American Land Program, Inc. v. Bonaventura Uitgevers Maatschappij, N.V., 81-1751

Citation710 F.2d 1449
Decision Date24 June 1983
Docket NumberNo. 81-1751,81-1751
Parties9 Media L. Rep. 1874 AMERICAN LAND PROGRAM, INC., Plaintiff-Appellant, v. BONAVENTURA UITGEVERS MAATSCHAPPIJ, N.V., Peter Hund, Louis Johan Leeman, N.A.G. Van Rossum, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)

Joseph E. Tesch of Tesch, Hufnagel & Van Dam, Salt Lake City, Utah, for plaintiff-appellant.

Marcia B. Paul, New York City (James H. Stark, New York City, with her on the brief; H. Wayne Wadsworth of Watkiss & Campbell, Salt Lake City, Utah, also on the brief), of Greenbaum, Wolff & Ernst, New York City, for defendants-appellees.

Before HOLLOWAY, McKAY and SEYMOUR, Circuit Judges.

SEYMOUR, Circuit Judge.

This is an action for slander arising out of a Dutch journalist's investigation of a land-sales scheme. American Land Program, Inc. appeals the district court's order granting a motion to dismiss for lack of personal jurisdiction over the foreign defendants. We reverse in part and affirm in part.

I. BACKGROUND

American Land Program, Inc. (ALP Inc.) is a California corporation that does business in various states. American Land Program, B.V. (ALP B.V.) is a Dutch corporation that conducts a wide-ranging real estate enterprise in which Dutch and other European investors are solicited to invest in American real estate. ALP B.V. makes broad claims that its investors will realize significant financial gain from direct return on the real estate and from tax advantages. ALP Inc. and ALP B.V. enjoy a degree of common ownership, and ALP Inc. brokers, markets, develops, and manages land sold to Dutch investors by ALP B.V. A significant amount of ALP Inc.'s income is derived from the fees it receives from handling these real estate transactions for ALP B.V.

Bonaventura Uitgevers Maatschappij, N.V. (Bonaventura) is a Dutch corporation which, among other things, publishes Elsevier's Weekblad (Weekblad), a weekly financial information magazine published in Holland. At the time this action arose, Peter Hund was Weekblad's real estate editor, Louis Leeman was the magazine's chief executive officer, and N.A.G. Van Rossum was its editor in chief.

ALP B.V. engaged in substantial publicity to promote its investment program. Hund became interested in the claims of financial success made by ALP B.V., and began investigating its program. In January 1979, Hund flew to the United States on assignment by Weekblad to acquire information to be used in a series of articles on ALP B.V. and the American real estate that it was marketing.

Hund spent approximately three weeks in the United States. During this time, he inspected properties marketed by ALP B.V. and interviewed a number of people, some of whom had business dealings with ALP Inc. Hund returned to Holland, and Weekblad subsequently published a series of six articles on the " 'American Land Program' (ALP)" activities, rec., vol. I, at 177, without distinguishing between the various ALP Inc. filed an action for defamation against Hund and Bonaventura, claiming that Hund had slandered ALP Inc. in the course of interviewing people doing business with it. This initial suit was filed in federal district court in California, in the district in which ALP Inc. maintains its principal place of business. The court dismissed the action for lack of jurisdiction because none of the alleged tortious conduct had occurred in California and personal service had not been perfected on Hund. ALP Inc. did not appeal the dismissal.

American Land Program corporations. The articles alleged serious discrepancies between claims made by "ALP" and facts discovered by Hund.

ALP Inc. subsequently filed the instant suit in the district of Utah. The complaint is virtually identical to that filed in the California action except for the addition of Van Rossum and Leeman as codefendants. The complaint alleges four causes of action against Hund and Bonaventura for slanderous statements Hund made in Utah, New York, and Texas while acting on behalf of Bonaventura. Specifically, it is alleged that Hund falsely stated to various individuals that plaintiff and its agents were making misrepresentations to investors, and that the property sold to investors was not worth as much as plaintiff claimed. Van Rossum and Leeman are named in a fifth cause of action that alleges a conspiracy to defame ALP Inc. Jurisdiction in the Utah district court is premised on diversity under 28 U.S.C. Sec. 1332 (1976). Service of process was made in Amsterdam on each of the named defendants under Federal Rule of Civil Procedure 4(d)(7) and the Utah long arm statute, Utah Code Ann. Sec. 78-27-24 (1977).

Defendants filed alternative motions to dismiss and for summary judgment. Following extensive briefing and oral argument, the trial court granted the motion to dismiss for lack of personal jurisdiction. The court based its ruling on Utah caselaw exploring the reach of Utah's long arm statute, and on the proposition that " 'First Amendment considerations surrounding the law of libel [and in this case slander] require a greater showing of contact to satisfy the due process clause than is necessary over other types of tortious activity.' New York Times Co. v. Connor, 365 F.2d 567, 572 (5th Cir.1966)." Rec., vol. II, at 426.

II. LONG ARM JURISDICTION

The issue on appeal is whether the district court had personal jurisdiction over the alien defendants under the Utah long arm statute. The statute provides:

"Any person, ... whether or not a citizen or resident of this state, who in person or through an agent does any of the following enumerated acts, submits himself, and if an individual, his personal representative, to the jurisdiction of the courts of this state as to any claim arising from:

"...

"(3) The causing of any injury within this state whether tortious or by breach of warranty...."

Utah Code Ann. Sec. 78-27-24 (1977).

The Utah Supreme Court, in examining the reach of the long arm statute, has recently remarked that

"reference to the Legislature's intent in enacting the Utah Long Arm Statute is illuminating. In declaring the purpose of the act the Legislature explained in 78-27-22:

"...

'The provisions of this act, to ensure maximum protection to citizens of this state, should be applied so as to assert jurisdiction over non resident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment to the United States Constitution.'

"The legislative mandate is clear. The protection afforded by the courts of this State must be applied to the fullest extent allowed by due process of law."

Brown & Associates v. Carnes Corp., 611 P.2d 378, 380 (Utah 1980). See Mallory "The Due Process Clause requires that before a court can exercise personal jurisdiction over a nonresident defendant, the defendant must have had such 'minimum contacts' with the forum state that maintenance of the suit 'does not offend "traditional notions of the fair play and substantial justice." ' " Leney v. Plum Grove Bank, 670 F.2d 878, 880 (10th Cir.1982) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), in turn quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)). International Shoe's "minimum contacts" doctrine focuses on the fairness of requiring the defendant to defend in the forum state. Leney, 670 F.2d at 880; see Kulko v. California Superior Court, 436 U.S. 84, 91, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978).

                Engineering, Inc. v. Ted R. Brown & Associates, 618 P.2d 1004, 1006 (Utah), cert. denied, 449 U.S. 1029, 101 S.Ct. 602, 66 L.Ed.2d 492 (1980).  We must thus determine whether assumption of personal jurisdiction over defendants in this action would violate due process. 1   Accordingly, while the decisions of the Utah courts applying the state's long arm statute inform our determination, they do not control it
                

"World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 [100 S.Ct. 559, 567, 62 L.Ed.2d 490] (1980), declared the defendant's 'conduct and connection with the forum State [must be] such that he should reasonably anticipate being haled into court there.' In determining whether it may fairly exercise jurisdiction based on the defendant's connections with the forum state, a court may consider the burden on the defendant, the forum state's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient, effective relief, and the judicial system's interest in efficiently resolving controversies. Id. at 292 ."

Leney, 670 F.2d at 880; see Mallory Engineering, 618 P.2d at 1008.

In determining if the exercise of jurisdiction over a nonresident defendant would offend traditional notions of fair play and substantial justice, the Utah Supreme Court has recognized that "the central concern of the inquiry into personal jurisdiction is the relationship of the defendant, the forum, and the litigation, to each other." Mallory Engineering, 618 P.2d at 1007. The assessment of that relationship involves determining whether the defendant has " 'purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws;' ... [w]hether the cause of action arises out of or has a substantial connection with the activity; and ... [t]he balancing of the convenience of the parties and the interests of the State in assuming jurisdiction." Id. at 1008 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958)); Brown & Associates, 611 P.2d at 380.

A. Hund

The present action arose directly out of defendant Hund's activity in Utah. He entered the state to conduct "investigative reporting," during which activity he is alleged to have slandered ALP Inc. By allegedly causing injury within the state, Hund satisfied the purposeful activity requirement of Hanson. See Mallory Engineering, 618 P.2d at 1008. This same conduct...

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