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CHASE v. PAN-PACIFIC BROADCASTING

August 30, 1985

SEYMOUR M. CHASE, Plaintiff,
v.
PAN-PACIFIC BROADCASTING, INC., et al., Defendants


Corcoran, Judge.


The opinion of the court was delivered by: CORCORAN

I. Preliminary Statement

 A. Factual Background1

 About June 25, 1980, Masataka Iwasaki, a California resident and Japanese citizen, telephoned Seymour Chase at his District of Columbia office. Mr. Chase is a member of the District of Columbia Bar whose legal practice is devoted principally to communication law. *fn2" Chase-1 paras. 2, 3, 4. *fn3" Iwasaki's initial telephone conversation with Chase concerned the possible purchase of a television station in California. The parties agreed to see each other the next weekend, after reaching an agreement on the payment of Chase's fees and expenses. Id. Iwasaki and Dennis Kinoshita, an associate of Iwasaki, met with Chase in Los Angeles on the July 4th weekend. Iwasaki para. 3; Kinoshita para. 4. Chase discouraged the purchase of a local television station, but he did point out that the Federal Communications Commission (FCC) would allocate a license for a television channel in Riverside, California. Accordingly, Chase suggested that Iwasaki apply for that license. Iwasaki para. 3.

 During the meeting, Iwasaki gave Chase a letter dated July 4, 1980 which Iwasaki had signed as president of Yomiuri World Television, Inc. Chase-1 para. 5; Complaint (filed June 1, 1983). In the first paragraph of the letter, Iwasaki wrote:

 
This [letter] will authorize you to act for me, for any associates I assemble, and for any partnerships or corporations I cause to be formed, in the preparation, filing, and prosecution of applications to the Federal Communications Commission for a construction permit for a new commercial television station and a subscription television system to serve the Los Angeles area.

 Iwasaki's letter also outlined the understood fees for Chase's legal services and noted that Iwasaki was providing Chase with a retainer. Chase-1 para. 5.

 Iwasaki owned the remaining 20 percent of Pan-Pacific stock. Kinoshita, exhibit. Charles M. Olson was president of the company, *fn5" and Kinoshita was the accountant and corporate secretary. Olson para. 3; Answers of Defendant to Plaintiff's Interrogatories No. 2. Both Olson and Kinoshita were Pan-Pacific directors. Kinoshita para. 8; Olson para. 3.

 Miko had three individual stockholders. Both Kinoshita and Olson each held 37 1/2 shares, while Iwasaki owned the remaining 25 shares. *fn6" Kinoshita para. 8, exhibit; Olson para. 4. Originally, Iwasaki had an option to purchase 32 1/2 shares from both Olson and Kinoshita as soon as Iwasaki became an American citizen. Kinoshita para. 8; Olson para. 4. But, due to claims of excessive control from competing applicants before the FCC, the parties modified the stock option in April 1982, disallowing Iwasaki from exercising his option until the proposed television station had been in operation for three years. Plaintiff's Brief on the Jurisdictional Issue at 19 (filed Apr. 22, 1985).

 Kinoshita was the president and accountant of Miko, and Olson was the treasurer. Kinoshita, exhibit; Olson, exhibit A. Both men were directors of the corporation. Kinoshita para. 8; Olson para. 3. Originally Iwasaki was a director for Miko, but, again due to the challenges of excessive control, Iwasaki gave up his director's position and pledged to refrain from proposing the election of any officer or director until after he had become a citizen. Neither Olson nor Kinoshita invested any money in Pan-Pacific or Miko. Chase-2 para. 7. Instead, Iwasaki provided all financing for the companies, either directly or through loans. See id. All business for both corporations was conducted through Iwasaki's own business office. Id. Iwasaki made all the business decisions with respect to the preparation and prosecution of the license application, assuming all financial responsibility for obtaining the license. Chase-2 para. 8.

 Several meetings followed which took place outside the District of Columbia. Iwasaki met with Chase in Aspen, Colorado on December 12-14, 1980. Iwasaki para. 5. Between March 6-8, 1981, Kinoshita and Iwasaki met Chase in Los Angeles to discuss the FCC license application. Iwasaki para. 6; Kinoshita para. 6. About June 10, 1981 and September 18-20, 1981, Olson met with Iwasaki in Wisconsin to help prepare the application. Olson para. 5. On October 12, 1981, Iwasaki had dinner with Chase in Los Angeles. Iwasaki para. 7. Kinoshita met with Chase in Los Angeles on February 7, 1982 to discuss problems involved with the FCC application. Kinoshita para. 7. Again, Olson met with Iwasaki in Wisconsin on June 6, 1982 to help prepare the application. Olson para. 5. Finally, on June 10, 1982, Iwasaki met again with Chase. Iwasaki para. 9.

 Two meetings took place in the District of Columbia. On September 25-26, 1981, Iwasaki met with Chase. Chase para. 7. During that meeting, Iwasaki agreed to a plan to negotiate with other competing FCC applicants about a possible merger of several applications. Chase para. 7. Iwasaki authorized Chase to secure the assistance of other law firms and agents to investigate the competing applicants. Iwasaki also asked Chase to make preliminary inquiries concerning Iwasaki's current business arrangements with a Los Angeles television station. Id. Additionally, Iwasaki raised the possibility of developing a business to provide Japanese language broadcasts in several other major cities. *fn7"

 Under the terms of the July 4, 1980 letter, Chase's primary function was to obtain a television license from the FCC for Pan-Pacific Broadcasting. Complaint, exhibit a. However, Chase performed other services which were not related exclusively to his contacts with the FCC. Chase-1 para. 9. He assisted the defendants with their business organization and corporate operations, prepared a press release regarding the activities of the defendants, assisted with the development of television programming plans, and made arrangements and contracts with engineers and other consultants regarding establishment of the defendants' broadcast operations and equipment acquisitions. Id. While some aspects of these business activities were included in material submitted to the FCC, they did not in all instances have a particular or necessary relationship to the FCC application. Id.

 B. Procedural Background

 Although he received some payments, Chase did not collect all his claimed attorney's fees. Consequently, he filed a complaint in the Superior Court of the District of Columbia against Pan-Pacific, Miko, Iwasaki, Kinoshita, and Olson, charging breach of contract and quantum meruit. Chase claimed that the defendants were jointly and severally liable for $ 71,718.43 in unpaid legal fees. Complaint paras. 8, 11. The case was removed to federal court, and on June 24, 1983, Pan-Pacific filed an answer and counterclaim. Answer and Counterclaim of Pan-Pacific (filed June 24, 1983). The other defendants filed answers which "incorporated" Pan-Pacific's counterclaim in their list of defenses. Answer of Kinoshita (filed June 24, 1983); Answer of Miko (filed June 24, 1983); Answer of Iwasaki (filed June 24, 1983); Answer of Olson (filed June 24, 1983).

 The Pan-Pacific counterclaim asserted three counts. First, Pan-Pacific alleged that Chase had disclosed confidential information to United American Telecasters, Inc. (United American), a company which had filed a competing application for the broadcast license. Second, Pan-Pacific claimed that Chase had negligently performed services for Pan-Pacific. For example, Pan-Pacific charged that Chase had incorrectly advised Pan-Pacific that it could secure a broadcast license with Iwasaki as the only financial investor. Finally, Pan-Pacific alleged that Chase had misrepresented the cost of filing an application for a broadcast license and of prosecuting the application before the FCC. Answer and Counterclaim of Pan-Pacific at 5-8.

 On August 10, 1983, Miko and the individual defendants moved to dismiss the complaint for lack of personal jurisdiction. See Motion of Defendants Miko, Kinoshita, Iwasaki, and Olson to Dismiss the Complaint (filed Aug. 10, 1983); Opposition of Plaintiff to Motion to Dismiss (filed Aug. 22, 1983); Supplemental Memorandum and Points of Authorities for Defendants (filed Aug. 30, 1983). Pan-Pacific did not join in this motion. On November 10, 1983, the district court denied the motion, holding that the defendants' adoption of Pan-Pacific's counterclaim waived any challenge to the court's exercise of personal jurisdiction. Memorandum and Order (filed Nov. 10, 1983). The court of appeals reversed and remanded the case to the district court "for prompt airing and decision of the objections to personal jurisdiction raised by Miko and the individual defendants." Chase v. Pan-Pacific Broadcasting, Inc., 242 U.S. App. D.C. 283, 750 F.2d 131, 134 (D.C. Cir. 1984).

  On January 18, 1985, we requested the parties to submit updated memoranda on the question of personal jurisdiction. *fn8" Status Call (Jan. 18, 1985). On April 22, 1985, both the plaintiff and defendants filed their supplemental memoranda. Supplemental Memorandum of Points and Authorities in Support of Motion of Defendants Miko Enterprises, Inc., Dennis K. Kinoshita, Masataka Iwasaki, and Charles R. Olson to Dismiss the Complaint (filed Apr. 22, 1985); Plaintiff's Memorandum in Response to Status Call (filed Apr. 22, 1985). After considering these memoranda, we entered an order on June 7, 1985 finding "that the plaintiff has made a prima facie showing of in personam jurisdiction over Masataka Iwasaki, Miko Enterprises, Inc., and Pan-Pacific Broadcasting, Inc." We held, however, that Chase "failed to establish such a showing with regard to Dennis K. Kinoshita or Charles R. Olson." We accordingly dismissed the complaint as to Kinoshita and Olson. In our order, we promised this memorandum to explain our decision. Order (filed June 7, 1985).

 II. Discussion

 To determine whether we may exercise jurisdiction over Miko and the individual defendants, we follow a three-part analysis. Section One outlines the general principles which govern jurisdictional questions. Section Two applies those principles to the defendants in this case. And Section Three examines the applicability of the so-called "government contacts" doctrine.

 1. Jurisdictional Principles

 Our court may assert personal jurisdiction over the defendants if the plaintiff fulfills two conditions. First, the plaintiff must demonstrate that the District of Columbia longarm statute authorizes service of process over the defendants, *fn9" and, second he must show that such a provision is consistent with the constitutional principles of due process. Margoles v. Johns, 157 U.S. App. D.C. 209, 483 F.2d 1212, 1220 (D.C. ...


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