A special action concerning personal jurisdiction over a trustee.

Wells Fargo Bank took judgment against Hoag. It then served subpoenas for financial records in aid of garnishment. Among the targets were  three charitable remainder trusts of which Hoag was settlor, recipient of regular payments, and trustee. In response Hoag resigned as trustee and appointed in his place a corporation in the Bahamas, which refused to comply with the subpoenas. The bank then brought the present suit against Hoag, the trusts, and the Bahamanian trustee alleging that “Hoag had fraudulently concealed his assets by transferring them to the [trusts]” (no doubt the bank’s Complaint was more coherent than this description makes it sound). The trustee moved to dismiss for lack of personal jurisdiction; the trial court denied the motion; on this special action the Court of Appeals reverses.

Under 14-10202 a trustee can become subject to jurisdiction by  “accepting the trusteeship of a trust having its principal place of administration” in Arizona. The bank argued that since Hoag administered the trusts here the new trustee was subject to jurisdiction here. But the court says that since the statute says “having,” which “refers to present action,” not “had,” it refers to where the trust is “currently being administered.” At the time of the lawsuit the trustee was administering the trusts in the Bahamas so the statute doesn’t apply.

Apparently, then, “having” refers not to the time of the trusteeship’s acceptance but to some future time when an action is brought.  We would have thought that “accepting” and “having” refer to the same time but it seems that’s just us. The court explains in a footnote that there is a difference between present and past participles; though unintended, we hope that’s an insult rather than a help to its readers.

14-10202 by its terms “does not preclude other methods of obtaining jurisdiction” and the trial court decided that it also had jurisdiction under Rule 4.2. So the opinion makes a constitutional analysis. As is seemingly the court’s standard practice nowadays, the discussion consists for the most part of lengthy explanations of elementary principles including citations of most of the jurisdiction cases you’ve ever heard of all the way back to Pennoyer v. Neff. The bottom line is that under these facts the trustee didn’t have minimum contacts. The bank seems to have argued that the trustee communicated with Hoag and sent him various things but the opinion decides that these were responses to Hoag’s acts, not acts purposefully availing the trustee of jurisdiction here.

The court remands with directions to dismiss as to the trustee. It agrees that the transfers look fishy but says the bank didn’t argue for jurisdictional purposes that the trustee intentionally abetted the hiding of assets.

(link to opinion)

This case involves a police chase and a dramatic killing and Fox News and the First Amendment. So our real interest, of course, is the standard-of-review paragraph. But we’ll save that for the end.

A carjacker fled police for  80 miles; then he stopped, got out of the car, and, after a bit of aimless wandering in the desert, abruptly shot himself in the head. Fox News broadcast the whole thing – including the suicide,  since it wasn’t using a delay on the feed from the helicopter camera. Two boys in the community heard about it at school; after school they rushed home to watch the video on YouTube, discovering thereby that the carjacker they watched kill himself was their father.

An appropriate response to this tragedy, someone eventually decided, was a lawsuit against Fox News for negligent and intentional infliction of emotional distress. Fox News moved to dismiss on First Amendment grounds; the trial court granted dismissal; the Court of Appeals affirms.

The court first tells us, citing various U. S. Supreme Court cases, that “speech on matters of public concern” merits “special protection” whereas speech on “purely private matters” gets “less . . . protection.” The court thus frames the issue here as whether this speech was public or private. It does not explain why “less protection” would for purposes of this case mean “no protection” nor where along the presumed continuum between “public” and “purely private” one passes the boundary of tort law. However, the simple public v. private distinction was probably how Fox presented the issue.

Matters of public concern include matters of legitimate news interest. The court spends a page explaining why the chase was such a matter. Then it turns out that the plaintiff agreed; her argument was merely that the few seconds of suicide were private. But public v. private is determined by the speech’s “overall thrust and dominant theme,” not by individual snippets here or there.

Plaintiff apparently also argued that Fox News shouldn’t have a First Amendment defense since it didn’t in this broadcast – although it normally did – use a tape delay. The court says basically that this didn’t make public speech private, that public speech is protected, and that having to use a tape delay to protect against liability would have a chilling effect.

So by now you’re anxious to hear about that standard-of-review stuff:

We’ve stopped pointing out that boilerplate standard-of-review paragraphs are silly. They’re now a standard module in CA1’s Lego-like process of building opinions. Removing them would require a depth of stylistic analysis that it is the purpose of that process to avoid, rather like lawyers who are happy to practice law by filling out legal forms without worrying about why the forms are worded as they are.

But the standard-of-review section here is actually two paragraphs. The first is boilerplate. The second, though, tells us that dismissals on First Amendment grounds are examined “with a more rigorous eye” (opinions are prone to such careless — and in this case slightly painful – analogies). The court cites for the proposition an opinion written by a U. of A. law professor sitting as a pro tem on CA2 in 1988. (The wording of the opinion suggests that an opinion by Judge Fidel also said it; the suggestion is no doubt inadvertent since it is wrong.)

What (we hope you ask, though apparently no one ever has) does that mean? Our guess is that because the Constitution was involved someone had vaguely in mind the rational basis-intermediate scrutiny-strict scrutiny idea. But those terms  describe distinct (at least in theory) methods of analysis. The analysis of a 12(b)(6) dismissal doesn’t vary by defense – which is why the court could have and use that first, boilerplate, paragraph. So the quotation means that when the First Amendment is the defense the court must do the same thing it always does – but more rigorously. In other words, some cases and some parties are important and for them courts need to work hard; for the rest of us the rest of the time they can throttle back and churn out the usual slop.

Of course this court didn’t mean that. But that’s what it said, and that courts are capable of saying such things does nothing to allay the suspicion of cynics that that’s the way they tend to think.

(link to opinion)

This is essentially Sullivan II; Sulllivan I, described by this opinion as such, is here and here. (The opinion hyperlinks in those blogs are working; we’re aware that the links in some number of our blogs no longer do and we apologize but we really don’t have the time to update 390 blogs every time the courts decide to change the file structure of their servers.) That was essentially a case about the economic-loss doctrine; the Sullivans, subsequent purchasers, sued Pulte for a defective retaining wall.The Supreme Court remanded to allow the negligence claim to proceed while suggesting, citing the Restatement, that it ultimately couldn’t work. This is the appeal of the negligence claim which, after remand, the trial court dismissed. The Court of Appeals affirms, with a dissent.

The court quotes the paragraph from the Supreme Court’s opinion that threw cold water on the negligence claim. But the Sullivans, we will assume in conscious response to that paragraph, had done a clever thing: they disclaimed reliance on common law and insisted that Pulte’s duty of care to them was created by Arizona statutes (apparently the contractor-licensing statutes) and the Phoenix building code. The argument was that those things established a public policy under which they were a protected class of persons.

But the building code says specifically that it isn’t intended to create a protected class. Even if it did, protected-class policy protects against injury, not economic loss. The same goes with the statutes.

The dissent argues that the defective retaining wall might have hurt someone so injury, not mere economic loss, is at issue and a duty should therefore exist. The dissent makes this point in its first paragraph then spends nine more pages making it again, and again, and again in case anyone didn’t get it the first or second or fifteenth time. Actually, though, the dissent carefully avoids using the words “might” or “speculative” in this connection. To the dissent, only the Sullivans’ ability to buy homeowners’ insurance (relevant to risk-spreading theories mentioned in the Restatement) is a “speculative” thing that “might” have happened. The retaining wall hurting someone is in the category of things that “have not yet” happened.

(link to opinion)