that

such actions would have a chilling effect on reporters and

editors.” J.A.97. The

“principal practical effect of holding the individual

defendants as parties to this lawsuit would be to

facilitate plaintiffs’ claims for punitive damages

against the individuals. ... Surely the right of a

plaintiff to punish a defendant resident of a remote

jurisdiction, and to receive damages beyond those

necessary to compensate him for his injury should

not weigh heavily on the constitutional scale of fun-

damental fairness.” J.A. 96-97.

The court contrasted the jurisdictional position of em-

ployees with that of a company doing interstate business:

“It may not be unfair to hold a publisher to ac-

count for compensatory and punitive damages in a

remote jurisdiction if a sensational story he pub-

lishes is false. After all, it is the publisher who

balances risk and reward in establishing the char-

acter of his publication, and it is the publisher who

stands to make substantial profits if he publishes

true stories of widespread interest.’

“It is quite another matter to hold magazine em-

ployees to the same accounting. A reporter or editor

who suffers an award of punitive damages would

not be entitled to reimbursement from his employer,

nor to indemnification based on any insurance policy

the employee or the employer might have. Thus,

punitive damages would come from the employee’s

own pocket. Few would be willing to risk writing

or editing controversial articles for national publica-

tions if they could be required personally to appear

in remote jurisdictions as individual defendants and

possibly suffer judgments for punitive damages, and

surely pay unlimited litigation expenses. Thus, pru-

dent reporters and editors would have an incentive

to avoid controversial stories vastly disproportional

to the rewards they could expect for their diligence

and industry in uncovering truthful but controver-

sial stories, especially stories adverse to wealthy or

powerful individuals. If such a state of affairs were

to come to pass, the informed public would be the

loser.” J.A. 97.

C. The Court of Appeal’s Reversal.

On appeal, the California Court of Appeal acknowl-

edged that “clearly there can be no general jurisdiction

in the present case as a result of defendants’ contacts

with California consisting of occasional trips to that

state.” J.A. 113. It noted that

“Neither defendant has ever owned assets or bank

accounts in California or engaged in business or been

employed there. It may not be said that defendants’

activities in California are extensive, wide-ranging,

substantial, continuous or systematic.” J.A. 112-13.

The trial court had erred, however, said the Court of

Appeal, by giving any weight to First Amendment con-

siderations in its jurisdictional analysis:

“Plaintiffs contend that the trial court improperly

applied a special First Amendment test in deter-

mining that the court may not assume jurisdiction

— defendants Calder and South. We agree.” J.A.

110.

The Court of Appeal held that “personal jurisdiction over

them must be determined in accord with traditional prin-

ciples unaffected by First Amendment considerations.”

J.A. 111. The court said that only “minimal contacts,”

J.A. 112, with California need be shown.

On that basis the court looked first at Appellant Calder:

“As the trial court observed, defendant Calder

did not enter California or even make telephone

calls into the state in connection with his role in

the preparation of the subject article; all of his

acts with reference to that article apparently were

performed in Florida.” J.A. 122-13.

Nevertheless, the court held, California’s jurisdiction over

the Florida editor (and over the reporter as well) was

established simply because the complaint alleged an in-

tentional tort with injury in California. As the Court of

Appeal! explained in its view of the law:

“For the purpose of determining whether a Cali-

fornia court may assume jurisdiction over Calder in

this lawsuit, it must be presumed that Calder, in

participating in the publication of the article as its

editor, intended to cause injury to plaintiffs in Cali-

fornia where they reside; such injury in fact oc-

curred. Accordingly, a valid basis exists for Cali-

fornia’s exercise of personal jurisdiction over Calder

Hn respect to the causes of action alleged herein.”

A. 114.

The court conceded that a California Supreme Court

case '° had rejected extraterritorial personal jurisdiction

in a contract claim premised on an effect caused in

California, when it been shown that the defend-

ant “purposefully availed himself of the privilege of con-

ducting business in California or of the benefits and pro-

. tections of California law,” or anticipated economic ben-

efit from dealings in California, or that the transaction

was subject to special regulation in California. J.A. 114-

15. Nevertheless, the court below announced,

‘2 Sibley v. Superior Court, 16 Cal. 8d 442, 646 P.2d 822, cert.

denied sub nom. Carleberg Mobile Home Properties, Ltd.—'7?2 v.

Sibley, 429 U.S. 686 (1976).

“such conditions need not be met where jurisdiction

is predicated on an act or omission committed out-

side the forum state with the intent to cause a tor-

tious effect within the state.” J.A. 115.

The court said that the same theory of effect in the

state gave jurisdiction over Appellant South as well. J.A.

116. For South it also announced two additional alterna-

tive theories for jurisdiction over him: First, the Court

of Appeal believed that it sufficed to show that from

Florida he had made one long-distance telephone call to

Mr. Ingels, allegedly causing Ingels distress, which ‘“‘con-

stituted the doing of a significant act in California.”

J.A. 116. As the other alternative theory, the court said

that extraterritorial personal jurisdiction over South was

established because “he gathered information appearing

in the allegedly defamatory article in the course of at

least one visit made by him to California and telephone

calls which he made to the state.” J.A, 115,’"

The court acknowledged that all of Appellants’ acts

were taken solely on behalf of their corporate employer,

but held that Appellants nevertheless could be subjected

to jurisdiction personally based on the same acts. It noted

that other courts, including the federal courts of Cali-

fornia, had held the contrary."* J.A. 116-17.

Having concluded that an allegation of effect sufficed

for contacts, the court said that the test for extraterri-

torial jurisdiction was simply to weigh on the one Hand

“inconvenience to the defendant,” against on the other

“the interest of the plaintiff in suing locally” and the “in-

- terest of a state in providing a forum for its residents.”

J.A. 117-18. It reversed the judgment. The Supreme

Court of Califorpia denied review. J.A. 122.

‘8 Regarding the of record evidence to support the vai

the court see note 11, supra.

4 Foraythe Vv. Overmyer, 576 F.2d 779 (9th Cir.), cert. denied,

489 U.S. 664 (1978).

SUMMARY OF ARGUMENT

Whether considered with or without the First Amend-

ment, the judgment of the court below is not consistent

with the Due Process Clause as interpreted in many de-

cisions of this Court.

In the first place, the contacts of these two individuals

with California—nonexistent in the case of Calder, con-

fined to a few long-distance telephone calls in the case of

South “—were not sufficient to meet the standard of In-

ternational Shoe Co. v. Washington, 326 U.S. 310 (1945),

and World-Wide Volkswagen Corp. v. Woodson, 444 U.S.

286 (1980). Neither Appellant as an individual “pur-

posefully availed himself,” see Hanson v. Denckla, 357

U.S. 235, 253 (1958), of a privileged granted by Cali-

fornia, and indeed under the Due Process and Privileges

and Immunities Clauses, and the First Amendment, news-

gathering is not a privilege that California could take

away. Moreover, where extraterritorial personal juris-

diction over an individual rather than a corporation is

asserted, the level of contacts required by due process

is even greater.

It is settled law, moreover, that a nonresident agent

of a corporation does not become personally subject to

extraterritorial jurisdiction for acts he does for a cor-

porate principal. The broad theory most relied upon by

the court below—that extraterritorial jurisdiction is con-

stitutional whenever it is alleged that an act outside the

state intentionally caused a tortious result within it—

simply is not the law. “The “effect” theory of jurisdic-

tion has been applied only by a few state courts, and

only to companies that manufacture physically hazardous

products and market them generally. When such hazards

of physical danger are not present, even the same courts

15 Even if South had made one news-gathering visit to California

in connection with the article, the jurisdictional analysis would be

no different. See notes 11, supra, and 19, infra.

have refused to apply the theory. See, ¢.g., Green v. Ad-

vance Ross Electronics Corp., 86 Ill. 2d 431, 427 N.E.2d

1203 (1981).

The court below also erred in rebuking the trial court

for considering the effect an assertion of extraterritorial

jurisdiction over reporters would have on activity pro-

tected by the First Amendment. This Court has made

clear for decades that the scale of due process weighs all

significant factors and policies, and certainly does not ex-

clude any policy as important as the one explicitly writ-

ten in the First Amendment, and made applicable to the

states through the very same Due Process Clause of the

Fourteenth. Appellants’ employer, the National Enquirer,

Inc., did not contest California’s jurisdiction over it. As

a practical matter, all that libel plaintiffs ordinarily

would gain from being able to reach out for nonresident

reporters in other states is an opportunity for personal

punitive damages; that is an insubstantial consideration

when weighed against the damage to the public’s infor-

mation sources, including small publishing individuals and

enterprises, that would flow from permitting extraterri-

torial jurisdiction of this kind.

Finally, even if there were no Due Process Clause; even

if there were no First Amendment; the California long-

arm statute as applied here still would clearly be con-

stitutionally invalid under the long line of decisions in

which this Court has applied the Commerce Clause to

strike down state laws that unduly burden interstate

commerce. California’s assertion here of personal juris-

diction over corporate employees in other states threatens

interstate businesses of every kind. And when applied

in this instance to corporate employees of a publisher,

it threatens not just the free trade in commerce, but the

free trade in ideas as well.

ARGUMENT

I. CALIFORNIA’S ASSERTION OF EXTRATERRI-

TORIAL JURISDICTION OVER THESE FLORIDA

INDIVIDUALS VIOLATES THE DUE PROCESS

CLAUSE OF THE FOURTEENTH AMENDMENT.

A. The Contacts of Appellants With California Were

Too Slight To Satisfy the Test Applied for Foreign

Corporations.

The due process standards governing a state’s power to

exercise extraterritorial personal jurisdiction over non-

residents are clear. They are stated in International Shoe

Co. V. Washington, 326 U.S. 310 (1945), and World-

Wile Volkswagen Corp. Vv. Woodson, 444 U.S. 286 (1980).

Those standards were not remotely met in this case.

At least since Chief Justice Stone’s opinion for this

Court in International Shoe, supra, this Court has ad-

hered to the rule that due process forbids extraterritorial

personal jurisdiction by a state court over a nonresident

defendant unless the plaintiff establishes (1) that the

defendant had at least a minimum level of contacts with

the forum state,’* and also (2) that to exercise jurisdic-

tion is consistent with “traditional notions of fair play

and substantial justice.” 326 U.S. at 316. In Hanson

v. Denckla, 357 U.S. 235 (1958), this Court explained

that although International Shoe was less rigid than the

strict territorial rule of Pennoyer v. Neff, 95 U.S. 714

(1878) :

“But it is a mistake to assume that this trend her-

alds the eventual demise of all restrictions on the

personal jurisdiction of state courts .... However

minimal the burden of defending in a foreign tri-

bunal, a defendant may not be called upon to do so

16 As explained by this Court later in the same Term, the holding

of International Shoe was simply that for a corporation “ ‘mere

solicitation’ when it is regular, continuous and persistent, rather

than merely casual, constitutes ‘doing business,’ contrary to

formerly prevailing notions.” Nippert v. City of Richmond, 327

U.S. 416, 422 (1946).

unless he has had the ‘minimal contacts’ with that

State that are a prerequisite to its exercise of power

over him.” 357 U.S. at 251.

Hanson Vv. Denckla emphasized that the constitutional

standard looks to the defendant’s forum-related activities:

“'Ijt is essential in each case that there be some

act by which the defendant purposefully avails

[him|self of the privilege of conducting activities

within the forum State.” 357 U.S. at 253, as quoted

in Kulko v. Superior Court, 4386 U.S. 84, 93-94

(1978), and also in World-Wide Volkswagen Corp. V.

Woodson, 444 U.S. 286, 298 (1980) (emphasis

supplied).

Moreover,

“The unilateral activity of those who claim some re-

lationship with a nonresident defendant cannot sat-

isfy the requirement of contact with the forum

state.” Ibid.

Most recently, in World-Wide Volkswagen Corp. V.

Woodson, 444 U.S. 286 (1980), this Court held that the

limitations imposed by the Due Process Clause involve two

distinct considerations: both (1) protection to defend-

ants from being haled into distant courts; and (2) pre-

serving the national union, and other states, from the

effects of one state’s seeking to regulate or punish con-

duct and persons beyond its jurisdictional limits:

“The concept of minimum contacts, in turn, can be

seen to perform two related, but distinguishable,

functions. It protects the defendant against the bur-

dens of litigating in a distant or inconvenient forum.

And it acts to ensure that the States, through their

courts, do not reach out beyond the limits imposed

on them by their status as coequal sovereigns in a

federal system.” 444 U.S. at 291-92.

Both of those constitutionally protected interests are

jeopardized by the ruling of the California Court of Ap-

peal in this case.

1. Calder’s Lack of Contacts.

The evidence is undisputed, and both courts below

found, J.A. 94, 118, that Iain Calder, the editor and

president of the Enquirer, had no contacts at all with

California: “all of his acts with reference to that article

apparently were performed in Florida.” J.A. 113. He

did not even make a long-distance telephone call. His

only connection with the story complained of was the

performance of routine editorial services, in the course

of which he probably read the story in proofs. J.A. 17,

27-28."

Such an absence of any association with California

means that that state cannot assert extraterritorial ju-

risdiction over Appellant Calder, unless the acts of his

corporate employer can be imputed personally to him.

The record in no way supports such an alter-ego finding,

however, which neither court below supposed,’* and this

Court last year noted that as a matter of agency law

it is the agent’s acts that are imputed to the principal—

not the (publisher) principal’s to the (employee) agent.

General Building Contractors Ass’n Vv. Pennsylvania, 102

S.Ct. 3141, 3151 (1982).

Extraterritorial personal jurisdiction, this Court has

held, must be based on contacts of the defendant with the

forum state. World-Wide Volkswagen Corp. v. Woodson,

supra. To assert that jurisdiction can be obtained over

him because in Florida he routinely read an article before

it was published by his corporate employer would be to

overrule World-Wide Volkswagen Corp. v. Woodson, not

to mention International Shoe. The due process “clause

does not contemplate that a state may make binding a

17 After publication he declined on behalf of the corporation to

print a retraction because “as far as I’m concerned the story is

true.” J.A. 29.

1*Mr. Calder was the second in command of the corporation.

J.A. 24, 75. Nothing in the record discloses what if any stock

ownership he held in its parent company.

judgment in personam against an individual or corporate

defendant with which the state has no contacts, ties, or

relations.” International Shoe, supra, 326 U.S. at 319;

Rush v. Savchuk, 444 U.S. 320, 332-33 (1980); Shaffer

v. Heitner, 433 U.S. 186, 216 (1977). Due process re-

quires contacts with the forum state. Appellant Calder

had none.

2. South’s Telephone Calls.

Appellant South’s contacts with California, insofar as

they relate to the article in question, were scarcely

greater than Appellant Calder’s. South did not visit Cal-

ifornia even once in connection with that article,’* and

only four long-distance telephone calls by him into that

state were established with any degree of certainty.”

19 The trial court with no record basis simply speculated that he

had made one such visit. See note 11, supra. That speculation is

entitled to no weight because it was not based on a personal judg-

ment of credibility (all the evidence was documentary), it contra-

dicts Appellant South’s undisputed affidavit, J.A. 19, and it fails to

reflect that the burden of proving facts to establish jurisdiction

was Appellee’s. McNutt v. General Motors Acceptance Corp., 298

U.S. 178, 189 (1936); Escude Cruz v. Ortho Pharmaceutical Corp.,

619 F.2d 902, 907 (1st Cir. 1980) (“Since plaintiff failed to

counter the affidavits, the jurisdictional facts stated therein are con-

trolling.”). See J.A. 90-91. Nevertheless, the Court of Appeal

repeated the same speculation. J.A. 115. This Court, particularly

in a case involving the First Amendment, is not bound by a con-

clusion of a lower court that has no basis in the record. See New

York Times Co. Vv. Sullivan, 376 U.S. 254, 285 (1964).

The utter baselessness of that speculation is confirmed by the

fact that two months after the trial court’s decision, Mr. Lucas was

deposed and testified that although on one occasion he had dis-

cussed the subject of the article with Mr. South during a long-

distance telephone call, he had never discussed it with South when

South was in California. See Appendix B.

2° See p. 5, supra. There was in addition one long-distance tele-

phone call from Florida to Mr. Lucas. See Appendix B. The trial

court concluded that Appellant South “made a few telephone calls

into California.” J.A. 94.

The Court of Appeal held that these investigative long-

distance telephone calls from a reporter in Florida “con-

stituted the doing of a significant act in California” suf-

ficient to support extraterritorial personal jurisdiction.

J.A. 116. But that again is not the law. If it were, the

contacts requirement of International Shoe and World-

Wide Volkswagen would be practically meaningless. More

than 25 billion long-distance telephone calls are made in

this country every year.“ If each of them could be po-

tentially the basis for jurisdiction over the caller by the

receiving state, then California would be close to regu-

lating primary conduct in Florida, and the limits on

sovereignty implicit in due-process limitations on state

jurisdiction, World-Wide Volkswagen, supra, 444 U.S. at

292, would vanish. For that reason the sensible rule ap-

plied up to now has been that long-distance telephone

calls do not suffice to establish extraterritorial jurisdic-

tion. Mindful of the contacts required by due process

and the constitutional framework, courts have held that

“use of the mails, telephone, or other international com-

munications simply do not qualify as purposeful activity

invoking the benefits and protection of the state.” Thos.

P. Gonzalez Corp. v. Consejo Nacional de Produccion, 614

F.2d 1247, 1254 (9th Cir. 1980). This is particularly

so when as here the telephone calls were simply to ob-

tain information, and were not forming a contractual

relationship.”

21 AMERICAN TELEPHONE & TELEGRAPH Co., 1982 ANNUAL REPORT

27 (1983). The figure includes some intrastate toll calls, but does

not include interstate calls on local exchanges, e.g., from Washing-

ton, D.C. to Fairfax, Virginia.

22 Accord, Lakeside Bridge & Steel Co. Vv. Mountain State Con-

struction Co., 597 F.2d 596, 604 (7th Cir. 1979), cert. denied, 445

U.S. 907 (1980) (rejecting assertion of jurisdiction even when

telephone calls were part of contract); Warren v. Dynamics Health

Equip. Mfg. Co., 483 F. Supp. 788, 791 (M.D. Tenn. 1980) ; Marshall

Egg Transp. Co. ¥. Bender-Goodman Co., 275 Minn. 534, 148 N.W.2d

161 (1967).

3. South’s Visits on Other Business.

South made no visits to California in connection with

the article of which Appellee complained. J.A. 19, 90-

91; see notes 11, 19, supra. And even if he had made a

visit on his employer’s behalf for the purpose of gather-

ing information for the article, that single visit, as the

trial court recognized, J.A. 94, would not be a substantial

enough basis for assertion of jurisdiction.

The fact that Appellant South visited California for

his employer on other occasions is jurisdictionally irrele-

vant, as both lower courts also held. Neither gave

any weight to South’s visits that were unrelated to the

article. Cf. J.A. 94, 115-16. Visits for other purposes

would be relevant only to support a theory that South

was personally present in California so pervasively that

that state would have general jurisdiction over him for

all purposes. But even the Court of Appeal acknowledged

that “clearly there can be no general jurisdiction in the

present case as a result of defendants’ contacts with

California consisting of occasional trips to that state.”

J.A. 118.% Accord, Rosenberg Bros. & Co. v. Curtis

Brown Co., 260 U.S. 516 (1923) ; International Shoe Co.

Vv. Washington, supra, 326 U.S. at 317.

4. Neither Appellant Purposefully Availed Himself

of a Privilege Granted by California.

Even if South had often visited California to gather

information about this story—and the record shows he

never visited it at all for that purpose—the due process

2Cf. Shaffer v. Heitner, supra, 433 U.S. at 209: jurisdiction is

not established when “the property which now serves as the basis for

state-court jurisdiction is completely unrelated to the plaintiff's

cause of action.”

* Appellee also argued, as an afterthought, that extraterritorial

jurisdiction might be asserted over South because—outside Cali-

fornia—he executed an affidavit to be filed in another California

proceeding. J.A. 86-89. The trial court described that argument

as “nonsense,” J.A. 91, and the Court of Appeal never bothered to

refer to it.

requirements for jurisdiction still would not have been

met. An information-gathering visit is totally different

from a sales visit. Nor would an information-gathering

visit be tortious, as was the automobile accident of the

out-of-state driver in Hess v. Pawloski, 274 U.S. 352

(1927). Information-gathering visits of reporters should

not be treated as jurisdictionally significant. See, e.v.,

Layne Vv. Tribune Co., 71 F.2d 223 (App. D.C.), cert.

denied, 293 U.S. 572 (1934) (statute); Margoles v.

Johns, 483 F.2d 1212 (D.C. Cir. 1973).

Moreover, it cannot be said that a reporter coming to

gather information “purposefully avails himself of the

privilege of conducting activities within the forum State.”

Hanson Vv. Denckla, supra, 357 U.S. at 253; Kulko v.

Superior Court, supra, 436 U.S. 93-94; World-Wide

Volkswagen Corp. Vv. Woodson, supra, 444 U.S. at 297.

The opportunity of individuals generally to travel freely

from state to state is not a state-granted privilege, but

rather a national right. Edwards v. California, 314 U.S.

160 (1941); Ward v. Maryland, 12 Wall. 418, 430

(1871); Crandall v. Nevada, 6 Wall. 35 (1868); U.S.

ConstT., Art. IV, § 2. Further, when the individual is a

reporter gathering news, he is exercising a freedom pro-

tected under federal law by the First and Fourteenth

Amendments that a state may not hinder or impede. Such

a news-gathering visit, or telephone call, unlike the cor-

poration’s decision to do or transact business in the state

or the motorist’s to use the state’s highways, is not the

“purposeful availing” of a state-conferred privilege that

can support jurisdiction over a nonresident. Cf. Connec-

ticut General Life Ins. Co. v. Johnson, 303 U.S. 77, 82

(1938) (rejecting as due process violation an attempt by

California to tax out-of-state transactions where it could

not withhold the privilege of doing business) (Stone, J.).

The record does not show that either Appellant profited

directly from their employer’s editorial and marketing

decisions with respect to California. As the trial court

noted, the risks and the rewards, and the option to pull

back, all were the corporation’s. J.A. 97. As this Court

observed in analogous circumstances,

“State Farm’s decision to do business in Minnesota

was completely adventitious as far as Rush was

concerned. He had no control over that decision... .

In short, it cannot be said that the defendant en-

gaged in any purposeful activity related to the forum

that would make the exercise of jurisdiction fair,

just, or reasonable....” Rush v. Savchuk, 444 U.S.

320, 328-29 (1980) (emphasis in original) .*

5. Convenience Is Not the Test.

For an individual to try to defend a multi-million-

dollar suit in a state court thousands of miles away from

his home and place of business is not an easy prospect.

But even if the foreign state were as near as Maryland

or Virginia is to this Court, the threshold requirement

for necessary contacts with the forum would not disap-

pear. As this Court explained in World-Wide Volkswagen

Corp. V. Woodson, supra,

“Even if the defendant would suffer minimal or no

inconvenience from being forced to litigate before

the tribunals of another State; even if the forum

State has a strong interest in applying its law to

the controversy; even if the forum state is the most

convenient location for litigation, the Due Process

Clause, acting as an instrument of interstate federal-

ism, may sometimes act to divest the State of its

power to render a valid judgment. Hanson v. Den-

ckla, supra, at 251, 254.” 444 U.S. at 294.

It certainly is not constitutionally sufficient to assume,

as the court below did, that due process is satisfied if

an effect is alleged on a plaintiff who is a resident of the

forum. The court below stressed that “this state and its

residents and taxpayers have a substantial interest in

providing a forum where a resident may seek whatever

2% Cf. Louis, The Grasp of Long Arm Jurisdiction Finally Ez-

ceeds Its Reach: A Comment on World-Wide Volkswagen Corp. Vv.

Woodson and Rush v. Savchuk, 58 N.C.L. REV. 407, 427 (1980).

redress is due him.” J.A. 118.% But what due process

requires is at least minimum significant contacts with

the forum by the defendant. International Shoe, supra.

This Court has made that requirement unequivocally

clear, rejecting decisions in which

“The State’s interests in providing a forum for its

residents . . . are substituted for its contacts with

the defendant and the cause of ac.ion. This subtle

shift in focus from the defendant to the plaintiff....

“Such an approach is forbidden by International

Shoe and its progeny.” Rush v. Savchuk, supra, 444

U.S. at 332.

See also, ¢.g., Green v. Advance Ross Electronics Corp.,

86 Ill. 2d 481, 439, 427 N.E.2d 1203, 1207-08 (1981).

The defendant’s contacts are essential; they cannot be

satisfied by those of the plaintiff. Indeed, if a plaintiffs’

contacts could suffice, there would have been no need for

this Court’s opinion in International Shoe Co. v. Wash-

ington, supra, because there the plaintiff was the state

itself, whose contacts with itself, one supposes, could not

have been greater.

What is at stake in this case is not only inconvenience,

anxiety and expense for individuals forced to defend in

a distant state for acts done at home. More, it is the

attempt by California to reach far beyond its borders

and regulate and punish primary conduct of individuals

in other states.

It is tempting to a state to try to extend its reach

in such a manner. “[{U]nder the relentless prod of local

interest, the state’s long arm will inevitably reach far-

ther and farther.” The very California statute whose

application is challenged here was drafted as broadly as

the English language allows, not with any specific set

of state concerns in mind, but simply to sweep into the

2% Quoting Hall v. University of Nevada, 8 Cal. 3d 522, 525-26,

503 P.2d 1368, 1865 (1972).

2 Louis, supra n. 25, at 432.

state’s jurisdiction all the future activity and persons

outside its borders that the California could possibly

claim to control. And as applied by the California courts,

this long-arm statute has been extended, as in the pres-

ent case, whenever California was satisfied that Califor-

nia was a convenient forum. See Ottonello, California’s

Convenience-Oriented Approach to Personal Jurisdiction:

A Critical Review, 18 LINCOLN L. REV. 21, 31, 35 (1982)

(“The California Supreme Court did not follow the

straight forward rule of Hanson.” “The California Su-

preme Court has proceeded on weak constitutional grounds

in allowing convenience factors to compensate for an

insufficient or nonexistent showing of minimum con-

tacts.”) ; cf. Cornelison v. Chaney, 13 Cal. 3d 143, 545

P.2d 264 (1976) (held, jurisdiction under § 410.10 over

nonresident Nebraska trucker for accident in Nevada

that injured a California resident); Kulko v. Superior

Court, 19 Cal. 38d 514, 564 P.2d 353 (1977), reversed,

436 U.S. 84 (1978).

When states do reach beyond their borders to regulate

primary conduct, the problems created are more than

theoretical. A reporter in Florida under the decision be-

low, and his employer, could not be sure of which state

would try him, nor of which state’s law would be

applied. State courts, once they have jurisdiction, under

current relaxed choice-of-law doctrine tend to apply their

own law. See, e.g., Babcock v. Jackson, 12 N.Y.2d 473,

191 N.E.2d 279 (1963); Mellk v. Sarahson, 49 N.J. 226,

229 A.2d 625 (1967); Foster v. Leggett, 484 S.W.2d 827

(Ky. 1972) (state applied “better law’—its own—to

accident in another state). Due process, to the extent it

limits extraterritorial jurisdiction, “gives a degree of

predictability to the legal system that allows potential

defendants to structure their primary conduct with some

minimal assurance as to where that conduct will and will

not render them liable to suit.” World-Wide Volkswagen

Corp. v. Woodson, supra, 444 U.S. at 297. The less pre-

dictable the forum, the less predictable the standard gov-

erning primary conduct. This Court has held that in

choice-of-law questions, the Constitution does not man-

date a single answer. Allstate Insurance Co. Vv. Hague,

449 U.S. 302 (1981). A forum state may even adopt one

part of another state’s law, but not the rest. Nevada v.

Hall, 440 U.S. 410 (1979). The absence of constitutional

standards as to choice of law is one reason why extra-

territorial jurisdiction must be watchfully policed, to pro-

tect federalism and the interests of other states and

their citizens. See Shaffer v. Heitner, supra, 433 U.S. at

197; Silberman, Commentaries on Shaffer v. Heitner, 53

N.Y.U. L. REv. 33, 88 n.286 (1978) .*

B. The Contacts of Appellants With California Were

Too Slight To Satisfy the Higher Standard That

Must Be Met for Extraterritorial Jurisdiction Over

Individuals.

Even if Appellants were a publishing enterprise, there-

fore, the level and quality of contacts required by Inter-

national Shoe Co. Vv. Washington, supra, were not met.

But they are not a publishing enterprise; they are indi-

viduals. And the level of contacts required when the de-

fendant is an individual is different, and must take into

account the differences between an individual and a busi-

ness entity.” “(TJjhere are relatively few circumstances

** As Mr. Justice Jackson observed, “I doubt that the position

can long be maintained that the reach of a state’s power is a

byproduct of an interest. The ultimate answer, it seems to me, will

have to be based on considerations of state relations to each other

and to the federal system.” Jackson, Full Faith and Credit: The

Lawyer's Clause of the Constitution, 45 CoLuM. L. REV. 1, 28 (1945).

7% “When the approach that allows a state to apply its own law

in marginal] cases is augmented by expanded bases of personal juris-

diction ... the combination raises the specter of massive invasions

by one state into the policies of another, rigidly enforced by the

rules of full faith and credit to judgments.” Martin, Constitutional

Limitations on Choice of Law, 61 CORNELL L. REV. 185, 230 (1976)

(footnote omitted).

* Corporations have been treated differently from natural per-

sons with respect to various constitutional provisions. See, ¢.g.,

under which one should be summoned to trial outside of

his home district or state.” Jackson, Full Faith and

Credit: The Lawyer's Clause of the Constitution, 45

Colum. L. Rev. 1, 22 (1945).

International Shoe focused not on individual defend-

ants, as to whom territorial tests of jurisdiction were rel-

atively easy to apply, put rather on foreign corporations,

as to which the test of jurisdiction had to involve more

assumptions and judgment. The question answered there

was the same one put by Judge Learned Hand in the case

that broke the ground for International Shoe: “what

dealings make it just to subject a foreign corporation to

local suit.” Hutchinson v. Chase & Gilbert, Inc., 45 F.2d

139, 141 (2d Cir. 1930) (emphasis supplied) ; cf. /nter-

national Shoe, supra, 326 U.S. at 317. This Court shortly

afterwards referred to “our recent decision in /nterna-

tional Shoe v. Washington, 326 U.S. 310, which was con-

cerned with the jurisdiction of a state over a foreign cor-

poration.” United States v. Scophony Corp., 333 U.S.

795, 804 n.13 (1948). International Shoe was written

broadly enough that its principles can apply both to cor-

porations and to individuals. However, as this Court re-

cently recognized,

“The differences between individuals and corpora-

tions may, of course, lead to the conclusion that a

given set of circumstances establishes state jurisdic-

tion over one type of defendant but not over the

Hale v. Henkel, 201 U.S. 43 (1906); United States v. White,

$22 U.S. 694 (1944) (Fifth Amendment privilege against self-

incrimination) ; People v. Consolidated Edison Co., 42 Misc. 2d 422,

248 N.Y.S.2d 267 (1964) (criminal jurisdiction). See Note, 92

Harv. L. REV. 1227, 1230 (1979). The unique nature of corpora-

tions, this Court has noted, has led to unique jurisdictional rules for

them. United States v. Scophony Corp., 333 U.S. 795, 802-03 (1948) ;

cf. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 636

(1819).

other.” Shaffer v. Heitner, 483 U.S. 186, 204 n.19

(1977) .™

The commentators traditionally distinguish between

standards for jurisdiction over corporations and over in-

dividuals. Compare RESTATEMENT (2D), CONFLICT OF

LAWS, Chapter 8, Topic 1, Title B, with id., Title C; com-

pare R. Fietp & B. KAPLAN, CIVIL PROCEDURE, Section 1

(“Natural Persons’) with id., Section 2 (‘Corpora-

tions”), at 625, 650 (temp. 2d ed. 1968).

The first leading case in which this Court focused on

state long-arm jurisdiction asserted over individuals not

in busines for themselves was Hess v. Pawloski, 274 U.S.

352 (1927). In upholding jurisdiction, it did so for prac-

tical and policy reasons, because of the dangerous nature

of automobiles, the seriousness of physical injuries they

can cause, and the widespread difficulty of remedy if

drivers fled the state. See Olberding v. Illinois C.R.R., 346

U.S. 388, 341 (1953). In other contexts, when attempts

have been made to assert extraterritorial jurisdiction

over nonresident individuals not personally engaged in

business for themselves, or not personally committing

tortious acts within the state, this Court has rejected

them. Vanderbilt v. Vanderbilt, 354 U.S. 416 (1947);

May v. Anderson, 345 U.S. 528 (1953).

C, An Employee Cannot Be Subjected to Extraterri-

torial Jurisdiction for Acts Performed Solely for

the Employer.

As a corollary of the recognized differences between

natural persons and corporations in measuring jurisdic-

tional contacts, it is well established that jurisdiction

over a foreign corporation does not carry with it juris-

‘In Flezner Vv. Farson, 248 U.S, 289, 2938 (1919), this Court

through Mr. Justice Holmes distinguished individuals from cor-

porations on the ground that a state might exclude the latter but

not the former. Later a nonresident individual engaging in a local

business specially regulated by the state and with an agent in the

state was treated for jurisdictional purposes like a corporation.

Henry L. Doherty & Co. Vv. Goodman, 294 U.S. 623 (1935).

diction over the corporation’s employees for their actions

on its behalf, In the present case the complaint alleged

that both Appellants “in doing the acts herein alleged

were acting within the course and scope of their employ-

ment,” J.A. 8, and their unchallenged affidavits con-

firmed that each performed whatever acts he did respec-

ing the article solely in the course of his employment and

‘not acting in a personal capacity.” J.A. 17, 19.

Contacts with a state that count under /nternational

Shoe, this Court has held, are personal to the actor and

must be voluntarily undertaken on his own behalf, for “it

is essential ... [that] the defendant purposefully avails

itself” (or himself) of the benefits and protections of the

forum state. Hanson v. Denckla, supra, 357 U.S. at 253

(emphasis supplied). As explained by one court in a

leading case:

“The situation here is much like activity by a corpo

rate employer who, by performing corporate busi-

ness, causes the corporation to purposefully avail it-

self of the law of another state. Absent a ruse to

conceal an employee’s persona] activity behind the

corporate shield, it is most difficult to conclude that

the employee purposefully availed himself of a dis-

tant forum’s laws.’ Jdaho Potato Comm'n Vv. Wash-

ington Potato Comm'n, 410 F, Supp. 171, 181 (D.

Ida. 1976).

As Hanson v. Denckla held, each defendant’s contacts

with the forum must be measured individually; they can-

not simply be lumped to achieve jurisdiction over all.

This Court accordingly long has held that the fact that a

subsidiary does business in a state does not confer juris-

diction over the parent, even if the subsidiary is wholly-

owned. Cannon Mfg. Co. v. Cudahy Packing Co., 267

U.S. 383 (1925).

This is consistent with the fairness that is a part of

due process. As the trial court pointed out, “it is the

publisher who balances risk and reward in establishing

the character of his publication, and it is the publisher

who stands to make substantial profiits if he publishes

true stories of widespread interest.” J.A. 97, Reporters

and editors have no direct personal economic stake in

their employer’s sales in a distant state—nor is the

ordinary employee able to control his employer’s market-

ing activities. Due process considers whether, and by

whom, a decision to market in a distant state was taken.

Cf. World-Wide Volkswagen Corp. Vv. Woodson, supra.

A vast number of cases therefore have held, either as

a matter of due process or as a construction of state long-

arm statutes, that even if a nonresident corporate officer

or employee of a foreign corporation enters the forum

state in connection with the controversy at bar, his acts

there which give rise to extraterritorial jurisdiction over

the corporation do not also create extraterritorial juris-

diction over the individual. The Ninth Circuit, in a case

specifically rejected by the court below, explained that

“a corporate officer who has contact with a forum

only with regard to the performance of his official

duties is not subject to personal jurisdiction in that

forum.” Forsythe v. Overmyer, 576 F.2d 779 (9th

Cir.!, cert. denied, 439 U.S, 864 (1978).

Such an exercise of jurisdiction over a nonresident

“would violate ‘federal due process.’”” Chem Lab Prod-

ucts, Ine. V. Stepanek, 554 F.2d 371, 372 (9th Cir, 1977).

The court below also specifically rejected the holding of

the court through Chief Judge Weinstein in Bulova Watch

Co. v. K. Hattori & Co., 508 F. Supp. 1822, 1347 (E.D.

N.Y. 1981), that

“under the ‘fiduciary shield’ doctrine, the acts of a

corporate officer or employee taken in his corporate

capacity within the jurisdiction generally do not

form the predicate for jurisdiction over him in his

individual capacity.”

The cases and policy were thoroughly analyzed last year

by the Supreme Court of Iowa in State ex rel. Miller v.

Internal Energy Management Corp., 324 N.W.2d 707 (Ta.

1982). See also 3A W. FLETCHER, CYCLOPEDIA OF THE

LAW OF PRIVATE CORPORATIONS § 1296.1 (Rev. perm. ed.

1975); 4 C. WricHT & A. MILLER, FEDERAL PRACTICE

AND PROCEDURE § 1069 (Supp. 1980). “If such suits

against officers of national corporations were ever per-

mitted, the individuals could be sued in every state of the

union whenever they make telephone calls or write letters

to a customer... .” Weller v. Cromwell Oil Co., 504

F.2d 927, 931 (6th Cir. 1974). Such has never been the

law.

In the present case, the Court of Appeal’s rejection of

settled due process doctrine™ is even more extreme, be-

cause here the two Appellants, who acted only in their

corporate capacity, did not even enter California at all in

connection with this dispute. The claim that jurisdiction

over a nonresident publishing company carries jurisdic-

tion over its nonresident reporters has been rejected.

Margoles v. Johns, 483 F.2d 1212 (D.C. Cir. 1973);

%2 For examples of decisions resting on due process, see, €.9.,

Weller v. Cromwell Oil Co., 504 F.2d 927 (6th Cir. 1974); Wilshire

Oil Co. v. Riffe, 409 F.2d 1277, 1282-83 (10th Cir. 1969) (“unless

the agents transact business on their own account and not on be-

half of the corporation; the agents are not engaged in business so

as to sustain an application of the long-arm statute to them as

individuals”) ; Idaho Potato Comm'n v. Washington Potato Comm'n,

410 F. Supp. 171 (D. Ida. 1975); State ez rel. Miller V. Internal

Energy Management Corp., supra; Hurletron Whittier, Inc. V.

Barda, 82 Ill. App. 3d 443, 402 N.E.2d 840 (1980). For decisions

reaching the same result construing state long-arm statutes, see,

¢.g., Marine Midland Bank v. Miller, 664 F.2d 899 (2d Cir. 1981) ;

Escude Cruz Vv. Ortho Pharmaceutical Corp., 619 F.2d 902 (1st Cir.

1980); Lehigh Valley Industries, Inc. v. Birenbaum, 389 F. Supp.

798, 803-804, aff'd, 527 F.2d 87 (2d Cir. 1975) (“It is axiomatic

that jurisdiction over an individual cannot be predicated upon juris-

diction over a corporation. That is to say, an individual’s trans-

action of business within the state solely as an officer of a corpora-

tion does not create personal jurisdiction over that individual.” ) ;

Willner v. Thompson, 285 F. Supp. 394, 397 (E.D.N.Y. 1968)

(“Since the corporate defendant is not the agent of the individual

defendant, its acts cannot possibly be attributed to him.”).

Bradlee Management Services, Inc. vy. Cassells, 249 Ga.

614, 292 S.E.2d 717 (1982).*

D. Alleging a Non-Physical Effect in the Forum State

Is Not Sufficient for Extraterritorial Jurisdiction.

In the years since International Shoe, many states

(like California) have rewritten their long-arm statutes

to sweep in whatever the Constitution will bear, and a

few courts have extended extraterritorial jurisdiction to

hold that if a dangerous manufactured object causes in-

jury in the forum state, nothing more for jurisdiction is

required. The two leading cases are Buckeye Boiler Co.

v. Superior Court, 71 Cal. 2d 893, 458 P.2d 57 (1969)

(pressure tank explosion); and Gray v. American Radi-

ator & Standard Sanitary Corp., 22 Ill. 2d 482, 176 N.E.

2d 761 (1961) (water heater explosion). Both Gray and

Buckeye Boiler, it is generally recognized, pushed due

process to the very limits, and if correctly decided are

explainable in part by the nature of the injury and by

unique circumstances present there.** This Court did not

% The only case cited as authority by the court below was an

anomalous district court decision, not involving defamation claims,

which specifically acknowledged that “as a rule the courts have

declined to exercise personal jurisdiction over individuals for their

acts done in a personal capacity.” Donner v. Tams-Witmark Music

Library, Inc., 480 F. Supp. 1229, 1233 (E.D. Pa. 1979).

* Buckeye Boiler, besides emphasizing the seriousness of the

harm and the need for strict liability to discourage careless manu-

facture of dangerous products, also relied on the fact that the Cali-

fornia plaintiff was suing both the Ohio boiler manufacturer and a

California physician who had (allegedly negligently) treated him

for his injuries. Each defendant claimed the other was at fault.

To decline jurisdiction over the Ohio corporation, said the court,

might lead to inconsistent verdicts and the possibility that the

plaintiff would not recover at all. See 71 Cal. 2d at 906, 458 P.2d

at 67.

In Gray, the court held that jurisdiction “depends on the particu-

lar facts in each case,” noting that in the case before it “a cause

of action arises from alleged defects in his product,” 22 IIl.2d at

444, 442, 176 N.E.2d at 767, 766; the court assumed that “the

trend in defining due process of law is away from the emphasis on

have occasion to review them, and their “effects” ra-

tionale is called into question by this Court’s later ruling

in Kulko v. Superior Court, supra, 436 U.S. at 98-99.

Only one product-liability case testing due-process ju-

risdictional protections has been decided by this Court:

World-Wide Volkswagen Corp. Vv. Woodson, supra. In it,

this Court limited the Gray line of cases to circumstances

in which “a corporation . .. delivers its products” for

marketing in the forum state. World-Wide Volkswagen

Corp. Vv. Woodson, supra, 444 U.S. at 298 (emphasis

supplied). In other words, jurisdiction is to be asserted

if at all only over the company marketing the dangerous

and defective products, because that company has the

power to “act to alleviate the risk” by if necessary “sev-

ering its connection with the State.” Jd. at 297. There is

no suggestion that jurisdiction over a manufacturing

company whose boiler blew up could also carry with it

jurisdiction over a welder who worked on it.” More-

over, this Court emphasized that convenience is not the

test and also that “ ‘foreseeability’ alone has never been

a sufficient benchmark for personal jurisdiction under the

Due Process Clause.” Id, at 295. The commentators and

cases alike recognize that effects in the forum are not

alone a sufficient basis for jurisdiction when those effects

“are not of a sort highly dangerous to persons or things.”

RESTATEMENT (2D), CONFLICT OF Laws, § 37 comment a;

Lakeside Bridge & Steel Co. v. Mountain State Construc-

tion Co., supra, 597 F.2d at 602. Moreover, the Supreme

Court of Illinois, citing World-Wide Volkswagen, has em-

territorial limitations and toward emphasis on providing adequate

notice and opportunity to be heard;” it saw no due process problem

if suit was brought “in the court where both parties can most con-

veniently settle their dispute.” 22 Ill. 2d at 441, 443, 176 N.E.2d

at 765, 766.

*% Nor is it appropriate, where First Amendment activity is con-

cerned, to view as acceptable a publisher’s “if the risks are too

great, severing its connection with the State.” 444 U.S. at 297. If

publishing is restricted and localized, then, as the trial court

recognized, “the informed public would be the loser.” J.A. 97-98.

phatically refused to apply its own effect rationale in

Gray to a tort that did not involve a dangerous product.

Green Vv. Advance Ross Electronics Corp., 86 Ill. 2d 431,

427 N.E.2d 1203 (1981).

The court below assumed that the most extreme product-

liability cases governed a libel claim, and that juris-

dictional requirements were satisfied by the bare allega-

tions of the complaint that harm in the forum state had

been intended and had occurred:

“(T]t must be presumed that Calder, in participating

in the publication of the article as its editor, in-

tended to cause injury to plaintiffs in California

where they reside; such injury in fact occurred. Ac-

cordingly, a valid basis exists for California’s exer-

cise of personal jurisdiction over Calder with respect

to the causes of action alleged herein.” J.A. 114.

That is, however, a total non sequitur. It ignores the

burden upon the plaintiffs to establish adequate jurisdic-

tional facts *—to show sufficient contacts of Calder and

South with the forum state as required by /nternational

Shoe Co. Vv. Washington, supra. Instead of contacts, the

court below was satisfied with jurisdiction by allegation

—allege an intentional injury in the state, and nothing

more is required. That has never been the law.

It is certainly not the law when a libel case is brought

against out-of-state employees of an out-of-state pub-

lisher. This Court often has noted the particularized

case-by-case analysis that is required by International

Shoe. See, e.g., Shaffer v. Heitner, 433 U.S. 186, 202-04

(1977). A defamation action complaining of humiliation

and injured feelings—not even damage to reputation—is

not a boiler-explosion case involving mangled limbs. The

injury, if any, is more difficult to identify and quantify,

is more easily feigned, and the “product” does not hold

% McNutt Vv. General Motors Acceptance Corp., 298 U.S. 178, 189

(1936). “Facts, not mere allegations, must be the touchstone.”

Chem Lab Products, Inc. v. Stepanek, 554 F.2d 371, 372 (9th Cir.

1977).

danger to the public at large. “Due process considerations

would undoubtedly be more restrictive if there were in-

volved simply a dispute of commercial dimensions be-

tween parties to a commercial contract {than where] one

introduces into a state a dangerous instrument.” Singer

v. Walker, 21 App. Div. 2d 285, 292, 250 N.Y.S.2d 216,

223 (1964).™

For many years now, courts and legislatures have

treated product-liability litigation, involving manufac-

tured products endangering the public generally, as sub-

ject to exceptional substantive rules. Many jurisdictions

have adopted a standard of strict liability without fault,

even though such is not the ordinary tort standard. It is

not surprising therefore that some state courts, as in

Gray and Buckeye Boiler, have adopted for dangerous

products a sort of strict-liability rule as to jurisdiction as

well. But what is before this Court is not a dangerous-

product case; and strict liability can never be applied in

the field of libel. Gertz v. Robert Welch, Inc., 418 U.S.

323, 347 (1974).

A newspaper may publish a story that causes anger or

distress, but a newspaper is not an inherently dangerous

object. Even if it is so characterized metaphorically, any

danger to one person’s reputation would not, like a defec-

7 Dissenting in World-Wide Volkswagen, supra, Mr. Justice

Blackmun explained that he reached the result he did because

“for me, a critical factor... is the nature of the instrumentality

under consideration.” “My position need not take me beyond the

automobile and the professional who does business by way of dis-

tributing and retailing automobiles. Cases concerning other instru-

mentalities will be dealt with as they arise and in their own con-

texts.” 444 U.S. at 318, 319.

88 Just as jurisdictional rules were stretched to meet the physical

danger from nonresident motorists, to reach “a nonresident doing

acts within the state, involving danger to life or property.”’ Scott,

Jurisdiction Over Non-Resident Motorists, 39 Harv. L. REV. 563,

586 (1926). Cf. Hess v. Pawloski, supra, 274 U.S. at 356 (“Motor

vehicles are dangerous machines... their use is attended by serious

dangers to persons and property.”).

tive manufactured item, threaten the public at large. A

due process analysis must take account of these differ-

ences, and not stretch jurisdiction so far when there is no

physical injury to be compensated. Appellee alleged no

physica] injury at all, nor even any damage to reputa-

tion. See J.A. 8-9. What may be reasonable in some

circumstances in product-liability cases is not appropri-

ate when “there is no claim that appellant has visited

physical injury on either property or person within the

State of California.” Kulko v. Superior Court, supra, 436

U.S. at 96-97 (emphasis supplied). Cf. Ohio v. Wyan-

dotte Chemicals Corp., 401 U.S. 493, 500-01 (1971)

(health hazard to public generally).

IL THE COURT OF APPEAL ERRED IN REFUSING

TO GIVE WEIGHT TO THE FIRST AMENDMENT.

As demonstrated in the previous section, the Court of

Appeal failed to apply “traditional principles” required

by International Shoe, and instead assumed jurisdiction

in spite of the absence of sufficient contacts with Cali-

fornia by either defendant to meet traditional jurisdic-

tional standards. This section deals with the Court of

Appeal’s further error of rejecting the First Amendment

as a necesary component in analyzing assertion of extra-

territorial jurisdiction over a publisher’s employees.

A. Constitutional Policies Cannot Be Ignored in Juris-

dictional Analysis.

It is a commonplace that in determining whether juris-

diction is fair and reasonable under Jnternational Shoe,

supra, courts must consider al] the circumstances bearing

on a particular case, including the substantive policies

* Her husband, Mr. Ingels, had alleged that he vomited on

learning of the article. J.A. 78. Even if this could have been

thought of as a jurisdictionally significant event, however, it was

contradicted by evidence from others that he instead had laughed,

J.A. 13, 71, and the trial court made no finding that his alleged

stomach upset ever had occurred. Mr. Ingels no longer is a party

to the case.

that are a part of the law. This has long been done in,

for example, many cases that held that in order to avoid

overburdening interstate commerce, restraint on extra-

territorial jurisdiction was called for. See, e.g., Davis Vv.

Farmers Co-operative Equity Co., 262 U.S. 312 (1923).

Moreover, to say that the “interest” of the several states

concerned will be examined is often simply another way

of saying that policy will be weighed. Cf. Texas v. New

Jersey, 379 U.S. 674, 679 (1965).

This Court has looked also even to non-constitutional

substantive policies in limiting state-court extraterrito-

rial jurisdiction. Thus in Kulko v. Superior Court, 436

U.S. 84 (1978), this Court refused to permit jurisdiction

over a nonresident father who let his daughter visit her

California mother, because to do so “would impose an

unreasonable burden on family relations,” 436 U.S. at 98,

and because “to find personal jurisdiction in a State on

this basis, merely because the mother was residing there,

would discourage parents from entering into reasonable

visitation agreements.” Jd. at 93. See also May v. Ander-

som, 345 U.S. 528, 533 (1953). “(T]he requisite mini-

mum quantum of ‘contact’ between the defendant and the

forum does and should vary with the measure of the val-

ues affected and the costs inflicted by the attempted ex-

ercise of power.” Carrington & Martin, Substantive In-

terests and the Jurisdiction of State Courts, 66 MICH. L.

REV. 227, 230 (1967) .”

This Court in other cases as well has looked to non-

constitutional] policies in weighing jurisdiction. In Hess

v. Pawloski, 274 U.S. 352 (1927), this Court referred to

a fictional consent to jurisdiction from the use of a state’s

highways, but it also emphasized that “motor vehicles are

“Cf. Wright v. Yackley, 459 F.2d 287 (9th Cir. 1972), holding

that jurisdiction should not be asserted over nonresident physicians

lest they be deterred from rendering medical assistance to residents.

See generally Reese, Legislative Jurisdiction, 78 CoLuM. L. REV.

1587, 1589 n.12 (1978); Monaghan, First Amendment “Due

Process,” 83 Harv. L. REV. 518 (1970).

dangerous machines.” 274 U.S. at 356. As this Court

later explained, the judgment that jurisdiction should at-

tach was a practical one, one of policy based on the dan-

gers from and mobility of interstate drivers. Olberding

v. Illinois C.R.R., 346 U.S. 338, 341 (1953) In McGee v.

International Life Ins. Co., 355 U.S. 220 (1957), this

Court permitted jurisdiction where it otherwise might

not have, because of the state’s especially strong interest

in regulating insurance transactions of its residents, an

interest reflected in special regulatory and jurisdictional

legislation. See Hanson v. Denckla, supra, 357 U.S. at

252; cf. also Henry L. Doherty & Co. Vv. Goodman, 294

U.S. 623, 627 (1935) (“Iowa treats the business of deal-

ing in corporate securities as exceptional and subjects it

to special regulation.’’).

The First Amendment’s policy of encouraging the flow

of information and a healthy press throughout the coun-

try is a constitutional imperative to which a court cannot

shut its eyes. “It is the purpose of the First Amendment

to preserve an uninhibited marketplace of ideas... .”

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 390

(1969); see also Associated Press v. United States, 326

U.S. 1, 20 (1945). Yet the court below, reversing the trial

court, explicitly decided the case as if the First Amend-

ment did not exist. When as here a publisher’s employees

are sued for their work on their employer’s newspaper,

such a pretense—that a part of the Constitution is miss-

ing—cannot be allowed.

The First Amendment, in fact, has been more potent

than most substantive constitutional provisions in influ-

encing procedure. In Near v. Minnesota ex rel. Olson, 283

U.S. 697 (1931), this Court through Chief Justice

Hughes held that the normal rules of equity do not apply

when prior restraints on the press are involved. In Dom-

browski v. Pfister, 380 U.S. 479 (1965), ordinary crimi-

nal procedure was held an insufficient safeguard for the

testing of First Amendment rights. New York Times Co.

v. Sullivan, 376 U.S. 254, 285 (1964), held that state-

court findings of fact are subject to an independent ap-

pellate review of the record in libel cases. See also, e.g.,

Speiser v. Randall, 357 U.S. 513 (1958); Carroll v.

President and Commissioners, 393 U.S. 175 (1968);

Grosjean V. American Press Co., 297 U.S. 233 (1936).

If the First Amendment means anything, it means that

a state by whatever means, including jurisdictional stat-

utes, cannot reach out to interfere unduly with the na-

tional market in information and ideas.

Moreover, to rely on the First and Fourteenth Amend-

ments, in the interest of the federal system, to limit the

extraterritorial reach of a state’s power to regulate or

punish the conduct of nonresidents is far less of an in-

trusion than to alter the state’s substantive law itself.

Yet there is no doubt that the First Amendment also has

altered as necessary the substantive laws of the states,

as for example by requiring that negligence not be an

acceptable standard for liability when public figures are

sued for libel. New York Times Co. v. Sullivan, 376 U.S.

254 (1964); Curtis Pub. Co. v. Butts, 388 U.S. 130, 155

(1967). State civil and criminal] statutes are tested more

strictly for vagueness when First Amendment rights may

- be affected. See, ¢.g., Ashton v. Kentucky, 384 U.S. 195,

200 (1966). State courts’ regulation of their bars, which

normally is not questioned, will be invalidated if it too

narrowly restricts First Amendment rights. United Mine

Workers v. Illinois State Bar Ass’n, 389 U.S. 217 (1967);

Brotherhood of R.R. Trainmen v. Virginia ex rel. Vir-

ginia State Bar, 377 U.S. 1 (1964). Two months ago in

Minneapolis Star & Tribune Co. v. Minnesota Commis-

sioner of Revenue, 108 S. Ct. 1865 (1983), this Court

held that a tax statute that otherwise might meet consti-

tutional] standards nevertheless failed when put to the

added test of the First Amendment’s protection of the

press.* State statutes that establish jurisdiction of the

“1 “(I]t may well be that certain rules impervious to attack when

applied to ordinary human conduct may have to be altered or

abandoned when used to regulate speech.” Rosenbloom vy. Metro-

state’s courts over nonresidents are not immune from

similar First Amendment testing.

To imagine that an assertion of extraterritorial juris-

diction over publisher’s employees can be evaluated with-

out regard to the effect on the First Amendment’s guar-

antees of “freedom of speech, or of the press” is to deny

the Amendment’s influence on procedural! decisions for at

least half a century. An analysis of contacts and inter-

ests—not excluding First Amendment interests—is ex-

actly what the “contacts” requirement of International

Shoe mandates. Indeed, the very same Fourteenth Amend-

ment that tests the assertion of extraterritorial jurisdic-

tion under International Shoe Co. Vv. Washington also

makes the First Amendment applicable to the actions of

California through its legislature and courts. Gitlow Vv.

New York, 268 U.S. 652, 666 (1925). Preserving First

Amendment freedoms is an “indispensable” part of the

“concept of ordered liberty” ** that the Fourteenth

Amendment mandates—yet dispense with it is exactly

what the court below did.

B. California’s Assertion of Extraterritorial Jurisdic-

tion Over a Florida Editor and Florida Reporter

Unconstitutionally Burdens Activity Protected by

the First Amendment.

This Court has warned, in speaking of libel actions, of

the “risk of inducing a cautious and restrictive exercise

of the constitutionally guaranteed freedoms of speech and

the press.” Gertz v. Robert Welch, Inc., 418 U.S. 323,

340 (1974). For that reason, the majority of state and

federal courts that have considered the issue have un-

hesitatingly applied the First Amendment’s speech and

media, Inc., 403 U.S. 29, 65 (1971) (Harlan, J., dissenting on other

grounds).

42 See Wolf v. Colorado, 338 U.S. 25, 27 (1949); Palko v. Con-

necticut, 302 U.S. 319, 325 (1937). Palko noted that freedom of

expression is an “indispensable condition, of nearly every other

form of freedom.” 302 U.S. at 327.

press protections as part of their analysis of extraterri-

torial jurisdiction. An early case to discuss the point at

length was New York Times Co. v. Connor, 365 F.2d 567

(5th Cir. 1966), and many others have approved and fol-

lowed it. Their reasoning was succinctly summarized

last year by Chief Judge Lord of the Eastern District of

Pennsylvania, who concluded that

‘Gf courts freely found in personam jurisdiction over

publishers of first amendment articles under the

same standards imposed on commercial entities, the

citizens of each state would soon find themselves with

access only to those publications with instate reve-

nues sufficiently high to justify the cost of litigation

within that particular jurisdiction.” McCabe Vv.

Kevin Jenkins & Associates, Inc., 531 F. Supp. 648,

655 (E.D. Pa. 1982).

Therefore “federal jurisdiction is subject to First Amend-

ment considerations when a nonresident publisher is sued

for libel.” Cox Enterprises, Inc. v. Holt, 678 F.2d 936,

937, rehearing on other grounds, 691 F.2d 989 (11th Cir.

1982). Those decisions were as recent as last year. More

than fifteen years ago, Judge Medina commented that “I

am not shocked to see the principles embedded in the First

Amen t applied to the expanding subject of jurisdic-

over the person.” Buckley v. New York Post Corp.,

373 F.2d 175, 184 (2d Cir. 1967) (concurring opinion) .“

43“'W)hen a court attempts to uasess whether jurisdiction over

4 a defendant is reasonable, First Amendment considerations are

a significant factor to be weighed.” Edwards V. Associated Press,

512 F.2d 258, 266 (5th Cir. 1975). See also, e.g., Wolfson Vv.

Houston Post Co., 441 F.2d 735 (5th Cir. 1971); Walker v. Savell,

335 F.2d 536 (5th Cir. 1964); Margoles v. Johns, 333 F. Supp. 942

(D.D.C. 1971), aff'd, 483 F.2d 1212 (D.C. Cir. 1973); Gonzales Vv.

Atlanta Constitution, 4 Media L. Rptr. 2146 (N.D. Ill. 1979).

“4 Judge Friendly for the court in that case said he preferred

to think of the rule as that “the First Amendment could be regarded

as giving forum non conveniens special dimensions and constitu-

tional stature in actions for defamation against publishers and

broadcasters.” 373 F.2d at 183-84. But jurisdiction must be estab-

Leading commentators on jurisdiction have approved the

reasoning of this line of cases as necessary for the pro-

tection of First Amendment activity. Carrington & Mar-

tin, supra, 66 MICH, L. REV. at 240-43; Weinstein,

Trends in Civil Practice, 62 CoLuM. L. REV. 1431, 1436

(1962); Leflar, Conflict of Laws, 36 N.Y.U. L. REv. 36,

42 (1961); see also RESTATEMENT (2D), CONFLICT OF

LAWS § 87 at 159 (1971).

The same reasoning has been applied a fortiori to re-

ject extraterritorial jurisdiction over a publishing com-

pany’s employees. Thus in Bradlee Management Services,

Ine. V. Cassells, 249 Ga, 614, 292 S.E.2d 717 (1982), the

Supreme Court of Georgia applying a First Amendment

test held that although a broadcasting company’s con-

tacts with the forum state were sufficient to permit juris-

diction over it, that was not so for an announcer who

worked in a distant city and had not entered the forum

state. Jurisdiction over an individual journalist also was

rejected, in consideration of First Amendment policy, in

Margoles Vv. Johns, 333 F. Supp. 942 (D.D.C. 1971),

aff'd, 483 F.2d 1212 (D.C. Cir. 1973). The same differ-

entiation was made, and the same holding, in Gonzales v.

lished before forum non conveniens can be considered. Gulf Oil

Corp. Vv. Gilbert, 380 U.S. 501, 504 (1947).

The result of a state court’s dismissal for lack of jurisdiction

under /nternational Shoe or for forum non conveniens would be

similar. But the practical difference between the two would be

substantial. The burden on the defendant in the latter approach

would be much greater because of the need to appear and then

to try to persuade the foreign court that as a forum it was not

suitable. State courts tend to see themselves as convenient. C/.

Tezas V. New Jersey, 379 U.S. 674, 679 (1965). The rules would be

40)

Atlanta Constitution, 4 Media L. Reptr. 2146 (N.D. II.

(1979).”

First Amendment considerations in jurisdiction are

particularly applicable where, as here, the plaintiff is

admittedly a public figure—indeed, a celebrity. See J.A.

8-9, Moreover, she did not even claim that her reputa-

tion was damaged. J.A. 9. “[P)ublic figures are less vul-

nerable to injury from defamatory statements because of

their ability to resort to effective ‘self-help.’ Also, “pub-

lic figures, like public officials, have ‘voluntarily exposed

themselves to increased risk of injury from defamatory

falsehood concerning them.’" Wolston v. Reader's Digest

Ass'n, 443 U.S, 157, 164 (1979), quoting in part Gertz

V. Robert Welch, Inc., 418 U.S, 323, 345 (1974), Report-

ers and editors, employees of publishers, should not have

to travel and perhaps retain counsel 3000 miles away to

defend against a complaint that, because it is filed by a

* The few cases that, like the decision below, held that the First

Amendment should be ignored in the jurisdictional analysis, also

ignored the rule of International Shoe that jurisdiction must be

based on, first, contacts, and also, fairness. Anselmi Vv. Denver Post,

Inc., 552 F.2d 316 (10th Cir.), cert. denied sub nom. Times Mirror

Co. Vv. Anselmi, 482 U.S, 911 (1977), interpreted /nternational

Shoe and McGee V. International Life Ins. Co., supra, as holding

that “due process can be satisfied even though the contact with

the state is limited to one business transaction.” 552 F.2d at 324.

From there it went on to decide that the First Amendment policy

applied in other cases was subject to the “countervailing policy

consideration” of “the extremely disadvantageous position that

citizens of Wyoming would be placed in” if they could not sue

locally. /bid. The court also assumed, quite erroneously, that the

Fifth Cireuit no longer gave weight to the First Amendment in

jurisdictional matters. /bid. Contra, ¢.g., Edwards Vv. Associated

Press, supra; Coz Enterprises, Inc. ¥. Holt, supra.

Church of Scientology V. Adams, 584 F.2d 898 (9th Cir. 1978),

erroneously concluded that “[{i|n a defamation case... the appro-

priate jurisdictional analysis should be to determine whether or

not it was foreseeable that a risk of injury by defamation would

arise in the forum state.” 584 F.2d at 897-08. Contra, World-Wide

Volkswagen Corp. V. Woodson, supra, 444 U.S. at 295.

public figure and does not even allege damage to reputa-

tion, may not even be constitutionally sufficient.”

It does not require lengthy exposition to demonstrate

the burden on an individual in Florida who must defend

a suit for $20,000,000 unliquidated compensatory and

punitive damages in a state court in California. Judge

Learned Hand once commented that “After now some

dozen years of experience I must say that as a litigant

I should dread a law suit beyond almost anything else

short of sickness and death.” Address, 3 ASSOCIATION OF

THE BAR OF THE CITY OF NEW YORK, LECTURES ON LEGAL

Topics 105 (1926). And worse than being a defendant

in a local court is being a defendant in a court nearly

three thousand miles away. Cf. Hutchinson v. Proxmire,

443 U.S. 111, 128 (1979).

Whether the reporter’s employer is a co-defendant does

not remove the burden.” To the extent the employer (as

here) chooses to defend the assertion of extraterritorial

jurisdiction over its employees, the burden on the press

is increased. To the extent it does not—as could happen

if the publisher and the reporter had inconsistent de

fenses—the cost of defending litigation for the reporter

could be ruinous, and the pressure for reporters to trim

their sails to avoid lawsuits all the greater. If the re-

porters could purchase insurance (and California like

** See Hutchinson V. Prormire, 443 U.S. 111, 1384 (1979), identify-

ing “protection to the reputation of an individual” as the constitu-

tionally significant purpose of libel law. Time, Jnc. Vv. Firestone,

424 U.S. 448, 460 (1976), assumed that injury to reputation there

had occurred even though compensation for it was not sought;

in the present case, however, damage to reputation is negated in the

complaint. J.A. 9. “The interest at stake in al) defamation is con-

eededly the reputation of the person assailed.” Grant v. Reader's

Digest Ass'n, 151 F.2d 738, 734 (2d Cir. 1945), cert. denied, 326

U.S. 797 (1946) (L. Hand, J.).

47 “The connection of one counterdefendant with Illinois cannot

be attributed to another simply because they have a common inter-

est.” Green Vv. Advance Ross Electronica Corp., supra, 86 Ill.2d at

440, 427 N.E.2d at 1208.

many states does not permit insurance against punitive

damages) ,** that cost would be an added burden on the

press; and to the extent reporters had to insure against

possible suits in every distant state, the risk would be

large and unpredictable. If they themselves paid, all that

it would take would be one major lawsuit in a distant

forum to wipe out most journalists financially; that could

occur whether ultimately they won or lost.

As Judge Sobeloff writing for the court noted in Er-

langer Mills, Inc. Vv. Cohoes Fibre Mills, Inc., 239 F.2d

502 (4th Cir. 1956),

“We cannot shut our eyes to the disorder and un-

fairness likely to follow from sustaining jurisdiction

in a case like this. It might require corporations from

coast to coast having the most indirect, casual and

tenuous connection with a State to answer frivolous

law suits in its courts. To permit this could se

riously impair the guarantees which due process

seeks to secure.” 239 F.2d at 507.

The burden of frivolous suits is illustrated, indeed, by

this very case. For more than three years the plaintiff

Marty Ingels pursued his lawsuit against Appellants as

well as their employer the National Enquirer. He ac-

cused them in a verified complaint of publishing an ar-

ticle about him that was “false, untrue, libelous and

defamatory,” J.A. 9, 14, and declared under penalty of

perjury that “it was all untrue” and a “pack of lies.”

J.A. 78. Then, without explanation, he voluntarily dis-

missed his complaint.” The expense to other defend-

** See City Products Corp. Vv. Globe Indemnity Co., 88 Cal. App.

Sd 31, 151 Cal. Rptr. 494 (1979).

* “(K)nowing that the court will automatically assume jurisdic-

tion over a distant defendant, plaintiffs may file nuisance suits in

the hope of obtaining settlement offers which will be increased by

the defendant’s expense of litigating in a foreign state. If plaintiffs

do not have the burden of establishing minimum contacts such

nuisance suits will only be encouraged.” Ottonello, supra p. 22,

at 28 (footnotes omitted).

ants of investigating and defending against those now-

abandoned charges has been substantial.” As one study

observed :

“The determination fof extraterritorial personal

jurisdiction] is a crucial one. The maintenance of

suit in an improper forum may subject the defend-

ant to unwarranted financial hardship because of

the high costs of transportation, to hostile triers of

fact with an unavowed prejudice in favor of the

local plaintiff or with a propensity for awarding

large sums in damages, and often to the application

of substantive rules of law less favorable to the de-

fendant than those which might be applied in an-

other court.” Note, Developments in the Law—

State-Court Jurisdiction, 73 Harv. L. REv. 909, 911

(1960); cf. Michigan C.R.R. v. Miz, 278 U.S. 492,

495 (1929).

Those considerations are particularly germane to libel

litigation, in which “the cost of litigating a libel action,

burdensome on even the largest news organizations, often

can cripple smaller news operations.” Steaks Unlimited,

Inc. Vv. Deaner, 623 F.2d 264, 280 n.76 (3d Cir. 1980)."

“ “4 defendant facing a lawsuit brought in bad faith or on little

factual or legal basis has a difficult choice: to settle and perhaps

encourage similar lawsuits, or to engage in expensive litigation.

The farther away the forum of the lawsuit, the more vulnerable is

the local manufacturer to what might be called ‘legalized backmail.’”

Kamp, Beyond Minimum Contacts: The Supreme Court’s New

Jurisdictional Theory, 15 Ga. L. REV. 19, 50 (1980).

“It must be remembered that lawsuits can be brought on frivolous

demands or groundless claims as well as on legitimate ones, and that

procedural rules must be designed and appraised in the light of

what is fair and just to both sides in the dispute. Interpretations

of basic rights which consider only those of a claimant are not

consonant with the fundamental requisites of due process.” Gray

v. American Radiator & Standard Sanitary Corp., supra, 22 Ill. 2d

at 441, 176 N.E.2d at 766.

51 The court went on:

“Five years ago, the minimum cost of defending a “full-fledged

libel suit’ was estimated at $20,000.00. Anderson, Libel and

The threat of litigation expense magnified in distant

forums for the individual editor or reporter is no less an

inhibition than others this Court has invalidated because

they inevitably lead to suppression of speech “by induc-

ing excessive caution in the speaker.” See Pittsburgh

Press Co. Vv. Pittsburgh Comm’n on Human Relations,

413 U.S. 376, 390 (1973).

C. The Objective of Punishing Speech Is Not Sufficient

To Support Extraterritorial Jurisdiction Over a

Publisher’s Employees.

The trial court observed that as a practical matter, Ap-

pellee could obtain from the publishing company any

compensatory damages to which she was entitled. “[I]t

appears that the principal practical effect of holding the

individual defendants as parties to this lawsuit would be

to facilitate plaintiffs’ claims for punitive damages

against the individuals.” J.A. 96-97. The trial court

went on to note that

Press Self-Censorship, 53 Texas L. Rev. 422, 435-36 (1975). The

successful defense of Rosenbloom v. Metromedia, Inc., 403 U.S.

29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971) was nearly $100,000.00.

Id. In Spouse v. Clay Communication, Inc., 211 S.E.2d 674, 690-

91 (W.Va.), cert. denied, 423 U.S. 882, 96 S.Ct. 145, 46 L.Ed.2d

107 (1975), the West Virginia Supreme Court of Appeals ex-

pressed concern that in its state, ‘where a large portion of the

State is served by newspapers which lack substantial financial

assets, the threat of potential libel actions becomes repressive,

not only because of possible judgments but also because of the

inordinate legal expenses normally incurred in defending a pro-

tracted libel suit.’ See also Nebraska Press Ass'n vy. Stuart,

427 U.S. 589, 610 n.40, 96 S.Ct. 2791, 2827, 49 L.Ed.2d 683

(1976) (Brennan, J., concurring in the judgment); Oakes,

Proof of Actual Malice in Defamation Actions: An Unsolved

Dilemma, 7 Hofstra L. Rev. 655, 713 (1979); Note, In Defense

of Truth in Defamation Law, 88 Yale L.J. 1735, 1742-43 & n.39

(1979).” Ibid.

See also Franchise Realty Interstate Corp. Vv. San Francisco Local

Joint Ezecutive Board, 542 F.2d 1076, 1083 (9th Cir. 1976), cert.

denied, 430 U.S. 940 (1977).

“Surely the right of a plaintiff to punish a defend-

ant resident of a remote jurisdiction, and to receive

damages beyond those necessary to compensate him

for his injury should not weigh heavily on the con-

stitutional seale of fundamental] fairness.” J.A. 97.

That observation is surely correct, and indeed should

be dispositive of this case. Punitive damages are punish-

ment; they are quasi-criminal “private fines,” and if col-

lected are simply a windfall to which a plaintiff has no

fundamental claim of right. See Gertz v. Robert Welch,

Inc., 418 U.S. 323, 350 (1974); cf. City of Newport v.

Fact Concerts, Inc., 453 U.S. 247, 266 (1981). “Punitive

damages may be employed to punish unpopular defend-

ants,” International Brotherhood of Electrical Workers

v. Foust, 442 U.S. 42, 50-51 n.14 (1979)—a category of

defendants in which nonresidents and writers of stories

critical of local heroes are likely to figure prominently.

See Gertz v. Robert Welch, Inc., supra, 418 U.S. at 350;

ef. New York Times Co. v. Sullivan, supra. At least two

courts, recognizing this, have held that punitive damages

for libel violate the First and Fourteenth Amendments.

Sprouse Vv. Clay Communication, Inc., 211 S.E.2d 674

(W. Va.), cert. denied, 423 U.S. 882 (1975); McHale v.

Lake Charles American Press, 390 So. 2d 556, 570 (La.

App. 1980), cert. denied, 452 U.S. 941 (1981). Other

states have arrived at the same result applying the

free speech and free press guarantees of their own

constitutions.

Whether or not punitive damages are allowable at all

in libel cases, it is clear that the interest in obtaining

them from a nonresident publisher’s nonresident em-

ployee cannot weigh very heavily, if at all, under Jnter-

national Shoe. Indeed, to the extent that in essence such

claims are inherently penal, they could be rejected on the

52 See Hall vy. May Dept. Stores, 292 Ore. 131, 637 P.2d 126 (1981) ;

Taskett v. KING Broadcasting Co., 86 Wash. 2d 439, 546 P.2d 81

(1976); Stone v. Essex County Newspapers, Inc., 367 Mass. 849,

859-60, 330 N.E.2d 161, 169 (1975).

long-recognized ground that nonresident individuals may

not be subjected to penal jurisdiction in absentia. Cf.

Hopt v. Utah, 110 U.S. 574 (1884).*

III. CALIFORNIA’S ASSERTION OF EXTRATERRI-

TORIAL JURISDICTION OVER THESE FLORIDA

INDIVIDUALS UNCONSTITUTIONALLY BUR-

DENS INTERSTATE COMMERCE.

It has been recognized at least since Gibbons v. Ogden,

9 Wheat. 1 (1824), that states may not enact laws that

place an undue burden on the flow of commerce among

the states that is protected by the Commerce Clause, Ar-

ticle I, § 8. See also, e.g., Edgar v. Mite Corp., 457 U.S.

624 (1982); Stone, Fifty Years’ Work of the United

States Supreme Court, 8 ORE. L. REV. 248, 252-54, 261-62

(1929). This Court also has held that the statutory as-

sertion by a state of jurisdiction over an out-of-state

defendant may itself unduly burden interstate commerce,

and be for that reason invalid. Several state jurisdic-

tional statutes as applied to interstate enterprises were

rejected on that basis by this Court in a series of opinions

by Mr. Justice Brandeis. Michigan C.R.R. v. Mix, 278

U.S. 492 (1929); Atchison, T & S.F. Ry. v. Wells, 265

U.S. 101 (1924); Davis v. Farmers Co-operative Equity

Co., 262 U.S, 312 (1923); see also Denver & R.G.W.R.R.

v. Terte, 284 U.S. 284 (1932) ; International Milling Co.

v. Columbia Transp. Co., 292 U.S. 511 (1934).™

53 When a state seeks to obtain jurisdiction of a nonresident

natural person to answer penal claims, the only prescribed method is

by extradition. See U.S. Const., Art. IV, § 2. International Shoe

has not been applied to penal matters. Cf. International Harvester

Co. Vv. Kentucky, 234 U.S. 579 (1914). See State v. Luv Pharmacy,

Inc., 118 N.H. 398, 408-05, 388 A.2d 190, 193-94 (1978).

‘ “While this circumstace might enable plaintiff to try his cause

there with less inconvenience than elsewhere, it would not

prevent imposition of a serious burden on interstate com-

merce. And, we have held, it is the infliction of the burden

The same Term that this Court decided International

Shoe Co. v. Washington, supra, it also decided Nippert v.

City of Richmond, 327 U.S. 416 (1946). In International

Shoe this Court had loosened some of the strict territo-

ria] limitations on jurisdiction established in Pennoyer V.

Neff, 95 U.S. 714 (1878). In Nippert v. City of Rich-

mond this Court in weighing a state’s jurisdiction to tax

persons “engaged in business as solicitors” referred to its

then recent holding in International Shoe, and recognized

that regular and continuous solicitation of sales in a state

might suffice to sustain jurisdiction against a purely due

process challenge. 327 U.S. at 426. Nevertheless, said

the Court, there were “other prohibited effects.” Ibid.

The Court observed that for many sellers the limitation

imposed by the state might be ‘‘not only burdensome but

prohibitive, with the result that the commerce is stopped

before it is begun.” Jd. at 429. This burden would be

multiplied by “the cumulative effect, practically speak-

ing, of flat municipal taxes laid in succession upon the

itinerant merchant as he passes from town to town.” Id.

at 429-30. The Court emphasized that when state stat-

utes are tested against the Commerce Clause, “practical

consequences for the doing of interstate commerce in ap-

plications to concrete facts are our concern.” ZJd. at 431.

State statutes that, like California’s long-arm statute,

aim particularly at non-residents, are especially subject

to scrutiny, because non-residents cannot vote:

“Provincial interests and local] political power are at

their maximum weight in bringing about acceptance

that deprives the courts of jurisdiction over cases like this.”

Denver & R.G.W.R.R. Vv. Terte, supra, 284 U.S. at 287.

In many other contexts this Court realistically has recognized that

having to defend in court may itself be an enormous and undue

burden. See, ¢.g., Hutchinson V. Prormire, 448 U.S. 111, 128 (1979)

(protection “not only from the consequences of litigation’s results

but also from the burden of defending themselves”); Helstocki v.

Meanor, 442 U.S. 500 (1978); Abney v. United States, 481 U.S.

651 (1977); Dombrowski v. Eastland, 387 U.S. 82, 85 (1967);

Dombrowski Vv. Pfister, 380 U.S. 479, 487 (1965).

of this type of legislation. With the forces behind it,

this is the very kind of barrier the commerce clause

was put in the fundamental law to guard against.”

Id. at 434,

The barrier to trade from having to defend suits in

distant jurisdictions can well turn out to be more onerous

than the burden of paying a tax, and it is far less foresee-

able.” The burden on interstate commerce weighs even

more when imposed through employees of a publisher, not

just because of the First Amendment concerns that are

involved, see pp. 33-46, supra, but also because libel is a

type of action in which defense costs are high and the size

of jury verdicts (for unquantifiable general damages and

for punitive damages) is often enormous and always un-

predictable. The burden is not diminished by, as here,

seeking to impose the extraterritorial jurisdiction on the

publisher’s employees—because what inhibits them in-

evitably inhibits the product of the employer for which

they work. And unlike a publishing company, which

usually does business as here in corporate form, the li-

ability of an individual to pay a judgment is not limited

by law.

State long-arm jurisdictional statutes, like other state

intrusions that affect interstate commerce, must be

tested under the Commerce Clause to weigh whether the

burden is inappropriate. Froning & Deppe, Inc. v. Con-

tinental Illinois Bank & Trust Co., 695 F.2d 289 (7th

Cir. 1982). Unwarranted state assertions of extraterri-

torial jurisdiction can be a “serious threat and deterrent

to the free flow of commerce between the states.” Er-

langer Mills, Inc. v. Cohoes Fibre Mills, Inc., supra, 289

F.2d at 507.

Newspapers are a significant part of the free flow of

commerce. Cf. United States v. Associated Press, 52

F. Supp. 362, 372 (S.D.N.Y. 1943), aff'd, 326 U.S. 1

* It has been recognized that assertions of jurisdiction of a state

to tax non-residents, and of jurisdiction to apply judicial power

to them, present similar issues. See, e.y., Erlanger Mills, Inc. V.

Cohoes Fibre Mills, Inc., 289 F.2d 5602, 506 (4th Cir. 1956).

(1945). To stifle and inhibit their circulation, by the

added threat of expense and punishment for their em-

ployees by courts and juries in distant places, would bur-

den not only free trade in commerce, but also “free trade

in ideas.” *

IV. THIS COURT’S JURISDICTION ON APPEAL IS

PROPER.

Appellee has argued that the provisions of 28 U.S.C.

$ 1257(2) do not apply to this appeal because the Cali-

fornia statute is drafted on its face to conform to con-

stitutional limits. Therefore, Appellee asserts, “the clear

language of this statute makes it clear that it is impos-

sible for it to be unconstitutional on its face or as ap-

plied....’’ Motion to Dismiss or Affirm at 2.

That argument is half tautology and half non sequitur.

It is correct that by definition a statute drafted in terms

to be limited to what is constitutional cannot be un-

constitutional on its face. But it is certainly not “impos-

sible” for such a statute to be applied in an unconstitu-

tional manner; indeed, that is exactly what Appellants

have complained of here. J.A. 106. It is well established

that when a state statute as applied is challenged as re-

pugnant to the United States Constitution and the chal-

lenge is rejected by the state court, this Court has juris-

diction on appeal under 28 U.S.C. § 1257/2). See, e.g.,

Japan Line, Ltd. v. County of Los Angeles, 441 U.S.

434, 440-41 (1979); Cohen v. California, 403 U.S. 15,

17-18 (1971) ; Dahnke-Walker Milling Co. v. Bondurant,

257 U.S. 282, 289 (1921). That principle applies to chal-

lenges to long-arm statutes as applied, as well as to

others. See, ¢.g., International Shoe Co. v. Washington,

supra, 310 U.S. at 313; Henry L. Doherty & Co. v. Good-

man, 294 U.S. 628, 626 (1935).

Kulko v. Superior Court, supra, which Appellee cites,

involved a different kind of record. In that case, this

% Abrams Vv. United States, 250 U.S. 616, 680 (1919) (Holmes,

J., dissenting).

Court noted, “Appellant did not argue below that this

statute was unconstitutional.” 436 U.S. at 90 n.4. Here

Appellants did so argue to the court below, e¢g., J.A.

105, 106, and that court held that the statute could be

applied to Appellants nevertheless. It is difficult to

imagine how the challenge and rejection could have been

clearer.”

Under Appellee’s novel theory, decisions upholding state

statutes challenged as applied could never be heard by

this Court on appeal if the statutes were drafted to be

constitutional on their face. That notion was long ago

rejected. Dahnke-Walker Milling Co. v. Bondurant, supra.

This Court has jurisdiction under 28 U.S.C. § 1257(2).™

CONCLUSION

For the reasons stated, the judgment should be reversed.

Respectfully submitted,

JOHN G. KESTER *

AUBREY M. DANIEL, III

Hill Building

Washington, D.C, 20006

(202) 331-3069

Of Counsel: Attorneys for Appellants

WILLIAMS & CONNOLLY

Hill Building

Washington, D.C. 20006

June 17, 1983

* Counsel of Record

5? The statute also was challenged in the other California courts.

See, ¢.g., J.A. 85, 120-121.

** Appellants have requested that if for any reason jurisdiction

under 28 U.S.C. § 1257(2) were deemed lacking, the appeal be treated

as a petition for certiorari in accordance with 28 U.8.C. § 2108.

Jurisdictional Statement at 3 n.1. The jurisdictional requirements

for certiorari under 28 U.S.C. § 1257(3) are clearly met.

APPENDIX A

CONSTITUTIONAL PROVISIONS

U.S. CONSTITUTION, ARTICLE I:

“Section. 8. The Congress shall have Power...

“To regulate Commerce with foreign Nations, and

among the several States, and with the Indian

Tribes... .”

ARTICLE IV:

“Section. 1. Full Faith and Credit shall be given

in each State to the public Acts, Records, and ju-

dicial Proceedings of every other State. And the

Congress may by general Laws prescribe the Manner

in which the Acts, Records and Proceedings shall be

proved, and the Effect thereof.

“Section. 2. The Citizens of each State shall be

entitled to all Privileges and Immunities of Citizens

in the several States.

“A Person charged in any State with Treason,

Felony, or other Crime, who shall flee from Justice,

and be found in another State, shall on Demand of

the executive Authority of the State from which he

fled, be delivered up, to be removed to the State hav-

ing Jurisdiction of the Crime... .”

FIRST AMENDMENT:

“Congress shall make no law respecting an estab-

lishment of religion, or prohibiting the free exercise

thereof; or abridging the freedom of speech, or of

the press; or the right of the people peaceably to as-

semble, and to petition the Government for a redress

of grievances.”

FOURTEENTH AMENDMENT:

“Section 1. All persons born or naturalized in

the United States, and subject to the jurisdiction

thereof, are citizens of the United States and of the

State wherein they reside. No State shall make or

enforce any law which shall abridge the privileges

or immunities of citizens of the United States; nor

shall any State deprive any person of life, liberty,

or property, without due process of law; nor deny to

any person within its jurisdiction the equal protec-

tion of the laws... .”

APPENDIX B

EXCERPT FROM DEPOSITION OF JOHN ROBERT LUCAS

DECEMBER 14, 1981

. . . *

(151) By Mr. Ablon: Did you ever meet with Mr.

John South in California in connection with this article?

This article?

Yes.

No.

Did you ever meet with Mr. South in California?

Yes.

On how many occasions?

Six or seven.

On none of those occasions was this article [152]

discussed or dealt with in any degree?

A We weren’t—he wasn’t allowed to discuss it with

me.

Q No, no. I’m not talking before its publication. At

the time you were working on the article?

A No.

Q Before it had ever been published, had you ever

had occasion to talk to Mr. South about it in California?

A No.

Q To the best of your recollection, how many conver-

sations did you have with Mr. South concerning the sub-

ject article or your work in connection with the subject

article?

A One conversation.

Q_ I take it that was a telephone conversation?

A You're right.

Q Other than that one telephone conversation to Mr.

South, you had no other conversations with Mr. South

or anyone else at the National Enquirer—

A That’s correct.

Q —<concerning the subject article or the preparation?

A That’s correct.

DOPOD PO YOY

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.