Brewster v. Boston Herald-Traveler Corporation

• Decision Date: 24 May 1956
• Docket Number: No. 4-63.,4-63.
• Citation: 141 F. Supp. 760
• Parties: Owen BREWSTER, Plaintiff, v. BOSTON HERALD-TRAVELER CORPORATION, Defendant.
• Court: U.S. District Court — District of Maine

141 F. Supp. 760

Owen BREWSTER, Plaintiff, v. BOSTON HERALD-TRAVELER CORPORATION, Defendant.

No. 4-63.

United States District Court D. Maine, S. D.

May 24, 1956.

Philip F. Chapman, Jr., Portland, Me., for plaintiff.

Leonard A. Pierce, Portland, Me., Jerome E. Andrews, Jr., Boston, Mass., for defendant.

CLIFFORD, District Judge.

This matter comes before this Court upon a motion filed by the defendant to dismiss the complaint. Its motion is based upon two grounds: first, the defendant was not and is not subject to service of process within the District of Maine; and second, that the defendant has not been properly served with process.

On July 1, 1955 the plaintiff, who has held various high public offices, brought an action of libel against the Boston Herald-Traveler Corporation, a Massachusetts corporation having its principal place of business at 80 Mason Street, Boston. Service was purportedly made upon the defendant by delivering a copy of the summons and of the complaint to Mr. Frank J. Capp as "general agent and person for service in the State of Maine."

The parties agreed that the motion to dismiss should be decided by this Court upon the basis of (1) the pleadings, including the Marshal's return of service and the two affidavits in support of the defendant's motion to dismiss; (2) the deposition of Mr. Frank J. Capp taken on October 18, 1955 (but excluding therefrom any references to what the City Directory for the City of Portland might or might not show); and, (3) the stipulation of counsel that there is an action pending in the United States District Court for the District of Massachusetts between the same parties for the same cause of action, in which the defendant has pleaded to the merits.

The material facts, as found by this Court, are as follows: The defendant is a Massachusetts corporation with its place of business at 80 Mason Street, Boston. It is engaged in the business of publishing two newspapers, The Boston Herald and The Boston Traveler. Both of these newspapers are published in Boston, with none of its publishing activities carried on in Maine. The defendant has not registered and is not licensed to do business in Maine; it has no office or other place of business in Maine; it has no bank account in Maine; its name is not listed in the Portland Telephone Directory, or in any other telephone directory in Maine; it has no post office box or other mailing address in Maine; and, no records as to circulation or otherwise are kept in Maine. The defendant has no property in Maine other than an automobile which is used by its single employee working in this State.

The defendant conducts no news-gathering activities within the State of Maine. For coverage of Maine events, the defendant relies upon the services of the Associated Press. Occasionally the defendant accepts articles or other contributions from persons located in the State of Maine, but such persons are not employees of the defendant and are not on the defendant's payroll, and their articles and other contributions are paid for on that basis only. Such articles and other contributions are submitted to the defendant at its place of business in Boston and are subject to acceptance or rejection by the defendant, in Boston.

To the extent that the defendant's newspapers are circulated within the State of Maine, the newspapers are sold by the defendant in one of two ways. Some of the circulation comes from individual subscriptions received by mail from persons living in Maine and filled by mail by the defendant. The remaining newspapers are sold to independent dealers located in Maine who handle the defendant's newspapers as well as those of defendant's competitors, and who in turn distribute the defendant's newspapers as well as those of defendant's competitors to the dealer's own outlets. Both with regard to the individual mail subscriptions and with regard to sales to dealers, the orders come by mail and are subject to acceptance or rejection by the defendant at the defendant's place of business in Massachusetts. According to a recent audit, the combined circulation of the daily and Sunday Herald and the Traveler in Maine was approximately 3.2 per cent of the total combined circulation of the three newspapers, or approximately 18,507 out of a total combined circulation of approximately 588,719.

In 1954 the amount of advertising space sold to Maine advertisers was approximately one tenth of one per cent of the defendant's total advertising volume for the year, or approximately $14,000 out of a total advertising volume of $12,706,306. Most of the Maine advertising was placed by Maine resort establishments or local Chamber of Commerce organizations and was directed at readers outside of the State of Maine.

Its only employee in Maine is Mr. Frank J. Capp, who is employed as a circulation roadman. His activities consist largely of acting as liaison man between the Boston office and the Maine dealers and distributors, funneling information into the Boston office, and transmitting instructions from the Boston office. He has little or no discretion. In almost every instance the decision is made in Boston. For instance, while one of Capp's duties is to contact the dealers and make a recommendation to the home office as to whether the dealer should be supplied more or fewer papers, it is clear that the only thing which Capp has the power to decide is what his recommendation will be to the Boston office, and that the actual decision as to whether the number of papers shall be increased or decreased is made in Boston. Similarly, while Capp occasionally makes recommendations as to whether a particular dealer should be dropped or a new dealer added, the final decision is made in Boston, not always in accordance with Capp's recommendation. And while Capp is sometimes instructed to call on specific delinquent accounts, he has no authority either to compromise or adjust the account or to institute suit. Even when it comes to the adjustment of complaints, if it is a matter of any importance, he discusses it with the Boston office before he proceeds. In ten or fifteen cases each year, when the normal supply of papers does not get through, Capp has acted as an emergency truckman, picking up papers where directed by his Boston superior and delivering them to the dealer designated by his superior.

He is a member of the union and is classified under the union contract as being in a non-supervisory capacity. He has no office and his name is not linked with that of the defendant either in any advertising or any telephone book or on the letterhead of either his own stationery or that of the Boston Herald-Traveler. He has no contact with reporters or contributors and has nothing to do with advertising and little or nothing to do with direct mail subscriptions.

Jurisdiction of this action is based solely upon diversity of citizenship. Rule 4 (d) (7) of the Federal Rules of Civil Procedure, 28 U.S.C.A., provides that service of process on a foreign corporation is valid if made in the manner prescribed by any statute of the United States or in the manner prescribed by the law of the State in which the service is made. There being no applicable federal statute, and service having been attempted under the procedure of this State, this matter is governed by the requirements for valid service in Maine.

Service upon foreign corporations in Maine is covered by two different chapters of the Revised Statutes of Maine 1954. By Section 19 of Chapter 112, a foreign corporation is subject to service in Maine if it has "a place of business within this state" or is "doing business herein". Section 127 of Chapter 53 provides for service upon the Secretary of State in any action arising as a result of the foreign corporation "doing business" in Maine, if it has not appointed an agent for service as required by law.

The principal issue in this...