Davis v. Costa-Gavras

• Decision Date: 07 February 1984
• Docket Number: No. 83 Civ. 2539 (ADS),83 Civ. 2539 (ADS)
• Citation: 580 F. Supp. 1082
• Parties: Nathaniel DAVIS, Frederick D. Purdy, Ray E. Davis, Plaintiffs, v. Constantin COSTA-GAVRAS, Universal City Studios, Inc., MCA, Inc.; Thomas Hauser, Harcourt Brace Jovanovich, Inc., and The Hearst Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

580 F. Supp. 1082

Nathaniel DAVIS, Frederick D. Purdy, Ray E. Davis, Plaintiffs, v. Constantin COSTA-GAVRAS, Universal City Studios, Inc., MCA, Inc.; Thomas Hauser, Harcourt Brace Jovanovich, Inc., and The Hearst Corporation, Defendants.

No. 83 Civ. 2539 (ADS)

United States District Court, S.D. New York.

February 7, 1984.

COPYRIGHT MATERIAL OMITTED

Robert Kasanof and Bart M. Schwartz, New York City, for plaintiffs; Robert Kasanof, Bart M. Schwartz, Howard E. Heiss, New York City, of counsel.

Williams & Connolly, Washington, D.C., for defendants Universal City Studios, Inc., MCA, Inc., and Constantin Costa-Gavras; Irving Younger, David E. Kendall, Steven A. Steinbach, Washington, D.C., of counsel.

Patterson, Belknap, Webb & Tyler, Esqs., New York City, for defendant Harcourt Brace Jovanovich, Inc.; Eugene L. Girden, Eugene M. Gelernter, Linda Novak, New York City, of counsel.

White & Case, New York City, for defendant Thomas Hauser; David J. Branson, Robert G. Berger, Washington, D.C., of counsel.

Baker & Hostetler, Washington, D.C., for defendant Hearst Corp.; Bruce W. Sanford, Washington, D.C., of counsel.

OPINION AND ORDER

SOFAER, District Judge:

This action for libel was filed on January 11, 1983, in the Eastern District of Virginia. Jurisdiction is based on diversity of citizenship, 28 U.S.C. § 1332, and venue on 28 U.S.C. § 1391(a). The plaintiffs are two State Department officials and a naval officer who were stationed in Santiago, Chile, in September 1973, at the time a military coup deposed the government of Salvador Allende Gossens. Plaintiff Nathaniel Davis served as United States Ambassador, Frederick D. Purdy as Consul to the Santiago Consulate, and Captain Ray E. Davis (U.S. Navy Ret.) as Commander of the United States Military Group and Chief of the United States Navy Mission in Santiago.

The coup in September 1973 was violent, and resulted in the death or disappearance of many people, including President Allende, whose bullet-riddled body was found the day after the military takeover. Among the other victims was a United States citizen named Charles Horman, who disappeared from his Santiago home a few days after the coup. A body with fingerprints that matched Horman's was discovered in Chile following Allende's overthrow. Horman's survivors sued several United States officials, including plaintiffs in this case, charging them with complicity in Horman's death. The suit was voluntarily dismissed. See Horman v. Kissinger, 77 Civ. 1748 (D.D.C. filed October 3, 1977). Horman's disappearance also attracted the attention of author Thomas Hauser, who researched and wrote what purports to be a nonfiction account entitled The Execution of Charles Horman: An American Sacrifice (hereinafter "Execution"). Execution was published in hardcover in 1978 by Harcourt Brace Jovanovich, Inc. ("HBJ"). In 1979 Hauser signed an option agreement to sell all movie rights in the book to Warner Brothers, which later assigned the option to Universal City Studios, Inc., ("Universal"), a subsidiary of MCA, Inc. Universal exercised the option in 1981. Director Constantin Costa-Gavras drew upon portions of the book for the screenplay of his film "Missing", starring Sissy Spacek and Jack Lemmon, released by Universal in 1982. The film, set in Santiago, dramatizes the search carried on by Horman's wife and father, a New York businessman, in the weeks following his arrest and execution. The Hearst Corporation ("Hearst"), which had purchased the paperback rights from HBJ in 1979, issued two softcover editions, one in 1980 under the original title and a second in 1982 retitled Missing and adopting the distinctive red-lettered logo of the film. The plaintiffs have named author Hauser, publishers HBJ and Hearst, and filmmakers Costa-Gavras, Universal, and MCA as defendants. They seek damages of $150 million, charging that through the publication of the books Execution and Missing, and the film "Missing," defendants have "falsely accused the plaintiffs of ordering or approving the order for the murder of Charles Horman."

Shortly after the suit was filed in the Eastern District of Virginia, defendants moved to dismiss for lack of personal jurisdiction and for improper venue, or in the alternative for a transfer of venue to this district under 28 U.S.C. § 1404(a). On March 25, 1983, Judge James Cacheris granted the defendants' motion to transfer in a ruling from the bench, denying without prejudice defendants' motion to dismiss. Davis v. Costa-Gavras, No. 83-019-A (E.D.Va. March 25, 1983).

After extensive discovery, defendants Hauser and HBJ now move for summary judgment, contending that the one-year statute of limitations has run on the original publication of the hardcover and paperback editions of Execution, and that they are not liable for Hearst's republication of the paperback Missing or for any alleged libels contained in the film. These motions require the resolution of several preliminary conflict-of-laws issues which bear upon the statute of limitations and the imposition of vicarious liability for a republication.

I. Applicable Law

Both Virginia and New York impose a one year statute of limitations in libel actions. N.Y.C.P.L.R. § 215(3); Va.Code § 8.01-248 (1977). Defendants Hauser and HBJ, relying upon New York law, argue that the action against them is time-barred because the hardcover edition of Execution —the only publication for which Hauser and HBJ admit responsibility—was published in 1978. Plaintiffs contend, however, that Virginia law governs the statute of limitations issue and that Virginia recognizes the common law rule that each sale of a book gives rise to a separate cause of action. Plaintiffs allege that discovery has shown that at least two books were shipped to Virginia between January 1982 and January 1983, when the suit was filed. Plaintiffs also contend that Virginia substantive law applies to the republication issue, since under Virginia conflict-of-laws rules substantive rights of the parties in a multistate tort action are governed by the law of the place of the wrong. Plaintiffs interpret Virginia law as imposing liability for any republication authorized by the original publisher or issued as a natural and probable consequence of the original publication. Defendants argue that New York conflict-of-laws rules dictate application of New York law to the republication issue, since New York is the state having the most significant relationship to the tort. They interpret New York law as imposing liability only if the original publisher exercised authority or control over the republication.

A. Effect of Transfer of Venue on Choice of Law.

Ordinarily a federal court sitting in diversity applies the law of the state in which it sits to any issues of procedure not covered by federal law. Hanna v. Plumer, 380 U.S. 460, 470, 85 S.Ct. 1136, 1143, 14 L.Ed.2d 8 (1965). It also looks to the forum state's conflict-of-laws rules in determining what substantive law to apply to the various issues in a diversity case. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941). When a case has been transferred for the convenience of the parties, however, the transferee court must apply the same law as the transferor court would have applied. Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 820, 11 L.Ed.2d 945 (1964). Otherwise, defendants might convert 28 U.S.C. § 1404(a) into a forum-shopping device, obtaining a "change of law as a bonus for a change of venue." Id. at 635, 84 S.Ct. at 818 (quoting Wells v. Simonds Abrasive Co., 345 U.S. 514, 522, 73 S.Ct. 856, 860, 97 L.Ed. 1211 (1953) (Jackson, J., dissenting)). But the exception in Van Dusen applies only if the action could have been maintained in the original forum. Martin v. Stokes, 623 F.2d 469, 474 (6th Cir.1980); Ellis v. Great Southwestern Corp., 646 F.2d 1099, 1110 (5th Cir.1981); Roofing & Sheet Metal Services, Inc. v. La Quinta Motor Inns, Inc., 689 F.2d 982, 991-93 (11th Cir.1982); see Van Dusen, 376 U.S. at 638, 84 S.Ct. at 820; 1 Moore's Federal Practice, ¶ 0.1454.-5, at 1613 (2d ed. 1983). This qualification prevents plaintiffs from filing wherever the law is most favorable in order to capture that forum's law and carry it with them on transfer to a proper venue. See id. at 1608-09.

When Judge Cacheris granted defendants' motion to transfer to the Southern District of New York, he explicitly declined to decide whether venue or jurisdiction was proper in the Eastern District of Virginia. A court "has power to transfer a case even if there is no personal jurisdiction over the defendants, and whether or not venue is proper in the district, if a transfer would be in the interest of justice." Volk Corp. v. Art-Pak Clip Art Service, 432 F.Supp. 1179, 1181 (S.D.N.Y. 1977); accord Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77 (2d Cir.1978); see Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). The transferor court may act under either section 1404(a) or 1406(a) to transfer an improperly venued action. Corke, 572 F.2d at 80. But when a transferor court has not ruled on the propriety of venue or jurisdiction, the transferee court must determine whether venue and jurisdiction would have been proper in the transferor court in order to decide which forum state's law will apply under Erie. See Martin, 623 F.2d at 474; Ellis, 646 F.2d at 1107; Roofing & Sheet Metal, 689 F.2d at 992-93. Examination of the facts and the law indicates that federal venue would not have been proper in the Eastern District of Virginia, and that Virginia's long-arm statute would not authorize personal jurisdiction over these defendants. Therefore, the conflict-of-laws and procedural rules of New York apply.

B. Personal Jurisdiction Under Virginia's Long Arm-Statute.

Plaintiffs do not allege that either the individual or the corporate defendants are subject to jurisdiction in...