Court finds 13 subscribers enough for reach over New York paper

CALIFORNIA–The circulation of 13 daily and 18 Sunday edition copies of the New York Daily News to subscribers in California was sufficient to establish the required “minimum contacts” needed to subject the New York newspaper to a libel suit in California, the U.S. Court of Appeals in Pasadena (9th Cir.) ruled in early September.

Berry Gordy, a resident of California and founder of Motown Records, filed a defamation lawsuit in Los Angeles Superior Court against the Daily News and its columnist George Rush for an allegedly defamatory column. The newspaper removed the lawsuit to a federal District Court in Los Angeles, which dismissed the action for lack of jurisdiction over it.

The unanimous three judge panel reversed the lower court’s decision, holding that the Daily News, by regularly circulating newspapers in California, had purposefully availed itself of the privilege of conducting business in the state. Further, Gordy’s libel claim was based on the publication of an allegedly defamatory article whose effects would clearly be felt in California, where Gordy resides. Finally, the court found that the paper had failed to make a compelling argument that litigating the case in California would be unreasonable.

The panel held that although the Daily News circulates 13 copies of its daily edition and 18 copies of its Sunday edition to subscribers in California, representing only .0017% of the paper’s total circulation, this was sufficient contact with the state. If it were not for the distribution of those newspapers, Gordy’s reputation would not have been injured in the state, the court ruled.

The court rejected the Daily News’s argument that its circulation in California was not solicited, but was random, isolated and fortuitous. Instead, the court found that mailing the paper to regular subscribers, even though few, was not random. “If some New York entity had written only 13 defamatory letters and sent them all to California, we would permit a defamed California resident to sue the entity in California. It is not clear why the distribution of 13 to 18 defamatory copies of a column loses magnitude as a contact simply because the Daily News does a lot of other things elsewhere.”

Although the court ruled that Gordy had satisfied the “minimum contacts” requirement, it said it would not adopt Gordy’s expansive view of the standard. Gordy had argued that the paper’s newsgathering methods of using stringers and sources based in California and sending reporters to California established sufficient contacts for jurisdictional purposes. (Gordy v. The Daily News; Media Counsel: R. Bruce Rich, New York)