Ciba-Geigy Corp. v. Barnett

• Decision Date: 17 September 1985
• Docket Number: CIBA-GEIGY,No. 8418SC389,8418SC389
• Citation: 76 N.C.App. 605,334 S.E.2d 91
• Court: North Carolina Court of Appeals
• Parties: CORPORATION v. Wayne BARNETT.

Page 91

334 S.E.2d 91

76 N.C.App. 605

CIBA-GEIGY CORPORATION v. Wayne BARNETT.

No. 8418SC389.

Court of Appeals of North Carolina.

Sept. 17, 1985.

Graham, Cooke, Miles & Bogan by James W. Miles, Jr., Greensboro, for defendant-appellant.

Smith Moore Smith Schell & Hunter by Maureen J. Demarest, Greensboro, for plaintiff-appellee.

EAGLES, Judge.

This appeal is properly before us. G.S. 1-277(b). Its resolution involves two questions: (1) Did defendant's conduct bring him within the North Carolina "long-arm" jurisdictional statutes? and (2) If so, does the exercise of that jurisdiction satisfy constitutional standards of due process? Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977). For reasons discussed below, we answer both questions in the affirmative.

I

Our jurisdictional statutes are to be construed liberally in favor of finding personal jurisdiction. Marion v. Long, 72 N.C.App. 585, 325 S.E.2d 300, appeal dismissed and disc. rev. denied, 313 N.C. 604, 330 S.E.2d 612 (1985). G.S. 1-75.4(5) is relevant here:

A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) or Rule 4(j1) of the Rules of Civil Procedure under any of the following circumstances:

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(5) Local Services, Goods or Contracts.--

In any action which:

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d. Relates to goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction; ....

From the record we conclude that the refund credits and replacement goods (The record is silent as to whether the goods were actually shipped from North Carolina; but they were shipped under orders from plaintiff's home office in Greensboro.) shipped by plaintiff were "things of value" (or "goods") as contemplated by G.S. 1-75.4(5)d and that they were shipped "on [defendant's] order or direction." Accordingly we conclude that the court had jurisdiction under G.S. 1-75.4(5).

II

The second question involves a determination of whether defendant, by his conduct, has established sufficient "minimum contacts" with this state such that requiring him to defend here will not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The minimum contacts test is not mechanical, Id., but requires consideration of the facts of each case. Decisions of the United States Supreme Court control, see Chadbourn, Inc. v. Katz, 285 N.C. 700, 208 S.E.2d 676 (1974), as well as North Carolina precedents.

Minimum contacts do not arise ipso facto from actions of a defendant having an effect in the forum state. Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132, reh'g denied, 438 U.S. 908, 98 S.Ct. 3127, 57 L.Ed.2d 1150 (1978). There must be some act or acts by which the defendant purposely availed himself of the privilege of doing business there, Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, reh'g denied, 358 U.S. 858, 79 S.Ct. 10, 3 L.Ed.2d 92 (1958), such that he or she should reasonably anticipate being haled into court there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). In light of modern business practices, the quantity, or even the absence, of actual physical contacts with the forum state merely constitutes a factor to be considered and is not of controlling weight. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). In Burger King, the court rejected an individual Michigan franchisee's argument that he had never visited Florida, the franchisor's home state and the forum state, but had dealt exclusively with a Michigan district office. The court found that defendant had knowingly affiliated himself with a national organization, agreeing to close supervision from Florida over a substantial period of time in exchange for the business benefits of joining a restaurant chain, and therefore constitutionally could be sued in Florida.

Similarly, in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), the Court found that a Florida reporter and editor could be sued for libel in California, despite limited physical contacts with the state. The court, relying heavily on the fact that the magazine had its largest circulation in plaintiff's home state of California, concluded that defendants' intentional and allegedly tortious actions were expressly aimed at that state, and upheld California's assertion of jurisdiction. "An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California." Id. at ----, 104 S.Ct. at 1487, 79 L.Ed.2d at 812-13.

In light of the powerful public interest of a forum state in protecting its citizens against out-of-state tortfeasors, the court has more readily found assertions of jurisdiction constitutional in tort cases. See Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984); Calder v. Jones, supra. In two other recent tort cases the court denied review on facts similar to those here. In Heilig v. Superior Court, 149 Cal.App.3d 978, 197 Cal.Rptr. 371 (1983) appeal dismissed and cert. denied sub nom. Heilig v. Miller, 466 U.S. 966, 104 S.Ct. 2336, 80 L.Ed.2d 811 (1984), California asserted jurisdiction over non-residents who had signed an allegedly libelous letter outside California for distribution in the state. The key to the California court's reasoning was defendants' knowledge that their tortious acts would have direct effect in California. In Wagman v. Lee, 457 A.2d 401 (D.C.Ct.App.), cert. denied, 464 U.S. 849, 104 S.Ct. 158, 78 L.Ed.2d 145 (1983), the court allowed an action for breach of fiduciary duty to be prosecuted in the District of Columbia, where the affected plaintiffs lived, even though all the tortious acts occurred in Maryland, defendant's home.

This court has repeatedly considered certain primary and secondary factors in deciding minimum contacts questions. See e.g. Sola Basic Industries, Inc. v. Parke County Rural Elec. Membership Corp., 70 N.C.App. 737, 321 S.E.2d 28 (1984); Harrelson Rubber Co. v. Layne, 69 N.C.App. 577, 317 S.E.2d 737 (1984). Without going through each factor exhaustively, we note that defendant had a lengthy business relationship with a North Carolina...