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Gordy v. Daily News

filed: September 9, 1996.

BERRY GORDY, PLAINTIFF-APPELLANT,
v.
THE DAILY NEWS, L.P.; GEORGE RUSH; TONY TURNER, DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Central District of California. D.C. No. CV-94-03603-RSWL (GK). Ronald S.W. Lew, District Judge, Presiding. Original Opinion Previously Reported at:,.

Before: William C. Canby, Jr., Robert Boochever and Edward Leavy, Circuit Judges. Opinion by Judge Canby.

Author: Canby

CANBY, Circuit Judge:

We are presented with the recurring question of where a newspaper and its writer can be sued for the alleged publication of a libel. Berry Gordy, a resident of California and the founder of Motown Records, brought a defamation action in California against The New York Daily News and columnist George Rush for a column published about Gordy in the Daily News.*fn1 The Daily News and Rush removed the action from Los Angeles Superior Court to federal district court, which dismissed the action for lack of personal jurisdiction over the defendants. We reverse.

I. Background

The jurisdictional facts in this case are undisputed. Gordy is founder and former president of Motown Records. He has lived in California for twenty-four years and most of his friends, family, and business associates reside in California.

The Daily News, which published the allegedly defamatory statements about Gordy, is a newspaper based in New York. More than 99% of the circulation of the Daily News occurs within 300 miles of the New York metropolitan area. The Daily News does not contract with or employ distributors, or solicit subscriptions, in California. Nevertheless, a small but regular circulation of the Daily News reaches California. The Daily News circulates 13 copies of its daily edition and 18 copies of its Sunday edition to subscribers in California. This California circulation of the Daily News is approximately 0.0017% of the paper's total circulation.

Although the Daily News primarily covers events that occur in New York, the features and columns in the Daily News deal with subject matter that is of nationwide interest, such as entertainment news. Because of its considerable emphasis on the entertainment industry, the Daily News frequently sends reporters to California. The paper also gathers news from stringers,*fn2 anonymous sources, and news services in California.

Rush, a newspaper columnist, is a citizen, resident, and domiciliary of New York. He researched and wrote the article in question in New York. Before publication of the article, Rush authorized his associate, Michael Riedel, to telephone Gordy in California to obtain his response. Riedel purportedly also made telephone calls to two other persons in California while researching the story, to confirm it; the sources were guaranteed confidentiality. Riedel has many California sources in addition to the two he contacted regarding the Gordy article.

The events reported in the allegedly defamatory article did not take place in California, nor did the article mention California.

II. Specific Jurisdiction

California's long-arm statute extends jurisdiction to the limits imposed by the Due Process Clause. See Cal. Civ. Proc. Code § 410.10; Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). "Because the jurisdictional facts are undisputed in this case, the constitutional limits on personal jurisdiction are reviewed de novo." Casualty Assurance Risk Ins. Brokerage Co. v. Dillon, 976 F.2d 596, 599 (9th Cir. 1992). Due process requires that the defendants have certain "minimum contacts with [the forum]." International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945).

In this appeal Gordy does not argue that the Daily News or Rush has sufficient contacts with California to subject either one to general jurisdiction there, regardless of the subject of the lawsuit. He contends instead that they had sufficient contacts related to his defamation claim to confer specific jurisdiction over them for the purpose of that claim. In determining whether a non-resident defendant may be subjected to specific jurisdiction, we have long iterated three requirements:

(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws. (2) The claim must be one which arises out of or results from the defendant's forum-related activities. (3) Exercise of jurisdiction must be reasonable.

Data Disc, Inc. v. Systems Technology Assocs., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977); see also Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (repeating formulation).

A. Contact With the Forum

The first requirement undergoes a certain amount of distortion when jurisdiction is based on an intentional act committed outside the forum that has intended effects within the forum. It is difficult to see how such a foreign actor "invokes the benefits and protections of [the forum's] laws." Data Disc, 557 F.2d at 1287. Yet we have recognized that a foreign act with forum effects can confer jurisdiction over a defendant who has never physically entered the forum. Haisten v. Grass Valley Medical Reimbursement Fund, Ltd., 784 F.2d 1392, 1399 (9th Cir. 1986). We have also recognized that this concept is an expansive one, to be applied with caution, especially in an international context. See Pacific Atl. Trading Co. v. M/V Main Express, 758 F.2d 1325, 1330 (9th Cir. 1985). The touchstone is whether 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. ...


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