State v. Luv Pharmacy, Inc.

Decision Date31 May 1978
Docket NumberNo. 7895,7895
Citation118 N.H. 398,388 A.2d 190
Parties, 16 A.L.R.4th 1304 The STATE of New Hampshire v. LUV PHARMACY, INC., Curtis Circulation Co., Inc., Penthouse International, Ltd.
CourtNew Hampshire Supreme Court

David H. Souter, Atty. Gen. (Richard B. Michaud, Concord, by brief, and Peter W. Heed, Concord, orally), for the State.

Devine, Millimet, Stahl & Branch, Manchester (Alice S. Love and Joseph M. McDonough, III, Manchester, by brief), for defendants.

BOIS, Justice.

Indictments were brought against the defendants for violation of the State obscenity statute, RSA 650:2. The defendants allegedly sold obscene material in that they sold the July 1976 issue of Penthouse magazine. On January 7, 1977, they filed pleas in abatement challenging the court's jurisdiction. Keller, C. J., made an interlocutory order on the pleas on April 19, 1977, and a final order denying the pleas on May 23, 1977. The defendants seasonably excepted to this denial. The court reserved and transferred all questions of law raised by the foregoing exceptions and all other exceptions appearing in the transcript. We affirm in part, and remand.

For the sake of clarity, this opinion analyzes each defendant's claims separately.

I. Luv Pharmacy, Inc. (hereinafter "Luv")

Luv owns a store in Manchester. Its manager sold a copy of the July 1976 issue of Penthouse magazine to a Manchester police officer. Luv was indicted for the sale; a copy of the indictment and a notice to appear was hand-delivered to the manager. The indictment alleges that "Luv Pharmacy, Inc. . . . did knowingly sell obscene material, in that the said defendant sold . . . the July 1976 issue of Penthouse Magazine . . . contrary to the form of the Statute . . . ." On January 7, 1977, Luv filed a plea in abatement, moving that the case be dismissed for lack of criminal jurisdiction. After an evidentiary hearing, the court denied the plea.

Luv argues that RSA 300:11 governs service of process in the instant proceeding. This statute provides methods of serving process "in any suit, action or proceeding, . . . (and of serving) any notice or demand required or permitted by law to be served on a foreign corporation . . . ." RSA 300:11(a) and (b) regulate service of process on registered agents of foreign corporations. (Under RSA 300:3(b), any foreign corporation registered to do business in New Hampshire must maintain a registered agent in this State). If a foreign corporation transacting business in this State fails to appoint or maintain a registered agent upon whom legal process can be served, then the secretary of state is authorized to accept service for the corporation. RSA 300:11(c).

Luv has no registered agent in New Hampshire, but no substituted service of process was made on the secretary of state. Defendant submits that this failure to make substituted service as per RSA 300:11(c) deprives the court of in personam jurisdiction. We disagree.

Defendant misreads the statute. By its very terms, RSA 300:11 permits service of process by means other than those it specifies. The first sentence of RSA 300:11 provides that: "Service of process . . . may be made on (a foreign) corporation as otherwise provided by law . . . ." RSA 300:13 reiterates that: "The method of service provided by this chapter is not exclusive, and service on (foreign) corporations may be made in any other manner provided by law."

One statute providing an alternative method of service is RSA 510:14. In re Tech Consolidated, Inc., 329 F.Supp. 27, 31 (D.N.H.1971); see LaBonte v. American Mercury Magazine, Inc., 98 N.H. 163, 168, 96 A.2d 200, 203 (1953); Taylor v. Klenzade Products, Inc., 97 N.H. 517, 522, 92 A.2d 910, 914 (1952). Service under RSA 510:14 may be made "upon any agent, overseer or other person having the care of any of the property or charge of any of the business of the corporation." As we noted above, service in the instant case was accomplished by hand-delivering a copy of the indictment and a notice to appear to the manager of Luv's Manchester store. The manager himself agreed at the hearing below that he was "the employee of Luv's that has the greatest authority of any employee of Luv's in New Hampshire." We hold that service on him satisfied RSA 510:14 and thereby met the service-of-notice requirements of in personam jurisdiction.

Luv has neither briefed nor argued any other exception to the denial of its plea in abatement. We therefore affirm the denial.

II. Penthouse International, Ltd. (hereinafter "Penthouse")

Penthouse is a Delaware corporation with its principal place of business in New York. It is not registered to do business in New Hampshire and has not appointed an agent to receive service of process here. The indictment entered against Penthouse charges that it "did purposely sell obscene material by the conduct of another for whom it is accountable, in that the defendant's conduct of publishing the said obscene material resulted in the said sale of this material within the State of New Hampshire . . . ." A copy of this indictment and a notice to appear was served on the secretary of Penthouse's executive vice-president in New York. Additionally, substituted service was made on the New Hampshire Secretary of State pursuant to RSA ch. 300. On January 7, 1977, Penthouse filed a plea in abatement, moving that the case be dismissed for lack of criminal jurisdiction. After an evidentiary hearing, the plea was denied.

Penthouse challenges the court's in personam jurisdiction as well as its territorial jurisdiction. We deal with these challenges seriatim.

A. In personam jurisdiction.

The requirement that a court possess in personam jurisdiction actually comprises two components: service of notice must be proper, and there must exist "those 'affiliating circumstances' without which the courts of a State may not enter a judgment imposing obligations on persons . . . ." Hanson v. Denckla, 357 U.S. 235, 245-46, 78 S.Ct. 1228, 1235, 2 L.Ed.2d 1283 (1958) (footnotes omitted). Penthouse claims only that "affiliating circumstances" are lacking. This contention must be rejected.

In the past, a court could render a binding judgment on a defendant only if the defendant were physically present in the jurisdiction. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); 1 C. Alexander, The Law of Arrests § 26d (1949); see State v. Keating, 108 N.H. 402, 236 A.2d 684 (1967) (by implication); 22 C.J.S. Criminal Law § 144 (1961). In the civil area this requirement was abolished by International Shoe, supra, which substituted the requirement that if the defendant "be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " Id. 326 U.S. at 316, 66 S.Ct. at 158. We have adopted the rationale of that case "without limitation." Roy v. North American Newspaper Alliance, 106 N.H. 92, 205 A.2d 844, 846 (1964).

Penthouse urges that the minimum contacts test of International Shoe and its progeny applies to this case. However, we are unable to locate, and the parties have failed to cite, any case law applying this test to criminal proceedings. Nor are we convinced that the minimum contacts analysis could or should be applied to all criminal proceedings. Application of this standard to natural persons charged with criminal offenses might mean that a criminal judgment could be rendered against a natural person even if he were absent from the jurisdiction. Such result might render nugatory, for example, RSA ch. 612, our extradition statute. It might also raise serious constitutional questions.

Nonetheless, corporations do pose a special problem. A corporation is a jural person, but not a person in fact. It is an artificial creature, acting only through agents, Boston, Concord & Montreal R. R. v. State, 32 N.H. 215, 227 (1855), and therefore potentially "present" everywhere it does business. March v. Eastern R. R. Co., 40 N.H. 548, 578 (1860). For this reason, trying to pinpoint the State in which a corporation is physically present, for purposes of determining criminal jurisdiction, is like trying to handcuff a shadow.

We find instructive the discussion in International Shoe, supra of corporate presence. The Supreme Court therein stated:

Since the corporate personality is a fiction, although a fiction intended to be acted upon as though it were a fact, . . . it is clear that unlike an individual its "presence" without, as well as within, the state of its origin can be manifested only by activities carried on in its behalf by those who are authorized to act for it. To say that the corporation is so far "present" there as to satisfy due process requirements, for purposes of . . . the maintenance of suits against it in the courts of the state, is to beg the question to be decided.

Id. 326 U.S. at 316, 66 S.Ct. at 158.

It should also be remarked that because a corporation does not consist of any one "body," it seemingly cannot be extradited. See RSA ch. 612.

The Supreme Court in Shaffer v. Heitner, 433 U.S. 186, n. 19, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977), recently noted (in the context of civil jurisdiction) that: "The differences between individuals and corporations may, of course, lead to the conclusion that a given set of circumstances establishes State jurisdiction over one type of defendant but not over the other."

We hold that Penthouse is sufficiently "present" in New Hampshire to be subject to prosecution for the alleged offense. At the hearing on its plea in abatement, Penthouse's own circulation manager testified that the defendant not only publishes Penthouse magazine but also is involved in its distribution. Curtis Circulation Company determines allotments for all of Penthouse's wholesalers throughout the nation, and then sends to Penthouse shipping labels with the names and addresses...

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