A federal appeals court has ended actor Arnold Schwarzenegger's $20 million lawsuit against an Akron, Ohio, area new-vehicle dealership, saying California courts have no jurisdiction over Fred Martin Motor Co.
The Barberton, Ohio, dealership can't be forced to defend itself in California because it doesn't have enough of a business connection in that state, the three-judge panel ruled.
The decision leaves open the possibility that Schwarzenegger, California's governor,will sue Fred Martin in Ohio. His lawyer, Martin Singer of Los Angeles, says settlement has been discussed. But Singer says, "If we don't resolve the matter, my client will bring a claim in Ohio."
The dealership's lawyer, Maureen Haight Gee of Los Angeles, though, says Ohio's so-called "right of publicity" law is stricter than California's and allows fewer damages.
In 2002, Fred Martin ran a series of five full-page color ads in the Akron Beacon Journal, each carrying a small photo of Schwarzenegger dressed as the Terminator. A cartoonlike bubble next to his mouth read: "Arnold says: 'Terminate EARLY at Fred Martin!'" The ad invited customers to terminate their leases early and buy or lease a new car. The ads, which included photos of cars, also promised in large type that Fred Martin "Won't be beat."
Schwarzenegger, who filed the lawsuit before he was elected governor, claimed that he never authorized use of his image in the ads and asserted that oversaturation of his image could reduce the audience for his films and cost him future earnings.
The Ninth Circuit U.S. Court of Appeals in San Francisco upheld a lower court judge's dismissal of the lawsuit.
The appeals court rejected Schwarzenegger's argument that Martin's contacts in California, such as buying Asia-made cars that are imported into that state and using a California direct-mail marketing company, are enough to subject it to the reach of courts there.
"The creation and publication of the advertisement was expressly aimed at Ohio rather than California," Judge William Fletcher wrote on behalf of the court. "The advertisement was never circulated in California, and Fred Martin had no reason to believe that any Californians would see it and pay a visit to the dealership," the judge wrote.
The dealership's Florida ad agency, Zimmerman & Partners Advertising Inc., which has offices in California, reached a confidential settlement with Schwarzenegger, Gee says. Singer says it involved a payment to Schwarzenegger.