Portland Paramount Corp. v. Twentieth Century-Fox F. Corp.

• Decision Date: 09 August 1966
• Docket Number: Civ. No. 65-313.
• Citation: 258 F. Supp. 962
• Parties: PORTLAND PARAMOUNT CORPORATION, a corporation, Plaintiff, v. TWENTIETH CENTURY-FOX FILM CORPORATION, a corporation, and Elizabeth Taylor, Defendants.
• Court: U.S. District Court — District of Oregon

258 F. Supp. 962

PORTLAND PARAMOUNT CORPORATION, a corporation, Plaintiff, v. TWENTIETH CENTURY-FOX FILM CORPORATION, a corporation, and Elizabeth Taylor, Defendants.

Civ. No. 65-313.

United States District Court D. Oregon.

August 9, 1966.

Clifford N. Carlsen, Jr., King, Miller, Anderson, Nash & Yerke, Portland, Or., for plaintiff.

James J. Kennedy and Ryan & Ryan, Portland, Or., for defendant Twentieth Century-Fox Film Corporation.

Milton A. Rudin and Bruce M. Ramer, Gang, Tyre, Rudin & Brown, Los Angeles, and Clifford B. Alterman, Kell & Alterman, Portland, Or., for defendant Elizabeth Taylor.

OPINION

KILKENNY, District Judge:

This cause is before the Court on the motion of the defendant Taylor challenging the jurisdiction of this Court over her by reason of the service of process under what is now called the Oregon "Long-Arm Statute,"¹ as made applicable to the federal courts under Rule 4 (d) (7), (e) and (f), F.R.Civ.P. Four causes of action are alleged in the complaint:

(1) this cause charges in substance that Fox, by reason of certain warranties and representations to Paramount, which Fox knew to be false, and by assertedly concealing material facts so as to create a false impression and deceive Paramount, induced it, as a motion picture exhibitor, to enter into a contract with Fox, as a motion picture distributor, for the exhibition of "Cleopatra" and to pay Fox a non-returnable advance against film rentals as a result of which Paramount was damaged in the sum of $44,653.15,

(2) the second cause incorporates the contract mentioned in the first cause and charges that Taylor acted in the title role of "Cleopatra", which picture the plaintiff exhibited, and that during the negotiations leading up to, and at the time of the execution of, the exhibition contract and ever since, Taylor and Richard Burton knowingly, maliciously, negligently and otherwise so conducted themselves as to interfere with the property rights of Paramount, but that Fox, in breach of a duty to Paramount, did nothing to prevent such conduct until April 22, 1964, and that as a result thereof, Paramount was damaged in the same sum as mentioned in the first cause,

(3) the third cause alleges that Taylor had knowledge of the plaintiff's exhibition rights in "Cleopatra", the value of which depended upon "Cleopatra" attracting attendance, but that, nevertheless, Taylor individually and jointly with Richard Burton, knowingly, maliciously, negligently and otherwise so acted, and induced others to act, that the said conduct on the part of Taylor, individually and jointly with Burton, proximately interfered with and injured plaintiff's exhibition property rights and business interests with the result that attendance at the exhibition of the picture was substantially diminished and proceeds lost to the damage to Paramount in the same figure mentioned in the first and second causes of action,

(4) the fourth cause charges that Taylor and Fox entered into a written employment agreement, in connection with the employment of Taylor in the title role of "Cleopatra", and that certain provisions of the contract were intended for the direct benefit of Paramount to protect the value and integrity of the exhibition of "Cleopatra"; that Taylor rendered service under said contract and was compensated therefor and that Taylor willfully breached the terms of the contract to Paramount's damage in the same figure as set forth in each of the first three causes of action.

The record shows that personal service of the process was made on Taylor in the state of California. She does not challenge the method of service, nor does she claim that she was not properly notified of the pendency of the action. Simply stated, she claims that the statute under which the service was made does not and could not constitutionally apply to her situation.

Taylor is not now, and never has been, a citizen of Oregon, nor has she ever been in said state. A stipulation which was entered into and became part of the record, even casts some doubt on her citizenship.²

Fox and the producers of "Cleopatra", Twentieth Century-Fox Productions, Ltd. (hereinafter called "Productions") entered into a "Distribution Agreement" with a joint venture consisting of MCL Films, S.A. ("MCL", in which Taylor has an interest) and Walwa Films, S.A. ("Walwa") on August 24, 1960. It has been agreed, for purposes of this motion, that the acts of MCL may be treated as the acts of Taylor. A 1961 agreement provides that Productions, an English corporation wholly owned by Fox, would jointly produce "Cleopatra" with MCL and Walwa (Swiss corporations). A third agreement, in 1961, effected the loan by Fox of the services of Taylor and others to the joint venture comprised of Productions, MCL and Walwa. It seems fair enough to generalize that "the transactions were really only a complicated method by which Taylor and Fox entered into an agreement to produce and distribute `Cleopatra', and share in the proceeds received from the exhibitors."

Taylor-MCL, apparently, have no voice in matters relating to the actual distribution of "Cleopatra", these being strictly under the control of Fox. The Distribution Agreement provides:

"Nothing herein contained shall in any wise constitute a partnership or joint venture between the Venture and Productions and the Distributor or be construed to evidence the intention of the Venture, Productions or the Distributor to constitute such. None of the parties shall hold itself out contrary to the terms of this Article, by advertising or otherwise, and none of the parties shall be or become liable or bound by any representations, act or omission whatsoever of any other party contrary to the provisions of this Article. Distributor agrees that it has no general or other authority to make or conclude contracts on behalf of the Venture or either corporation * * *." Section V, Art. 1.

and further:

"Nothing contained in this Agreement shall be deemed to impress a trust, express or implied, on any of the gross receipts or net profits from the Photoplay and all thereof may be fully comingled sic by the Distributor with its other funds in all countries and territories throughout the world, and the Distributor's sole obligation shall be to pay to the Venture and Productions such amounts as the Venture and Productions may become entitled to receive under this Agreement, computed as herein specified." Section V, Art. 12.

The warranties, on which plaintiff claims it relied, are as follows:

(a) That "Cleopatra" was a superior motion picture, the ultimate in motion picture making, and fully acceptable to the public;

(b) that defendant Elizabeth Taylor would perform her services with due diligence, care and attention, and that such acting performance was of the highest quality;

(c) that Richard Burton would perform his services with due diligence, care and attention, and that such acting performance was of the highest quality.

It is also charged in the complaint in the first cause, which is reincorporated in the other causes, that Taylor failed to make a full and complete disclosure to the plaintiff of the following facts which plaintiff is informed and believes are true:

(a) defendant Taylor was conspiring and inducing others to breach their agreement faithfully to perform their services in the production of "Cleopatra"; and

(b) that Richard Burton was conspiring with and inducing others to breach their agreements faithfully to perform their services in the production of "Cleopatra"; and

(c) that the screen play for "Cleopatra" was written during the filming of "Cleopatra" on virtually a day to day basis and not in advance of the filming of that motion picture.

Then defendant Taylor and Richard Burton are charged with jointly, knowingly, intentionally, willfully, maliciously and negligently interfering with the property rights and business interests of the plaintiff in "Cleopatra" as created by the Exhibition Agreement, all without justification and that said persons were acting, and each was inducing the other to act, in willful, wanton, malicious and negligent disregard of the property rights and business interests of the plaintiff by:

(1) their notorious and scandalous conduct with one another while, to public knowledge, each was married to another;

(2) holding themselves up to public opprobrium, ridicule and scorn;

(3) public statements made by defendant Elizabeth Taylor to the effect that "Cleopatra is of inferior quality"; and

(4) engaging in and each inducing the other to engage in the acts set forth in one, two and three, above mentioned, during the periods of production, distribution and exhibition of "Cleopatra", all of which activity was thereby associated with "Cleopatra" in the eyes of the public.

Plaintiff argues that Taylor's over-all conduct amounted to nothing less than:

(a) tortious acts "in Oregon — in that what she did in `Cleopatra' and under circumstances whereby other communications media would be aware of her conduct, was bound to be displayed in or communicated widely in the state of Oregon." These alleged tortious acts would include her breaches of "warr...