Opinion
2 CA-CV 98-0038
Filed August 31, 1999
Appeal from the Superior Court of Pima County, Cause No. C-318186.
Honorable Michael Alfred, Judge
REVERSED AND REMANDED
O'Connor Cavanagh Molloy Jones By D. Michael Mandig, Attorneys for Plaintiff/Appellant, Tucson.
Haralson, Miller, Pitt McAnally, P.L.C. By Gerald Maltz, Attorneys for Defendant/Appellee DeFrantz, Tucson.
Rusing Lopez, P.L.L.C. By Michael J. Rusing and Tara K. Bookspan, Attorneys for Defendant/Appellee, United States Olympic Committee, Tucson.
Steptoe Johnson LLP By David J. Bodney and Peter B. Swann, Attorneys for Amici Curiae, The Associated Press, Phoenix Newspapers, Inc., and Arizona Newspapers Association, Inc., Phoenix.
OPINION
¶ 1 Rick DeMont won a gold medal in swimming at the 1972 Olympics, but the International Olympic Committee (IOC) disqualified him based on a positive drug test for ephedrine, an ingredient of his prescribed asthma medication, and took away his medal. DeMont has since made several unsuccessful efforts to have the IOC return the medal, the most recent at an IOC meeting in Lausanne, Switzerland, on March 4, 1996. After the meeting, an Associated Press reporter interviewed Anita DeFrantz, a member of the IOC from the United States, and quoted her as stating in part:
"It appears that there were no documents indicating that Mr. DeMont was asthmatic or the amount or the type of medication he was taking. Besides that, the dosage was off the scale." Her statements were included in a story published the following day in the Tucson Citizen newspaper about the IOC's action.
¶ 2 Based on the statements, DeMont, an Arizona resident, filed a defamation action against DeFrantz and the United States Olympic Committee (USOC); DeFrantz is a member of the USOC's board of directors and executive committee. DeFrantz, a California resident, and the USOC, a federally chartered corporation with headquarters in Colorado, moved to dismiss the suit for lack of personal jurisdiction pursuant to Rule 12(b)(2), Ariz.R.Civ.P., 16 A.R.S. The trial court granted the motion, and this appeal followed. We have jurisdiction under A.R.S. § 12-2101(D).
¶ 3 We review de novo a trial court's dismissal for lack of personal jurisdiction. A. Uberti and C. v. Leonardo, 181 Ariz. 565, 892 P.2d 1354 (1995). The plaintiff has the burden of making a prima facie showing that personal jurisdiction exists. Id. If the jurisdictional facts are in conflict, we view them in the light most favorable to the plaintiff. MacPherson v. Taglione, 158 Ariz. 309, 762 P.2d 596 (App. 1988).
¶ 4 DeMont claims Arizona may assert general jurisdiction over the USOC even though its headquarters are in Colorado. General jurisdiction arises when a defendant has "continuous and systematic" general business contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 1873, 80 L.Ed.2d 404, 412 (1984). See also Meyers v. Hamilton Corp., 143 Ariz. 249, 693 P.2d 904 (1985). DeMont also claims the USOC consented to jurisdiction by appointing a statutory agent in this state. Generally, a foreign corporation consents to jurisdiction by appointing a statutory agent as a condition of doing business in the forum state. See Restatement (Second) of Conflict of Laws § 44 cmt. b (1971); Mississippi Publ'g Corp. v. Murphree, 326 U.S. 438, 66 S.Ct. 242, 90 L.Ed. 185 (1946); Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196 (8th Cir. 1990). Finally, DeMont claims Arizona has limited or specific jurisdiction over DeFrantz and, thus, indirectly has jurisdiction over the USOC. Specific jurisdiction exists when a defendant's minimum contacts with the forum state make it reasonable to subject the defendant to that state's jurisdiction. Uberti; Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). Because the record, viewed in the light most favorable to DeMont, establishes a prima facie case of specific jurisdiction over DeFrantz, we decline to address whether it establishes jurisdiction on the other bases DeMont claims.
The USOC conceded in the trial court and at oral argument in this court that, if Arizona has specific jurisdiction over DeFrantz and if the allegations of DeMont's complaint are taken as true, Arizona would also have jurisdiction over the USOC. We will thus refer to DeFrantz and the USOC collectively as DeFrantz.
¶ 5 Arizona may assert specific jurisdiction over a nonresident if it is authorized by a "long-arm" statute or rule and if the assertion of jurisdiction would not deprive the nonresident of due process. See International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Rule 4(e)(2), Ariz.R.Civ.P., 16 A.R.S., authorizes long-arm service on a nonresident who "has caused an event to occur in this state out of which the claim which is the subject of the complaint arose." See Meyers (rule applies to breach of contract action in which claim arises out of contract made in Arizona). Under Rule 4(e)(2), "Arizona will exert personal jurisdiction over a nonresident litigant to the maximum extent allowed by the federal constitution." Uberti, 181 Ariz. at 569, 892 P.2d at 1358. Because "[t]he tort of libel is generally held to occur wherever the offending material is circulated," Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 777, 104 S.Ct. 1473, 1479, 79 L.Ed.2d 790, 799 (1984), Arizona may exercise jurisdiction over DeMont's defamation claim pursuant to Rule 4(e)(2). See Restatement (Second) of Conflict of Laws § 37 cmt. a (forum state has natural interest in effects of act within its territory even though act done elsewhere); W. Page Keeton et al., Prosser and Keeton on The Law of Torts § 111 (5th ed. 1984) (defamation is invasion of interest in reputation and good name in plaintiff's community).
¶ 6 Although Arizona may have jurisdiction over a plaintiff's claim, such as DeMont's, the due process requirements of the Fourteenth Amendment to the United States Constitution must be satisfied before Arizona may exert personal jurisdiction over a nonresident defendant, such as DeFrantz. To satisfy federal due process, the nonresident must have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe, 326 U.S. at 316, 66 S.Ct. at 158, 90 L.Ed. at 102, quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1941). This means "that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, 501 (1980). Whether due process has been satisfied requires an examination of the nonresident's minimum contacts with the forum state and the reasonableness of exercising jurisdiction over the nonresident. Uberti (two factors govern scope of federal due process: (1) foreign defendant's minimum contacts with forum state and (2) reasonableness of exercising jurisdiction over defendant). Accordingly, we examine whether DeMont made a prima facie showing of sufficient minimum contacts for Arizona to exercise personal jurisdiction over DeFrantz.
We need not examine the reasonableness issue because it was not addressed by the trial court, nor have the parties raised it on appeal. To resolve the issue on remand, the trial court should weigh the factors set forth in Uberti, Asahi, and other relevant case law.
¶ 7 A forum state may not exercise jurisdiction over a nonresident "solely as a result of `random,' `fortuitous,' or `attenuated' contacts." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542 (1985); see also Hustler Magazine. The contacts must result from actions of the defendant that create a "substantial connection" with the forum state. McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223, 226 (1957); see also Burger King. "The `substantial connection' between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State." Asahi, 480 U.S. at 112, 107 S.Ct. at 1032, 94 L.Ed.2d at 104 (citations omitted).
¶ 8 The Supreme Court found such purposefully directed action in the libel case of Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). There, actress Shirley Jones brought suit in California, where she lived and worked, against two Florida defendants, a reporter and an editor with the National Enquirer, claiming she had been libeled in an article written and edited by the defendants and then published in that magazine, which had a large circulation in California. The Court agreed with the California Court of Appeal that jurisdiction over the defendants was "proper in California based on the `effects' of their Florida conduct in California." Id. at 789, 104 S.Ct. at 1487, 79 L.Ed.2d at 812. The Supreme Court observed that the article had "impugned the professionalism of an entertainer whose television career was centered in California . . . and the brunt of the harm . . . was suffered in California." Id. at 788-89, 104 S.Ct. at 1486, 79 L.Ed.2d at 812.
¶ 9 The Court also rejected the defendants' argument that they should not be subjected to California's jurisdiction merely because they could "`foresee' that the article [would] be circulated and have an effect in California." Id. at 789, 104 S.Ct. at 1487, 79 L.Ed.2d at 812. The Court found that the defendants' actions were not merely negligent but "intentional" because "they knew [the article] would have a potentially devastating impact upon [Jones and] that the . . . injury would be felt by [her] in the State in which she lives and works." Id. at 789-90, 104 S.Ct. at 1487, 79 L.Ed.2d at 812. "Under the circumstances," said the Court, the defendants "must `reasonably anticipate being haled into court there.'" Id. at 790, 104 S.Ct. at 1487, 79 L.Ed.2d at 812, quoting World-Wide Volkswagen Corp., 444 U.S. at 297, 100 S.Ct. at 567, 62 L.Ed.2d at 501. The Court remarked, "An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California." Id. at 790, 104 S.Ct. at 1487, 79 L.Ed.2d at 812-13.
¶ 10 Whether the conduct in this case satisfies Calder is a close question. DeFrantz testified at her deposition that, when she spoke with the Associated Press reporter in Lausanne after the IOC meeting, she knew that the reporter's stories were "republished not only in Europe but in the United States of America, including [her] home state of California" and that her remarks about DeMont could "[p]ossibly [be] republished in his home state of Arizona." In addition, several months before the IOC meeting, DeFrantz had received a copy of DeMont's request for review that had been submitted to the IOC. The cover page of the request stated: "Rick DeMont, citizen of the United States, domiciled at 6245 North Camino Escalante, Tucson, Arizona 85718." The body of the request further stated: "Rick DeMont never really retired from swimming even after his last international competition in 1981. . . . He is currently 39 years old and has been the assistant swim coach at the University of Arizona for eight years." DeFrantz also received a telephone call from Steven Ungerleider before the IOC meeting urging support for DeMont's case. Ungerleider claimed in his affidavit that he had told DeFrantz that DeMont "had never really fully left competitive swimming, that he was a swimming coach at the University of Arizona in Tucson, and that he had coached a number of world class and Olympic athletes there."
¶ 11 Assuming the above is true, MacPherson, one may fairly infer that DeFrantz knew, at the time she made her allegedly defamatory statements to the Associated Press reporter, that her statements would adversely affect DeMont's reputation and that the injury would be felt in Arizona, where DeMont lived and worked. Calder. As a result, DeFrantz could reasonably expect to answer for her statements in Arizona.
¶ 12 Although this case, as noted above, presents a close question of in personam jurisdiction, we find more persuasive the defamation cases DeMont cites than those DeFrantz cites. DeMont's cases both cite and discuss Calder in resolving the jurisdictional issue, whereas DeFrantz's cases generally do not, except for Wilson v. Belin, 20 F.3d 644 (5th Cir. 1994), which found Calder inapposite because, inter alia, the plaintiff was not a resident of the forum state and his career was not centered there. We find Hugel v. McNell, 886 F.2d 1 (1st Cir. 1989), particularly persuasive because the court rejected a claim similar to DeFrantz's that the forum state lacks personal jurisdiction when the newspaper determines where the effects of the libelous statements will be felt. The [nonresident defendants] urge that the intervening actions of the Washington Post and its employees . . . determined where their tortious acts were directed and where the brunt of the injury would be felt. But the intervening actions of the reporters and editors of the Washington Post are irrelevant to the question of whether [the forum state] can exert personal jurisdiction over the [defendants] . . . [if they] knew that the brunt of the devastating blow caused by release of the allegedly libelous material would be felt in the State where [the plaintiff] resides and has an established reputation as a businessman and public servant.
Gordy v. Daily News, L.P., 95 F.3d 829 (9th Cir. 1996) (citing Calder, court found specific jurisdiction based on tortious effect of alleged libel in plaintiff's home state); Hugel v. McNell, 886 F.2d 1 (1st Cir. 1989) (relying on Calder, specific jurisdiction found when plaintiff alleged nonresident defendant knew brunt of libel would be felt by plaintiff in forum state); Brainerd v. Governors of the Univ. of Alberta, 873 F.2d 1257 (9th Cir. 1989) (based on Calder, nonresident defendant knew injury and harm from communications would occur in forum state where plaintiff lived and worked).
Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201 (1st Cir. 1994) (Calder cited but discussed only briefly on nondispositive First Amendment issue); Wilson v. Belin, 20 F.3d 644 (5th Cir. 1994) (dispositive facts in Calder absent); Madara v. Hall, 916 F.2d 1510 (11th Cir. 1990) (post-Calder decision but case not cited); McBreen v. Beech Aircraft Corp., 543 F.2d 26 (7th Cir. 1976) (pre-Calder decision); Mann v. Tom James Co., 802 F. Supp. 1293 (E.D. Pa. 1992) (post-Calder decision but case not cited).
Id. at 5. We agree; neither the absence of DeFrantz's direct involvement in publishing the allegedly defamatory statements nor her status as a journalistic source necessarily precludes this state from exercising personal jurisdiction over her. See Blue Ridge Bank v. Veribanc, Inc., 755 F.2d 371 (4th Cir. 1985) (citing Calder, court held Virginia could exercise personal jurisdiction over Massachusetts corporation that knew libelous material it had provided to syndicated New York columnist about Virginia corporation could appear in Virginia newspaper); Cole v. Doe, 258 N.W.2d 165 (Mich.App. 1977) (sufficient minimum contacts for Michigan to exercise personal jurisdiction over defendant who knew libelous statements made to national columnist in California about Michigan plaintiff would be republished in Michigan).
¶ 13 The two cases amici curiae cite, which DeFrantz did not cite, do not alter our conclusion. In Berrett v. Life Insurance Co. of the Southwest, 623 F. Supp. 946 (D. Utah 1985), the court found, contrary to the amici curiae's assertion, that the forum state did, in fact, have personal jurisdiction over the nonresident defendants. Relying on Calder and Burt v. Board of Regents of the University of Nebraska, 757 F.2d 242 (10th Cir. 1985), the court held that sufficient minimum contacts resulted from the defendants' telephone calls into the forum state in which they had made false representations about the plaintiffs and encouraged their policyholders to discontinue doing business with them. In Underwager v. Channel 9 Australia, 69 F.3d 361 (9th Cir. 1995), the court neither cited nor discussed Calder but, understandably, held that the forum state lacked personal jurisdiction over the defendants who, the plaintiff conceded, did not know that a third party would republish an allegedly defamatory portion of a 60 Minutes television program almost two years after it was originally broadcast.
¶ 14 We therefore conclude that, if DeFrantz knew her statements to the Associated Press reporter would injure DeMont and knew he would feel the effects of that injury in Arizona, this state may properly exercise jurisdiction over DeFrantz because she "knowingly cause[d] the injury in [Arizona]." Calder, 465 U.S. at 790, 104 S.Ct. at 1487, 79 L.Ed.2d at 813. See also Pegler v. Sullivan, 6 Ariz. App. 338, 342, 432 P.2d 593, 597 (1967) (Arizona had personal jurisdiction over New York defendants who broadcast stage play on national television because their actions were "purposeful, reasonably foreseeable and calculated to have effect in Arizona," where plaintiffs resided). Inasmuch as DeMont presented prima facie evidence of personal jurisdiction warranting further proceedings, the trial court erred in granting the motion to dismiss at this stage of the case. Uberti. The record does not rule out DeFrantz's having "purposefully established `minimum contacts' in the forum State," the "constitutional touchstone" for personal jurisdiction. Burger King, 471 U.S. at 474, 105 S.Ct. at 2183, 85 L.Ed.2d at 542.
Although not defamation cases, we also find compelling the analysis and application of Calder in Panavision International, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) (defendant knew his conduct would likely have effect of injuring plaintiff corporation in forum state where it had its principal place of business), and in Sinatra v. National Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988) (Calder modified "purposeful availment rubric" by allowing personal jurisdiction over nonresident whose only contact with forum state is purposeful direction of foreign act with effect in forum state).
¶ 15 Nevertheless, the evidence is in conflict whether DeFrantz knew DeMont lived in Tucson when she made her statements in Lausanne. At her deposition, DeFrantz stated she "had no idea where Rick DeMont was until the [l]awsuit appeared" and was not "consciously aware of where his residence happened to have been." Accordingly, we remand the case for the trier of fact to resolve this disputed jurisdictional issue, which is intertwined with the merits of the defamation claim. See Bonner v. Minico, Inc., 159 Ariz. 246, 766 P.2d 598 (1988). DeMont has the burden of establishing jurisdiction, Swichtenberg v. Brimer, 171 Ariz. 77, 828 P.2d 1218 (App. 1992), and must do so by a preponderance of evidence. Sinatra v. National Enquirer, Inc., 854 F.2d 1191 (9th Cir. 1988).
¶ 16 We therefore reverse the trial court's granting of the motion to dismiss and remand the case for further proceedings consistent with this opinion.
__________________________ WILLIAM E. DRUKE, Judge
CONCURRING:
________________________________ JOHN PELANDER, Presiding Judge
____________________________ M. JAN FLÓREZ, Judge