688 F.2d 328 (5th Cir. 1982), 81-4451, Brown v. Flowers Industries, Inc.

Docket Nº:81-4451.
Citation:688 F.2d 328
Party Name:Pete Harding BROWN and Mott's Inc. of Mississippi, Plaintiffs-Appellants, v. FLOWERS INDUSTRIES, INC., A Delaware Corporation, Jerry Kralis, and Kralis Brothers Foods, Inc., An Indiana Corporation, Defendants-Appellees.
Case Date:September 22, 1982
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 328

688 F.2d 328 (5th Cir. 1982)

Pete Harding BROWN and Mott's Inc. of Mississippi,

Plaintiffs-Appellants,

v.

FLOWERS INDUSTRIES, INC., A Delaware Corporation, Jerry

Kralis, and Kralis Brothers Foods, Inc., An

Indiana Corporation, Defendants-Appellees.

No. 81-4451.

United States Court of Appeals, Fifth Circuit

September 22, 1982

Page 329

[Copyrighted Material Omitted]

Page 330

Cliff Finch, Batesville, Miss., William Clement Walker, Jr., University, Miss., for plaintiffs-appellants.

Jackson H. Ables, III, Jackson, Miss., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Mississippi.

Before BROWN, RUBIN and REAVLEY, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

This suit was dismissed by the district court for want of jurisdiction on the basis that due process would be denied by assuming jurisdiction over a nonresident defendant whose sole contact with the forum state was the making of a single defamatory telephone call to a person in that state. Concluding that, under the facts presented, due process permits invocation of jurisdiction over a nonresident who commits in whole or in part a single tort in a state, we reverse.

I

Seeking the benefit of diversity jurisdiction, 28 U.S.C. § 1332 (1976), which permits a resident of the forum state to resort to federal court to assert a claim against a nonresident for relief that a state court could afford, 1 Pete Harding Brown, a Mississippi resident, and Mott's Inc. of Mississippi, a Mississippi corporation with its principal place of business in Mississippi, sued Flowers Industries, Inc. ("Flowers"), a Delaware corporation with its principal place of business in Georgia; Kralis Brothers Foods, Inc. ("Kralis Brothers"), an Indiana corporation with its principal place of business in Indiana; and Jerry Kralis ("Kralis"), an Indiana resident and president of Kralis Brothers. None of the defendants is qualified to do business in Mississippi.

The plaintiffs alleged that the defendants conspired to and did cause them economic and other injuries, and, although relying on diversity jurisdiction, that the defendants also violated the Sherman Antitrust Act, 15 U.S.C. §§ 1-7, and the Robinson-Patman Act, 15 U.S.C. §§ 13-13b, 21a. This was accomplished, they contend, in October 1979 when Kralis made a defamatory telephone call from Indiana to the United States Attorney in Oxford, Mississippi. The plaintiffs

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allege that the conspiracy and telephone call caused them to lose the chance to obtain a $4 million loan from the Farmers Home Administration.

Service of process was made under the Mississippi long-arm statute, Miss. Code Ann. § 13-3-57 (Cum. Supp. 1981). 2 The defendants moved to dismiss the action for lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). This motion was granted by the district court based on its findings that (1) Flowers had "no contacts at all with Mississippi"; (2) Kralis Brothers had neither purchased nor sold products in Mississippi, and had no employees or agents there; and (3) Kralis had no contacts with Mississippi other than the October 1979 telephone call he made to the United States Attorney in Mississippi and a two-day visit to the state more than twelve years ago. The district court reasoned: "We assume, without deciding, that the telephone call placed by Jerome Kralis from his office in Mentone, Indiana, to the Office of the United States Attorney in Oxford, Mississippi, was sufficient to come within the ambit of § 13-3-57, ... and authorize service of process upon (Kralis) and perhaps (Kralis Brothers) based upon commission of a tort in whole or in part in Mississippi .... (T)he court is unable to conclude that this single contact with Mississippi is sufficient to subject defendants to in personam jurisdiction there." The defendants admit that Kralis made the telephone call although they dispute the plaintiffs' contention that the message was defamatory. They also admit he was acting as an officer of Kralis Brothers but they deny he was an agent or employee of Flowers. They submitted affidavits, not adequately countered, saying that, although Flowers is a holding company that owns stock in Kralis Brothers, Kralis is neither an officer nor an employee of Flowers and was not acting as an agent of Flowers when he made the telephone call.

II

In a diversity action a federal court enjoys jurisdiction over a nonresident defendant to the extent permitted by the long-arm statute of the forum state. Quasha v. Shale Dev. Corp., 667 F.2d 483, 485-86 (5th Cir. 1982); Moore v. Lindsey, 662 F.2d 354, 357-58 (5th Cir. 1981); Fed. R. Civ. P. 4(d)(7), (e); 4 C. Wright & A. Miller, Federal Practice and Procedure § 1115, at 470 (1969). Two tests must be met before a state statute can confer jurisdiction over a

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nonresident defendant. First, the defendant must be amenable to service under the statute, 3 a requirement that is controlled by the law of the forum state. 4 Second, assertion of jurisdiction over the defendant must be consistent with the due process clause of the fourteenth amendment, 5 a requirement that is controlled by federal law. 6 Due process requires that a nonresident defendant 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,' " 7 or that he perform some act "by which (he) purposefully avails (him)self of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws," 8 before the forum may extend its long-arm to embrace him. 9

The party invoking the jurisdiction of a federal court bears the burden of establishing the court's jurisdiction over a nonresident defendant. Southwest Offset, Inc. v. Hudco Publishing Co., 622 F.2d 149, 152 (5th Cir. 1980) (per curiam); Thorington v. Cash, 494 F.2d 582, 584 n...

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