New York Times Company v. Connor

• Citation: 365 F.2d 567
• Decision Date: 04 August 1966
• Docket Number: No. 22362.,22362.
• Parties: The NEW YORK TIMES COMPANY, Appellant, v. Eugene CONNOR, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

365 F.2d 567 (1966)

The NEW YORK TIMES COMPANY, Appellant, v. Eugene CONNOR, Appellee.

No. 22362.

United States Court of Appeals Fifth Circuit.

August 4, 1966.

T. Eric Embry, Birmingham, Ala., Thomas F. Daly, New York City, Beddow, Embry & Beddow, Birmingham, Ala., Lord, Day & Lord, New York City, Louis M. Loeb, Ronald S. Diana, Gene R. McHam, New York City, of counsel, for appellant.

James A. Simpson, Crampton Harris, Birmingham, Ala., James E. Simpson, Birmingham, Ala., Lange, Simpson, Robinson & Somerville, Birmingham, Ala., of counsel, for appellee.

Before TUTTLE, Chief Judge, THORNBERRY, Circuit Judge, and LYNNE, District Judge.

THORNBERRY, Circuit Judge:

This case now makes its third appearance before this Court. It originated as a libel action against The New York Times and Mr. Harrison Salisbury, a staff member of The Times, arising out of the publication of Salisbury's article on Alabama racial conditions in the April 12, 1960, issue of The Times. Of the seven separate suits brought by various individuals, the only one to survive to this point is that of Mr. Eugene Connor, one of the then City Commissioners of Birmingham, Alabama. In order to fix the context of the present appeal, we shall briefly summarize the previous litigation.

Service on defendants was attempted under the substituted service of process provision of Alabama's "long-arm" statute, Ala. Code tit. 7, § 199(1) (1960),¹ and upon The Times by service upon two "stringers," men who are not regular employees of The Times but who are paid on the basis of what they write. District Judge H. H. Grooms consolidated the seven actions for hearing on defendants' motions to quash service of process. Judge Grooms quashed service on the two stringers but upheld service under the long-arm statute. On interlocutory appeal from this action, this Court found that Alabama followed the "single publication rule" in libel actions — i. e., the injury occurs only at the place where the newspaper is printed. New York Times Co. v. Connor, 5th Cir. 1961, 291 F.2d 492, 494. The Court then concluded that service under the Alabama statute was improper for failure to satisfy the requirement of that statute "that the cause of action must have accrued * * * from some business or service performed in Alabama or from some act incidental to the performance of such business or service there." Id. at 496.

On remand, the plaintiffs dropped their actions against Salisbury and sought to amend their complaint to allege a cause of action arising out of the distribution of The Times in Alabama. The District Court dismissed the actions since the amended complaints presented "no new matter not heretofore ruled on, and embraced in the appeal heretofore taken in this cause." Some of the plaintiffs, including Connor, appealed this decision. Prior to argument on appeal, the Alabama Supreme Court announced its opinion in New York Times Co. v. Sullivan, 1962, 273 Ala. 656, 144 So.2d 25, rev'd on other grounds, 1964, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed. 2d 686, in which it concluded that:

"It is clear under our decisions that when a non-resident prints a libel beyond the boundaries of the State, and distributes and publishes the libel in Alabama a cause of action arises in Alabama, as well as in the State of the printing or publishing of the libel. * * *

"The scope of substituted service is as broad as the permissible limits of due process."

Id. at 670, 144 So.2d at 34. The Fifth Circuit's statement of the Alabama law in Connor was found to be "erroneous." Id. at 687, 144 So.2d at 51. In response to the Alabama decision, this Court vacated its earlier decision in Connor and remanded the case so that the constitutional questions raised by the parties could be decided upon a full record after trial on the merits. Connor v. The New York Times Co., 5th Cir. 1962, 310 F.2d 133, 135. This mandate was stayed pending the appeal to the United States Supreme Court of the Sullivan case.

The cause proceeded to trial on September 16, 1964. By the time the case went to the jury, the only plaintiff remaining in the case was Connor. The jury found that The Times made statements relating to Connor with "actual malice" and awarded the plaintiff $40,000 compensatory damages. On this appeal, The Times urges (1) that its subjection to the jurisdiction of the court under the long-arm statute violates due process and the First Amendment and (2) that the jury's finding of actual malice is not supported by any evidence.

I. Jurisdiction under the Alabama Long-Arm Statute

Since the Alabama Supreme Court has found that the scope of the Alabama Long-Arm Statute is "as broad as the permissible limits of due process * * *," New York Times Co. v. Sullivan, supra, we must examine the facts to determine if The Times had the "minimum contacts" with the State that are a prerequisite to the constitutional exercise of power over it. Hanson v. Denckla, 1958, 357 U.S. 235, 231, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283; McGee v. International Life Ins. Co., 1957, 355 U.S. 220, 222, 78 S.Ct. 199, 2 L.Ed.2d 223; International Shoe Co. v. Washington, 1945, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95; Buckley v. New York Times Co., 5th Cir. 1964, 338 F.2d 470, 473.

The New York Times Company is a New York corporation which publishes its daily newspaper in New York. It maintains no office, employees or agents in Alabama. Newspapers are mailed directly from New York to individual subscribers, independent wholesalers and retailers; orders are accepted or rejected in New York; and payment is due in New York. Staff correspondents, other than Salisbury, had visited Alabama on seven occasions during a period from April 1, 1959, to August 22, 1960. The Times sometimes purchased stories at a certain rate per word from independent correspondents located in Alabama who were regularly employed by other businesses. These reporters are known as stringers. During the period mentioned above, The Times paid Alabama stringers a total of $415. Five times during this period, Times employees visited Alabama soliciting prospective advertisers. Alabama advertising accounted for approximately 25/1000 to 46/1000 of 1% of the total Times advertising revenue. Average daily circulation in Alabama was some 395 copies out of a total approximate circulation of 650,000. Sunday circulation in Alabama was about 2,455 out of roughly 1,300,000. Alabama sales revenue accounted for some 23/100 of 1% of the total sales revenue.

Harrison Salisbury, a staff reporter, was assigned to go to Alabama to write a "situationer," a story which describes the events taking place and their causes as distinguished from a particular news event. He spent five days in Alabama on this assignment and wrote the article in controversy while on a plane returning to New York.

These contacts are virtually identical to those discussed in Buckley v. New York Times Company, 5th Cir. 1964, 338 F.2d 470.² In Buckley, The Times had a daily circulation in Louisiana of 391 and a Sunday circulation of 1784. Id. at 475. Although the article involved in Buckley came from an Associated Press dispatch rather than a Times reporter as here, this factor does not serve as a basis for distinguishing the two cases. The Associated Press, an association of member newspapers, is as much an agent of The Times in this respect as is one of The Times' own news staff.

The Court in Buckley found that "mere circulation of a periodical through the mails to subscribers and independent distributors * * *" and "sporadic news gathering by reporters on special assignment and the solicitation of a small amount of advertising do not constitute doing business nor engaging in business activity." Id. at 474.

"It is evident that even the broadest view of the principles of International Shoe and McGee will not bring these activities within the `minimum contacts\' rule. The `quality and nature\' of the activities of these newspaper companies during the period involved was not `continuous and systematic\'; to the contrary, these activities constituted at most a `casual presence\' in the State of Louisiana; such is not enough to make it reasonable and just, and in conformity with the due process requirements of the Fourteenth Amendment, for the State of Louisiana to enforce against them obligations arising out of such activities."

Id. at 475. There can be no doubt that the facts as developed below are controlled by the holding in Buckley. For this reason, service under the Alabama Long-Arm Statute upon the New York Times must be quashed since the plaintiff has not established the minimum contacts necessary to sustain service on an out-of-state corporate defendant.

Our consideration would ordinarily conclude with the finding that the present case is controlled by the decision in Buckley; however, our attention has been drawn to a recent concurring opinion by a member of this Court, questioning the applicability of Buckley in Alabama. The Curtis Publishing Co. v. Birdsong, 5th Cir. 1966, 360 F.2d 344, 348 (May 10, 1966, concurring opinion, Rives, J.). In Birdsong, Judge Rives suggests that the Louisiana statute involved in Buckley is not as broad as the Alabama statute and notes that the Alabama Supreme Court has already concluded that the activities of The Times in circulating 390 daily and 2,500 Sunday papers constituted "doing `any business' as that term is used in the Alabama long-arm statute." We believe, however, that Buckley cannot be distinguished nor restricted in this manner. The Court in Buckley treated the Louisiana statute as being as broad as the permissible limits of the due process clause — the same scope attributed by the Alabama Supreme Court and this Court to the Alabama statute. See New York Times v. Sullivan, 1962, 273 Ala. 656, 144 So.2d 25, rev'd on other grounds, 1964, 376 U.S. 254, 84 S.Ct. 710;³ Elkhart Engineering Corp. v. Dornier Werke, 5th Cir. 1965, 343 F.2d 861, 865. Nor does the fact...