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ARBITRON CO. v. E. W. SCRIPPS

March 14, 1983

Arbitron Company, Plaintiff,
v.
E. W. Scripps, Inc., and Memphis Publishing Company, Defendants



The opinion of the court was delivered by: POLLACK

MILTON POLLACK, District Judge.

 MILTON POLLACK, District Judge:

 The Arbitron Company has asserted claims for copyright infringement and related torts against E. W. Scripps and the Memphis Publishing Company. Arbitron claims that Memphis Publishing, a corporation that publishes two local newspapers in Memphis, Tennessee, obtained unauthorized access to Arbitron's information regarding estimates of radio and television audiences and that it used these estimates to prepare comparative advertising brochures that were distributed in the Memphis area.

 Defendant Memphis Publishing has moved to dismiss the action on the grounds that there is no personal jurisdiction over it and that venue is improper. Defendant Scripps has moved to dismiss the claims against it claiming that it is in no way involved in the action.

 Jurisdiction over Memphis Publishing

 Plaintiff attempts to establish jurisdiction over Memphis Publishing ("MP") by relying on both CPLR §§ 301 and 302.

 Jurisdiction under CPLR § 301

 CPLR § 301 allows New York courts to obtain jurisdiction over an out-of-state defendant such as Memphis Publishing if the defendant is doing business in New York. It is irrelevant whether the claim arose in New York. In general, the defendant corporation must conduct activities with a fair measure of permanence and continuity in New York before it can be found to be doing business here. Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 115 N.E. 915 (1917). This basic test has been made somewhat more specific in cases where plaintiffs have attempted to gain jurisdiction over out-of-state defendants on the basis of acts of agents of the defendants in the state. Thus, the court in Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851 (1967), cert. denied, 389 U.S. 923, 19 L. Ed. 2d 266, 88 S. Ct. 241 (1967), held that for jurisdiction to be based on an agent's activities, "this is the significant and pivotal factor -- the Service [agent] does all the business which Hilton (U.K.) could do were it here by its own officials." The local agent's activities must be "widespread and energetic." Id. 281 N.Y.S.2d at 45. In Aquascutum of London v. American Champion, 426 F.2d 205 (2d Cir. 1970), the court held that "solicitation-plus" "some financial or commercial dealings in New York" "or the defendant's holding himself out as operating in New York, either personally or through an agent," could form the basis for personal jurisdiction. Id. at 212. However, it is not doing business here "when a foreign corporation's activities in New York in addition to soliciting orders amount to nothing more than paying persons to perform essentially mechanical tasks for it. . . ." Id.

 One recent Southern District case has noted that before it is possible to use this "solicitation plus" test, the amount of solicitation must be substantial and carried on with a considerable measure of continuity and from a permanent locale. Stark Carpet v. M-Geough Robinson, Inc., 481 F. Supp. 499 (S.D.N.Y. 1980).

 While no one fact is determinative of the question of personal jurisdiction, courts do rely upon the presence of certain factors in their analyses. For example, the authority of the agent that solicits sales to confirm those sales is a factor supporting jurisdiction. Miller v. Surf Properties, 4 N.Y.2d 475, 176 N.Y.S.2d 318, 151 N.E.2d 874 (1958). Similarly, the functioning of the agent as a claims adjuster, Meat Systems Corp. v. Ben Langel-Mol, 410 F. Supp. 231 (S.D.N.Y. 1976), and the assistance of the agent in the collection of debts and in customer relations and negotiations, Carter-Wallace v. Ever-Dry Corp., 290 F. Supp. 735 (S.D.N.Y. 1968), can help support a finding of jurisdiction.

 Summary of Memphis Publishing's New York Activities

 MP is a Delaware corporation with its principal place of business in Memphis, Tennessee, where it publishes two newspapers, the Commercial Appeal and the Press-Scimitar. There are only 24 out of 482,000 paid subscriptions to the Commercial Appeal in New York and no paid subscriptions to the Press-Scimitar. MP has no office, no telephone listing, no bank account and no property in New York. It does not perform any services in New York and does not pay New York taxes. It is not licensed to do business in New York and does not have an agent to accept service of process here. Further, except as specified below, it has no agent in New York.

 Arbitron's principal effort to obtain jurisdiction over MP relies on MP's use of two New York agencies, Metro and Story, to solicit advertising. The type of advertising that these companies solicit is nationwide copy that companies such as Ford wish to place in many papers. The advertisers utilize agents such as Metro and Story so that they can place their ads in many national papers at one time.

 Story is an independent advertising sales agency that attempts to procure national advertising for 33 newspapers, including those published by MP. In 1981, Story solicited $2.5 million worth of advertising for MP. This constituted 4.3% of MP's total advertising revenue and 2.59% of MP's total advertising lineage. Story solicits companies that it selects but uses rates set by MP. Formally, MP retains the right to review and reject all of the advertising solicited by Story. While Arbitron claims that this option has never been utilized, MP, by the Reply Affidavit of Williams, para. 5, shows that copy has been rejected by MP. Letters attached to Plaintiff's Memorandum of Law, Exhibit 3, suggest that Story assists MP in collecting delinquent accounts. In addition, ...


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