Opinion
6:11-cv-06416-TC
04-30-2012
MARK STEVEN CORRINET, Plaintiff, v. RUSTY BURKE, PAUL HERMAN, BILL CAVALIER, PATRICE LOUINET, FREDRIK MALMBERG, ROB ROEHM and GLENN LORD, as individuals and the ROBERT E. HOWARD FOUNDATION INC., as a Texas corporation and DOES 1-25 inclusive, Defendant.
ORDER AND FINDINGS AND RECOMMENDATION :
Background
Plaintiff, Mark Steven Corrinet, brings this action seeking monetary damages and injunctive relief for claims of libel, defamation, and negligence. Plaintiff claims damages in the amount of $1,140,000 and injunctive relief in the form of a formal letter of apology to be published along with a retraction of an article that is alleged to have contained false statements about plaintiff and his property. The article was published in a foundation newsletter that is distributed by mail to a select group of donors on a quarterly basis. Defendants filed a Motion to Dismiss plaintiff's complaint for lack of personal jurisdiction. Plaintiff replied asking the court to either transfer the case to another District Court, for the District of Southern California or for the District of Columbia (D.C.), under 28 U.S.C. § 1404(a) or to dismiss without prejudice.
PERSONAL JURISDICTION
Legal Standard
Where defendant moves to dismiss a complaint for lack of personal jurisdiction, plaintiff has the burden of establishing that jurisdiction is proper. Farmers Ins. Exchange v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 912 (9th Cir. 1990). Although plaintiff cannot "simply rest on the bare allegations of his complaint," uncontroverted allegations in the complaint must be taken as true. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (quoting Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)). Factual disputes are resolved in the plaintiff's favor. Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006).
Where no federal statute governing personal jurisdiction applies, this court applies the law of the state in which it sits. Schwarzenegger, 374 F.3d at 800. Oregon Rules of Civil Procedure, Rule 4 L extends jurisdiction to the outer reaches of federal due process under the Fourteenth Amendment. State, ex rel. Hydraulic Servocontrols Corp. v. Dale, 294 Or. 381, 384 (1982). When the long-arm jurisdictional statute is coextensive with the requirements of federal due process, the principles of due process in a jurisdictional analysis are the same under state and federal law. Chan v. Society Expeditions, Inc., 39 F.3d 1398, 1405 (9th Cir. 1994). The due process clause requires defendants must have "certain minimum contacts" with the relevant forum such that exercise of jurisdiction "does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations and citations omitted).
Discussion
Defendants move to dismiss plaintiff's complaint for lack of personal jurisdiction. In his complaint, plaintiff alleges that defendants are liable for damages resulting from an article published by defendants. Specifically, plaintiff alleges that all defendants committed libel against plaintiff in publishing the article, that defendants Burke and Herman defamed plaintiff by presenting him in a false light, and that defendants Cavalier, Louinet, Malmberg, Roehm, Lord, and the Robert E. Howard Foundation (the Foundation) were negligent in allowing the article to be published.
The claims arise out of an article published in the Foundation Newsletter, Winter 2010 edition, entitled, "Hunting for Deer but Finding Bigfoot." This article was authored by defendant Paul Herman who is also the treasurer and a board member of the Foundation. On page 20 of the article, which describes a trip Herman made to obtain certain items previously owned by Robert E. Howard, it states "but that guy in California has the real one, right? I discussed with her some of the research carried out... and that it is our opinion that the California typewriter is almost certainly not REH's." (emphasis in original) Plaintiff claims that he is "that guy in California" and that a typewriter he owns is the "California typewriter." Plaintiff alleges that of two typewriters owned by Robert E. Howard, one was presumed lost immediately following the death of Robert E. Howard and that the other is in his possession. Plaintiff's typewriter was allegedly authenticated by the Federal Bureau of Investigation labs in 1993.
Plaintiff states that there are sufficient minimum contacts between Oregon and defendants because the effects of the alleged conduct were felt in Oregon including damage to plaintiff's reputation and the value of the typewriter. Plaintiff alleges that these were foreseeable effects of the allegedly libelous article.
Defendants argue that none of the defendants had the requisite minimum contacts with Oregon sufficient to establish general or specific personal jurisdiction and that the alleged harm was not aimed at Oregon since the newsletter was not published to a third party in Oregon. To provide context, an explanation is needed of the scope of publishing of the Foundation's newsletter. There are three different levels of Foundation membership depending on financial contribution- Supporting member, Friend of Robert E. Howard, and Legacy Circle. The Friend and Legacy level members receive a copy of the Foundation's quarterly newsletter which is only distributed to these members and is not available to the public, electronically or otherwise. A declaration by defendant Rusty Burke, President and Board Member of the Foundation, indicates that plaintiff was the only Legacy member in Oregon and the only recipient of the newsletter in Oregon for all of 2010 and 2011. (#9 Declaration of Rusty Burke, page 3). In addition, defendant correctly points out that the article does not mention plaintiff nor make any reference to Oregon.
Defendant Robert E. Howard Foundation is a 501(c)(3) non-profit corporation registered in the state of Texas. Id. at 2. The Foundation maintains its corporate office, books, and records in Texas. Id. The Foundation has no offices, telephone listings, mailing addresses, bank account or real property in Oregon and no officer or director of the Foundation resides in Oregon. Id. The Foundation is not registered in Oregon as a foreign domestic corporation nor has it appointed any agent to accept service of process in Oregon. Id. at 3. Defendants Herman, Burke, Cavalier, Louinet, Malmberg, and Roehm have served on the Board of Directors for the Foundation during the relevant time frame, January 2, 2010 to the present. Memorandum in Support of Defendants' Motion to Dismiss, page 2. These defendants have never lived in Oregon and do not own real property in Oregon. Id. at 2-3. At most, a few have occasionally visited Oregon. Id. at 3.
Plaintiff does not contend and it is clear that defendants did not have substantial or "continuous and systematic contacts" with Oregon such that exercise of general jurisdiction would be proper. A defendant's contacts with the forum must be continuous and systematic to be subjected to general jurisdiction, if not, the forum may assert specific personal jurisdiction for a cause of action arising out of the defendants forum-related activities, determined by a three-part test. Reebok Intern. Ltd. v. McLaughlin, 49 F.3d 1387, 1391 (9th Cir. 1995), cert. denied, 516 U.S. 908, 116 S.Ct. 276 (1995). Therefore, the issue before this court is whether specific personal jurisdiction can be asserted over defendants based on the activities underlying this cause of action. The three-part test in determining whether specific jurisdiction exists over defendant is:
(1) The nonresident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; 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 relates to the defendant's forum-related activities; andId. The burden is on the plaintiff to satisfy the first two parts of the test. Schwarzenegger, 374 F.3d at 802 (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). If the plaintiff fails, personal jurisdiction is not established in the forum state. Id. If the plaintiff succeeds, the burden shifts to the defendant to "present a compelling case" that the exercise of jurisdiction would not be reasonable. Schwarzenegger, 374 F.3d at 802 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174, 2184-5 (1985)). For the reasons that follow, I find that plaintiff has failed to satisfy the first prong of the test in establishing personal jurisdiction.
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
Under the first prong, plaintiff must establish that defendants either purposefully availed themselves to the privilege of conducting activities in Oregon or purposefully directed their activities toward Oregon. Schwarzenegger, 374 F.3d at 802. A purposeful direction analysis is used most often in cases involving allegations of tortious conduct . Id. Purposeful direction is analyzed under the three-part effects test established in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482 (1984). The Calder effects test requires that the defendant allegedly have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state. Schwarzenegger, 374 F.3d at 803. Due process permits the exercise of personal jurisdiction over a defendant who "purposefully directs" his activities at residents of a forum, even in the "absence of physical contacts" with the forum. Burger King, 471 U.S. at 476, 105 S.Ct. at 2184 (citing Keeton v. Hustler Magazine, 465 U.S. 770 at 774-75, 104 S.Ct. 1473, 1481 (1984)). However, "Calder cannot stand for the broad proposition that a foreign act with foreseeable effects in the forum state always gives rise to specific jurisdiction." Bancroft & Masters, Inc. V. Augusta National, Inc., 223 F.3d 1082, 1087 (9th Cir. 2002). There must be "express aiming" at the forum state. Id.
Though plaintiff has chosen not to burden this court with lengthy arguments and does not rely on any case law to support his assertion that jurisdiction exists in Oregon, I find that Calder provides a notable contrast regarding a libel action to the facts of the libel action in this case. In Calder, the Supreme Court upheld a lower court decision finding jurisdiction over nonresident defendants in a libel action where effects of the defendants' conduct were felt in the forum state. Calder, 465 U.S. at 783-4, 104 S.Ct. at 1482. The Supreme Court based this decision on the "theory that [defendants] intended to, and did, cause tortious injury to [the plaintiff]" in the forum state. Id. at 787, 104 S.Ct. at 1485, The Court noted the scope and degree of the conduct that supported its findings, specifically the size and circulation of the libelous material in the forum state. Id. at 789-90, 104 S.Ct. at 1486-87.
Because all of plaintiff's causes of action derive from the alleged libelous sentence in the Foundation's quarterly newsletter, the analysis, so far as the effects of defendants' conduct goes, is based on case law regarding jurisdiction in the libel context. --------
There are notable differences in the present instance. Plaintiff does not allege that the newsletter was circulated in Oregon to anyone but himself. The only "effect" in Oregon is the possibility that the reputation of plaintiff was allegedly diminished in other jurisdictions. Notably, the newsletter did not refer to plaintiff by name or to Oregon, but rather to a "man in California." There is no indication that defendants intended to cause any injury to plaintiff in the forum state nor is it clear that they did cause any injury. Unlike Calder, defendants have not established contact with this forum by dispatching libelous material they knew would be widely circulated here. Defendants did not direct activity toward the forum as they did not refer to plaintiff or Oregon in the article and the sole person in Oregon to receive the newsletter was plaintiff himself.
In Cas. Assur. Risk Ins. Brokerage Co. v. Dillon, 976 F.2d 596 (9th Cir. 1992), plaintiff argued that "effects" of libel are felt by plaintiff and therefore jurisdiction exists wherever plaintiff resides. 976 F.2d at 601. The Court found this argument unconvincing as plaintiff relied solely on case law holding "jurisdiction proper where the plaintiff resides and the defamatory material is published or circulated." Id. (emphasis in original). The Court declined to extend the effects theory under Calder to "encompass any jurisdiction where the plaintiff is present, regardless of whether any defamation was circulated in that jurisdiction." Id. Purposeful availment or direction is more appropriately linked to the effect of the tort being directed toward the forum state rather than the effect of the tort being felt in the forum state. Id.
As defendants noted to the court in their memorandum in support of their Motion to Dismiss, this case is similar to that in Cas. Assur. Risk Ins. Brokerage Co. The Foundation newsletter was not published in Oregon. The newsletter was not circulated in Oregon. The only contact the allegedly defamatory material had with Oregon was with plaintiff himself. The allegedly defamatory material does not name plaintiff or Oregon and therefore defendants did not unleash libel, the effects of which, they knew would be felt in Oregon. Nothing regarding the publication of the article occurred in Oregon. The newsletter is assembled and formatted in California. (#14 Declaration of Rob Roehm, page 2). It is printed and mailed from Indiana. (#11 Declaration of Bill Cavalier, page 2). The article in question was written in Texas. (#10 Declaration of Paul Herman, page 2). None of these facts support the assertion that defendants were directing the allegedly libelous statements toward the forum state. Because the allegedly defamatory material was not circulated in the forum, defendants could not reasonably anticipate being haled into court there, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567 (1980).
When analyzing defendants' activities under Calder effects test, it is clear that defendants did not purposefully direct activities toward Oregon that they thought would cause harm in the forum. The only intentional acts were the writing of the newsletter article and the publishing of that article. Even though writing the sentences in the article and publishing the newsletter are considered intentional acts, the sentences specified in plaintiff's complaint as the allegedly libelous material refer to California, not Oregon, and do not reference plaintiff by name. This deviates from the standards required under Calder that the act be "expressly aimed at the forum state." In addition, plaintiff's libel and accompanying defamation and negligence claims do not arise out of defendants' contacts with the forum because the newsletter at the heart of this matter was never circulated in Oregon or sent to anyone in Oregon. Because the newsletter is not circulated in Oregon, there was no harm caused in the forum state, let alone a harm that defendants knew would likely be suffered in the forum state.
Plaintiff does not meet the first prong of the specific personal jurisdiction test by showing that the defendants purposefully directed any activities at this forum. The writing and publishing of the article in question does not show effects sufficient to pass the Calder effects test. Therefore, I find that this Court has no jurisdiction over defendants. Furthermore, it is not clear whether plaintiff disputes that personal jurisdiction is inappropriate and instead, plaintiff asks for a venue transfer or dismissal without prejudice.
VENUE TRANSFER
Legal Standard
In his response to defendant's motion, plaintiff asks for a transfer of venue under 28 U.S.C. § 1404(a) where "for the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought" or, in the alternative, to dismiss without prejudice. I construe plaintiff's response as a motion to transfer venue under 28 U.S.C. § 1404(a).
A motion to transfer venue should be granted upon a showing that the transferee venue is "clearly more convenient" than the venue chosen by the plaintiff." In re Genentech, Inc., 566 F.3d 1338, 1342 (Fed. Cir. 2009)(citing World-Wide Volkswagon, 444 U.S. at 297; see also, Sparling v. Hoffman Constr. Co., 864 F.2d 635, 639 (9th Cir. 1988)(recognizing that district courts have broad discretion to transfer a case to another venue).
This circuit applies the "public" and "private" factors when considering a § 1404(a) motion to transfer venue. The public factors include: (1) administrative difficulties flowing from court congestion; (2) imposition of jury duty on people of a community that has no relation to the controversy; (3) local interest in having localized controversies decided at home; (4) the interest in having a diversity case tried in a forum familiar with the law that governs the action; and (5) the avoidance of unnecessary problems in conflicts of law. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). The private factors are: (1) relative ease of access to sources of proof; (2) the availability of compulsory process for attendance of unwilling witnesses, and cost of obtaining willing witnesses; (3) possibility of viewing subject premises; and (4) all other factors that render trial of a case expeditious and inexpensive. Id. When considering a motion to transfer venue, the court must balance the preference accorded the plaintiff's choice of forum with the burden of litigating in an inconvenient forum. Id. The burden is on the party moving to transfer venue to establish that a transfer will allow a case to proceed more conveniently and better serve the interests of justice. Commodity Futures Trading Comm. v. Savage, 611 F.2d 270, 279 (9th Cir. 1979).
Finally, I note that because a motion to transfer venue does not address the merits of the case but merely changes the forum of an action, it is a non-dispositive matter that is within the province of a magistrate judge's authority. Holmes v. TV-3, Inc., 141 F.R.D. 697, 697 W.D. La. 1991) (stating that "[s]ince a Motion to Transfer Venue is not one of the motions excepted in 28 U.S.C. § 636(b)(1)(A), nor is it dispositive of any claim on the merits within the meaning of Rule 72 of the Federal Rules of Civil Procedure, this ruling is issued under the authority thereof, and in accordance with the standing order of this Court."); see also, Paoa v. Marati, et.al., 2007 WL 4563938 (D. Haw., December 28, 2007)(noting that transfer of venue is a non-dispositive matter and the standard of review for the magistrate's findings is clear error).
Discussion
Defendants argue that plaintiff's motion to transfer should be denied because the court lacks personal jurisdiction and therefore, a transfer under 28 U.S.C. § 1404 would be improper and a request to transfer is moot. However, personal jurisdiction is irrelevant to the Court's ability to transfer.
Defendants propose that a transfer for the convenience of the parties is not proper when there is no personal jurisdiction. To support this argument, they cite to Gulf Oil v. Gilbert, 330 U.S. 501 (1947) noting this case was superceded by 28 U.S.C. § 1404. In addition, defendants look to the doctrine of forum non conveniens, as it is explained in Martin v. Stokes, 623 F.2d 469 (6th Cir. 1980) which states that the doctrine presumes the existence of two permissible forums. Defendants use this explanation to argue that a transfer is not proper under § 1404 unless forum is established in the transferring state, and that because this court does not have personal jurisdiction, a transfer of venue is improper. However, there is a noted absence of recent case law in defendant's argument addressing transfers of venue under 28 U.S.C. §§ 1404 and 1406 and their reasoning using forum non conveniens and Martin is incorrect.
Defendants use the terms "forum" and "venue" interchangeably in their explanation of why transfer under § 1404 is not proper. Permissible or proper forum analysis is a separate issue from either venue or personal jurisdiction. Having a permissible forum does not establish personal jurisdiction but rather establishes subject matter jurisdiction by the court. The appropriate forum for this case is federal court based on diversity jurisdiction and amount in controversy. Therefore, transfer from one federal court to another is proper under 28 U.S.C. § 1404 as both are the appropriate forum. With forum established, we can look to see whether venue is proper in the district the action was brought. Separately, the court must establish personal jurisdiction over defendants based on the analysis discussed previously.
The Supreme Court explained these principles in Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913 (1962). In Goldlawr, plaintiff filed suit in District Court for the Eastern District of Pennsylvania. Id. at 464. On a motion to dismiss for improper venue and lack of personal jurisdiction, the Pennsylvania District Court found that venue was improper and transferred the case to the Southern District of New York where venue was proper and personal jurisdiction could be established over defendants. Id. Defendants moved to have the case dismissed on the ground that the Pennsylvania District Court had not had personal jurisdiction over them, and without such jurisdiction, it had not had power to transfer under § 1406. Id. The New York District Court granted the motion to dismiss on these grounds and the Court of Appeals affirmed. Id. at 465. The Supreme Court granted certiorari and held that "the language of § 1406 is amply broad enough to authorize the transfer of cases, however wrong the plaintiff may have been in filing his case as to venue, whether the court in which it was filed had personal jurisdiction over the defendants or not." Id. at 466.
Though Goldlawr speaks specifically to transfers under § 1406, district courts have extended the rationale to transfers under § 1404. Two years following the decision in Goldlawr, the Third Circuit held that a transfer from the Eastern District of Pennsylvania to the Eastern District of New York under § 1404 was allowed even though the transferring court did not have personal jurisdiction over defendants. U.S. v. Berkowitz, 328 F.2d 358, 359 (3rd Cir. 1964). Berkowitz explained that Goldlawr conclusively settled this issue and though Goldlawr involved interpretation of § 1406(a), "nevertheless, we think that its rationale applies equally to § 1404(a), for these are companion sections, remedial in nature, enacted at the same time, and both dealing with the expeditious transfer of an action from one district or division to another." Id. at 361. Though this district has not specifically addressed this issue, many districts have applied this rationale and concluded that a district court may transfer under § 1404 (a) regardless of whether personal jurisdiction is established. See Kawamoto v. CB Richard Ellis, Inc., 225 F.Supp. 2d 1209 (D. Haw. 2002); Reed v. Brown, 623 F.Supp. 342 (D. Nev. 1985); McMichael v. Small, 2005 WL 1111211 (W.D. Wash. 2005).
Though this Court may transfer under § 1404 (a), a transfer of venue cannot be granted based on the facts as alleged by plaintiff. The moving party bears the burden of showing that transfer will allow a case to proceed more conveniently and better serve the interests of justice. Commodity Futures Trading Comm. v. Savage, 611 F.2d 270, 279 (9th Cir. 1979). Beyond consideration of the factors in determining whether transfer of venue is appropriate, the conclusory statements by plaintiff aren't enough to establish that venue is appropriate in either the Southern District of California or the District of Columbia under 28 U.S.C. § 1391.
Under 28 U.S.C. § 1391(b), venue is appropriate in (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.
Plaintiff has not alleged facts to show that venue is appropriate in Washington, D.C. or Southern California. In his response to defendant's motion, plaintiff requests a transfer to Washington, D.C., stating that one of the defendants lives there, that witnesses are located there, that it is a more convenient for the defendant who resides in France, and that the Foundation newsletter containing the allegedly defamatory statement was created and edited there. Plaintiff's Reply p. 2-3. In the alternative, plaintiff requests a transfer of this case to the Southern District of California on the basis that two of the defendants reside there and that the Foundation newsletter is assembled and printed there. Id. p. 3.
Venue in Washington, D.C. and Southern California under § 1391(b)(1) is inappropriate because not all of the defendants are residents of either state where these districts are located. Arguably, jurisdiction would be proper under § 1391(b)(2) if plaintiff could show that one of these districts was where a substantial part of the events or omissions giving rise to these claims occurred. Plaintiff asserts that the newsletter containing the alleged defamatory statement was created and edited in Washington, D.C. and assembled and printed in Southern California. Based on the limited information before me, it is difficult to discern where the events giving rise to these claims substantially occurred. The only contact with Washington, D.C. is that defendant Burke lives there. (#9 Declaration of Rusty Burke, page 1). The newsletter is assembled and formatted in Lancaster, California. (#14 Declaration of Rob Roehm, pages 1-2). The newsletter is printed and mailed in Michigan City, Indiana, (#11 Declaration of Bill Cavalier, pages 8-9). Perhaps most importantly, the article in the newsletter containing the alleged defamatory statement was penned in Texas by a Texas resident, (#10 Declaration of Paul Herman, page 1-2). Based on these bare facts, it seems that no part of the events giving rise to these claims occurred in Washington, D.C. and that there was minimal contact with Southern California solely for the purposes of formatting and assembling the newsletter. Based on the pleadings filed by plaintiff, I cannot determine whether venue is appropriate in Washington, D.C. or Southern California. Therefore, it is unnecessary to consider the factors relevant for determination of a § 1404 transfer to one of these jurisdictions.
CONCLUSION
Order
There are insufficient facts plead to determine appropriate venue and therefore I deny plaintiff's request to transfer venue which he raised in his response to defendant's motion (#24).
Findings and Recommendations
Based on the information before me, I find that plaintiff failed to establish that this court has personal jurisdiction over defendants for the actions underlying his complaint. Thus, I recommend that this court grant the Motion to Dismiss (#7) for lack of personal jurisdiction without prejudice to refile the complaint in the appropriate venue. The above Findings and Recommendation will be referred to a United States District Judge for review. Objections, if any, are due no later than fourteen days after the date this order is filed. The parties are advised that the failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). If no objections are filed, review of the Findings and Recommendation will go under advisement on that date. If objections are filed, any party may file a response within fourteen days after the date the objections are filed. Review of the Findings and Recommendation will go under advisement when the response is due or filed, whichever date is earlier.
DATED this 30th day of April 2012.
/s/_________
THOMAS M. COFFIN
United States Magistrate Judge