Opinion ID: 1592553
Heading Depth: 2
Heading Rank: 1

Heading: The first group, or the Texas Two:

Text: These defendants argue they are protected by what they refer to as the Fiduciary Shield Doctrine, which they claim was recognized by this Court in Thames v. Gunter-Dunn, Inc., 373 So.2d 640 (Ala.1979). In Thames, supra, this Court held that bank officers of an out-of-state bank, who had never been in Alabama and over whom the plaintiff sought in personam jurisdiction in a suit for breach of a lease, an accounting, and foreclosure of a landlord's lien, or alternatively damages for breach of a lease, were not subject to the jurisdiction of Alabama courts. The Court held: `[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he 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.' ... [Quoting from International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).] While it is sometimes proper to hold that a foreign corporation or bank whose agents acted in Alabama, and caused ramifications in this state, has sufficient contacts with the state to warrant jurisdiction, it is a totally different matter to hold that individual officers have such minimum contacts. In this case the officers had never been present in Alabama, and there was no proof that the appellees were conducting any personal business either through the use of the corporation as an alter ego, or through personal agents in this state. Thus this Court finds that the minimum contacts necessary to extend personal jurisdiction are lacking. [Emphasis added.] Based upon the record, these bank officers performed all acts within the scope of their bank employment. To allow personal jurisdiction over them when they acted solely in the furtherance of their official positions would be to extend the long-arm statute too far. Accordingly, the exercise of jurisdiction over these appellees would be improper under ARCP 4.2. Thames, supra, at 642-643. See also, Mann v. Frank Hrubetz & Co., 361 So.2d 1021, 1022 (Ala.1978). Earlier in the Thames opinion, this Court quoted approvingly language from another court's opinion: In Idaho Potato Com'n v. Washington Potato Com'n, 410 F.Supp. 171, 181 (D.Idaho 1975), the court said: `[U]nless there is evidence that the act by the corporate officer was other than as an agent for the corporation, then personal jurisdiction over the corporate officer will not lie. Fashion Two Twenty, Inc. v. Steinberg, 339 F.Supp. 836, 842 (E.D.N.Y.1971).' Thames, supra, at 642. The Brookses argue that the doctrine recognized in Thames is not applicable to the Texas Two because even though never physically present in Alabama, they owed a personal duty to Jerry Brooks which they had either assumed or were delegated responsibility for, and that they breached that duty under the principle set out in Fireman's Fund American Insurance Co. v. Coleman, 394 So.2d 334 (Ala. 1980), and, therefore, that jurisdiction over them could be acquired under Ala.R.Civ.P. 4.2(a)(2)(D). They further argue that these two defendants should have clearly foreseen that they could be haled into court in Alabama for an injury occurring at the Mobile terminal. Ala.R.Civ.P. 4.2(a)(2) reads in pertinent part:  Sufficient Contacts. A person has sufficient contacts with the state when that person, acting directly or by agent, is or may be legally responsible as a consequence of that person's     (C) causing tortious injury or damage by an act or omission in this state including but not limited to actions arising out of the ownership, operation or use of a motor vehicle, aircraft, boat or watercraft in this state; (D) causing tortious injury or damage in this state by an act or omission outside this state if the person 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; (E) causing injury or damage in this state to any person by breach of warranty expressly or impliedly made in the sale of goods outside this state when the person might reasonably have expected such other person to use, consume, or be affected by the goods in this state, provided that the person also 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;     (I) otherwise having some minimum contacts with this state and, under the circumstances, it is fair and reasonable to require the person to come to this state to defend an action. The minimum contacts referred to in this subdivision (I) shall be deemed sufficient, notwithstanding a failure to satisfy the requirement of subdivisions (A)-(H) of this subsection (2), so long as the prosecution of the action against a person in this state is not inconsistent with the constitution of this state or the Constitution of the United States. Under Ala.R.Civ.P. 4.2(a)(2)(A) and 4.2(a)(2)(C), Thames found no jurisdiction over nonresident defendants who had never been in Alabama. Section 4.2(a)(2)(D) applies to tortious acts committed outside the state and so is more liberal in permitting Alabama courts to hale nonresidents into court through process issued pursuant to the long-arm rule. The holding in Thames, supra, although not discussing the application of Rule 4.2(a)(2)(D), seems to be most appropriate to the jurisdictional questions presented here. The United States Supreme Court recently spoke to the issue of whether under another state's long arm statute, that state had personal jurisdiction over certain nonresident defendants. See Calder v. Jones, ___ U.S. ___, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). There, the plaintiff, an entertainer who lived and worked in California and whose case was centered there, brought suit in California, claiming she had been libeled by an article published by the National Enquirer, a national magazine which has its principal place of business in Florida. The suit named as defendants, in addition to the magazine and its distributing company, the reporter who authored the article and the editor of the magazine. The reporter and editor were residents of Florida and had written and edited the article in Florida. The reporter frequently traveled to California on business unrelated to the article, and the editor had been to California on two occasions, once on a pleasure trip and once to testify in an unrelated trial. The reporter had researched the article in Florida by means of telephone calls to sources in California. The trial court held that there was no personal jurisdiction over the reporter and editor. The California District Court of Appeal reversed. Jones v. Calder, 138 Cal.App.3d 128, 187 Cal.Rptr. 825 (1982). The rationale of the state appeals court was that even though the actions causing the effects in California were performed outside the state, this did not prevent the state from asserting jurisdiction over a cause of action arising out of those effects. The U.S. Supreme Court approved this reasoning. Calder v. Jones, supra . Justice Rehnquist, speaking for the Court, succinctly summarized the law: The Due Process Clause of the Fourteenth Amendment to the United States Constitution permits personal jurisdiction over a defendant in any State with which the defendant has `certain minimum contacts... such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Milliken v. Meyer, 311 U.S. 457, 463 [61 S.Ct. 339, 343, 85 L.Ed. 278].' International Shoe Co. v. Washington, 326 U.S. 310, 316 [66 S.Ct. 154, 158, 90 L.Ed. 95] (1945). In judging minimum contacts, a court properly focuses on `the relationship among the defendant, the forum, and the litigation.' Shaffer v. Heitner, 433 U.S. 186, 204 [97 S.Ct. 2569, 2580, 53 L.Ed.2d 683] (1977). See also Rush v. Savchuk, 444 U.S. 320, 332 [100 S.Ct. 571, 579, 62 L.Ed.2d 516] (1980). The plaintiff's lack of `contacts' will not defeat otherwise proper jurisdiction, see Keeton v. Hustler Magazine, Inc., [___ U.S. ___, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) ], but they may be so manifold as to permit jurisdiction when it would not exist in their absence. Here, the plaintiff is the focus of the activities of the defendants out of which the suit arises. See McGee v. International Life Ins. Co., 355 U.S. 220 [78 S.Ct. 199, 2 L.Ed.2d 223] (1957).     Jurisdiction over petitioners is therefore proper in California based on the `effects' of their Florida conduct in California. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-298 [100 S.Ct. 559, 567, 62 L.Ed.2d 490] (1980); Restatement (Second) of Conflicts of Law § 37. Calder v. Jones, supra, at ___, 104 S.Ct. at 1486. This effects test approved by the Supreme Court appears quite similar to the consequences test enunciated in Alabama Waterproofing Co. v. Hanby, 431 So.2d 141 (Ala.1983). Cf., Helicopteros Nacionales de Columbia, S.A. v. Hall, ___ U.S. ___, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (holding that the Texas contacts of defendant, a corporation headquartered in Columbia, South America, were not related to the cause of action brought in Texas for wrongful death; the deaths occurred in Peru). Interestingly, the Calder court also discussed an argument quite similar to the fiduciary shield doctrine argued by the appellees herein: Petitioners argue that they are not responsible for the circulation of the article in California. A reporter and an editor, they claim, have no direct economic stake in their employer's sales in a distant state. Nor are ordinary employees able to control their employer's marketing activity. The mere fact that they can `foresee' that the atticle will be circulated and have an effect in California is not sufficient for an assertion of jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 295 [100 S.Ct. at 566]; Rush v. Savchuk, 444 U.S., at 328-329 [100 S.Ct. at 577]. They do not `in effect appoint the [article their] agent for service of process.' World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 296 [100 S.Ct. at 566]. Petitioners liken themselves to a welder employed in Florida who works on a boiler which subsequently explodes in California. Cases which hold that jurisdiction will be proper over the manufacturer, Buckeye Boiler Co. v. Superior Court, 71 Cal.2d 893 [80 Cal.Rptr. 113], 458 P.2d 57 (1969); Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961), should not be applied to the welder who has no control over and derives no direct benefit from his employer's sales in that distant state. Petitioners' analogy does not wash. Whatever the status of their hypothetical welder, petitioners are not charged with mere untargeted negligence. Rather, their intentional, and allegedly tortious, actions were expressly aimed at California. Petitioner South wrote and petitioner Calder edited an article that they knew would have a potentially devastating impact upon respondent. And they knew that the brunt of that injury would be felt by respondent in the State in which she lives and works and in which the National Enquirer has its largest circulation. Under the circumstances, petitioners must `reasonably anticipate being haled into court there' to answer for the truth of the statements made in their article. World-Wide Volkswagen Corp. v. Woodson, 444 U.S., at 297 [100 S.Ct. at 567]; Kulko v. Superior Court, 436 U.S. 84, 97-98 [98 S.Ct. 1690, 1699-1700, 56 L.Ed.2d 132] (1978); Shaffer v. Heitner, 433 U.S. 186, 216 [97 S.Ct. 2569, 2586, 53 L.Ed.2d 683 (1977). An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause the injury in California. Petitioners are correct that their contacts with California are not to be judged according to their employer's activities there. On the other hand, their status as employees does not somehow insulate them from jurisdiction. Each defendant's contacts with the forum state must be assessed individually. See Rush v. Savchuk, 444 U.S., at 332 [100 S.Ct. at 579] (`The requirements of International Shoe ... must be met as to each defendant over whom a state court exercises jurisdiction'). In this case, petitioners are primary participants in an alleged wrongdoing intentionally directed at a California resident, and jurisdiction over them is proper on that basis. (Emphasis added.) Calder v. Jones, supra, at ___, 104 S.Ct. at 1487; see also; Columbia Briargate Co. v. First National Bank, 713 F.2d 1052 (4th Cir.1983) (there the court stated that the fiduciary shield doctrine is not a constitutional doctrine, but is more an equitable doctrine). These Texas Two defendants are charged with mere untargeted negligence; thus, assertion of personal jurisdiction over them would offend traditional notions of fair play and substantial justice. Calder v. Jones, supra . See also Alabama Waterproofing Co. v. Hanby, 431 So.2d 141 (Ala.1983).