Karl Rove & Co. v. Thornburgh, 93-8451

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Citation39 F.3d 1273
Docket NumberNo. 93-8451,93-8451
PartiesKARL ROVE & COMPANY, Plaintiff-Appellee, Cross-Appellant, v. Richard THORNBURGH, et al., Defendants, Richard Thornburgh, Defendant-Appellant, Cross-Appellee, and Raymond P. Dimuzio, Defendant-Cross-Appellee.
Decision Date30 November 1994

James C. Winton, Lindsay Lee Lambert, Baker & Hostetler, Houston, TX, for Dimuzio.

Roger M. Adelman, Leslie A. Leatherwood, Kirkpatrick & Lockhart, Washington, DC, for Thornburgh.

Kenneth W. Starr, Christopher Landau, Washington, DC, for amicus curiae: Republican Nat. Committee.

G. Michael Lawrence, Preston Randall, Graves, Dougherty, Hearon & Moody, P.C., Austin, TX, for plaintiff-appellee, cross-appellant.

Appeal from the United States District Court for the Western District of Texas.

Before SMITH, WIENER and BENAVIDES, Circuit Judges.

WIENER, Circuit Judge:

This appeal arises from a diversity jurisdiction suit on a contractual debt. Defendant-Appellant/Cross-Appellee Richard Thornburgh ("Thornburgh") asks us to reverse the district court's judgment holding him personally liable for a contractual obligation incurred during his campaign for the U.S. Senate by the "Thornburgh for Senate Committee" (the "Committee"), Thornburgh's unincorporated principal campaign committee. He argues that the district court erred by finding that--personally and through his general agent, Murray Dickman ("Dickman")--Thornburgh authorized, assented to, or ratified the Committee's contract on which the court held him personally liable. The Republican National Committee ("RNC"), appearing as amicus curiae, argues that the district court ignored notions of federalism, and thus applied an incorrect legal standard, in determining Thornburgh's liability for the Committee's debt.

In response, Plaintiff-Appellee/Cross-Appellant, Karl Rove & Company ("Rove & Company") cross appeals the district court's dismissal of Rove & Company's claim against Defendant/Cross-Appellee, Ray Dimuzio ("Dimuzio") for lack of personal jurisdiction. Rove & Company argues in the alternative that if Thornburgh is not liable for the Committee's contract, then Dimuzio is, thus vesting the court with personal jurisdiction. As we conclude that the district court properly interpreted and applied the correct legal standard, we affirm the district court's judgment holding Thornburgh liable and dismissing Rove & Company's claim against Dimuzio for lack of personal jurisdiction.


The facts material to the outcome of this appeal are relatively straightforward and, for the most part, undisputed. As the district court in its opinion has already provided an accurate and detailed chronology of the events leading up to this litigation, 1 we limit our reiteration to those facts directly relevant to the issues raised on appeal.

In 1991, Thornburgh ran in a special election to fill the U.S. Senate seat that had become vacant when Pennsylvania Senator John Heinz was killed in an aircraft accident. Dickman, a longtime Thornburgh aide, agreed to the offer of Rove & Company to provide direct mail fundraising services for the campaign, upon Thornburgh's entering into the U.S. Senate race and establishment of a principal campaign committee. The instant There is no longer any dispute regarding the existence or quantum of the Committee's liability to Rove & Company on the September Contract. On appeal, therefore, the only issue is whether Thornburgh personally has joint and several liability with the Committee for the debt to Rove & Company. If not, then we must consider whether Dimuzio is personally liable for the debt, and thus subject to the jurisdiction of the court.

dispute arose when, after Thornburgh lost the election, the then-insolvent Committee failed to pay Rove & Company for services that it had provided pursuant to a contract with the Committee, dated September 18, 1991 (the "September Contract").

The September Contract was between Rove & Company and the Committee, not Thornburgh. That agreement contained a signature line for both parties and identified "Murray Dickman" as the proposed signatory for the Committee. 2 Rove signed the contract and forwarded it to Bob Mason ("Mason"), the Financial Director of the Committee, who, in turn, delivered it to Dickman. But neither Dickman nor anyone else ever signed the document for the Committee. The district court found nonetheless that Rove & Company and the Committee thereafter conducted business according to the terms of the September Contract. 3 There is no evidence in the record, however, that Thornburgh ever saw this agreement or knew of its terms and conditions.

Dickman is a longtime Thornburgh aide, who, according to the district court, was widely known to be Thornburgh's spokesman. 4 Karl Rove ("Rove"), the president of Rove & Company, initiated the contact with Dickman when Rove learned that Thornburgh was interested in running in the special election to select Heinz' successor. Rove contacted Dickman because Rove was aware of Dickman's association with Thornburgh and knew that Dickman was the person who had been in primary control of Thornburgh's previous campaigns.

True to form, Dickman also played a prominent role during this senatorial campaign. He took part in the Committee's decision to hire Michele Davis ("Davis") as campaign manager, a position characterized as the chief executive officer of the Committee. Dickman was the primary point of contact between the Committee and Thornburgh; Dickman was also one of the persons involved in the Committee's decisions to hire Rove & Company, then whether to pay Rove & Company, and, if so, when to pay Rove & Company.

Dickman conducted the initial negotiations with Rove & Company on behalf of the Committee and, in the early stages of the campaign, delivered much of the material that Rove & Company needed to conduct the direct mail campaign. 5 For example, in response to Rove's request, Dickman obtained and supplied Thornburgh's own list of political donors, a collection of Thornburgh's speeches, personal letters, previous campaign materials, and an exemplar of Thornburgh's signature. Dickman was also the person who instructed Rove that Thornburgh wanted the letterhead on all solicitation letters to read "Dick Thornburgh," not "Richard Thornburgh." In his discussions with Rove, however, Dickman never expressly represented himself as an agent for either Thornburgh or the Committee.

Thornburgh's direct interactions with Rove and with Rove & Company were more limited Thornburgh denied that he knew whom the Committee had retained to provide direct mail fundraising services. He did acknowledge, however, that he was aware that the Committee had contracted to have such services provided and that the Committee was being charged for these services. Neither did Thornburgh object to the Committee's decision to purchase direct mail fundraising services; in fact, he testified that: "I assisted the [C]ommittee in whatever way that I could in helping them to raise money through a direct mail effort" and "I cooperated with [the Committee] and facilitated with them and facilitated their efforts to see that the contract [for direct mail services] went forward."

                than Dickman's.  In fact, the district court found that Rove's only personal contact with Thornburgh occurred on September 23 or 24, 1991, when Rove accidentally ran into Thornburgh in an airport. 6  Rove stated that he identified himself to Thornburgh as the person running the direct mail fundraising campaign, and that Thornburgh responded by telling Rove that he was doing a good job and to keep up the good work.  At no time, however, was Rove or anyone else told by Thornburgh that he intended to be personally liable to Rove & Company for the September Contract or any other debt incurred with regard to the services provided by Rove & Company

In support of those fundraising efforts, Thornburgh authorized the Committee to use his signature on the solicitation letters; he made available his political donors' list; and, he reviewed and edited the content and language of several fundraising letters. Thornburgh testified that he inspected the letters for accuracy to "protect his reputation." Although Thornburgh did not review each such letter, the district court found that there was very little variation in these fundraising letters, and that "once Thornburgh had approved the content and language of a given story or statement attributed to him, there would be no need for him to review subsequent letters reincorporating the same substance." 7 Finally, Thornburgh admitted that he had the authority, if he desired, to stop completely all direct mail fundraising efforts on his behalf at any time.

Thornburgh also testified regarding his knowledge of and interactions with the Committee. On his statement of candidacy, Thornburgh designated the Committee as his only "principal campaign committee." He also approved Dimuzio as treasurer of the Committee.

Thornburgh testified, however, that he did not know who was on the Committee, did not select or approve its members, and did not know who had authority to act for the Committee. He further testified that he was not familiar with the inner workings of the Committee, was not involved in the management of Committee finances, did not know how the Committee spent its funds, and played no part in the Committee's selection of vendors in general or Rove & Company in particular.

In light of the fact that Thornburgh is a "very experienced and intelligent politician with intimate knowledge of the inner workings of political campaigns," the district court found that Thornburgh's testimony regarding his attenuation from the Committee lacked credibility. 8 The district court commented that "there is no way a man of his intellect--a man who was entrusted with the governorship of his home state and who served as Attorney General for his...

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