Roth v. Garcia Marquez

• Decision Date: 08 August 1991
• Docket Number: Nos. 90-55713,90-55751,s. 90-55713
• Citation: 942 F.2d 617
• Parties: Richard ROTH; Richard Roth Productions, Plaintiffs-Appellants, v. Gabriel GARCIA MARQUEZ; Carmen Balcells, Defendants-Appellees. Richard ROTH; Richard Roth Productions, Plaintiffs-Cross-Appellees, v. Gabriel GARCIA MARQUEZ; Carmen Balcells, Defendants-Cross-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 617

942 F.2d 617

Richard ROTH; Richard Roth Productions, Plaintiffs-Appellants, v. Gabriel GARCIA MARQUEZ; Carmen Balcells, Defendants-Appellees.

Richard ROTH; Richard Roth Productions, Plaintiffs-Cross-Appellees, v. Gabriel GARCIA MARQUEZ; Carmen Balcells, Defendants-Cross-Appellants.

Nos. 90-55713, 90-55751.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted June 7, 1991.

Decided Aug. 8, 1991.

Maxwell M. Blecher, Blecher & Collins, Los Angeles, Cal., for plaintiffs-appellants.

Dennis M. Perlus, Hufstedler, Kaus & Ettinger, Los Angeles, Cal., and Jay Cohen, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before D.W. NELSON, O'SCANNLAIN and TROTT, Circuit Judges.

D.W. NELSON, Circuit Judge:

This case revolves around Richard Roth's and Richard Roth Productions' ("Roth") attempt to secure the movie rights to Gabriel Garcia Marquez' novel Love in the Time of Cholera. Roth appeals the district court's dismissal of his complaint for failure to state a claim and its denial of leave to amend. In addition, Garcia Marquez and agent Carmen Balcells appeal the district court's denial of their motion to dismiss for lack of personal jurisdiction. While none of these three issues is easily resolved, we initially affirm the district court's finding of personal jurisdiction. We also affirm the district court's dismissal for failure to state a claim and its denial of leave to amend. In sum, we are unwilling to grant through litigation what negotiation could not achieve.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellant Richard Roth is a movie producer who lives in California and carries out his projects through Richard Roth Productions. Gabriel Garcia Marquez, an internationally renowned author who won the Nobel Prize for Literature in 1982, has written numerous bestselling novels. The film rights to his work Love in the Time of Cholera ("Cholera") are at issue in the present litigation. Garcia Marquez has resided in Mexico City for the last sixteen years. Carmen Balcells is the president of a literary agency headquartered in Barcelona, Spain. A resident of Barcelona, Balcells has been Garcia Marquez' literary agent for more than 25 years.

In late 1986, Roth contacted Garcia Marquez in Mexico City to express his interest in making a film based on Cholera. Roth flew to Havana, Cuba, to meet Garcia Marquez on this matter. Garcia Marquez told Roth that he would consider selling film rights under the following three conditions: 1) Roth would agree to pay him a large sum of money (later Balcells specified the sum of five million dollars); 2) Roth would agree to use a Latin American director; and 3) Roth would shoot the film in Colombia. Garcia Marquez later authorized Balcells to pursue negotiations with Roth.

Negotiations dragged on with disputes both about the price for the option and the identity of the possible director. Roth traveled a number of times to Barcelona and Mexico City to meet with Balcells and Garcia Marquez, and repeated calls, letters, and faxes passed between the parties. The only meetings that occurred in the United States were in May 1988, when Balcells traveled to California to attend an American Booksellers Association convention and met with Roth on the side, and in November 1988, when Garcia Marquez visited Los Angeles for four days at the social invitation of a friend. He met with Roth and agreed that Roth could shoot the film in Brazil, not Colombia, but he remained firm on the other two terms.

On November 17, 1988, the same day that Roth and Garcia Marquez met, Alan Schwartz, Roth's representative, faxed a letter to Balcells in Barcelona. The letter offered Garcia Marquez $200,000 for the grant of an option of two years on the film rights, the right to extend the option for another year for an additional $100,000, these monies to be applied against $1,250,000 to be paid when the option was exercised, $400,000 more on the release of the video, $350,000 more on the release of television showing, and 5% of the net profits of the film. On January 19, 1989, Schwartz telecopied another letter, which changed the first sum of $200,000 for the option to $400,000. The letter, which is the crux of this litigation, stated that the first paragraph of the November 17, 1988, letter was changed to the following:

(a) A payment of $400,000 for an option of two years to acquire the motion picture and allied rights to this novel. The option shall commence upon signature by Gabriel Garcia Marquez to the formal agreement and the return of said signed agreement to me or Richard Roth, at which time the option payment shall be made to you as agent for Gabriel Garcia Marquez.

The letter also stated: "On behalf of Richard Roth and myself I am very happy to confirm the final agreement between Richard and Gabriel Garcia Marquez ..." and "Please convey to Garcia Marquez the excitement Richard and I feel in being able finally to get this project moving." Balcells countersigned the letter and faxed back the following the next day:

Thank you for today's fax and I am happy that this deal is finally concluded.

I had no time to tell Gabo [Marquez] about this conclusion. In any case, I am returning your letter duly signed.

I shall await the formal agreement at your earliest convenience.

That same day, Roth wrote independently to Balcells thanking her "so much for concluding the deal" and telling her he was "putting the best champagne on ice so we can celebrate and drink it together."

In late February Schwartz transmitted the 25-page formal agreement to Balcells. Balcells objected to a number of points particularly the omission of clauses about a Latin American director and the site of the shooting. Balcells communicated these objections, and weeks of renewed negotiations failed to produce an agreement. Garcia Marquez never signed the formal agreement, and the money was never paid him.

For personal jurisdiction analysis, Garcia Marquez lives in Mexico City and has never resided in California. He has visited the state four times for a total of twenty days. He met with Roth once in California, but entered the state for a social purpose. He has never owned property in the state, nor has he ever conducted business on a regular basis or authorized any resident of the state to do so on his behalf. He has maintained a checking account, not his principal one, in Los Angeles since 1988 for the purposes of having an account in dollars for certain transactions occurring outside of California.

Balcells lives in Barcelona. She has never lived in California, though she has visited twice. On one of those occasions, she met with Roth, though she was in the state for a convention. She has never owned property in California, has no office or telephone number there, and has never conducted business on a regular basis or authorized any resident of the state to do so for her.

In December 1989, Roth filed a complaint in district court seeking declaratory relief to determine the status of his rights to produce the film. Appellees filed a motion to dismiss, alleging both that the court lacked personal jurisdiction over each defendant and that because appellees had not entered into a binding contract, the complaint failed to state a claim upon which relief could be granted. The district court denied the motion to dismiss for lack of personal jurisdiction, but it granted the motion to dismiss for failure to state a claim. The district court also denied Roth's motion for leave to amend the complaint. Both sides now appeal the unfavorable ruling(s) against them.

II. PERSONAL JURISDICTION

Appellees cross-appeal the district court's denial of their motion to dismiss for lack of personal jurisdiction. Neither Balcells nor Garcia Marquez may be haled into court, they contend, without offending due process.

We review de novo the denial of a motion to dismiss for lack of personal jurisdiction where the underlying facts are undisputed. FDIC v. British-American Ins. Co., 828 F.2d 1439, 1441 (9th Cir.1987).

The California long-arm statute provides that jurisdiction may be exercised over nonresident defendants "on any basis not inconsistent with the Constitution of this state or of the United States." Cal.Civ.Proc.Code § 410.10. Since California's jurisdictional statute is coextensive with federal due process requirements, the jurisdictional inquiries under state law and federal due process merge into one analysis. FDIC, 828 F.2d at 1441. The due process clause prohibits the exercise of jurisdiction over nonresident defendants unless those defendants have "minimum contacts" with the forum state so that the exercise of jurisdiction "does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (internal quotation omitted).

We have interpreted International Shoe and its progeny as allowing jurisdiction by California courts over a nonresident defendant if he has enough continuous contacts with California to subject him to the court's general jurisdiction or if the specific cause of action arises out of a defendant's more limited contacts with the state so that California may exercise limited or specific jurisdiction over him. Data Disc v. Systems Technology Assoc., 557 F.2d 1280, 1287 (9th Cir.1977). Appellants concede that there is no general jurisdiction over appellees; the question, then, turns on whether the contacts in this case enable California to exercise limited jurisdiction over Balcells and Garcia Marquez. A three-part test has been articulated for limited jurisdiction: 1) the nonresident defendant must have purposefully availed himself of the privilege of conducting activities in the forum by some affirmative act or conduct; 2) plaintiff's claim must arise out of or result from the defendant's...