Lewron Television, Inc. v. International Alliance of Theatrical Stage Employees

Moore, J., delivered the opinion of the Court. This appeal, involving the application of the long-arm statute, Md. Cts. & Jud. Proc. Code Ann. § 6-103 (1974), to a labor union International, has already acquired a three-year history.

Plaintiff-appellant has not, thus far, advanced beyond the stage of service of process. Our mandate leaves it at the starting line. I In September 1974 the plaintiff, Lewron Television, Inc., a Maryland corporation, filed a Declaration in the Superior Court of Baltimore City charging the defendant, International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada (hereinafter the “International”) with intentional •interference with contractual relations, and seeking more than $11 million in compensatory and punitive damages. The International is an unincorporated association which maintains its principal office in New York City.

Service of process was made in Baltimore upon an officer of Local 833 of the union. The defendant International moved to quash service on the ground that the Local was an entity separate and distinct from the International, and was not authorized to accept service on behalf of the International. On January 2, 1975, Judge James W. Murphy granted the motion to quash, with leave to reissue under the Maryland Rules. Plaintiffs summons was reissued and, in February 1975, Walter F. Diehl, the President of the International, was served by mail in New York City, pursuant to Rule 107.

Defendant filed a new motion to quash service, stating that the Declaration failed to allege any facts tending to show that the defendant was doing business in Maryland, as required under the long-arm statute, or that jurisdiction would be consistent with Fourteenth Amendment due process. On May 22, 1975, Judge Murphy granted the second ⁶⁶⁴ motion to quash, finding plaintiff had “failed to establish that Defendant directly or by an agent ‘regularly does or solicits business, engages in any other persistent course of conduct in the state or derives substantial revenue from goods, food, services or manufactured products used or consumed in the state.’ See: Zinz v. Evans & Mitchell Industries, 22 Md. App. 126 .” Prior to the court’s ruling, plaintiff had prepared a “Response” to defendant’s reply to a memorandum of points and authorities in opposition to the motion to quash. This document, in which plaintiff requested time for discovery proceedings, had evidently not been received when the motion to quash was granted. Therefore, on June 12, 1975, Judge Murphy vacated the judgment previously entered, and granted the plaintiff sixty days to complete discovery on the question of whether jurisdiction over the defendant was conferred by the long-arm statute.

Following discovery, a hearing was held on June 1, 1976 before Judge Shirley B. Jones and, after the submission of post-hearing briefs by both parties, defendant-appellee’s motion to quash service on the ground of lack of jurisdiction was granted. This appeal was taken from Judge Jones’ ruling. II The ultimate question before us may be stated quite succinctly: Did the defendant International have the requisite “minimum contacts” with the State of Maryland to be subject to suit on a cause of action which did not arise in this State? The lower court twice answered this question in the negative, and we agree.

In determining whether the Maryland courts may exercise in personam jurisdiction over an out-of-state defendant, the provisions of the long-arm statute, Md. Cts. & Jud. Proc. Code Ann. § 6-103 (1974), must be satisfied in a manner not inconsistent with the due process clause of the Fourteenth Amendment to the federal constitution. Malinow v. Eberly, 322 F. Supp. 594 (D. Md. 1971).

Due process is, of course, the ⁶⁶⁵ primary consideration, and its requirements were enunciated by the Supreme Court in the now familiar case of International Shoe Co. v. Washington, 326 U. S. 310 (1945), in an opinion by Chief Justice Stone: “[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” 326 U. S. at 316 . (Citations omitted; emphasis added.) Although due process may be satisfied where the contacts of the out-of-state party are relatively few based on the “quality and nature of the activity,” Id. at 319 , “it has been generally recognized that the casual presence of the corporate agent or even his conduct of single or isolated items of activities are not enough to subject it to suit on causes of action unconnected -with the activities there. ” Id. at 317 . (Emphasis added.) See also Hanson v. Denckla, 357 U. S. 235 (1958); McGee v. International Life Insurance Co., 355 U. S. 220 (1957). The Maryland long-arm statute, now codified at § 6-103 of the Courts Article, was enacted in 1964 for the purpose of extending personal jurisdiction over out-of-state parties to the fullest extent constitutionally permissible.

Malinow v. Eberly, supra, at 598; Van Wagenberg v. Van Wagenberg, 241 Md. 154 , 215 A. 2d 812 , cert. denied, 385 U. S. 833 (1966); Geelhoed v. Jensen, 277 Md. 220 , 352 A. 2d 818 (1976); and “the reach of the statute will largely depend upon whether Maryland in persona,m jurisdiction may be asserted under the Fourteenth Amendment.” Krashes v. White, 275 Md. 549, 559 , 341 A. 2d 798, 804 (1975). It is not disputed that the instant appeal involves only the application of § 6-103 (b) (4) of the statute. This section provides: “(b) In general. — A court may exercise personal ⁶⁶⁶ jurisdiction over a person who directly or by an agent: “(4) Causes tortious injury in the state or outside of the state by an act or omission outside the state if he regularly does or solicits business, engages in any other persistent course of conduct in the state or derives substantial revenue from goods, food, services, or manufactured products used or consumed in the state [.]” (Emphasis added.) While in personam jurisdiction thus may be obtained over an out-of-state defendant even where the alleged injury has occurred outside Maryland, in such a case due process requires “other contacts between the [defendant] and the state [to] be fairly extensive before the burden of defending a suit there may be imposed .. . without offending ‘traditional notions of fair play and substantial justice.’ ” F. James, Civil Procedure 640 (1965); Ratliff v. Cooper Laboratories, Inc., 444 F. 2d 745, 748 (4th Cir.), cert. denied, 404 U. S. 948 (1971); Egeria, Societa di Navigazione Per Azioni v. Orinoco Mining Co., 360 F. Supp. 997 (D. Md. 1973). Ill Having stated the constitutional and statutory guidelines which govern our decision in this case, we shall relate the operative facts as we have gleaned them from the record.

The International, as previously noted, is an unincorporated association having its principal office in New York. It maintains no office in Maryland, but does have a branch office in Los Angeles, California. Approximately 900 local unions throughout the United States and Canada are affiliated with the International. It has approximately 65,000 members of whom approximately 190 are members of two locals in this State.

It maintains no bank accounts in Maryland, has no accounts receivable from Maryland nor any interest in Maryland real property, nor does it have any investments of any kind within the State. ⁶⁶⁷ None of the acts of the International upon which plaintiffs claims are based was committed in Maryland. Rather, the alleged tortious conduct occurred in New York and California. The Constitution of the International sets forth the purposes of the organization, and explains the powers of the International vis-a-vis the locals. Such purposes are expressed, in Article One, Section 2, as the improvement of social and economic conditions for employees in the various fields of endeavor encompassed by the union’s membership, the assurance of employment for members, and the maintenance of fair wage payments.

The membership of the International comprises, for the most part, the members in good standing of all locals holding a charter from the International. Several sections of the Constitution indicate powers which the International holds over its local units. Article Seven, Section 9 states that the International President may order the officers of a local to submit its books and records for inspection whenever it may be deemed expedient. Section 10 of the same article allows the President to order members to refrain.from rendering service to employers who may be indebted to other members.

The President is further given the pcwer, by Section 16, to invoke sanctions against local unions for failure to meet financial obligations to the International, or even, in certain emergency situations, to “take over all books, records, credits and property of such union of every nature whatsoever. . . .” Revenues from the local are derived by the International for certain items, described in Article Fourteen of the Constitution: a “per capita tax” is imposed on locals in accordance with their active and retired membership; and a charter fee of $100 is also charged locals wishing to affiliate with the International. In addition, a defense fund has been established through assessment of individual members, such monies to be used to defray legal and other expenses, where a local was “faced with an unauthorized strike or a lock-out.” Article Nineteen of the International’s constitution focuses upon the “Powers and Duties of Local Unions.” This ⁶⁶⁸ Article makes clear that the locals are autonomous bodies, independent in all major respects, except for the fact that they have chosen to associate themselves with a central advisory unit, 'namely, the International. Section 2 is particularly revealing, and we quote it in its entirety: “Section 2. Home Rule.

Home Rule is granted to all affiliated local unions of this Alliance and this shall be construed to confer upon each local union the authority to exercise full and complete control over its own affairs; provided, however, that no local union shall take any actions or adopt any laws which conflict with any portion of the Constitution and By-Laws.” (Emphasis added.) The affiliated locals, under Section 3, are empowered to adopt their own constitutions and by-laws for self-government, although the approval of the International President is required for such documents. Further evidence of the autonomy of the locals is provided in Section 15, which permits locals to “execute written contracts with local managers and other employers regulating conditions of employment of all members within their jurisdiction.” Each local was authorized “to fix the scale of wages within its jurisdiction.” We note also, from an affidavit of the International’s President contained in the record, that the sum of the local’s powers is quite broad: the local has its own constitution and by-laws; maintains its own treasury; nominates and elects its own officers; conducts its own meetings; collects its own fees and dues; passes upon the qualifications of all membership applicants; “engages in its own organizing activities, negotiates its own contracts with employers and administers such contracts on its own including the handling of grievances with employers”; 1