Summary
finding no personal jurisdiction over defendant who operated a message board where a third party posted an allegedly defamatory message
Summary of this case from TRIPLE DIAMOND ENERGY CORP. v. VENTURE RESEARCH INSTOpinion
03 Civ. 5381 (SAS)
March 30, 2004
Philip Seldon, New York, New York, for Plaintiffs
Daniel A. Bartoldus, Esq., Lewis Johs Avallone Aviles Kaufman, LLP, Melville, New York, for Defendants DRT and Wolfe
OPINION AND ORDER
Philip Seldon, proceeding pro se, brings this diversity action against Direct Response Technologies ("DRT") and Jason Wolfe (collectively "defendants") alleging libel, violations of New York General Business Law section 349, negligence, tortious interference with business relations, and tortious interference with economic advantage. He seeks compensatory and punitive damages. Defendants now move to dismiss the action for lack of personal jurisdiction. For the reasons set forth below, defendants' motion is granted.
Seldon brought numerous additional causes of action against defendants Tracy Lunt and Barb "Doe." By order dated December 10, 2003, the action against Lunt was dismissed. In his Second Amended Complaint, Seldon identified Barb "Doe" as Barb Sherman. However, he apparently has neither served Sherman nor taken any steps to pursue this action against her.
Defendants style their motion as one for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. However, because motions to dismiss for lack of personal jurisdiction are governed by Rule 12(b)(2), the Court will deem the motion brought pursuant to Rule 12(b)(2). Defendants' Revised Statement of Uncontested Facts Submitted Pursuant to Local Rule 56.1 ("56.1 Statement") will nonetheless be considered by the Court because in deciding a motion to dismiss pursuant to Rule 12(b)(2), the court may consider materials outside of the pleadings. See Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 1985); Hsin Ten Enter. USA, Inc. v. Clark Enters., 138 F. Supp.2d 449, 452 (S.D.N.Y. 2000).
I. FACTS
Philip Seldon is a citizen of the State of New York. See Second Amended Complaint ("Compl.") ¶ 1. Seldon does business as Birddog Associates, and Birddog Associates maintains the website www.bestdealmagazines.com. Compl. ¶¶ 2, 4. DRT is a Delaware corporation with its principal place of business in Pennsylvania. See 56.1 Statement ¶ 3. Wolfe is the Chief Executive Officer ("CEO") of DRT, and a citizen of Pennsylvania. See Compl. ¶¶ 7, 8.
Though the facts contained in the complaint are sparse and difficult to follow, Seldon appears to allege that DRT maintains the website www.mycoupons.com. The site includes message boards that allow users to interact with each other, and post messages about online and offline bargains ("the message boards"). See id. ¶¶ 11, 15. There are four rules governing the message boards: (1) no defamation; (2) no vulgarity; (3) no "destructive behavior"; and (4) no advertising. See id. ¶ 20. The Court's review of www.mycoupons.com reveals that the website provides users with internet coupons that the site has discovered via internet searches. Viewers can print the coupons, or access the coupon codes, at no cost, though additional benefits are available to paying members. Viewers can also subscribe to a "newsletter." Thus, mycoupons.com has both passive and interactive content.
According to Seldon, on July 22-23, 2002, Tracy Lunt, a user, posted (and DRT published) a message on the message boards, criticizing Seldon and Best Deal Magazines. The posting warned others against giving money to Best Deal Magazines, and claimed that Seldon threatened Lunt with litigation if she refused to contribute $10,000 to his charity. Seldon contends that the statement contained in Lunt's message is false and defamatory. See id. ¶¶ 47-50. It is defendants' conduct in publishing this allegedly defamatory material that gives rise to his causes of action.
Lunt apparently did not identify the charity in her posting.
Seldon further alleges that Wolfe, acting in his capacity as CEO, has solicited business in New York, and that Craig Campbell, a DRT executive, solicited business in New York on January 22, 2002. See id. ¶¶ 39, 40; see also Reply Affirmation of Philip Seldon ("Reply Aff.") ¶¶ 5, 7. Finally, in his Reply Affirmation, Seldon alleges that in March, 2002, he negotiated a contract with DRT, the contract was sent to him at his New York office, and he submitted payment to DRT in connection with the contract from his New York office. See id. ¶ 4. Seldon never describes the nature of the alleged contract, but his submissions to the Court indicate that this purported contract is the subject of an action against these very defendants in Pennsylvania. See id. ¶ 3. In any event, the contract is not attached to the complaint, does not give rise to the causes of action alleged, and apparently is unrelated to Seldon's claims.
Although these allegations are not contained in the Second Amended Complaint, because Seldon is appearing pro se, I will consider them. See Lerman v. Board of Elections in the City of New York, 232 F.3d 135, 140 (2d Cir. 2000) (because "most pro se plaintiffs lack familiarity with the formalities of pleading requirements, [courts] must construe pro se complaints liberally, applying a more flexible standard to evaluate sufficiency . . ."); Gill v. Mooney, 824 F.2d 192, 195 (2d Cir. 1987); Donahue v. United States Dep't of Justice, 751 F. Supp. 45, 49 (S.D.N.Y. 1990) ("The policy reasons favoring liberal construction of pro se pleadings warrant the Court's consideration of the allegations contained in plaintiffs' memorandum of law, at least where those allegations are consistent with the allegations in the complaint.").
Although I conclude that there is no jurisdiction over defendants in New York, there may be jurisdiction over them in Pennsylvania because Wolfe is a citizen of Pennsylvania, and DRT has its principal place of business there. Thus, Seldon might consider amending his contract action against these defendants in Pennsylvania to include the causes of action before this Court.
II. APPLICABLE LAW
A. Legal Standard
Upon motion, a court is obligated to dismiss an action against a defendant over which it lacks personal jurisdiction. See Fed.R.Civ.P. 12(b)(2); see also In re Ski Train Fire in Kaprun, Austria on November 11, 2000, 230 F. Supp.2d 403, 406 (S.D.N.Y. 2002).
Prior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith legally sufficient allegations of jurisdiction. At that preliminary stage, the plaintiff's prima facie showing may be established solely by allegations. After discovery, the plaintiff's prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the trier, would suffice to establish jurisdiction over the defendant.Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990) (citation omitted); see also Metropolitan Life Insur. Co. v. Robertson-Ceco. Corp., 84 F.3d 560, 566-67 (2d Cir. 1995). Thus, although the court may consider materials outside of the pleadings in considering a motion to dismiss pursuant to Rule 12(b)(2), see Whitaker, 261 F.3d at 208; Hsin Ten, 138 F. Supp.2d at 452, it must credit the plaintiff's averments of jurisdictional facts as true, see Met Life, 84 F.3d at 567. The plaintiff bears the ultimate burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the defendant. See Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999); Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994).
The parties in this action have engaged in limited jurisdictional discovery.
B. Personal Jurisdiction
The determination of whether a federal court has personal jurisdiction over a defendant is a two-step process. First, the court must determine whether the plaintiff has shown that the defendant is subject to personal jurisdiction under the forum state's laws. See Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997); Met Life, 84 F.3d at 567. Second, the court must assess whether its assertion of jurisdiction pursuant to the forum state's laws comports with the requirements of due process. See Bensusan, 126 F.3d at 27; Met Life, 84 F.3d at 567.
Because I conclude that defendants are not subject to personal jurisdiction under New York law, I need not consider whether the exercise of jurisdiction over defendants in New York comports with due process.
B. New York Law
In New York, sections 301 and 302(a) of the New York Civil Practice Law and Rules ("C.P.L.R.") set forth the relevant law.
1. General Jurisdiction
Under section 301 of the C.P.L.R., New York subjects a foreign corporation to general jurisdiction if it is "doing business" in the state. See N.Y. C.P.L.R. § 301 (McKinney's 2003). Under this test, "a foreign corporation is amenable to suit in New York if it is 'engaged in such a continuous and systematic course' of 'doing business' here as to warrant a finding of its 'presence' in this jurisdiction." Aerotel Ltd. v. Sprint Corp., 100 F. Supp.2d 189, 191-92 (S.D.N.Y. 2000) (quoting Frummer v. Hilton Hotels Int'l Inc., 19 N.Y.2d 533, 536 (1967)).
At common law, New York courts exercised general jurisdiction over foreign corporations that were doing business in the state. See Jacobs v. Felix Bloch Erben Verlag, 160 F. Supp.2d 722, 731 n. 7 (S.D.N.Y. 2001) (citing Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 58 (2d Cir. 1985)). "Because section 301 provides that '[a] court may exercise such jurisdiction over persons, property or status as might have been exercised heretofore,' 'doing business' in New York continues to be a basis for general jurisdiction." Id. (quoting N.Y. C.P.L.R. § 301) (alteration in original).
To determine whether a foreign corporation is doing business in New York, courts focus on a traditional set of indicia: (1) whether the company has an office in the state; (2) whether it has any bank accounts or other property in the state; (3) whether it has a phone listing in the state; (4) whether it does public relations work in the state; and (5) whether it has individuals permanently located in the state to promote its interests. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 98 (2d Cir. 2000) (citing Hoffritz, 763 F.2d at 58; Frummer, 19 N.Y.2d at 537). However, these factors are only intended to provide guidance — they do not amount to a "formula" for testing jurisdiction. As the Second Circuit has noted, "there is no talismanic significance to any one contact or set of contacts that a defendant may have with a forum state; courts should assess the defendant's contacts as a whole" Met Life, 84 F.3d at 570 (emphasis in original); see also Landoil Res. Corp. v. Alexander Alexander, Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990) ("The Court must analyze a defendant's connections to the forum state 'not for the sake of contact-counting, but rather for whether such contacts show a continuous, permanent and substantial activity in New York.'" (quoting Weinstein, Korn Miller, New York Civil Practice, ¶ 301.16, at 3-32)).
B. Long-Arm Jurisdiction
Under section 302(a)(1), a court may exercise personal jurisdiction over a nondomiciliary if "the nondomiciliary transact[s] business within the state, [and] the claim against the nondomiciliary arise[s] out of that business activity." CutCo. Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). "A nondomiciliary 'transacts business' under C.P.L.R. 302(a)(1) when he 'purposefully avails himself of the privilege of conducting activities within New York, thus invoking the benefits and protections of its laws.'" Id. (quoting McKee Elec. Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382 (1967)) (alterations omitted); see also Fort Knox Music Inc. v. Baptiste, 203 F.3d 193, 196 (2d Cir. 2000) ("[T]he statute allows jurisdiction only over a defendant who has purposefully availed himself of the privilege of conducting activities within New York and thereby invoked the benefits and protections of its laws.") (quotation marks and alteration omitted)). A court's determination of whether a defendant "transacts business" in New York is based on an assessment of the sum of the defendant's activities. See Sterling Nat 7 Bank Trust Co. of N.Y. v. Fidelity Mortgage Investors, 510 F.2d 870, 873 (2d Cir. 1975).
Section 302(a)(1) reads, in relevant part: "[A] court may exercise personal jurisdiction over any non-domiciliary . . . who in person or through an agent transacts any business within the state or contracts anywhere to supply goods or services in the state." N.Y. C.P.L.R. § 302(a)(1) (McKinney 2003).
2. Section 302(a)(2)
Under section 302(a)(2), personal jurisdiction over a non-domiciliary may be asserted over a defendant that "commits a tortious act within the state." N.Y. C.P.L.R. § 302(a)(2) (McKinney 2003). Notably, this section explicitly excludes "cause[s] of action for defamation of character arising from the act." Id. The Second Circuit has interpreted section 302(a)(2) to "require that the tortious act itself physically be performed within New York State." Westvaco. Corp. v. Viva Magnetics Ltd., No. 00 Civ. 9399, 2002 WL 1933756, at *2 (S.D.N.Y. Aug. 20, 2002).
3. Section 302(a)(3)
Under section 302(a)(3), personal jurisdiction may be asserted over a non-domiciliary if the non-domiciliary "commits a tortious act without the state" injuring a person within New York, and either (i) "regularly does or solicits business, or engages in any other persistent course of conduct," or (ii) derives substantial revenue from interstate commerce and expects or reasonably should expect the tortious act to have consequences in the state. N.Y. C.P.L.R. § 302(a)(3) (McKinney 2003). Like section 302(a)(2), section 302(a)(3) specifically excludes "cause[s] of action for defamation of character arising from the act." Id.
C. Jurisdiction Based on Website Activity
"It is well settled that a court must examine the nature and quality of a defendant's activity on its website to determine whether jurisdiction is appropriate in New York." Alpha Int'l, Inc. v. T-Reprods., Inc., No. 02 Civ. 9586, 2003 WL 21511957, at *3 (S.D.N.Y. July 1, 2003) (quoting Mattel, Inc. v. Adventure Apparel, No. 00 Civ. 4085, 2001 WL 286728, at *3 (S.D.N.Y. Mar. 22, 2001)). Courts assessing whether internet activity permits the exercise of personal jurisdiction "have identified an array of fact patterns." Hsin Ten, 138 F. Supp.2d at 456. At one end of the spectrum are "passive" websites which display, but do not permit an exchange of, information. "At the other end of the spectrum are cases in which the defendant clearly does business over the Internet . . . Occupying the middle ground are 'interactive' websites, which permit the exchange of information between the defendant and website viewers." Id.
"Most courts considering the significance of internet activity for the exercise of personal jurisdiction have done so in the context of a specific, rather than general, jurisdictional analysis." Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549, 570-71 (S.D.N.Y. 2000). Thus, while a defendant's use of an interactive website may support a finding of specific jurisdiction, Alpha Int'l, Inc., 2003 WL 21511957, at *3; Zippo Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119, 1124 (W.D. Pa. 1997); Hsin Ten, 138 F. Supp.2d at 456, it generally will not confer general jurisdiction over a defendant.
Where a cause of action arises from a posting on an internet website, the fact that the posting appears on the website in every state will not give rise to jurisdiction in every state. To the contrary, jurisdiction will lie only if the posting is intended to target or focus on internet users in the state where the cause of action is filed. See Revell v. Lidov, 317 F.3d 467, 471 (5th Cir. 2002) (no jurisdiction in Texas over New York defendant that maintained website where purportedly defamatory article was published because there was no evidence that the website targeted Texas internet users); Barrett v. Catacombs Press, 44 F. Supp.2d 717, 729 (E.D. Pa. 1999) (no jurisdiction in Pennsylvania over a nonresident defendant for posting allegedly libelous information on an interactive website message board because plaintiff failed to allege that defendant's comments specifically targeted Pennsylvania users); Mallinckrodt Medical, Inc. v. Sonus Pharmaceuticals, Inc., 989 F. Supp. 265 (D.D.C. 1998) (no jurisdiction over nonresident defendant that purportedly posted defamatory material on an AOL bulletin board where the material was not sent to or from the District of Columbia and the subject of the message was unrelated to the District of Columbia).
III. DISCUSSION
Seldon fails to allege sufficient facts giving rise to jurisdiction in New York over DRT and Wolfe. According to Seldon, the defendants' relationship with New York is, at most, limited to (1) occasional, unspecified solicitation of business in New York; (2) negotiating from Pennsylvania, via telephone, with Seldon, who was located in New York; (3) mailing a proposed contract from Pennsylvania to Seldon, who was in New York; and (4) maintaining a website that contains interactive message boards.
A. There is No General Jurisdiction Over Defendants in New York
Seldon has not alleged facts supporting jurisdiction pursuant to section 301, because he has not alleged that defendants are "doing business" in New York. Specifically, Seldon has not alleged that defendants have an office in New York, have any bank accounts or other property in New York, have a phone listing in New York, or permanently use individuals in New York to promote DRT's interests. See Wiwa, 226 F.3d at 98. Defendants do maintain a somewhat interactive website that is available to New York users, but this alone does not give rise to general jurisdiction. See Citigroup Inc., 97 F. Supp.2d at 570-71. Given the lack of any allegation indicating a substantial connection between defendants and New York, I cannot conclude that defendants are "engaged in such a continuous and systematic course' of 'doing business' here as to warrant a finding of [their] 'presence' in this jurisdiction." Aerotel, 100 F. Supp.2d at 191-92 (quoting Frummer v. Hilton Hotels Int'l Inc., 19 N.Y.2d 533, 536 (1967)).
B. There is No Long-Arm Jurisdiction Over Defendants
Although Seldon alleges that defendants solicit business in New York and entered into a contract with him while he was in New York, Seldon's causes of action do not arise out of any of this contract-related activity. Instead, Seldon's causes of action appear to arise entirely from defendants' maintenance of a website that has interactive message boards available to New York users. However, Seldon does not allege that the message boards specifically target New Yorkers, or that defendants' publication of Lunt's message on the boards was aimed at New York users. Thus, Seldon fails to allege that defendants "purposefully availed [themselves] of the privilege of conducting activities within New York, thus invoking the benefits and protections of its laws," CutCo. Indus., 806 F.2d at 365 (quoting McKee Elec. Co., 20 N.Y.2d at 382), because interactive message boards alone do not give rise to long-arm jurisdiction. See Revell, 317 F.3d at 471; Barrett, 44 F. Supp.2d at 729; Mallinckrodt Medical, 989 F. Supp. at 272-73. Therefore, section 302(a)(1) does not provide for jurisdiction over defendants.
Finally, sections 302(a)(2) and (3) also fail to provide jurisdiction over defendants because neither section 302(a)(2) or 302(a)(3) may be invoked to support jurisdiction in defamation actions. See N.Y. C.P.L.R. §§ 302(a)(2)-(3). Although Seldon also purports to state causes of action for negligence, tortious interference with business relations, and tortious interference with economic advantage, these claims do not result from a tortious act physically performed by defendants within New York, as required by section 302(a)(2). See Westvaco. Corp., 2002 WL 1933756, at *2. And while the facts alleged in support of the negligence and tortious interference claims may constitute tortious acts committed outside the state that caused an injury in New York, Seldon has not alleged that defendants either engaged in a persistent course of conduct in New York, or derive substantial revenue from interstate commerce and expect or reasonably should expect their tortious act to have consequences in the state, as required by section 302(a)(3).
Sections 302(a)(2) and (3) cannot confer jurisdiction over Seldon's cause of action for a violation of New York General Business Law section 349, because such a claim is a statutory cause of action, rather than a tort. See Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201 (2001).
VI. CONCLUSION
For the foregoing reasons, defendants' motion to dismiss for lack of personal jurisdiction is granted, and this action is dismissed as against DRT and Jason Wolfe. The Clerk of the Court is directed to close this motion [docket # 17].
SO ORDERED.