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No.

02-56937

In the United States Court of Appeals


for the Ninth Circuit

Arnold Schwarzenegger,
Plaintiff and Appellant,
vs.

Fred Martin Motor Co.,


Defendant and Appellee.

APPELLANT’S OPENING BRIEF


On Appeal From A Judgment Of The United States District Court
Central District Of California, Western Division
No. CV-02-06354-FMC-(SHSx)
The Honorable Florence-Marie Cooper

James C. Martin (Cal. Bar 83719) Martin D. Singer (Cal. Bar 78166)
Denise M. Howell (Cal. Bar 149731) Charles J. Harder (Cal. Bar 184593)
Benjamin G. Shatz (Cal. Bar 160229) LAVELY & SINGER
REED SMITH CROSBY HEAFEY LLP Professional Corporation
355 South Grand Avenue, Suite 2900 2049 Century Park East, Suite 2400
Los Angeles, CA 90071 Los Angeles, CA 90067-2906
Telephone: (213) 457-8000 Telephone: (310) 556-3501
Facsimile: (213) 457-8080 Facsimile: (310) 556-3615

Attorneys for Appellant


Arnold Schwarzenegger
TABLE OF CONTENTS

Page

I. JURISDICTIONAL STATEMENT AND STANDARD OF


REVIEW.............................................................................1

II. STATEMENT OF ISSUES ON APPEAL ....................................2

III. PRELIMINARY STATEMENT ................................................3

IV. FACTUAL AND PROCEDURAL BACKGROUND ......................5

A. Fred Martin Motor Company Misappropriates Mr.


Schwarzenegger’s Likeness For Commercial Purposes In
Print Advertisements Published In Ohio...............................5

B. Mr. Schwarzenegger Sues Fred Martin Motor Co. In


California For Misappropriating His Name And Likeness.........7

C. When FMMC Moves To Dismiss The Action On Personal


Jurisdiction Grounds, Mr. Schwarzenegger Responds With
Evidence Detailing FMMC’s Extensive California Contacts
And Knowledge Of Mr. Schwarzenegger’s Residence And
Work Within The Forum .................................................8

D. The District Court Dismisses The Action Against FMMC


On Personal Jurisdiction Grounds And Mr. Schwarzenegger
Appeals..................................................................... 11

V. ARGUMENT ..................................................................... 12

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TABLE OF CONTENTS
(continued)
Page

A. The District Court Erred In Ruling That FMMC Is Beyond


The General Or Specific Jurisdiction Of A California
Forum ...................................................................... 12

B. FMMC’s Extensive And Habitual Business Transactions In


California Are Critical To Its Ability To Market And Sell
Automobiles And, Taken As A Whole, Establish General
Jurisdiction ................................................................ 17

1. FMMC’s Contacts With California Are So Extensive


As To Give It A “Presence” In The State For
Jurisdictional Purposes .......................................... 19

2. FMMC’s Practice Of Purchasing Considerable


Inventory From California To Sustain Its Operations,
When Combined With Its Other Forum Contacts,
Likewise Supports The Exercise Of General
Jurisdiction ........................................................ 22

C. By Intentionally Directing Its Wrongful Conduct At A


Forum Resident, FMMC Subjected Itself To The Specific
Jurisdiction Of A California Forum .................................. 29

1. FMMC Purposefully Availed Itself Of The Privileges


Of The Forum By Committing An Intentional Tort
That FMMC Knew Or Should Have Known Would
Injure A California Resident ................................... 30

2. Mr. Schwarzenegger’s Claims Arise Out Of Or


Result From FMMC’s Forum Related Activities .......... 36

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TABLE OF CONTENTS
(continued)
Page

3. The Exercise Of Personal Jurisdiction Over FMMC


Is Reasonable And Consistent With Important
Policies Balancing State And Individual Interests.......... 39

VI. CONCLUSION................................................................... 45

VII. STATEMENT OF RELATED CASES ..................................... 47

VIII. CERTIFICATE OF COMPLIANCE ........................................ 48

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TABLE OF AUTHORITIES

Page(s)

CASES

Amoco Egypt Oil Co. v. Leonis Navigation Co., Inc.,


1 F.3d 848 (9th Cir. 1993) ........................................................... 17

Asahi Metal Indus. Co. v. Superior Court,


480 U.S. 102 (1978) .............................................................. 14, 39

Ballard v. Savage,
65 F.3d 1495 (9th Cir. 1995) ................................................... 39, 42
Bancroft & Masters, Inc. v. Augusta National, Inc.,
223 F.3d 1082 (9th Cir. 2000) ..................................................passim
Buckeye Boiler Co. v. Superior Court,
71 Cal. 2d 893 (1969) ................................................................. 13
Burger King Corp. v. Rudzewicz,
471 U.S. 462 (1985) ............................................... 23, 39, 40, 41, 45
Calder v. Jones,
465 U.S. 783 (1984) ............................................... 30, 31, 32, 33, 35
California Software, Inc. v. Reliability Research,
631 F. Supp. 1356 (C.D. Cal. 1986) ........................... 16, 31, 32, 34, 44
Credit Lyonnais Securities (USA), Inc. v. Alcantara,
183 F.3d 151 (2nd Cir. 1999) ....................................................... 16

Cubbage v. Merchant,
744 F.2d 665 (9th Cir. 1984) ........................................................ 44

Cybersell Inc. v. Cybersell, Inc.,


130 F.3d 414 (9th Cir. 1997) ........................................................ 28

Data Disc, Inc. v. Systems Technology Assocs., Inc.,


557 F.2d 1280 (9th Cir. 1977) ........................................ 12, 13, 16, 22

Dorsey v. American Golf Corp.,


98 F. Supp. 2d 812 (E.D. Mich. 2000) ............................................ 18

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TABLE OF AUTHORITIES
(continued)
Page(s)

Forsyth v. Overmyer,
576 F.2d 799 (9th Cir. 1978) ........................................................ 15

Freeman v. Hittle,
747 F.2d 1299 (9th Cir. 1984) .........................................................1

Glencore Grain Rotterdam, B.V. v. Shivanth Rai Harnarain Co.,


284 F.3d 1114 (9th Cir. 2002) ..................................................passim

GTFM, Inc. v. International Basic Source, Inc.,


2002 WL 31050840, 5 (S.D.N.Y. 2002)........................................... 25

Helicopteros Nacionales de Colombia, S.A. v. Hall,


466 U.S. 408 (1984) ..............................................................passim

Integral Development Corp. v. Weissenbach,


99 Cal. App. 4th 576 (2002) ......................................................... 15

International Shoe v. Washington,


326 U.S. 310 (1945) ......................................................... 12, 13, 15

Landoil Resources Corp. v. Alexander & Alexander Services, Inc.,


918 F.2d 1039 (2nd Cir. 1990) ...................................................... 16

McGee v. International Life Insurance Co.,


355 U.S. 220 (1957) ................................................................... 16

Metropolitan Life Ins. Co v. Robertson-Ceco Corp.,


84 F.3d 560 (2d Cir. 1996) .......................................................... 18

Panavision Int'l v. Toeppen,


141 F.3d 1316 (9th Cir. 1998) ...............................................2, 37, 39

Pavlovich v. Superior Court,


29 Cal. 4th 262 (2003) ................................................................ 31

Perkins v. Benguet Consolidated Mining Co.,


342 U.S. 437 (1950) .................................................... 13, 21, 22, 26

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TABLE OF AUTHORITIES
(continued)
Page(s)

Provident National Bank v. California Federal Savings & Loan,


819 F.2d 434 (3d Cir. 1987) .......................................... 18, 22, 26, 27

Rio Properties, Inc. v. Rio Int'l Interlink,


284 F.3d 1007 (9th Cir. 2002) ..................................................passim

Rosenberg Bros. & Co. v. Curtis Brown Co.,


260 U.S. 516 (1923) ............................................................. 23, 24

Simpson v. Quality Oil Company, Inc.,


723 F. Supp. 382 (S.D. Ind. 1989) ................................................. 25

Sinatra v. National Enquirer, Inc.,


854 F.2d 1191 (9th Cir. 1988) ..................................................passim

T.H. Davies & Co. v. Republic of Marshall Islands,


174 F.3d 969 (9th Cir. 1998) .............................................. 24, 25, 27

Thomson v. Continental Ins. Co.,


66 Cal. 2d 738 (1967) ............................................................ 14, 43

Toys "R" Us, Inc. v. Step Two, S.A.,


318 F.3d 446, 2003 WL 175322 (3rd Cir. 2003) ................................ 28

Vons Companies, Inc. v. Seabest Foods, Inc.,


14 Cal. 4th 434 (1996) ................................................. 13, 18, 38, 41

World Gym Licensing, Ltd. v. Fitness World, Inc.,


47 F. Supp. 2d 614 (D. Md. 1999) ...................................................5

Zippo Mfg. Co. v. Zippo Dot Com, Inc.,


952 F. Supp. 1119 (W.D. Pa. 1997) ............................................... 28

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TABLE OF AUTHORITIES
(continued)
Page(s)

STATUTES

California

Cal. Civ. Code § 410.10 .................................................................. 12

Cal. Civ. Code § 3344 ................................................................... 5, 7

Federal

28 U.S.C. § 1332 .............................................................................1


28 U.S.C. § 1441 .............................................................................1

Fed. R. App. Proc. 32(a)(7)(C) .......................................................... 48

Fed. R. Civ. P. 12(b)(2) ................................................................... 17


Fed. R. Civ. P. 54(b) ........................................................................1

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I.
JURISDICTIONAL STATEMENT AND STANDARD OF REVIEW

Jurisdiction And Timely Appeal. Arnold Schwarzenegger


appeals the Judgment dismissing defendant Fred Martin Motor Company,
entered for the reasons set forth in the district court’s Order granting Fred
Martin Motor Company’s motion to dismiss for lack of personal jurisdiction.
(ER II:943; III:662) The district court had jurisdiction under 28 U.S.C.
sections 1332 and 1441 (district court jurisdiction over actions removed from
state court on diversity of citizenship grounds) and this Court has jurisdiction
under 28 U.S.C. sections 1291 and 1294(1) (jurisdiction over district court
judgments).

The appeal was initiated before entry of a judgment of dismissal.


Thereafter, at Mr. Schwarzenegger’s request, on December 20, 2002 the
district court entered judgment pursuant to Rule 54(b) of the Federal Rules of
Civil Procedure. The entry of judgment timely perfected this appeal. See
Freeman v. Hittle, 747 F.2d 1299, 1300-01 (9th Cir. 1984) (Rule 54(b)
judgment applies retroactively to previously filed notice of appeal); see also
FRAP 4(a)(2).

Standard Of Review. A district court’s determination that


personal jurisdiction does not exist is a question of law reviewed de novo. Rio
Properties, Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002).
Mr. Schwarzenegger bears the burden of establishing jurisdiction, but need

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only make a prima facie showing to sustain that burden. Id. In determining
whether Mr. Schwarzenegger has met this burden, the allegations in his
complaint must be taken as true, and conflicts between the facts contained in
the parties’ affidavits must be resolved in his favor. Id. Any factual findings
by the district court are reviewed for clear error. Panavision Int’l v. Toeppen,
141 F.3d 1316, 1320 (9th Cir. 1998).

II.
STATEMENT OF ISSUES ON APPEAL

Did the district court err in finding no prima facie case of general
personal jurisdiction in California over Fred Martin Motor Company, where
the record establishes substantial, ongoing, business-critical purchases from
parties within the state, in addition to various other commercial contacts?

Did the district court err in finding no prima facie case of specific
personal jurisdiction in California over Fred Martin Motor Company, where
the company purposefully availed itself of the benefits of the forum, engaged
in forum related activities that gave rise to these claims, and reasonably is
susceptible to the forum’s jurisdiction?

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III.
PRELIMINARY STATEMENT

Motions to dismiss for lack of personal jurisdiction have a place


in our system of jurisprudence. But as this Court and others have emphasized,
a plaintiff’s prima facie showing of the facts needed to support jurisdiction
should defeat such a motion. The court below failed to heed that message and
erroneously granted a Rule 12(b)(2) dismissal. This Court should rectify that
error.

Those who have had access to motion pictures and television for
the last quarter century will be immediately familiar with the profession and
work of Arnold Schwarzenegger. Because Mr. Schwarzenegger’s name,
image and other attributes are instantly recognizable, they are of considerable
commercial value both to Mr. Schwarzenegger and to anyone he grants
permission for their use. In light of the popularity of Mr. Schwarzenegger’s
films, two particularly valuable aspects of his publicity rights are his
photograph and references to the movies that have helped make him a
household name.

Without Mr. Schwarzenegger’s consent, and indeed without any


prior contact with Mr. Schwarzenegger, appellee Fred Martin Motor
Company (FMMC), an Ohio car dealership, misappropriated the value of Mr.
Schwarzenegger’s image and onscreen repute as “The Terminator,” by using

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his name and photograph in a newspaper advertising campaign intended to
further FMMC’s business of selling cars.

Although the advertising in question took place in Ohio, the most


fair, efficient and convenient forum for litigation of this tort dispute is
California. The record reflects that FMMC has the requisite substantial or
continuous contacts with California to confer general jurisdiction. It likewise
reflects that FMMC manipulated the name and likeness of a California
resident by illegal means for its own commercial gain knowing the harm
would be felt in California, thereby making an exercise of specific jurisdiction
appropriate as well. Faced with this record, the district court should have
found that general jurisdiction was present, or if not, that specific jurisdiction
was established. It did not.

On this record, the district court’s grant of FMMC’s motion to


dismiss undermines established principles of jurisdictional jurisprudence.
Defendants who engage in systematic and business-critical transactions in a
forum may be called to answer there for their wrongful conduct. Defendants
who likewise misappropriate the valuable publicity rights of a well-known
California celebrity cannot be immunized simply by conducting their illegal
activities from afar. If the courts of this forum cannot redress injuries directed
at its residents through unauthorized advertising campaigns that conceivably
may originate anywhere in the country, entertainers like Mr. Schwarzenegger
effectively are robbed of the valuable and hard-won fruits of their creative
efforts. The state too is deprived of its strong interests in enforcing its right of

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publicity laws, including Civil Code Section 3344, and providing residents
with a fair, convenient and effective forum. For all of these reasons, this
Court should reverse the order granting FMMC’s motion to dismiss.

IV.
FACTUAL AND PROCEDURAL BACKGROUND

A. Fred Martin Motor Company Misappropriates Mr.


Schwarzenegger’s Likeness For Commercial Purposes In Print
Advertisements Published In Ohio

Arnold Schwarzenegger is a world famous celebrity, known as a


movie actor, body builder, former Chair of the President’s Council on
Physical Fitness, and potential political candidate. See ER I:6-7, 64-85, 94-
95, 344-48; see also World Gym Licensing, Ltd. v. Fitness World, Inc., 47 F.
Supp. 2d 614, 617 (D. Md. 1999) (noting Schwarzenegger is “widely
recognized” in various capacities). For more than three decades, Mr.
Schwarzenegger has been in the public eye, starring in dozens of movies,
primarily as the “hero” character in comedic and action roles. (ER I:6, 97)
Mr. Schwarzenegger’s renown gives his name and likeness tremendous
commercial value. (ER I:10)

One of Mr. Schwarzenegger’s most popular and readily


recognizable film roles is as the title character in The Terminator (1984), a
role reprised in Terminator 2: Judgment Day (1991), and the upcoming

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Terminator 3: Rise of the Machines (scheduled for release July 2003). Taking
advantage of Mr. Schwarzenegger’s popularity and recognizable “Terminator”
visage for its own commercial ends, on at least five separate occasions in
April, 2002, FMMC used Mr. Schwarzenegger’s name and photograph in
advertising with the text: “Arnold says: ‘Terminate EARLY at Fred
Martin!’” (i.e., encouraging owners of leased cars to end their leases before
the contractual expiration date). (ER I:7-8) Specifically, these full-page print
advertisements appeared in the Akron Beacon Journal newspaper on April 7,
13, 18, 21 and 25, 2002. (ER I:6, II:349-53)

FMMC neither obtained, nor indeed ever sought to obtain,


permission to use Mr. Schwarzenegger’s likeness in its advertising campaign
to sell cars. Had such an effort been made, it would not have succeeded
because Mr. Schwarzenegger would not have consented. (ER I:7-8) While
Mr. Schwarzenegger has agreed to a very limited number of commercial
endorsements outside the United States (e.g., in Japan), he exercises careful
control over the commercial use of his name, photograph, image, likeness and
other publicity rights to ensure that his hard-earned and well-deserved
reputation is not diminished by overexposure or tarnished by advertising of
consumer products or services. (ER I:6)

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B. Mr. Schwarzenegger Sues Fred Martin Motor Co. In California For
Misappropriating His Name And Likeness

On learning of FMMC’s misappropriation of his name and


likeness, Mr. Schwarzenegger sued FMMC in his home state of California.1
(ER I:4) The complaint, filed in Los Angeles County Superior Court on July
3, 2002, alleged six state law causes of action including violation of California
Civil Code section 3344.2 Section 3344 prohibits the knowing use of another
person’s name, photograph or likeness for advertising or commercial purposes
without obtaining prior consent.

Mr. Schwarzenegger alleges that FMMC intentionally—and


without permission—used his name, photograph and likeness in full-page
advertisements in the Akron Beacon Journal and other publications. He seeks
damages equivalent to the market value of his misappropriated name and
likeness, in addition to other compensatory and exemplary relief. (ER I:14-
16)

1
The complaint also named FMMC’s advertising agency, Zimmerman &
Partners Advertising, Inc. (Zimmerman), a Florida corporation that does not
dispute its amenability to California jurisdiction. Zimmerman is not a party to
this appeal.
2
The other causes of action include violation of the right of publicity, unfair
competition, quantum valebant, unjust enrichment, and injunctive relief. (ER
I:6-14)

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FMMC removed the action to federal court (the Central District
of California) on diversity of citizenship grounds (i.e., plaintiff
Schwarzenegger is a California citizen, and defendant FMMC is an Ohio
citizen). (ER I:1-2)

C. When FMMC Moves To Dismiss The Action On Personal


Jurisdiction Grounds, Mr. Schwarzenegger Responds With
Evidence Detailing FMMC’s Extensive California Contacts And
Knowledge Of Mr. Schwarzenegger’s Residence And Work Within
The Forum

FMMC moved to dismiss for lack of personal jurisdiction,


claiming that it had “no contacts” with California.3 (I:26, 35-36) Mr.
Schwarzenegger opposed this motion, by revealing through jurisdictional
discovery over 3,000 separate business transactions central to FMMC’s
business with at least six different California companies. (ER II:400)
Specifically, Schwarzenegger presented evidence that:

3
While FMMC submitted a carefully worded declaration in support of its
motion in support of its position that “no” California contacts existed, that
declaration plainly failed to tell the whole story. (ER I:35-36) Subseqent
discovery—some produced two months after its due date, after the depositions
of FMMC’s witnesses and on the eve of the hearing on the motion—disclosed
a host of jurisdictionally significant contacts, as detailed below. (ER II:397-
660)

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• FMMC purchases vehicles from, and has purchasing
agreements with, Nissan, Suzuki, Daewoo, and Isuzu—all
California corporations;

• FMMC purchased 3,304 vehicles from these companies


between May, 1999 and November, 2002—an average of 2.6
cars a day—paying approximately $62,160,503, making up
12% of FMMC’s sales;

• For each Nissan, Suzuki and Daewoo vehicle, FMMC has paid
a separate vehicle invoice listing a California address for each
payee;

• FMMC regularly employs Caliber Promotions, a California


corporation based in California, for marketing purposes (i.e.,
15 contracts between 1999 and 2002, paying Caliber more than
$300,000);

• FMMC transacts with Joe Verde Sales & Management


Training, Inc., a California corporation based in California,
for consulting services; and

• FMMC maintains a Web site advertising, promoting and


soliciting inquiries about its products, services and business
that is accessible throughout California and nationwide. (ER

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I:64-85, 87-97, 101-11, 126-27, 130-34, 137, 140-41, 170-76,
182, 268; II:298-321, 322-42, 343, 344-48, 349-53, 396-97,
426, 444-45 468, 476, 527; III:622a)

Mr. Schwarzenegger also opposed the motion with evidence that


FMMC’s representatives knew that their tortious conduct would have a direct
effect in this state. That is, FMMC’s representatives, when they
misappropriated Mr. Schwarzenegger’s likeness, knew of his status as a
California resident, of his involvement in the motion picture industry centered
here, and knew of reports that Mr. Schwarzenegger was contemplating
running for Governor of the state. (ER I:64-85, 94-95, 344-48)

Additional documents produced only five days prior to the hearing


on the motion also supported the exercise of jurisdiction by demonstrating
FMMC’s willingness to subject itself to a California forum.4 Several
agreements between FMMC on the one hand, and its California vehicle
suppliers on the other, feature California choice of law provisions, and require
contractual disputes thereunder to be resolved in Los Angeles. (ER I:396-97;
II:426, 444-45 468, 476, 527; III:622a)

4
This eleventh hour production also confirmed that the volume of FMMC’s
purchases was higher than FMMC previously had represented: 3,304 vehicles
for a total of $62,160,503 between May, 1999 and November, 2002, not
2,670 for a total of approximately $53,400,000, as originally disclosed.
(ER II:400)

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D. The District Court Dismisses The Action Against FMMC On
Personal Jurisdiction Grounds And Mr. Schwarzenegger Appeals

FMMC’s motion to dismiss was heard November 4, 2002. (ER


III:674) At the hearing, Mr. Schwarzenegger emphasized the systematic
nature of FMMC’s business contacts with California, as well as its
employment of a California direct mail firm to coordinate advertising efforts,
and its transactions with a California training and marketing firm. (Id. at 676-
84) He further highlighted that FMMC expressly has subjected itself to
California law and jurisdiction under agreements with the California suppliers
so central to its business, and FMMC’s undisputed awareness that the injury
inflicted by its misappropriation of Mr. Schwarzenegger’s name and likeness
would cause harm in this state. (Id.)

The district court nevertheless granted FMMC’s motion the


following day. (ER III:662) The court found it lacked personal jurisdiction
over FMMC because it deemed FMMC’s purchases, purchase-related
contracts, and Web site advertising and solicitation insufficient to give rise to
general jurisdiction. (Id. at 664-65) It also found that FMMC’s wrongful
misappropriation of Mr. Schwarzenegger’s name and likeness was not
sufficiently directed toward a California resident to support specific personal
jurisdiction by this state. (Id. at 665-70)

Mr. Schwarzenegger filed his timely notice of appeal after entry


of the trial court’s order granting the motion to dismiss. (ER III:671; IV:943 )

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V.
ARGUMENT

A. The District Court Erred In Ruling That FMMC Is Beyond


The General Or Specific Jurisdiction Of A California Forum

Where, as here, a district court’s subject matter jurisdiction is


premised on diversity, the exercise of personal jurisdiction must be authorized
by a rule or statute and must adhere to the constitutional principles of due
process. Data Disc, Inc. v. Systems Technology Assocs., Inc., 557 F.2d 1280,
1285-86 (9th Cir. 1977).5

In a line of authority commencing with International Shoe v.


Washington, 326 U.S. 310 (1945), the U.S. Supreme Court has defined the
standard for jurisdiction over nonresident defendants. International Shoe
involved a Washington court’s attempted jurisdiction over a corporation that
was incorporated in Delaware and had a principal place of business in
Missouri. The Court allowed jurisdiction because of the defendant’s sufficient
“minimum contacts” with Washington. The Court explained,

Due process requires only that in order to subject


a defendant to a judgment in personam [personal

5
California will assert personal jurisdiction over a foreign defendant on any
basis consistent with the state and federal constitutions. Cal. Civ. Code
§410.10.

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jurisdiction], 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.” International Shoe,
326 U.S. at 316.

Subsequent decisions have identified two ways to establish


jurisdiction under the minimum contacts test: personal jurisdiction may either
be general or specific. See, e.g., Vons Companies, Inc. v. Seabest Foods,
Inc., 14 Cal. 4th 434, 445 (1996).

General jurisdiction is present when the defendant’s forum related


activity is sufficiently continuous and systematic as to make the defendant
essentially “present” in the forum. Perkins v. Benguet Consolidated Mining
Co., 342 U.S. 437, 446-47 (1950) (Philippine corporation subjected to general
jurisdiction due to combination of activities in forum); Data Disc, 557 F.2d at
1286-87 and n.3 (endorsing Perkins standard, and noting the persuasive value
of state cases in the Court’s constitutional due process analysis); Buckeye
Boiler Co. v. Superior Court, 71 Cal. 2d 893, 898-99 (1969) (general
jurisdiction triggered by activity of “such extensive or wide-ranging
proportions” as to make the defendant sufficiently “present” in the forum
state).

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Specific jurisdiction exists, in turn, when a defendant commits
some act relating to the forum state that gives rise to a claim appropriately
addressed in the state's courts. Rio Properties, 284 F.3d at 1019; see Sinatra
v. National Enquirer, Inc., 854 F.2d 1191, 1200 (9th Cir. 1988) (“California
maintains a strong interest in providing an effective means of redress for its
residents tortiously injured by commercial misappropriation [of name and
likeness] . . . California’s interest in providing effective redress for its
residents supports the exercise of jurisdiction in this case”); Thomson v.
Continental Ins. Co., 66 Cal.2d 738, 742-43 (1967) (“California residents
ought to be able to obtain redress for grievances in California courts, which
are maintained by the state for their benefit. This state is concerned with the
welfare of California residents and has a decided interest in assuring that its
citizens are not denied damages because of the inconvenience or expense of
bringing suit in a distant jurisdiction”).6

As the Supreme Court has emphasized, the flexible minimum


contacts standard is not a mechanical test, but one that depends on the “quality
and nature of the activity in relation to the fair and orderly administration of

6
Regardless of which test is used to analyze a defendant’s minimum contacts,
the assertion of jurisdiction must be reasonable in either case. See Asahi
Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1978); Glencore
Grain Rotterdam, B.V. v. Shivanth Rai Harnarain Co., 284 F.3d 1114, 1125
(9th Cir. 2002). Because reasonableness is one of the three express factors
comprising part of the obligatory specific jurisdiction inquiry, the
reasonableness of jurisdiction over FMMC in this forum—applicable to either
minimum contacts analysis—is addressed in the specific jurisdiction portion of
this brief.

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laws.” 326 U.S. at 319. “[T]he question of jurisdiction cannot be answered
by the application of precise formulas or mechanical rules. Each case must be
decided on its own facts.” Integral Development Corp. v. Weissenbach, 99
Cal.App. 4th 576, 583 (2002). It thus stands to reason that a court’s
evaluation of minimum contacts under the two pertinent tests—i.e., those for
general and specific jurisdiction—should not proceed in a vacuum.
Jurisdiction should be exercised where, given the facts and circumstances
presented in support of a general or specific jurisdiction theory, or both, it
makes sense to do so. See Forsyth v. Overmyer, 576 F.2d 799, 782 (9th Cir.
1978) (“[W]e view the facts with a common sense perspective and evaluate
carefully the fundamental issues of fairness of the challenged jurisdictional
exercise in light of the facts”).

Moreover, the law of minimum contacts, as it has developed since


International Shoe, increasingly has favored the exercise of jurisdiction. This
is understandable in light of ongoing advances in travel and communications
and the inexorable trend toward globalization. The Supreme Court addressed
this reality more than four decades ago:

Looking back over this long history of litigation a


trend is clearly discernible toward expanding the
permissible scope of state jurisdiction over
foreign corporations and other nonresidents. In
part this is attributable to the fundamental
transformation of our national economy over the

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years. Today many commercial transactions
touch two or more States and may involve parties
separated by the full continent.

McGee v. International Life Insurance Co., 355 U.S. 220, 222-23 (1957). As
courts strive to balance the interests of defendants who may have ambiguous
ties to a forum against those of the sovereign states and their residents, they do
so in recognition of the routine manner in which today’s businesses and
individuals transcend geographic boundaries: “[W]hile modern technology
has made nationwide commercial transactions simpler and more feasible, even
for small businesses, it must broaden correspondingly the permissible scope of
jurisdiction exerciseable by the courts.” California Software, Inc. v.
Reliability Research, 631 F.Supp. 1356, 1362, 1363 (C.D. Cal. 1986).

Finally, as the principles for exercising personal jurisdiction have


become more generous, the standards governing a district court’s assessment
of the evidence in ruling on a motion to dismiss have developed on a parallel
course. In keeping with the drastic nature of a dismissal at the pleading stage,
such motions should be granted only in the clearest of cases, and only where
the jurisdictional theory presented indisputably can be rejected. See Data
Disc, 557 F.2d at 1280 (a plaintiff must only make a prima facie showing of
jurisdictional facts to avoid a motion to dismiss); Credit Lyonnais Securities
(USA), Inc. v. Alcantara, 183 F.3d 151, 153 (2d Cir. 1999) (the
uncontroverted allegations in the complaint are deemed true); Landoil
Resources Corp. v. Alexander & Alexander Services, Inc., 918 F.2d 1039,

- 16 -
1043 (2d Cir. 1990) (all pleadings and declarations are read in the plaintiff's
favor).

When properly employed to test the fairness of going forward in


the plaintiff’s chosen forum, the goal of a motion under Rule 12(b)(2) is to
ascertain whether the jurisdictional contacts alleged, if true, would permit the
case to proceed. Unless the answer unequivocally is “no,” the motion should
be denied. The district court here was faced with a record demonstrating
sufficient jurisdictional ties to California, but failed to allow Mr.
Schwarzenegger to proceed in his chosen forum. This error warrants reversal.

B. FMMC’s Extensive And Habitual Business Transactions In


California Are Critical To Its Ability To Market And Sell
Automobiles And, Taken As A Whole, Establish General
Jurisdiction

As noted above, general jurisdiction exists when a defendant is


domiciled in the forum state or the defendant’s contacts with the forum state
are “substantial” or “continuous and systematic.” Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984). While the general
jurisdiction requirements are applied in order to ensure fairness to nonresident
defendants, this Court and the California high court agree that those
requirements are satisfied by a defendant’s substantial, ongoing and systematic
activities within the forum. Amoco Egypt Oil Co. v. Leonis Navigation Co.,
Inc., 1 F.3d 848, 851 (9th Cir. 1993) (for purposes of Washington long arm

- 17 -
statute, defendants who conduct substantial and continuous business within the
state are subject to general jurisdiction); Vons, 14 Cal. 4th at 444 (general
jurisdiction over a nonresident defendant exists where activities within the
forum are extensive or wide ranging, or substantial, continuous and
systematic).

Other courts likewise have recognized that general jurisdiction


may rest on a series of contacts with the forum that are critical to a
nonresident defendant’s ability to conduct a nationwide business. Metropolitan
Life Ins. Co v. Robertson-Ceco Corp., 84 F.3d 560, 572-73 (2d Cir. 1996)
(contracts with parties within the forum, engagement in national advertising
that reached the forum state and other contacts taken cumulatively justified
general jurisdiction); Provident National Bank v. California Federal Savings &
Loan, 819 F.2d 434, 436 (3d Cir. 1987) (general jurisdiction present where
activities in forum were “central” to defendant’s business); Dorsey v.
American Golf Corp., 98 F.Supp.2d 812, 815 (E.D. Mich. 2000) (nonresident
subject to local general jurisdiction where small percentage of defendant’s
nationwide business depended on its continuous and systematic operations
within the forum).

- 18 -
1. FMMC’s Contacts With California Are So Extensive As
To Give It A “Presence” In The State For Jurisdictional
Purposes

The absence of physical contact or presence in the forum has


never been a barrier to general jurisdiction where, as here, a nonresident
defendant is engaged in a series of regular business transactions in the state, on
which it relies in order to effectively carry out its business. In particular,
FMMC:

• has agreements to purchase and sell automobiles supplied by


Nissan, Suzuki, Daewoo, and Isuzu—all California
corporations;

• derives at least 12% of its sales from vehicles purchased from


these companies—some 3,403 between May, 1999 and
November, 2002, averaging approximately 2.6 cars per day—
and has paid over $60 million since that time into California to
support these sales;

• explicitly subjects itself both to the application of California’s


laws and to the resolution within the state of legal actions
arising from its relationships with various of its California
vehicle suppliers;

- 19 -
• pays a separate vehicle invoice for each Nissan, Suzuki and
Daewoo vehicle listing a California address for each payee;

• touts itself as the second largest Suzuki dealer in the United


States, and one of the largest Nissan dealers in Ohio;

• employs a California based and incorporated direct mail


marketing company called Caliber Promotions, pursuant to at
least fifteen separate agreements with Caliber between 1999
and 2002, and has paid Caliber more than $300,000 for
services that include sending close to 200,000 direct mail
pieces from California to Ohio;

• transacts with a California based and incorporated sales


training company called Joe Verde Sales & Management
Training, Inc. for consulting services; and

• maintains a Web site—FredMartinSuperstore.com—accessible


in California and nationwide, that both supplies information
about FMMC’s business, and also interacts with visitors (for
example, by enabling them to run a customized interest rate
inquiry). (ER I:64-85, 87-97, 101-11, 126-27, 130-34, 137,
140-41, 170-76, 182, 268; II:298-321, 322-42, 343, 344-48,
349-53, 396-97, 426, 444-45 468, 476, 527; III:622a)

- 20 -
Taken together, these considerations constitute the kind of
continuous and systematic contacts with the forum envisioned by the Supreme
Court in Perkins.7 There, the Court examined an array of factors including
the maintenance of an office, the keeping of files, the carrying on of
correspondence, the holding of meetings, the maintenance of bank accounts
and the engagement of the services of local entities, and found that since the
Philippine defendant “ha[d] been carrying on in Ohio a continuous and
systematic, but limited, part of its general business,” the assertion of general
jurisdiction was proper. Perkins, 342 U.S. at 438-45.

Here too, the uncontroverted record establishes that FMMC


continuously and systematically carries on a part of its general business in
California. There likewise is no question that those activities—the
maintenance of a supply of automobiles for sale, the promotions of sales
through direct mail efforts, and the training of sales staff—go to the heart of

7
FMMC’s effort to characterize its contacts with California as something less
than continuous and systematic is unpersuasive and adopts an approach
inconsistent with a court’s role in determining personal jurisdiction on a
motion to dismiss. Although FMMC offers an evidentiary litany intended to
demonstrate that its undisputed California contacts more properly should be
deemed to originate elsewhere, this strategy does not succeed. (See ER
II:375-78) Try as FMMC might to deflect attention from the key facts, it
cannot avoid or dispute that it has transacted over $60 million in business with
California businesses, just as it cannot avoid the remaining jurisdictionally
significant evidence cited by Mr. Schwarzenegger. Those contacts are
continuous and systematic for purposes of the general jurisdiction analysis.
That analysis, in turn, should involve the tallying up of FMMC’s California
contacts to determine their jurisdictional sufficiency—not, as FMMC would
have it, the weighing of the California contacts against the volume of
FMMC’s activities conducted elsewhere.

- 21 -
FMMC’s daily business as “one of the largest automotive retailers in the state
of Ohio.” (ER 322) See Provident National Bank, 819 F.2d at 437-38
(defendant savings and loan’s activities in Pennsylvania, the borrowing and
lending of money, went to “the very bread and butter of its daily business”).

Application of these principles compels a conclusion that the


unique circumstances of this case satisfy the fundamental requirements of
Perkins. The cumulative and undisputed evidence amounts to a prima facie
showing of general jurisdiction over FMMC, and should have defeated the
motion. See Rio Properties, 284 F.3d at 1019 (uncontroverted complaint
allegations must be taken as true, and conflicts between the facts contained in
the parties’ affidavits must be resolved in plaintiff’s favor on motion to dismiss
for lack of personal jurisdiction); Data Disc, 557 F.2d at 1285-86 (in the
absence of an evidentiary hearing, plaintiff need not establish more than a
prima facie showing of jurisdictional facts through materials submitted in
opposition to motion to dismiss).

2. FMMC’s Practice Of Purchasing Considerable


Inventory From California To Sustain Its Operations,
When Combined With Its Other Forum Contacts,
Likewise Supports The Exercise Of General Jurisdiction

The district court, however, granted the motion to dismiss below


because it ascribed too much significance to the fact that many of FMMC’s
contacts with California related to purchases, and too little significance to

- 22 -
FMMC’s nonpurchasing acts, such as retaining marketing and sales
consultants, originating direct mail marketing from the state, acquiescing to
the state’s laws and venues for dispute resolution, and conducting interactive
online advertising and marketing within the state. (ER III:662-70) In reliance
on Helicopteros and Glencore, 284 F.3d 1114, the district court applied a
standard that rules out extensive, ongoing and business-critical purchasing
activity as a possible basis for jurisdiction, even when accompanied by
numerous examples of other jurisdictional contacts that did not constitute
purchases. Such a result does not follow from, and indeed contradicts, the
court’s cited authorities and controlling Supreme Court and Ninth Circuit
precedent.8

In Helicopteros, the Court held that “mere” purchases of items


unrelated to the alleged wrong, even if made at regular intervals and
constituting some 80% of the defendant’s helicopter fleet, were not enough to
support general jurisdiction. Helicopteros, 466 U.S. at 411, 417-18 and n.12.
It relied on Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516

8
In its Motion, FMMC put great emphasis on its lack of physical contacts
with California. It is well settled, however, that the defendant’s location,
while certainly considered in the personal jurisdiction calculus, is not outcome
determinative. The minimum contacts test does not turn on physical contacts
with the forum state, but on whether the contacts in the aggregate, physical or
otherwise, suffice to approximate the defendant’s presence. See Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (“Jurisdiction … may not be
avoided merely because the defendant did not physically enter the forum State
… ”); Glencore, 284 F.3d at 1125 (examining whether the defendant has
“made itself at home”). FMMC’s argument that Mr. Schwarzenegger has
failed to set forth any evidence of physical contacts in the state of California
thus is irrelevant.

- 23 -
(1923), in reaching that conclusion, but the focus of Rosenberg too was on the
overall volume of the defendant’s contact. In Rosenberg, the Court found that
sporadic purchases of goods to be sold in a men’s furnishings store alone
lacked legal significance for jurisdiction. Id. at 517. The Court in
Helicopteros also expressly disclaimed endorsement of Rosenberg’s holding
that purchasing activity cannot sustain jurisdiction over a cause of action
arising from the purchasing activity. Helicopteros, 466 U.S. at 418 n.12.

Helicopteros and Rosenberg thus do not stand for the proposition


that a court should reject purchases per se as a potential basis for general
jurisdiction, and this Court expressly has declined to adopt such an approach.
In T.H. Davies & Co. v. Republic of Marshall Islands, 174 F.3d 969 (9th Cir.
1998), for example, the Court considered whether an action could proceed in
the District of Hawaii against several non-U.S. defendants (the Republic of the
Marshall Islands and its agents) who had purchased three power generators,
worth $206,887, $265,800 and $1,187,612, respectively, from a Hawaii
corporation. Id. at 971-72. Based primarily on these three purchases—the
only other contacts with the forum were an unidentified number of meetings
held in Hawaii—the Court found minimum contacts with the United States to
be present under a general jurisdiction analysis. Id. at 974-75. The purchases
constituted a sufficient amount of economic activity to form a “consistent and
substantial pattern of business relations,” which in turn warranted the exercise
of general personal jurisdiction because the defendants had so thoroughly
invoked the benefits and protections of the laws of the forum that they

- 24 -
reasonably could anticipate being haled into court there. Id. at 975.9 The
Court’s approach in T.H. Davies applies with equal force here, where FMMC
has made not three but over 3,000 purchases from forum entities, totaling
more than $60 million, which were critical to supporting its core automobile
sales business.

The lesson of these cases for the present general jurisdiction


analysis, then, is that significant purchases from the forum that are central to
the defendant’s business, accompanied by other substantial contacts, and
related to the wrong perpetrated, will suffice. Each of these factors is in turn
satisfied on this record. FMMC engages in high volume, high dollar purchase
transactions with California entities. It uses this inventory for its primary
business of selling cars and related financing services in Ohio. In addition to
its purchases, FMMC has myriad other contacts with California. And,
FMMC used Mr. Schwarzenegger's name and photograph without permission
to advertise for sale the very cars it purchased from California. (ER I:96,
141) When considered in tandem with FMMC's other California contacts, the

9
See also, GTFM, Inc. v. International Basic Source, Inc., 2002 WL
31050840, *5 (S.D.N.Y. 2002) (finding of general jurisdiction based on
several factors including the purchase of goods on numerous occasions from at
least three vendors in the forum); Simpson v. Quality Oil Company, Inc., 723
F.Supp. 382, 390 (S.D. Ind. 1989) (Helicopteros distinguished because it
involved a Colombian defendant and not two U.S. based parties; Kentucky
defendant’s oil purchases from Indiana were “continuous and systematic”
contacts with the state; defendant’s redistribution of the purchased fuel was its
central business purpose; purchases plus other contacts gave rise to general
jurisdiction).

- 25 -
vehicle purchases are but part and parcel of its continuous and systematic
contacts with the state.

The remaining cases relied on by the district court for its


conclusion that regular and high volume purchase transactions connected to the
claims at stake should not factor into the general jurisdiction are inapposite.
Glencore, 284 F.3d at 1124-25 (jurisdictional contacts at issue did not include
purchasing but were limited to the presence of an import and distribution agent
facilitating sales in the forum; Helicopteros discussed in summarizing
standards for assessing general jurisdiction); Perkins, 342 U.S. 413, passim
(jurisdiction founded on conduct of some business of Philippine mining
company from home office of general manager in Ohio; no mention, and no
ruling out, of purchasing as a factor in the general jurisdiction calculus). Even
the district court had to acknowledge that, as reflected in the reasoning of
Provident National (activities comprising “the bread and butter of [a
defendant’s] daily business” can give rise to general jurisdiction), Helicopteros
could not be read to rule out the exercise of general jurisdiction based in part
on purchasing activities.10 See Provident National, 819 F.2d at 437-38. (ER

10
Provident National distinguished Helicopteros because there the Colombian
defendant’s contacts with the Texas forum were “important but not central to
the defendant’s business, the provision of helicopter services for South
American oil and construction companies.” 819 F.2d at 438. The present
case is equally distinguishable from Helicopteros for the same reason.
FMMC's automobile purchases and other contacts with California—e.g., the
purchase of marketing and training services from California businesses, the
origination of direct mail marketing from California, and the maintenance of
its promotional Web site—relate directly to the “bread and butter” of FMMC's
daily business—selling cars and related financing. Just as in Provident
National, “It would appear that due to the nature of its contacts, [FMMC]

- 26 -
III:665) It nevertheless failed to discern how the combination of factors
present here indicate that FMMC has not “merely stepped through the door”
of the state of California, but “has sat down and made itself at home.” See
Glencore, 284 F.3d at 1125.

Yet, this is the only conclusion permitted by the uncontroverted


record of ongoing purchases and contracts vital to FMMC’s daily operations.
As this court confirmed in T.H. Davies, the threshold for general jurisdiction
is higher than a single transaction, but does not require, as FMMC would have
it, the consummation of sales to parties in the forum. FMMC purchased over
$60 million in inventory from California businesses, then advertised those
same cars using Mr. Schwarzenegger’s name and likeness. FMMC agreed to
California’s jurisdiction and laws in connection with such purchases. It
retained the services of California businesses. It originated direct mail from
California to Ohio residents. It maintains a Web site, accessible at any hour
of the day to some 36 million Californians, that solicits sales and user
information and delivers customized reports to visitors. It touts itself as the
second largest Suzuki dealer in the United States and one of the largest Nissan
dealers in Ohio, and relies on the inventory it obtains from those California
corporations to do so.

would have a greater expectation of being haled into court in [California] than
the Helicopteros defendant had of being haled into court in Texas.” Provident
National, 819 F.3d at 438.

- 27 -
This sort of significant economic activity is sufficient to trigger
general jurisdiction regardless of whether any sales to California residents
have occurred. See Bancroft & Masters, Inc. v. Augusta National, Inc., 223
F.3d 1082, 1086 (9th Cir. 2000) (general jurisdiction factors are several, and,
in addition to making sales in the forum, include soliciting or engaging in
business within the state); see also Cybersell Inc. v. Cybersell, Inc., 130 F.3d
414, 418 (9th Cir. 1997) and Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952
F.Supp. 1119, 1124 (W.D. Pa. 1997) (acknowledging enhanced jurisdictional
significance of commercial Web sites that enable a user to exchange
information with the host computer and deliver information to the user that is
tailored to the user’s preferences); Toys “R” Us, Inc. v. Step Two, S.A., 318
F.3d 446, 2003 WL 175322, *6 (3rd Cir. 2003) (the exact mix of Internet and
non-Internet contacts required to support an exercise of personal jurisdiction
“should be made on a case-by-case basis by assessing the ‘nature and quality’
of the contacts”).11

As these authorities amply demonstrate, engaging in purchasing


activity in the forum is but one of many factors a court should consider in
determining whether general jurisdiction is present. The district court thus

11
FMMC’s reply in support of the motion to dismiss below emphasized that
its in-forum activities have non-forum components as well. See, e.g., ER
II:375-78, describing how FMMC’s transactions with California entities have
involved individuals and locations outside the state. While this is
understandable given that FMMC is based in Ohio and the companies from
which it purchases do business worldwide, it does nothing to erase the
significant volume of business FMMC transacts with entities that call
California home.

- 28 -
erred fundamentally when it disregarded the fact that FMMC could not sell
cars at present volumes without its California purchases, and that these
business-critical purchases were buttressed by evidence of numerous other
factors that separately confirm FMMC’s tacit and express acquiescence to
litigating disputes in California. The “fair warning” standard that underlies
the minimum contacts rule is satisfied on this record, and the district court’s
erroneous characterization of FMMC’s contacts as mere and insignificant
purchases does not suffice to shield it from suit in California.

C. By Intentionally Directing Its Wrongful Conduct At A Forum


Resident, FMMC Subjected Itself To The Specific Jurisdiction
Of A California Forum

When determining whether the alternate basis for exercising


personal jurisdiction—specific jurisdiction—is present, a court considers the
“relationship among the defendant, the forum and the litigation, and employs a
familiar, three part test: (1) the defendant must purposefully avail itself of the
privileges of conducting activities in the forum, (2) the plaintiff’s claim must
arise out of or result from the defendant’s forum related activity, and (3) the
exercise of jurisdiction must be reasonable. Helicopteros, 466 U.S. at 414;
Glencore, 284 F.3d at 1123; Rio Properties, 284 F.3d at 1019. “By requiring
that contacts proximately result from actions by the defendant himself that
create a ‘substantial connection’ with the forum State, the Constitution ensures
that a defendant will not be haled into a jurisdiction solely as a result of
‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.” Glencore, 284 F.3d at 1123,

- 29 -
quoting Burger King, 471 U.S. at 475 (internal quotation marks omitted).
Because Mr. Schwarzenegger’s action against FMMC fulfills each of these
jurisdictional requirements, the specific jurisdiction analysis provides
independent confirmation of the propriety of a California forum.

1. FMMC Purposefully Availed Itself Of The Privileges Of


The Forum By Committing An Intentional Tort That
FMMC Knew Or Should Have Known Would Injure A
California Resident

The purposeful availment inquiry focuses on the defendant’s


intentionality in carrying out the wrongdoing alleged. In cases such as this
one involving the misappropriation of a celebrity’s name and likeness, this
Court adopts the U.S. Supreme Court’s three part “effects test.” See Sinatra,
854 F.2d at 1196 (effects test applied to claim asserting misappropriation of
name and likeness).

Under the effects test, if a nonresident defendant engages in an


intentional act expressly aimed at the forum, and causes harm the defendant
knows is likely to be suffered in the forum, the purposeful availment prong of
the specific jurisdiction analysis is met. See Calder v. Jones, 465 U.S. 783,
788-89 (1984) (“foreseeable results” prong of effects test satisfied where a
Florida National Enquirer editor with no contacts with California beyond
participation in an allegedly defamatory article knew plaintiff Shirley Jones
would suffer injury in the forum); Bancroft, 223 F.3d at 1087 (“express

- 30 -
aiming” requirement of effects test is satisfied “when the defendant is alleged
to have engaged in wrongful conduct targeted at a plaintiff whom the
defendant knows to be a resident of the forum state”); Sinatra, 854 F.2d at
1195 (a Swiss clinic that misappropriated Frank Sinatra’s name in connection
with advertising alluding to the entertainer’s alleged treatment at the clinic
necessarily would injure Sinatra in California by diluting the commercial value
of his name); California Software, Inc., 631 F.Supp. at 1362 (intent, aiming
and injury prongs of effects test were present where false statements made to
nonresidents concerning a California resident were expressly calculated to
cause injury in California, the nonresident defendants knew the plaintiff would
feel the injury in California, and expected to directly benefit from the
statements; reasoning adopted by Sinatra, 854 F.2d at 1198).12

Applying these concepts to this record, Mr. Schwarzenegger has


demonstrated purposeful availment by FMMC under the Calder effects test.
FMMC acted intentionally when it placed its advertisements exploiting Mr.
Schwarzenegger’s name and likeness. (ER I:96, 141) The ads were expressly
aimed at California because FMMC knew plaintiff to be a resident of

12
Compare Pavlovich v. Superior Court, 29 Cal.4th 262, 273-76 (2003)
(effects test not satisfied as to Texas defendant where alleged harm involved
operation of a passive Web site; record demonstrated at most defendant knew
or should have known of potential harm to industries presumed to have
substantial presence in California, and not to any specifically targeted
individual or entity). Here, the California Supreme Court’s 5-4 Pavlovich
decision only would militate against a finding of purposeful availment if
FMMC had not misappropriated the name and likeness of an individual
celebrity like Mr. Schwarzenegger, but had instead misappropriated something
like the “Hollywood” sign.

- 31 -
California, a well-known film actor and a possible state gubernatorial
candidate. (Id. at I:94-95; II:344-48) Finally, the injury to Mr.
Schwarzenegger, occasioned by FMMC’s use of his name and likeness
without authorization or compensation and in a manner guaranteed to diminish
their value, was felt, as FMMC knew it would be, in California. (Id. at I:94-
97; II:344-48)

The district court’s analysis of the purposeful availment question,


however, imposed evidentiary burdens on Mr. Schwarzenegger that had no
basis in the controlling law, and failed to acknowledge key and undisputed
aspects of the record. While FMMC is quick to emphasize that the ads
exploiting Mr. Schwarzenegger’s name and likeness ran on five discrete
occasions in an Ohio newspaper, that is not the end of the inquiry. What is
missing from this analysis is the role played by the ads in FMMC’s overall
strategy of using California entities and individuals such as Nissan, Suzuki,
Daewoo, Isuzu, Caliber Promotions, Joe Verde Sales & Management
Training, California visitors to FMMC’s Web site, and Mr. Schwarzenegger—
the least willing participant—to support its business. Confronted with the
limited geographic and time distribution of FMMC’s “Terminator” ads, the
district court found that FMMC’s conduct could be expressly aimed at
California only if the ads had reached a California audience. Such a
conclusion does not flow from Calder, Sinatra or California Software as the
court apparently believed. (ER III:665-70)

- 32 -
In Calder, for example, the fact the article was published in
California was but one aspect—indeed, almost an afterthought—of the Court’s
consideration of the more critical factors of the harm to Shirley Jones and the
targeting of a known California resident:

California [was] the focal point both of the story


and of the harm suffered . . . The allegedly
libelous story concerned the California activities
of a California resident. It impugned the
professionalism of an entertainer whose television
career was centered in California . . . and the
brunt of the harm, in terms both of [Jones’s]
emotional distress and the injury to her
professional reputation, was suffered in
California. Calder, 465 U.S. at 788-89.

The Court further emphasized the “potentially devastating impact” the


individual defendants knew the article would have on Jones, the fact they knew
or should have known she would feel the brunt of this injury in the state where
she lived and worked, and the fact they were not charged with mere,
untargeted negligence: “Rather, their intentional and allegedly tortious actions
were expressly aimed at California.” Id. at 789-90.

Likewise in Sinatra, this Court’s focus was not on where the


clinic would run its ads—though that happened to be in California as well—but

- 33 -
on where the plaintiff was known to reside and where he would suffer harm.
Sinatra, 854 F.2d at 1197.

In short, a myriad of factors must be considered to determine


whether a defendant purposefully availed itself of the forum. And, while it
may be relevant that aspects of the alleged wrong were carried out in the
forum, that fact is not outcome determinative in resolving whether to exercise
jurisdiction. California Software considered just such a scenario. In
California Software, the court asserted jurisdiction in California over
nonresident defendants who, while outside of California, made allegedly
defamatory statements concerning the plaintiff to third parties also outside the
state. Id., 631 F.Supp. at 1358-59. The district court expressly held that
where tortious statements “which, though directed at third persons outside
California, were expressly calculated to cause injury in California,” this was
all that was needed to satisfy the express aiming test; tortious statements made
to third persons in California were not necessary. Id. at 1361-62. The
California Software facts are nearly indistinguishable from those presented by
the record here, and this Court explicitly has endorsed its reasoning. Sinatra,
854 F.2d at 1198 (“The clinic is in a similar position and acted with a similar
intent in this case. Therefore, we adopt the reasoning of the district court in
California Software to allow the exercise of jurisdiction”).

This Court’s analysis in Bancroft also confirms the correctness of


California Software, as well as the district court’s error in finding that case
unpersuasive on this point. In Bancroft, the alleged harm arose from a letter

- 34 -
sent by the defendant to a Virginia entity—the domain name registrar Network
Solutions, Inc.—challenging a California corporation’s rights in an Internet
domain name. Bancroft, 223 F.3d at 1084-88. This was all that was needed
to satisfy the purposeful availment prong of the specific jurisdiction analysis:

ANI acted intentionally when it sent its letter to


NSI. The letter was expressly aimed at
California because it individually targeted B&M,
a California corporation doing business almost
exclusively in California. Finally, the effects of
the letter were primarily felt, as ANI knew they
would be, in California. … This is sufficient to
satisfy Calder and thereby demonstrate the
purposeful availment necessary for an exercise of
personal jurisdiction. Id. at 1088.

Consistent with Bancroft, express aiming results from wrongful


conduct that individually identifies a known forum resident. “The presence of
individualized targeting”—not the presence of communications by the
defendant with third parties in the forum—“is what separates these cases from
others in which we have found the effects test unsatisfied.” Bancroft, 223
F.3d at 1087-88.

When confronted with the question of whether an Ohio entity


purposefully availed itself of the benefits of a California forum by running an

- 35 -
ad in Ohio that used, without permission, the name and likeness of a
California celebrity, a court properly should consider where the ad was
published, and with what frequency. But consistent with settled U.S. Supreme
Court and Ninth Circuit principles, this cannot be the court’s only guidepost.
Of greater importance is whether the forum can be severed from the wrong
alleged. See Sinatra, 854 F.2d at 1197 (“Here, the misappropriation is
properly viewed as an event within a sequence of activities designed to use
California markets for the defendant’s benefit”) (emphasis added). Mr.
Schwarzenegger established that each of the criteria for demonstrating
purposeful availment under the effects test—intent, aiming and foreseeable in-
forum harm—are satisfied, because the “Terminator” ad campaign specifically
identified Mr. Schwarzenegger and was but one manifestation of FMMC’s
persistent use of California entities and individuals to conduct its business.
Specific jurisdiction over FMMC in California accordingly exists as long as
the remaining considerations of a nexus between the claims and FMMC’s
forum related activity, and the overall reasonableness of the exercise of
jurisdiction, are present. See Bancroft, 223 F.3d at 1086-87.

2. Mr. Schwarzenegger’s Claims Arise Out Of Or Result


From FMMC’s Forum Related Activities

The second requirement for specific jurisdiction is that Mr.


Schwarzenegger’s claim arise out of FMMC’s forum related activities. Rio
Properties, 284 F.3d at 1021. This requirement is measured in terms of “but
for” causation. That is, if “but for” the defendant’s conduct an in-forum

- 36 -
injury would not have occurred, this aspect of the specific jurisdiction analysis
is established. See, e.g., Rio Properties, 284 F.3d at 1021 (central to Court’s
finding that the forum related activities requirement was satisfied was the fact
that maintenance of gambling Web site by the Puerto Rican defendant injured
plaintiff in Nevada, “its principal place of business and the capital of the
gambling industry”); Bancroft, 223 F.3d at 1088 (forum related activities
requirement satisfied where, but for defendant’s mailing of a letter to Virginia
based Network Solutions, Inc., California plaintiff would have had no need to
seek relief); Panavision, 141 F.3d at 1322 (forum related activities
requirement satisfied where defendant’s domain name registration of
Panavision’s trademark had the effect of injuring Panavision in California, its
home state and the home of the movie industry).

As was true in these illustrative Ninth Circuit decisions, in the


present case Mr. Schwarzenegger was injured in California, his home state
and the heart of the U.S. motion picture industry, and but for this injury he
would not need to seek redress from FMMC.

The district court’s rejection of this analysis and the consistent


determinations of this Court is both perplexing and unexplained.13 To the
extent the court below deemed the connection between Mr. Schwarzenegger’s
claims and FMMC’s contacts with California insufficiently direct, it erred in

13
Its order simply offers a cursory rejection of Panavision as “unpersuasive.”
(ER III:670)

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its reading of both the record and the governing law. “A claim need not arise
directly from the defendant’s forum contacts in order to be sufficiently related
to the contact to warrant the exercise of specific jurisdiction.” Vons, 14 Cal.
4th at 452. Instead, it is enough that the wrong asserted bears a substantial
connection to the defendant’s contacts within the forum. In Vons, for
example, franchise agreements with a Delaware entity containing California
choice of law and forum provisions enabled defendants to conduct business in
Washington, where various E. coli contaminations occurred (much as
FMMC’s purchase agreements with California entities containing California
choice of law and forum provisions enable it to conduct business in Ohio,
where it ran the ads containing Mr. Schwarzenegger’s name and likeness). Id.
at 456-459. The presence of the choice of law and forum provisions in
agreements with non-California entities was all that was needed in Vons to
demonstrate that the claims arose out of or resulted from forum related
activities. Id. The “arising out of” prong thus does not require that an injury
be caused by the very activity that constitutes the defendant’s forum contacts.
Indeed, such a reading, would thwart the fairness rationale underlying specific
jurisdiction, because “a state never could exercise jurisdiction over a tort
claim arising from a contractual contract.” Id. at 459-60.

The connection between FMMC’s California contacts and Mr.


Schwarzenegger’s claims is far less attenuated than that deemed sufficient in
Vons. FMMC uses California entities to help it market automobiles and
financing services outside California. FMMC used Mr. Schwarzenegger’s

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name and likeness for the identical purpose. The second requirement for the
exercise of personal jurisdiction accordingly is satisfied.

3. The Exercise Of Personal Jurisdiction Over FMMC Is


Reasonable And Consistent With Important Policies
Balancing State And Individual Interests

The final requirement for specific jurisdiction, and one the district
court’s order fails to address at all, is reasonableness.14 (See ER III:65-70)
For jurisdiction to be reasonable, it must comport with fair play and
substantial justice. Burger King, 471 U.S. at 462.

The third prong of the applicable test for specific jurisdiction


represents a departure from prongs one and two, in that the Supreme Court
has explicitly burdened the defendant with demonstrating unreasonableness by
putting forth “a compelling case.” Id. at 476-77; see Panavision, 141 F.3d at
1322 (once a plaintiff has satisfied the first two prongs of the Ninth Circuit’s
test for limited jurisdiction, the burden shifts to the defendant “to present a
compelling case that the presence of some other considerations would render
jurisdiction unreasonable”); see also Ballard v. Savage, 65 F.3d 1495, 1500

14
The exercise of personal jurisdiction must be fair and reasonable regardless
of whether the basis is general or specific. See Asahi, 480 U.S. at 113;
Glencore, 284 F.3d at 1125. The analysis that follows thus applies with equal
force to confirm the propriety of general jurisdiction. See n.4, infra.

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(9th Cir. 1995) (defendant carries a “heavy burden” to overcome the “strong
presumption in favor of jurisdiction”).

In determining the reasonableness of jurisdiction, the Court


considers seven distinct factors: (1) the extent of the defendant’s purposeful
injection into the forum state, (2) the burden on the defendant in defending in
the forum, (3) the extent of the conflict with the sovereignty of the defendant’s
state, (4) the forum state’s interest in adjudicating the dispute, (5) the most
efficient judicial resolution of the controversy, (6) the importance of the forum
to the plaintiff’s interest in convenient and effective relief, and (7) the
existence of an alternative forum. Burger King, 471 U.S. at 476-77; Rio
Properties, 284 F.3d at 1021.

In the district court, FMMC made no factual showing in an effort


to comply with the specific Burger King factors.15 Instead, FMMC stated
without evidentiary support that jurisdiction would be unreasonable. (ER I:28-

15
FMMC instead contended that no burden shift occurred because in its view
Mr. Schwarzenegger failed to show that FMMC purposely had availed itself
of the benefits of a California forum. (ER II:386) FMMC made no similar
contention with respect to the second, forum related activities aspect of the
specific jurisdiction analysis. (Id.) The venue portion of FMMC’s motion
necessarily discussed reasonableness factors that resemble those required
under Burger King. But the focus of the venue and personal jurisdictional
analyses are not the same. While it is appropriate in the venue context to
compare different forums and determine which is more reasonable, the Burger
King factors instead are designed to determine whether jurisdiction is
reasonable in the plaintiff’s chosen forum in the first instance. At best,
FMMC’s venue related arguments below confirm the self-evident fact that
Ohio constitutes a possible alternate forum. (See ER I:31-33; II:386-91)

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30; II:386-91) This is inadequate to demonstrate a “compelling case” of
unreasonableness focused on the applicable Burger King factors. For this
reason alone, given Mr. Schwarzenegger’s ample showing as to the other
requisites for specific jurisdiction, specific jurisdiction exists as to FMMC that
should have precluded the district court’s dismissal.

In any event, even if FMMC had attempted to meet the


evidentiary burden imposed on it by Burger King and the subsequent decisions
of this Court, it would not have succeeded. On the contrary, the factors
bearing on the overall reasonableness of California jurisdiction weigh strongly
on the side of such jurisdiction:

Purposeful Injection Into Forum. The extent of FMMC’s


purposeful interjection into the forum is great for the reasons discussed in the
general jurisdiction and purposeful availment analyses, above. FMMC’s
forum related activities, including its vehicle purchase contracts that specify
FMMC’s choice of California law and forum, are necessary to a substantial
proportion of its sales, and critical to its overall sales and marketing efforts.
See Vons, 14 Cal.4th at 456-459 (specific jurisdiction exercised based on
franchise agreements with non-California entities containing California choice
of law and forum provisions).

Burden On Defendant. While one cannot discount the time,


expense and inconvenience to FMMC to defend this action in California, the
relative burden it will face is not substantial, and certainly is not unfair. Most

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of the likely percipient witnesses and all of the likely expert witnesses reside in
California. (ER I:9616) The distance between Ohio and California is not
extreme under modern conditions. See Ballard, 65 F.3d at 1501 (requirement
that Austrian defendant travel to California not so great as to violate due
process); Sinatra, 854 F.2d at 1199 (“modern advances in communications
and transportation have significantly reduced the burden” even of litigating in
another country).

Conflict With Ohio’s Sovereignty. As for the potential conflict


with Ohio’s sovereignty, the record reveals none. FMMC would not be
shielded from Mr. Schwarzenegger’s California law claims if this matter were
to proceed in Ohio. However, both parties would be deprived of the
heightened familiarity of Ninth Circuit courts with the California claims being
asserted.

California’s Interest In Adjudicating The Dispute. The


underlying dispute involves the intentional misappropriation of one of the most
pivotal and hard-won assets a motion picture actor can possess: the
commercial value and presentation of his public persona. Mr.
Schwarzenegger not only is a California resident, but also is a representative
and icon of one of the state’s most prized industries. California based
celebrities are uniquely vulnerable to the kind of wrongdoing that FMMC

16
See also ER III:897, 904, 907-09 (Mr. Schwarzenegger’s evidentiary
submissions in opposition to Zimmerman’s unsuccessful motion to transfer the
district court proceedings to Ohio, discussing related considerations).

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engaged in here. Particularly if such conduct is not diligently controlled
through litigation such as this, it is prone to increase and spread without
thought of jurisdictional boundaries. California’s interest in shielding Mr.
Schwarzenegger and those like him from the need to pursue piecemeal actions
throughout the country could not be stronger. See Sinatra, 854 F.2d at 1200
(“California maintains a strong interest in providing an effective means of
redress for its residents tortiously injured by commercial misappropriation [of
name and likeness] . . . California’s interest in providing effective redress for
its residents supports the exercise of jurisdiction in this case”); Thomson v.
Continental Ins. Co., 66 Cal.2d 738, 742-43 (1967) (“California residents
ought to be able to obtain redress for grievances in California courts, which
are maintained by the state for their benefit. This state is concerned with the
welfare of California residents and has a decided interest in assuring that its
citizens are not denied damages because of the inconvenience or expense of
bringing suit in a distant jurisdiction”).

Most Efficient Forum. The “most efficient forum” factor


weighs forcefully in California’s favor. This case involves claims asserted
under California law by a plaintiff who resides and was injured in the state.
The underlying action is proceeding in California against another out of state
defendant—Zimmerman—as to whom personal jurisdiction is not an issue.17
Given the disproportionate number of witnesses who reside in California, it is

17
Defendant Zimmerman attempted without success to transfer the district
court proceedings to Ohio. (ER III:691-895; IV:946-67)

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more convenient and less expensive for all parties to resolve the claims in this
forum. (ER I:96 and n.16, infra) See California Software, 631 F.Supp. at
1364, citing Cubbage v. Merchant, 744 F.2d 665, 671-72 (9th Cir. 1984)
(“[t]he court sitting in the place the injury occurred is ordinarily the most
efficient forum”).

Importance Of Forum To Plaintiff’s Interest In Convenient


And Effective Relief. Given the foregoing analysis, it is unsurprising that the
California forum is extremely important to Mr. Schwarzenegger’s interest in
convenient and effective relief. A California forum for this litigation will help
ensure that costs to all parties are minimized, that all parties benefit from the
greater familiarity of the local trial and appellate tribunals with the laws at
stake, and that Mr. Schwarzenegger and others in his position need not
inevitably pursue—in their myriad home jurisdictions—those far and wide who
would exploit a celebrity’s fame for their own, unauthorized commercial
purposes.

Existence Of Alternate Forum. Although Ohio is a conceivable


alternative forum where this action could proceed, it is a far less reasonable
one than California. Mr. Schwarzenegger already is proceeding against
FMMC’s advertising agency and co-defendant in the court below, having
defeated that party’s efforts first to transfer, then to stay, the trial court
proceedings. (ER IV:968, 1095) If the lower court’s dismissal of FMMC is
permitted to stand, this will necessitate multiple lawsuits in multiple forums
from the same set of facts and circumstances, thus constituting an unwarranted

- 44 -
waste of judicial and party resources. See California Software, 631 F.Supp. at
1364 (“It would be both unfair, in light of the forum related activity, and
inefficient to require plaintiffs who have suffered an economic injury as a
result of defendants’ intentional conduct to sue in defendants’ home states …
or in the three jurisdictions in which the known recipients of the CRF message
reside”).

The calculus under each of the Burger King reasonableness factors


only serves to reinforce the propriety of California’s exercise of personal
jurisdiction over FMMC. California’s interests in protecting its residents and
providing efficient dispute resolution in fact are sufficiently strong here that
“the reasonableness of [California] jurisdiction [may be established] upon a
lesser showing of minimum contacts than would otherwise be required.”
Burger King, 471 U.S. at 477 (factors including the state’s interest in
adjudicating the dispute, the plaintiff’s interest in convenient and effective
relief, “the interstate judicial system’s interest in obtaining the most efficient
resolution of controversies,” and the states’ shared interest in furthering social
policies, can support a finding of minimum contacts where extent of activity
otherwise insufficient) (citations omitted).

VI.
CONCLUSION

Without relief from this Court, Mr. Schwarzenegger must pursue


FMMC in Ohio, and FMMC in turn is permitted to evade California’s strong

- 45 -
interest in curbing and rectifying FMMC’s unlawful conduct. This Court
should refuse to permit that result. Assertion of personal jurisdiction over
FMMC, based on the nature of its contacts with California and the intended
effect of its conduct within California, effectuates controlling state and federal
constitutional directives. Because the Constitution permits it, California would
and should provide a forum to litigate this dispute. We urge this Court to
reverse the judgment below.

DATED: February ____, 2003. Respectfully submitted,

LAVELY & SINGER


Professional Corporation

REED SMITH CROSBY HEAFEY LLP

By
Denise M. Howell
Attorneys for Appellant
Arnold Schwarzenegger

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VII.
STATEMENT OF RELATED CASES

Appellant Arnold Schwarzenegger is not aware of any related


cases pending in this Court.

DATED: February ____, 2003. Respectfully submitted,

LAVELY & SINGER


Professional Corporation

REED SMITH CROSBY HEAFEY LLP

By
Denise M. Howell
Attorneys for Appellant
Arnold Schwarzenegger

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VIII.
CERTIFICATE OF COMPLIANCE

I certify that, pursuant to Federal Rule of Appellate Procedure


32(a)(7)(C) and Ninth Circuit Rule 32-1, the attached Appellant's Opening
Brief is proportionately spaced, has a typeface of 14 points or more, and
contains 9,440 words (opening briefs must not exceed 14,000 words).

DATED: February ____, 2003. Respectfully submitted,

LAVELY & SINGER


Professional Corporation

REED SMITH CROSBY HEAFEY LLP

By
Denise M. Howell
Attorneys for Appellant
Arnold Schwarzenegger

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PROOF OF SERVICE
I am a resident of the State of California, over the age of eighteen
years, and not a party to the within action. I am employed in the office of a
member of the bar of this court at whose direction the service was made. My
business address is REED SMITH CROSBY HEAFEY LLP , 355 South
Grand Avenue, Suite 2900, Los Angeles, CA 90071. On March 3, 2003, I
served the following document(s) by the method indicated below:
APPELLANT’S OPENING BRIEF

¨ By transmitting via facsimile on this date from fax number (213) 457-8080
the document(s) listed above to the fax number(s) set forth below. The
transmission was completed before 5:00 p.m. and was reported complete
and without error. The transmission report, which is attached to this proof
of service, was properly issued by the transmitting fax machine. Service
by fax was made by agreement of the parties, confirmed in writing.
ý By placing the document(s) listed above in a sealed envelope with postage
thereon fully prepaid, in the United States mail at Los Angeles, California
addressed as set forth below. I am readily familiar with the firm’s practice
of collection and processing of correspondence for mailing. Under that
practice, it would be deposited with the U.S. Postal Service on that same
day with postage thereon fully prepaid in the ordinary course of business.
I am aware that on motion of the party served, service is presumed invalid
if the postal cancellation date or postage meter date is more than one day
after the date of deposit for mailing in this Declaration.
¨ By placing the document(s) listed above in a sealed envelope(s) and by
causing personal delivery of the envelope(s) to the person(s) at the
address(es) set forth below. A signed proof of service by the process
server or delivery service will be filed shortly.
¨ By personally delivering the document(s) listed above to the person(s) at
the address(es) set forth below.
¨ By placing the document(s) listed above in a sealed envelope(s) and
consigning it to an express mail service for guaranteed delivery on the next
business day following the date of consignment to the address(es) set forth
below. A copy of the consignment slip is attached to this proof of service.

-1-
Larry J. Brock, Esq. Attorneys for Defendant and Appellee
Pollard, Archer, Cranert, Googooian Fred Martin Motor Company
& Stevens
2 North Lake Avenue, Suite 850
Pasadena, CA 91101-1872
Roy G. Weatherup, Esq. Attorneys for Defendant and Appellee
Haight, Brown & Bonesteel, LLP Fred Martin Motor Company
6080 Center Drive, Suite 800
Los Angeles, CA 90045-1574

I declare under penalty of perjury under the laws of the United


States that the above is true and correct. Executed on March 3, 2003, at Los
Angeles, California.

Adriane I. Lark

-2-
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