St. Clair v. Righter

• Decision Date: 19 January 1966
• Docket Number: Civ. A. No. 65-C-35-R.
• Citation: 250 F. Supp. 148
• Court: U.S. District Court — Western District of Virginia
• Parties: Huston ST. CLAIR, Plaintiff, v. Volney F. RIGHTER, Robert H. Moore, Jr., and Albridge C. Smith, III, Defendants.

250 F. Supp. 148

Huston ST. CLAIR, Plaintiff, v. Volney F. RIGHTER, Robert H. Moore, Jr., and Albridge C. Smith, III, Defendants.

Civ. A. No. 65-C-35-R.

United States District Court W. D. Virginia, Roanoke Division.

January 19, 1966.

John S. Battle, Battle, Neal, Harris, Minor & Williams, Richmond, Va., for plaintiff.

Eppa Hunton, IV, John Ritchie, Jr., Hunton, Williams, Gay, Powell & Gibson, Richmond, Va., for defendants.

DALTON, Chief Judge.

This is a libel action wherein plaintiff alleges that the defendants published false and defamatory statements concerning him in a certain letter which they circulated to the stockholders of the Jewell Ridge Coal Corporation. Plaintiff is, and was at the time of the alleged defamation, president and a director of Jewell Ridge, and the letter, in essence, charged him with violation of his fiduciary duties to the Corporation in order to personally benefit himself and members of his family. It is alleged in the complaint that plaintiff is a resident of the Western District of Virginia and that the utterances complained of were published there and elsewhere. It appears, however, that all of the letters were mailed from a point outside Virginia. Plaintiff demands judgment against the defendants, jointly and severally, in the sum of $250,000.00 actual damages and $500,000.00 exemplary damages, plus costs.

Defendants, by counsel, filed a motion to dismiss, alleging:

(1) that the defendants are not residents of Virginia and that Chapter 4.1 of the Code of Virginia does not authorize the exercise of personal jurisdiction over them individually or collectively for any act alleged in the complaint, and therefore service cannot be validly made under the provisions of Va.Code Ann. § 8-81.3 (Supp.1964); and

(2) if the statute does so authorize the exercise of personal jurisdiction over the defendants in this case, the statute violates the Due Process clause of the United States Constitution.

The jurisdictional statute involved is Virginia's new "long-arm" statute, Va. Code Ann. § 8-81.2 (Supp. 1964), enacted by the General Assembly on March 31, 1964, which reads, in part:

When Personal Jurisdiction Over Person May Be Exercised

(a) A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's

(1) Transacting any business in this State;

(2) Contracting to supply services or things in this State;

(3) Causing tortious injury by an act or omission in this State;

(4) Causing tortious injury in this State by an act or omission outside this State if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this State;

* * * * * *

The case at bar involves three main questions:

(1) Can jurisdiction be asserted under the terms of the statute itself? In other words, do the acts alleged bring the defendants within the terms of the Virginia "long-arm" statute?

(2) If jurisdiction can be asserted under the statute, would this violate the due process considerations of the United States Constitution?

(3) If the statute does not authorize an assumption of jurisdiction in this case, may this court take jurisdiction under any other theory?

As a preliminary matter, we must consider whether a federal district court may take jurisdiction under a state statute of this type. Although there was previously a conflict in the cases on this point (based mainly on the substance-procedure distinction with respect to the Erie doctrine Erie R. Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188), the answer now is definitely "yes" under the new Federal Rule 4(e) entitled "Service Upon Party Not Inhabitant of or Found Within State." There is no question but that this court can use the Virginia "long-arm" statute to extend its jurisdiction over nonresident defendants.

The term "long-arm" when used with respect to jurisdictional legislation refers to the enlargement of a state's jurisdictional powers over nonresident defendants. The first of these statutes was enacted by Illinois in 1956, Ill.Ann.Stat. ch. 110 § 17 (Smith-Hurd 1956), and since that time several other states, including Virginia, have passed similar legislation.

It will be noted that Virginia has included two separate paragraphs, (3) and (4), which deal with jurisdiction predicated on a potentially tortious injury which occurs within the State (the statute refers to the causing of a "tortious injury" which, of course, is something of a misnomer, since whether or not the injury was tortious is generally the fact at issue). This sets the Virginia statute apart from the so-called "single-act" long-arm statutes (notably those of Illinois and New York) which state simply that in personam jurisdiction may be asserted over a person who commits a "tortious act" within the state. Ill.Ann.Stat., supra; N.Y. CPLR § 302 (1963). Paragraph (4) is considerably more restrictive than paragraph (3), the former requiring that the defendant engage in some persistent course of conduct or derive substantial revenue from goods used or consumed or services rendered within the State for jurisdiction to attach. Therefore, in interpreting the Virginia statute we must attempt to ascertain the legislative purpose behind the inclusion of the two tortious injury paragraphs.

The significant difference between Virginia's statute and the "single-act" statutes is that the General Assembly saw fit to separate the causal act from the resulting injury. In legislation which bases jurisdiction simply on a "tortious act" committed within the state, it is obvious that the act and injury must coincide, as an act cannot be tortious in the absence of injury. Virginia, on the other hand, refers both to the "act or omission" and the "tortious injury" resulting therefrom. In both paragraphs the tortious injury occurs within Virginia, but in paragraph (3) the causal act also occurs within the State while in paragraph (4) it occurs outside the State, a fact which, in the minds of the legislators, necessitated the restrictive language appended to the latter paragraph.

It seems well settled that in a defamation action, the place of publication (the last event necessary to render the tort-feasor liable) is the place of the wrong. See Dale System, Inc. v. Time, Inc., 116 F.Supp. 527 (D.Conn. 1953); Hartmann v. Time, Inc., 166 F.2d 127, 1 A.L.R.2d 370 (3d Cir. 1948); O'Reilly v. Curtis Pub. Co., 31 F.Supp. 364 (D. Mass.1940); Palmisano v. News Syndicate Co., 130 F.Supp. 17 (S.D.N.Y.1955); Restatement, Conflicts of Laws § 377, para. 5 (1934). There is little doubt, then, that the facts of this case would fall within the provisions of a "single-act" statute such as the one enacted in Illinois, as the injury (tortious "act") occurred in Virginia where the alleged libel was published. As an example, take the case of Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961). There an Illinois plaintiff brought an action for breach of warranty (which would come in under the "tortious act" section in Illinois) against an Ohio valve manufacturer for a defective valve. The Ohio manufacturer had shipped the valve to a Pennsylvania corporation which had installed it in a water heater. The heater was shipped to Illinois where plaintiff purchased it. Thereafter, the heater exploded, causing plaintiff serious injury. The Illinois Supreme Court sustained the exercise of personal jurisdiction over the Ohio valve manufacturer, saying that the failure of the defective valve, the last event necessary to make the manufacturer liable for a tortious act, occurred in Illinois. In Gray, the actual "act" which precipitated the injury was the manufacture of the defective valve, which occurred outside Illinois. This was not a "tortious act," however, until the hot water heater exploded and caused injury to the plaintiff, and this occurred in Illinois. It is interesting to compare Gray with the earlier case of Trippe Mfg. Co. v. Spencer Gifts, Inc., 270 F.2d 821 (7th Cir. 1959). This was a decision under the Illinois "long-arm" statute by the Court of Appeals for the Seventh Circuit, which, at that time, had no controlling state precedent to rely on. In Trippe there was a New Jersey mail-order corporation which was not licensed to do business in Illinois but had mailed catalogs, containing allegedly false statements, into the state. The court decided that the defendant had performed no act within the state, tortious or otherwise. It seems safe to say that after Gray the Trippe case would be decided differently in Illinois, but it is believed that the Trippe result would be reached in a state, such as Virginia, where the statute requires a truly separate inquiry into the place of the act and the place of the injury.

In the instant case, the alleged tortious injury occurred upon the publication of the alleged libel within Virginia, but this was caused by the act of writing and mailing the letters outside Virginia. Plaintiff, therefore, must predicate jurisdiction upon paragraph (4), and this court must hold that the acts alleged in this case do not fall within the terms of the statute, as there is no evidence of any persistent course used by the Virginia General Assembly of conduct or derivation of revenue on the part of the defendants. The language must be interpreted with relation to the statute as a whole, and if the court were to hold that plaintiff could use paragraph (3) to obtain jurisdiction (a holding that the act occurred in Virginia), the necessity for paragraph (4) would be completely obviated, as every set of facts which give rise to tortious injury could be brought within the terms of paragraph (3). We would in effect be assimilating the Virginia statute to the single-act statutes of other states. Obviously, there is a purpose for paragraph (4) or the legislature...