04-3924
Best Van Lines, Inc. v. Walker
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 August Term, 2005
4 (Argued: April 27, 2006 Decided: June 26, 2007)
5 Docket No. 04-3924-cv
6 -------------------------------------
7 BEST VAN LINES, INC.,
8 Plaintiff-Appellant,
9 - v -
10 TIM WALKER,
11 Defendant-Appellee.
12 -------------------------------------
13 Before: KEARSE, McLAUGHLIN, and SACK, Circuit Judges.
14 Appeal from a judgment of the United States District
15 Court for the Southern District of New York (Gerard E. Lynch,
16 Judge). The plaintiff brought suit against the defendant, an
17 Iowa resident, for defamation based on comments he posted on his
18 website. The district court granted the defendant's motion to
19 dismiss the complaint pursuant to Federal Rule of Civil Procedure
20 12(b)(2) for lack of personal jurisdiction under N.Y. C.P.L.R.
21 § 302(a), New York's "long-arm" jurisdiction statute.
22 Affirmed.
23 Tim Walker, Waverly, IA, Defendant-
24 Appellee, pro se.
25 Thomas Freedman (Terrence A. Oved,
26 Darren Oved, Eric S. Crusius, on the
1 brief), Oved & Oved, New York, NY, for
2 Plaintiff-Appellant.
3 Slade R. Metcalf (Katherine M. Bolger,
4 on the brief), Hogan & Hartson, LLP, New
5 York, NY, amicus curiae in support of
6 Defendant-Appellee.1
7 SACK, Circuit Judge:
8 The defendant, Tim Walker, a resident of Waverly, Iowa,
9 is the proprietor of a not-for-profit internet website that
10 provides information and opinions about household movers. In
11 August 2003, Walker posted derogatory comments about the
12 plaintiff, Best Van Lines, Inc. ("BVL"), a New York-based moving
13 company. Walker asserted, at two different locations on his
14 website, that BVL was performing household moves without legal
15 authorization and without insurance that is required by law.
16 Less than a month later, BVL brought suit against Walker in the
17 United States District Court for the Southern District of New
18 York alleging that the statements about it on the website were
19 false, defamatory, and made with an intent to harm BVL. Compl.
20 ¶¶ 21-30. BVL sought injunctive and monetary relief.
21 On May 4, 2004, the district court (Gerard E. Lynch,
22 Judge) granted Walker's motion to dismiss pursuant to Federal
23 Rule of Civil Procedure 12(b)(2) on the ground that N.Y. C.P.L.R.
24 § 302(a), the New York State "long-arm" statute, did not give the
25 court personal jurisdiction over Walker. Best Van Lines, Inc. v.
1
Because the defendant-appellee was not represented by
counsel and the appeal raises difficult issues, we requested pro
bono counsel to appear for him as amicus curiae. The Court is
grateful for counsel's participation.
2
1 Walker, 03 Civ. 6585, 2004 WL 964009, at *1, 2004 U.S. Dist.
2 LEXIS 7830, at *1 (S.D.N.Y. May 4, 2004). Having concluded that
3 it lacked jurisdiction under the statute, the court found it
4 unnecessary to consider whether asserting jurisdiction over
5 Walker would violate his constitutional right to due process.
6 Id. at *7, 2004 U.S. Dist. LEXIS 7830, at *24. Because BVL had
7 not demonstrated a prima facie case supporting jurisdiction, the
8 court also denied jurisdictional discovery.
9 We affirm.
10 BACKGROUND
11 The defendant, Tim Walker, is the proprietor of a
12 website, "MovingScam.com" (the "Website"). He operates it from
13 his home in Waverly, Iowa. As its name suggests, the Website
14 provides consumer-related comments, most of them derogatory,
15 about household movers in the United States. On or about August
16 5, 2003, Walker posted statements about BVL in the section of the
17 Website called "The Black List Report." Under the heading
18 "Editor's Comments," Walker wrote that "as of 8/5/2003 [BVL] was
19 performing interstate moving services without legal authority
20 from the Federal Motor Carrier Safety Administration, and did not
21 carry Cargo insurance as required by law." Compl. ¶ 8. Walker
22 made similar factual assertions in response to a question about
23 BVL that was posted on the message-board section of the Website
24 by a person whose whereabouts are not disclosed in the record.2
2
In response to the query, Walker wrote, "If you are
talking about Best Van Lines of Brooklyn, NY, then DO NOT USE
3
1 On August 26, 2003, BVL instituted this lawsuit against
2 Walker by filing a complaint in the United States District Court
3 for the Southern District of New York. In it, BVL alleges that
4 the statements about it on the Website were false, defamatory,
5 and made with an intention to harm it. Compl. ¶¶ 21-30. We
6 assume at this stage of the proceedings that BVL's allegations
7 are correct and can be proved. BVL seeks to have Walker enjoined
8 from publishing further defamatory statements about BVL. It also
9 seeks compensatory and punitive damages totaling $1.5 million.
10 Walker moved to transfer the action to the United
11 States District Court for the Southern District of Iowa. BVL
12 opposed the motion, but also treated it as a motion to dismiss
13 for lack of personal jurisdiction pursuant to Rule 12(b)(2) of
14 the Federal Rules of Civil Procedure. Best Van Lines, 2004 WL
15 964009, at *1, 2004 U.S. Dist. LEXIS 7830, at *3. In his reply,
16 Walker, representing himself, argued that N.Y. C.P.L.R.
17 § 302(a) -- New York's long-arm statute -- did not give New York
18 courts jurisdiction over him for purposes of this lawsuit. Id.
19 The district court granted what was construed to be
20 Walker's motion to dismiss. The court concluded that BVL had
21 failed to allege facts sufficient to show that Walker had
THEM! They have only had their DOT license since February, 2003
and have NO interstate authority whatsoever with the Federal
Motor Carrier Safety Administrator. They also have not provided
the FMCSA with proof of any Cargo Insurance, and they have a
vehicle Out of Service record of 40% and a driver Out of Service
record of 100% (national averages are 22.9% and 7.21%,
respectively)." Compl. ¶ 11.
4
1 transacted business for purposes of section 302(a)(1), or that
2 its suit arose from any such transaction. Id. at *7, 2004 U.S.
3 Dist. LEXIS 7830, at *24. The court found it unnecessary to
4 address whether asserting jurisdiction over Walker would be
5 consistent with the Fourteenth Amendment's Due Process guarantee.
6 Id. It also denied permission to take jurisdictional discovery.
7 Id., 2004 U.S. Dist. LEXIS 7830, at *24-25.
8 BVL appeals.
9 DISCUSSION
10 I. Standard of Review
11 We review a district court's dismissal of an action for
12 lack of personal jurisdiction de novo. Sole Resort, S.A. de C.V.
13 v. Allure Resorts Mgmt., LLC, 450 F.3d 100, 102 (2d Cir. 2006).
14 "In order to survive a motion to dismiss for lack of personal
15 jurisdiction, a plaintiff must make a prima facie showing that
16 jurisdiction exists." Thomas v. Ashcroft, 470 F.3d 491, 495 (2d
17 Cir. 2006).
18 II. Personal Jurisdiction in New York
19 A. The Issue on Appeal
20 This appeal raises a single question: whether the
21 United States District Court for the Southern District of New
22 York had personal jurisdiction over Walker for purposes of
23 entertaining this lawsuit. To answer that question, we look
24 first to the law of the State of New York, in which the district
25 court sits. Kronisch v. United States, 150 F.3d 112, 130 (2d
26 Cir. 1998). If, but only if, our answer is in the affirmative,
5
1 we must then determine whether asserting jurisdiction under that
2 provision would be compatible with requirements of due process
3 established under the Fourteenth Amendment to the United States
4 Constitution. See Int'l Shoe Co. v. Washington, 326 U.S. 310,
5 315 (1945).
6 Agreeing with the district court, we conclude that
7 while New York appellate courts have not decided this precise
8 issue, under well-settled principles of New York law, the
9 district court did not have such jurisdiction. We therefore need
10 not address the second question: whether, if New York law
11 conferred it, asserting such jurisdiction would be permissible
12 under the Due Process Clause of the Fourteenth Amendment to the
13 United States Constitution.3 Still, because the analysis of the
14 state statutory and federal constitutional limitations have
15 become somewhat entangled in New York jurisprudence, we think it
16 advisable to explore the relationship between the two in some
17 detail.
18 B. Constitutional Limits on Personal Jurisdiction
19 In 1945, the Supreme Court held that states' power to
20 exercise personal jurisdiction over defendants consistent with
21 the federal Constitution was not contingent on those defendants'
3
Because we think that we can determine this issue based on
well-settled principles of New York law, we have decided not to
certify it to the New York Court of Appeals. See Sole Resort,
S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100, 104 (2d
Cir. 2006) (deciding a question of how to interpret section
302(a)(1) that was "novel . . ., both in this court and in the
New York courts").
6
1 physical presence within the states' borders. Int'l Shoe, 326
2 U.S. at 316. Instead, in order to exercise personal jurisdiction
3 over out-of-state defendants, the Due Process Clause of the
4 Fourteenth Amendment requires only that the defendants have
5 "certain minimum contacts with [the forum state] such that the
6 maintenance of the suit does not offend 'traditional notions of
7 fair play and substantial justice.'" Id. (citation omitted).
8 A court deciding whether it has jurisdiction over an
9 out-of-state defendant under the Due Process Clause must evaluate
10 the "quality and nature," Burger King Corp. v. Rudzewicz, 471
11 U.S. 462, 475 (1985), of the defendant's contacts with the forum
12 state under a totality of the circumstances test, id. at 485-86.
13 The crucial question is whether the defendant has "purposefully
14 avail[ed] itself of the privilege of conducting activities within
15 the forum State, thus invoking the benefits and protections of
16 its laws," id. at 475 (quoting Hanson v. Denckla, 357 U.S. 235,
17 253 (1958)) (internal quotation marks omitted), "such that [the
18 defendant] should reasonably anticipate being haled into court
19 there," id. at 474 (quoting World-Wide Volkswagen Corp. v.
20 Woodson, 444 U.S. 286, 297 (1980)) (internal quotation marks
21 omitted).4
4
Applying this principle, the Court has held that the
Due Process Clause forbids the exercise of personal
jurisdiction over an out-of-state automobile
distributor whose only tie to the forum resulted from a
customer's decision to drive there, World-Wide
Volkswagen Corp. v. Woodson[, 444 U.S. 286 (1980)];
over a divorced husband sued for child-support payments
7
1 Applying these principles, in Keeton v. Hustler
2 Magazine Inc., 465 U.S. 770 (1984), the Supreme Court concluded
3 that a New Hampshire federal district court had jurisdiction over
4 the defendant magazine publisher, an Ohio corporation with its
5 principal place of business in California, id. at 772. The Court
6 based its conclusion on the fact that the defendant's magazine in
7 which the alleged libel appeared had a monthly circulation in New
8 Hampshire of 10,000 to 15,000. This established that the
9 defendant "continuously and deliberately exploited the New
10 Hampshire market," creating in the defendant a reasonable
11 expectation that it might be haled into court there in an action
12 based on the contents of the magazine. Id. at 781.
13 Also invoking the minimum contacts rubric, in Calder v.
14 Jones, 465 U.S. 783 (1984) -- decided the same day as Keeton --
15 the Court concluded that a California state court had personal
16 jurisdiction over The National Enquirer, a nationally distributed
17 weekly with editorial offices in Florida, and a reporter and an
18 editor, both Florida residents, in a lawsuit based on an
whose only affiliation with the forum was created by
his former spouse's decision to settle there, Kulko v.
California Superior Court, 436 U.S. 84 (1978); and over
a trustee whose only connection with the forum resulted
from the settlor's decision to exercise her power of
appointment there, Hanson v. Denckla, 357 U.S. 235
(1958). In such instances, the defendant has had no
"clear notice that it is subject to suit" in the forum
and thus no opportunity to "alleviate the risk of
burdensome litigation" there. World-Wide Volkswagen
Corp. v. Woodson, [444 U.S.] at 297.
Burger King, 471 U.S. at 475 n.17.
8
1 allegedly libelous story about the California activities of a
2 California resident. Id. at 786, 788. Employing what has since
3 come to be called the "effects test," the Court reasoned that
4 because "California is the focal point both of the story and of
5 the harm suffered," jurisdiction over the defendants was "proper
6 in California based on the 'effects' of their Florida conduct in
7 California." Id. at 789. In the language of minimum contacts,
8 when the defendants committed "their intentional, and allegedly
9 tortious, actions . . . expressly aimed at California," they
10 "must [have] 'reasonably anticipate[d] being haled into court
11 there' to answer for the truth of the statements made in their
12 article." Id. at 789-90 (citations omitted).
13 Although Calder and Keeton were handed down
14 simultaneously on similar subjects, they relied on independent,
15 if conceptually overlapping, methods of demonstrating minimum
16 contacts -- Keeton on the defendant's overall activity within the
17 forum state; Calder on the in-state effects of out-of-state
18 activity.
19 C. Long-Arm Statutes and N.Y. C.P.L.R. § 302(a)
20 Relying on International Shoe, state legislatures began
21 enacting laws, known as "long-arm" statutes,5 prescribing the
5
The popular name of these statutes seems likely to have
roots in the expression "the long arm of the law." See, e.g.,
Charles Dickens, The Old Curiosity Shop, Ch. 73 (1841) ("[T]he
failure of a spirited enterprise in the way of their
profession . . . caused their career to receive a sudden check
from the long and strong arm of the law."); see also Michael
Quinion, World Wide Words, http://www.worldwidewords.
org/qa/qa-lon1.htm (last visited June 25, 2007) (tracing the
9
1 terms under which their courts could exercise personal
2 jurisdiction. Most of these laws explicitly provide, or have
3 been interpreted to provide, that jurisdiction will be permitted
4 to the full extent allowed by the federal Constitution.6 When
5 federal courts sit in such states, there is but one inquiry as to
6 specific personal jurisdiction over the out-of-state defendant:
7 whether the defendant has sufficient contacts with the forum
8 state to satisfy the requirements of due process. See, e.g.,
9 Young v. New Haven Advocate, 315 F.3d 256, 261 (4th Cir. 2002)
10 ("Because Virginia's long-arm statute extends personal
11 jurisdiction to the extent permitted by the Due Process Clause,
12 the statutory inquiry necessarily merges with the constitutional
13 inquiry, and the two inquiries essentially become one."
14 (citations and internal quotation marks omitted)).
15 The reach of New York's long-arm statute, by contrast,
16 does not coincide with the limits of the Due Process Clause.
17 Analysis under it therefore may involve two separate inquiries,
18 one statutory and one constitutional. If jurisdiction is
expression back to The Old Curiosity Shop).
6
See, e.g., Cal. Civ. Proc. Code § 410.10; 14 M.R.S. § 704-A
(Maine); Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1,
6, 389 N.E.2d 76, 79 (1979) (interpreting Massachusetts law);
N.J. Ct. R. 4:4-4; Ricker v. Fraza/Forklifts of Detroit, 160 Ohio
App. 3d 634, 640, 828 N.E.2d 205, 210 (Ohio Ct. App. 2005)
(interpreting Ohio law); 42 Pa.C.S. § 5322; R.I. Gen. Laws § 9-5-
33; Tex. Civ. Prac. & Rem. Code § 17.042; Utah Code § 78-27-22;
Young v. New Haven Advocate, 315 F.3d 256, 261 (4th Cir. 2002)
(interpreting Virginia law).
10
1 statutorily impermissible, of course, we need not reach the
2 question of its constitutionality.
3 The New York long-arm statute provides:
4 As to a cause of action arising from any of
5 the acts enumerated in this section, a court
6 may exercise personal jurisdiction over any
7 non-domiciliary, or his executor or
8 administrator, who in person or through an
9 agent:
10 1. transacts any business within the
11 state or contracts anywhere to supply
12 goods or services in the state; or
13 2. commits a tortious act within the
14 state, except as to a cause of action for
15 defamation of character arising from the
16 act; or
17 3. commits a tortious act without the
18 state causing injury to person or
19 property within the state, except as to a
20 cause of action for defamation of
21 character arising from the act, if he
22 (i) regularly does or solicits
23 business, or engages in any other
24 persistent course of conduct, or
25 derives substantial revenue from
26 goods used or consumed or services
27 rendered, in the state, or
28 (ii) expects or should reasonably
29 expect the act to have consequences
30 in the state and derives substantial
31 revenue from interstate or
32 international commerce; or
33 4. owns, uses or possesses any real
34 property situated within the state.
35 N.Y. C.P.L.R. § 302(a). Importantly for present purposes,
36 sections 302(a)(2) and (3), which permit jurisdiction over
37 tortious acts committed in New York and those committed outside
38 New York that cause injuries in the state, respectively,
11
1 explicitly exempt causes of action for the tort of defamation7
2 from their scope, whether or not such jurisdiction would be
3 consistent with due process protection. The defamation
4 exceptions thus create a "gap" between the jurisdiction conferred
5 by the New York statute and the full extent of jurisdiction
6 permissible under the federal Constitution. See Ingraham v.
7 Carroll, 90 N.Y.2d 592, 596-97, 687 N.E.2d 1293, 1294-95, 665
8 N.Y.S.2d 10, 11-12 (1997) ("[S]ubdivision [302(a)(3)] was not
9 designed to go to the full limits of permissible jurisdiction.
10 The limitations contained in subparagraphs (i) and (ii) were
11 deliberately inserted to keep the provision well within
12 constitutional bounds.") (citations and internal quotation marks
13 omitted; second brackets in original).8
7
"Defamation" includes the torts of libel (usually written)
and slander (usually oral). See, e.g., Marcone v. Penthouse
Int'l Magazine for Men, 754 F.2d 1072, 1080 n.1 (3d Cir. 1985);
Belli v. Orlando Daily Newspapers, Inc., 389 F.2d 579, 586 (5th
Cir. 1967); Varian Med. Sys., Inc. v. Delfino, 113 Cal. App. 4th
273, 293-95, 6 Cal. Rptr. 3d 325, 340-43 (6th Dist. 2003), rev'd
on other grounds, 35 Cal. 4th 180, 25 Cal. Rptr. 3d 298, 106 P.3d
958 (2005).
8
There are other possible "gaps" between the extent of
jurisdiction allowed by the New York statute and that permitted
by due process. See, e.g., Banco Ambrosiano, S.p.A. v. Artoc
Bank & Trust, Ltd., 62 N.Y.2d 65, 71-72, 464 N.E.2d 432, 435, 476
N.Y.S.2d 64, 67 (1984) (discussing quasi-in-rem jurisdiction, and
noting that "C.P.L.R. [§] 302 does not provide for in personam
jurisdiction in every case in which due process would permit it,"
so that "a 'gap' exists in which the necessary minimum contacts,
including the presence of defendant's property within the State,
are present, but personal jurisdiction is not authorized by
C.P.L.R. [§] 302"). Section 302(b) also prescribes limits on
jurisdiction in matrimonial cases that may not be coterminous
with the jurisdictional reach of due process. See N.Y. C.P.L.R.
§ 302(b).
12
1 New York's Appellate Division, First Department,9 has
2 reflected on the reasons for the defamation exception.
3 [T]he Advisory Committee intended to avoid unnecessary
4 inhibitions on freedom of speech or the press. These
5 important civil liberties are entitled to special
6 protections lest procedural burdens shackle them. It
7 did not wish New York to force newspapers published in
8 other states to defend themselves in states where they
9 had no substantial interests, as the New York Times was
10 forced to do in Alabama.
11 Legros v. Irving, 38 A.D.2d 53, 55, 327 N.Y.S.2d 371, 373 (1st
12 Dep't 1971) (referring to N.Y. Times Co. v. Sullivan, 376 U.S.
13 254 (1964), which reversed a large Alabama libel judgment against
14 the New York Times based on a pro-civil rights advertisement that
15 it published where jurisdiction was based on limited daily
16 circulation of the New York Times within Alabama).
17 In light of these intentions, one might think that the
18 New York State legislature meant for no provision of the long-arm
19 statute to grant jurisdiction over an out-of-state defendant with
20 respect to a cause of action for defamation. See Vardinoyannis
21 v. Encyclopedia Britannica, Inc., 89 Civ. 2475, 1990 WL 124338,
22 at *6 n.3, 1990 U.S. Dist. LEXIS 10881, at *9 n.3 (S.D.N.Y. Aug.
23 20, 1990) (Leval, J.) ("Because §§ 302(a)(2) and (3) expressly
24 exclude actions for defamation, there are strong arguments that
25 the legislature intended to bar use of the long-arm statute in
9
"We are bound, as was the district court, to apply [New
York] law as interpreted by New York's intermediate appellate
courts . . . unless we find persuasive evidence that the New York
Court of Appeals, which has not ruled on [an] issue, would reach
a different conclusion." Pahuta v. Massey-Ferguson, Inc., 170
F.3d 125, 134 (2d Cir. 1999) (citations omitted).
13
1 defamation cases."). But New York courts have not gone that far.
2 Under New York law, when a person utters a defamatory statement
3 without the state that causes injury to the plaintiff within the
4 state, jurisdiction may be acquired under section 302(a)(1), even
5 though section 302(a)(3) -- which explicitly concerns
6 jurisdiction as to out-of-state tortious acts that cause in-state
7 injury -- excludes defamation cases from its scope.
8 Legros itself relied on section 302(a)(1) to support
9 jurisdiction over an out-of-state defendant in a defamation case.
10 After describing the history of the statute, the court defended
11 its reliance on section 302(a)(1), which covers transactions of
12 business within the state, to establish jurisdiction.
13 There is a clear distinction between a
14 situation where the only act which occurred
15 in New York was the mere utterance of the
16 libelous material and on the other hand, a
17 situation where purposeful business
18 transactions have taken place in New York
19 giving rise to the cause of action. Where
20 purposeful transactions of business have
21 taken place in New York, it may not be said
22 that subjecting the defendant to this State's
23 jurisdiction is an "unnecessary inhibition on
24 freedom of speech or the press."
25 Legros, 38 A.D.2d at 55-56, 327 N.Y.S.2d at 373. Because
26 "virtually all the work attendant upon publication of the book
27 [containing the alleged libel] occurred in New York,"
28 jurisdiction over the defendant under subsection (1) was proper.
29 Id. at 56, 327 N.Y.S.2d at 373.
30 D. Defamation Cases under Section 302(a)(1)
14
1 New York courts evaluating specific jurisdiction under
2 section 302(a)(1) look to both the language of the statute and
3 the relation between the alleged conduct and the cause of action.
4 To determine the existence of jurisdiction under section
5 302(a)(1), a court must decide (1) whether the defendant
6 "transacts any business" in New York and, if so, (2) whether this
7 cause of action "aris[es] from" such a business transaction. See
8 Deutsche Bank Sec., Inc. v. Montana Bd. of Invs., 7 N.Y.3d 65,
9 71, 850 N.E.2d 1140, 1142, 818 N.Y.S.2d 164, 166 (2006). Courts
10 look to "the totality of the defendant's activities within the
11 forum," Sterling Nat'l Bank & Trust Co. of N.Y. v. Fidelity
12 Mortgage Investors, 510 F.2d 870, 873 (2d Cir. 1975) (citation
13 and internal quotation marks omitted), to determine whether a
14 defendant has "transact[ed] business" in such a way that it
15 constitutes "purposeful activity" satisfying the first part of
16 the test, see id. at 874; Longines-Wittnauer Watch Co. v. Barnes
17 & Reinecke, Inc., 15 N.Y.2d 443, 457, 261 N.Y.S.2d 8, 18-19, 209
18 N.E.2d 68, 75, cert. denied, 382 U.S. 905 (1965). As for the
19 second part of the test, "[a] suit will be deemed to have arisen
20 out of a party's activities in New York if there is an
21 articulable nexus, or a substantial relationship, between the
22 claim asserted and the actions that occurred in New York."
23 Henderson v. INS, 157 F.3d 106, 123 (2d Cir. 1998) (internal
24 quotation marks omitted); accord Deutsche Bank, 7 N.Y.3d at 71,
25 850 N.E.2d at 1142, 818 N.Y.S.2d at 166-67.
26 1. Transacting Business
15
1 With respect to the first part of the test for
2 jurisdiction under section 302(a)(1), New York courts define
3 "transact[ing] business" as purposeful activity -- "'some act by
4 which the defendant purposefully avails itself of the privilege
5 of conducting activities within the forum State, thus invoking
6 the benefits and protections of its laws.'" McKee Elec. Co. v.
7 Rauland-Borg Corp., 20 N.Y.2d 377, 382, 229 N.E.2d 604, 607, 283
8 N.Y.S.2d 34, 37-38 (1967) (quoting Hanson v. Denckla, 357 U.S.
9 235, 253 (1958)).10 This "purposeful[] avail[ment]" language
10
Section 302(a)(1)'s "transact[ing] business" language does
not require that the business in question be commercial in
nature. In Padilla v. Rumsfeld, 352 F.3d 695, 709 (2d Cir.
2003), rev'd on other grounds, 542 U.S. 426 (2004), we noted that
the purpose of section 302(a)(1) "was to extend the jurisdiction
of New York courts over nonresidents who have engaged in some
purposeful activity here in connection with the matter in suit"
and that "the statute's jurisprudential gloss and its legislative
history suggest that its 'transacts business' clause is not
restricted to commercial activity." (citations, brackets, and
internal quotation marks omitted) (emphasis added). We noted
there that "transacting business" under Section 302(a)(1) has
been held to include:
engaging in active bidding on an open phone line from
California, Parke-Bernet[ Galleries v. Franklyn, 26
N.Y.2d 13, 19, 308 N.Y.S.2d 337, 342, 256 N.E.2d 506,
509 (1970)]; the conducting of proceedings and
disciplinary hearings on membership by a private
organization, Garofano v. U.S. Trotting Assoc., 78
Misc. 2d 33, 355 N.Y.S.2d 702, 705-06 (Sup. Ct. 1974);
the execution of a separation agreement, Kochenthal v.
Kochenthal, 28 A.D.2d 117, 282 N.Y.S.2d 36, 38 (N.Y.
App. Div. 1967); the making of a retainer for legal
services, Elman v. Belson, 32 A.D.2d 422, 302 N.Y.S.2d
961, 964-65 ([N.Y. App. Div.] 1969); the entry into New
York by non-domiciliary defendants to attend a meeting,
Parker v. Rogerson, 33 A.D.2d 284, 307 N.Y.S.2d 986,
994-95 (N.Y. App. Div. 1970), appeal dismissed, 26
N.Y.2d 964, 311 N.Y.S.2d 7, 259 N.E.2d 479 (1970); and
the conducting of audits, U.S. Steel Corp. v.
Multistate Tax Comm'n, 367 F. Supp. 107, 121 (S.D.N.Y.
16
1 defining "transacting business" has been adopted by the New York
2 Court of Appeals from Supreme Court cases analyzing the
3 constitutional limitations on a state's power to assert personal
4 jurisdiction over a non-domiciliary defendant. See Kreutter v.
5 McFadden Oil Corp., 71 N.Y.2d 460, 467, 522 N.E.2d 40, 43, 527
6 N.Y.S.2d 195, 198 (1988) ("New York's long-arm statute, C.P.L.R.
7 § 302, was enacted in response to [inter alia, McGee v.
8 International Life Ins. Co., 355 U.S. 220 (1957), and
9 International Shoe Co. v. Washington, 326 U.S. 310 (1945)].").
10 New York decisions thus, at least in their rhetoric, tend to
11 conflate the long-arm statutory and constitutional analyses by
12 focusing on the constitutional standard: whether the defendant's
13 conduct constitutes "purposeful[] avail[ment]" "of the privilege
14 of conducting activities within the forum State, thus invoking
15 the benefits and protections of its laws." Denckla, 357 U.S. at
16 253; see, e.g., McKee, 20 N.Y.2d at 382, 229 N.E.2d at 607, 283
17 N.Y.S.2d at 37-38 (quoting Denckla, 357 U.S. at 253).
18 It may be that the meaning of "transact[ing] business"
19 for the purposes of section 302(a)(1) overlaps significantly with
20 the constitutional "minimum contacts" doctrine. See McKee, 20
21 N.Y.2d at 382, 229 N.E.2d at 607, 283 N.Y.S.2d at 37 ("[I]t seems
22 to us the contacts here, rather than being minimal, were so
23 infinitesimal, both in light of Hanson v. Denckla, 357 U.S. 235
1973).
Padilla, 352 F.3d at 709 n.19.
17
1 [(1958),] and Longines-Wittnauer Watch Co. v. Barnes &
2 Reinecke, 15 N.Y.2d 443[, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965)],
3 that jurisdiction of the New York courts cannot be sustained.");
4 Deutsche Bank, 7 N.Y.3d at 71-72, 850 N.E.2d at 1142-43, 818
5 N.Y.S.2d at 166-67 (discussing the section 302(a)(1) and due
6 process requirements seemingly simultaneously); Donini Int'l,
7 S.p.A. v. Satec (U.S.A.) LLC, 03 Civ. 9471, 2004 WL 1574645, at
8 *5, 2004 U.S. Dist. LEXIS 13148, at *16 (S.D.N.Y. July 13, 2004)
9 (noting that the analysis under section 302 is "in essence, the
10 same as that established by the United States Supreme Court to
11 evaluate the constitutionality of personal jurisdiction under
12 long-arm statutes"). But we do not understand New York courts to
13 teach that the "gap" created by the defamation exceptions in
14 sections 302(a)(2) and (3), see Ingraham, 90 N.Y.2d at 597, 687
15 N.E.2d at 1294-95, 665 N.Y.S.2d at 11-12, is eliminated by the
16 "transact[ing] business" analysis. Some distance remains between
17 the jurisdiction permitted by the Due Process Clause and that
18 granted by New York's long-arm statute.
19 New York courts do not interpret "transact[ing]
20 business" to include mere defamatory utterances sent into the
21 state. Although section 302(a)(1) does not exclude defamation
22 from its coverage, New York courts construe "transacts any
23 business within the state" more narrowly in defamation cases than
24 they do in the context of other sorts of litigation. In other
25 cases, "proof of one transaction," or a "single act," "in New
26 York is sufficient to invoke [long-arm] jurisdiction, even though
18
1 the defendant never enters New York," Deutsche Bank, 7 N.Y.3d at
2 71, 850 N.E.2d at 1142, 818 N.Y.S.2d at 166-67 (internal
3 quotation marks omitted); see also Parke-Bernet Galleries, Inc.
4 v. Franklyn, 26 N.Y.2d 13, 17, 256 N.E.2d 506, 508, 308 N.Y.S.2d
5 337, 340 (1970) (finding jurisdiction where out-of-state
6 defendant never entered New York, but participated in a live
7 auction in New York by making one telephone call to New York and
8 thus was "receiving and transmitting bids over an open telephone
9 line"); Fischbarg v. Doucet, 38 A.D.3d 270, 832 N.Y.S.2d 164,
10 2007 N.Y. Slip Op. 1964, at *2 (1st Dep't Mar. 13, 2007) (finding
11 jurisdiction over out-of-state defendants who solicited New York
12 lawyer plaintiff to provide them with legal advice and called,
13 emailed, and faxed the plaintiff in New York pursuant to such
14 representation, though defendants never entered the state);
15 Catauro v. Goldome Bank for Sav., 189 A.D.2d 747, 748, 592
16 N.Y.S.2d 422, 422 (2d Dep't 1993) (finding jurisdiction where
17 Missouri defendant called a New York bank with an inquiry,
18 "mailed letters to the bank, enclosing the bankbook and the power
19 of attorney," and thereafter received money from the bank). But
20 see Kimco Exchange Place Corp. v. Thomas Benz, Inc., 34 A.D.3d
21 433, 434, 824 N.Y.S.2d 353, 354 (2d Dep't 2006) ("The defendants'
22 acts of faxing the executed contracts to New York and of making a
23 few telephone calls do not qualify as purposeful acts
24 constituting the transacting of business."). In defamation
25 cases, by contrast, the "single act" of uttering a defamation, no
26 matter how loudly, is not a "transact[ion of] business" that may
19
1 provide the foundation for personal jurisdiction. In other
2 words, when the defamatory publication itself constitutes the
3 alleged "transact[ion of] business" for the purposes of
4 section 302(a)(1), more than the distribution of a libelous
5 statement must be made within the state to establish long-arm
6 jurisdiction over the person distributing it.11
7 Consistent with this analysis, in cases where the
8 plaintiff has brought a defamation action based on letters the
9 defendant sent into New York from outside the state, New York
10 courts have concluded that the act of sending the letters into
11 the state does not alone amount to a transaction of business
12 within the state under Section 302(a)(1). For example, in Kim v.
13 Dvorak, 230 A.D.2d 286, 658 N.Y.S.2d 502 (3d Dep't 1997), the
14 Third Department concluded that the sending of four allegedly
15 defamatory letters by the defendant to health care professionals
16 in New York did not constitute transaction of business in the
17 state, id. at 290, 658 N.Y.S.2d at 505. To hold otherwise, the
18 court said, would "unjustifiably extend the intendment of the
19 Legislature to allow, in limited circumstances, the reach of this
20 State's jurisdiction beyond its borders." Id. In Pontarelli v.
21 Shapero, 231 A.D.2d 407, 647 N.Y.S.2d 185 (1st Dep't 1996), the
11
Our interpretation of section 302(a)(1) factors into the
analysis the defamation exemptions contained in sections
302(a)(2) and (3) consistent with the "cardinal rule" of
statutory construction "that a statute is to be read as a whole,
since the meaning of statutory language, plain or not, depends on
context." King v. St. Vincent's Hosp., 502 U.S. 215, 221 (1991)
(citations omitted); accord Handberry v. Thompson, 436 F.3d 52,
68 (2d Cir. 2006).
20
1 First Department similarly decided that the sending of two
2 allegedly defamatory letters and one facsimile into New York did
3 not constitute transaction of business in the state for purposes
4 of section 302(a)(1), id. at 410-11, 647 N.Y.S.2d at 188. And in
5 Strelsin v. Barrett, 36 A.D.2d 923, 320 N.Y.S.2d 886 (1st Dep't
6 1971), the court concluded that it did not have jurisdiction over
7 a California defendant who had allegedly libeled the plaintiff in
8 a television broadcast recorded in California. Subsequent
9 distribution of a tape of the broadcast in New York "d[id] not
10 constitute doing business in New York by the newscaster who
11 performed elsewhere." Id. at 923, 320 N.Y.S.2d at 885.
12 To be sure, New York courts have found jurisdiction in
13 cases where the defendants' out-of-state conduct involved
14 defamatory statements projected into New York and targeting New
15 Yorkers, but only where the conduct also included something more.
16 In Sovik v. Healing Network, 244 A.D.2d 985, 665 N.Y.S.2d 997
17 (4th Dep't 1997), for example, the Appellate Division, Fourth
18 Department, concluded that one allegedly defamatory letter sent
19 by the defendants could provide a basis for jurisdiction where
20 the defendants had "drafted the letter and either distributed or
21 authorized the distribution of the letter in the Buffalo area,"
22 thereby demonstrating the defendants' "active involvement and
23 personal control [in New York] over the writing and distribution
24 of the allegedly defamatory statement." Id. at 987, 665 N.Y.S.2d
25 at 999 (affirming district court's decision that plaintiffs were
26 entitled to jurisdictional discovery); cf. Legros, 38 A.D.2d at
21
1 55-56, 327 N.Y.S.2d at 373 (concluding that the publication of an
2 allegedly defamatory book for which "virtually all the work
3 attendant upon publication" had occurred in New York, including
4 the research for it and the negotiations and execution of the
5 contract with the publisher, constituted "transactions of
6 business" for the purposes of section 302(a)(1)); Modica v.
7 Westchester Rockland Newspapers, Inc., 54 Misc. 2d 1086, 283
8 N.Y.S.2d 939 (Sup. Ct. Westchester County 1967) (finding
9 jurisdiction proper under section 302(a)(1) where the newspaper
10 containing an allegedly defamatory column was published in New
11 York for New York readers).
12 2. "Arising from" a Transaction of Business
13 If the defendant is transacting business in New York,
14 the second half of the section 302(a)(1) inquiry asks whether the
15 cause of action "aris[es] from" that business transaction or
16 transactions. See Deutsche Bank, 7 N.Y.3d at 71, 850 N.E.2d at
17 1142, 818 N.Y.S.2d at 167. "New York courts have held that a
18 claim 'aris[es] from' a particular transaction when there is
19 'some articulable nexus between the business transacted and the
20 cause of action sued upon,' or when 'there is a substantial
21 relationship between the transaction and the claim asserted.'"
22 Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d
23 100, 103 (2d Cir. 2006) (citations omitted). "A connection that
24 is 'merely coincidental' is insufficient to support
25 jurisdiction." Id. (citation omitted).
22
1 Under the "arises from" prong, New York courts have
2 also concluded that they lacked jurisdiction over out-of-state
3 defendants accused of having uttered defamatory falsehoods where
4 the "[defamation] claim did not arise from the defendants'
5 specific business transactions in New York." Realuyo v. Villa
6 Abrille, 01 Civ. 10158, 2003 WL 21537754, at *6, 2003 U.S. Dist.
7 LEXIS 11529, at *17 (S.D.N.Y. July 8, 2003) (noting that the
8 defendants were not involved in the publication or distribution
9 of the allegedly libelous article at issue). In Talbot v.
10 Johnson Newspaper Corp., 71 N.Y.2d 827, 522 N.E.2d 1027, 527
11 N.Y.S.2d 729 (1988), for example, a California resident wrote two
12 letters to the president and board of trustees of St. Lawrence
13 University. In the letter, he alleged that his daughter had seen
14 the plaintiff, a school athletic coach, drunk at a fraternity
15 party. Id. at 828, 522 N.E.2d at 1028, 527 N.Y.S.2d at 730. A
16 newspaper later published one of the letters, which it had
17 received from one of the trustees, and quoted from a telephone
18 interview with the daughter, who was also a California resident.
19 In concluding that New York courts did not have jurisdiction over
20 the father and daughter in a defamation suit brought against them
21 by the coach, the New York Court of Appeals did not address
22 whether the letters or the telephone call into the state could
23 themselves constitute "purposeful activities." Instead, it found
24 that even if the daughter's attendance at St. Lawrence could
25 qualify as a purposeful activity, jurisdiction would be improper
26 because the cause of action did not arise out of that contact
23
1 with New York. Id. at 829, 522 N.E.2d at 1029, 527 N.Y.S.2d at
2 731. And in American Radio Association, AFL-CIO v. A. S. Abell
3 Co., 58 Misc. 2d 483, 296 N.Y.S.2d 21 (Sup. Ct. N.Y. County
4 1968), the court noted that the defendant, the publisher of the
5 Baltimore Sun, which circulated 400 copies in New York State and
6 derived just over 3% of its advertising revenue from New York,
7 might transact business in New York, but the court concluded that
8 the defamation claim did not arise from any of those contacts,
9 id. at 484-85, 296 N.Y.S.2d at 22-23. ("[N]ot one [of the alleged
10 contacts] may be relied upon to uphold jurisdiction under the
11 long-arm statute since the cause of action alleged in the
12 complaint does not, as is required by statute, arise from any of
13 the acts enumerated."). Instead, "[t]he acts of publication, of
14 distribution and of circulation which underlie the alleged
15 grievances occurred in Baltimore and not here." Id. at 485, 296
16 N.Y.S.2d at 23.
17 E. Section 302(a)(1) and Case Law Respecting Defamatory Websites
18 While no New York appellate court has yet explicitly
19 analyzed a case of website defamation under the "transact[ing]
20 business" provision of section 302(a)(1), several federal
21 district courts in New York have. Consistent with the principles
22 developed in the New York cases discussed above, these courts
23 have concluded that the posting of defamatory material on a
24 website accessible in New York does not, without more, constitute
25 "transact[ing] business" in New York for the purposes of New
26 York's long-arm statute. See Realuyo, 2003 WL 21537754, at *7,
24
1 2003 U.S. Dist. LEXIS 11529, at *20-21 (deciding that the
2 availability of an article on a website, without more, does not
3 amount to "transaction of business" for purposes of
4 section 302(a)(1)); see also Starmedia Network, Inc. v. Star
5 Media, Inc., 00 Civ. 4647, 2001 WL 417118, at *3, 2001 U.S. Dist.
6 LEXIS 4870, at *7 (S.D.N.Y. Apr. 23, 2001) ("[I]t is now well
7 established that one does not subject himself to the jurisdiction
8 of the courts in another state simply because he maintains a web
9 site which residents of that state visit.") (citation and
10 quotation indication omitted). In addition, to the extent that
11 there are business transactions incident to establishing a
12 website, a defamation claim based on statements posted on a
13 website does not "arise from" such transactions. See Realuyo,
14 2003 WL 21537754, at *7, 2003 U.S. Dist. LEXIS 11529, at *20-22
15 (finding that "the publication of the article was not the
16 transaction of business in New York" and the defamation claim did
17 not arise from advertising links on the website); see also
18 Competitive Techs., Inc. v. Pross, 13297/2006, 14 Misc. 3d
19 1224(A), 2007 WL 283075, at *3, 2007 N.Y. Misc. LEXIS 217, at *8
20 (Sup. Ct. Suffolk County, Jan. 26, 2007) (concluding that
21 libelous statements posted on a Yahoo! message board did not give
22 rise to jurisdiction because they were "not in connection with
23 any business transactions").
24 F. Internet Defamation, and Analysis under Zippo Mfg. Co.
25 In analyzing personal jurisdiction in the internet
26 context, so many courts have turned to the standards set out more
25
1 than ten years ago by a judge of the Western District of
2 Pennsylvania in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.
3 Supp. 1119 (W.D. Pa. 1997) (cited by, e.g., Toys "R" Us, Inc. v.
4 Step Two, S.A., 318 F.3d 446, 452 (3d Cir. 2003) (calling Zippo
5 the "seminal authority regarding personal jurisdiction based upon
6 the operation of an Internet web site"); ALS Scan, Inc. v.
7 Digital Serv. Consultants, Inc., 293 F.3d 707, 713-14 (4th Cir.
8 2002) (adopting the Zippo model); Cybersell, Inc. v. Cybersell,
9 Inc., 130 F.3d 414, 418 (9th Cir. 1997); Citigroup Inc. v. City
10 Holding Co., 97 F. Supp. 2d 549, 565 (S.D.N.Y. 2000)), that the
11 opinion warrants separate mention here. In Zippo, the court
12 applied traditional due process "minimum contacts" principles to
13 determine whether jurisdiction over the out-of-state website
14 proprietor was constitutionally permissible. Zippo, 952 F. Supp.
15 at 1122 (citing Pennsylvania's long-arm statute, 42 Pa. C.S.A.
16 § 5322(b), which allows Pennsylvania courts to exercise
17 jurisdiction to the "fullest extent allowed under the
18 Constitution"). Noting that "the likelihood that personal
19 jurisdiction can be constitutionally exercised is directly
20 proportionate to the nature and quality of commercial activity
21 that an entity conducts over the Internet," the court explained
22 the spectrum of internet interactivity that many courts have
23 since invoked in determining jurisdiction.
24 At one end of the spectrum are situations
25 where a defendant clearly does business over
26 the Internet. If the defendant enters into
27 contracts with residents of a foreign
28 jurisdiction that involve the knowing and
26
1 repeated transmission of computer files over
2 the Internet, personal jurisdiction is
3 proper. At the opposite end are situations
4 where a defendant has simply posted
5 information on an Internet Web site which is
6 accessible to users in foreign jurisdictions.
7 A passive Web site that does little more than
8 make information available to those who are
9 interested in it is not grounds for the
10 exercise [of] personal jurisdiction. The
11 middle ground is occupied by interactive Web
12 sites where a user can exchange information
13 with the host computer. In these cases, the
14 exercise of jurisdiction is determined by
15 examining the level of interactivity and
16 commercial nature of the exchange of
17 information that occurs on the Web site.
18 Id. at 1124 (citations omitted).12
19 Several federal district courts in New York have
20 applied the Zippo formulation to website defamation cases in
21 analyzing personal jurisdiction under section 302(a)(1).
22 See Citigroup, 97 F. Supp. 2d at 565 ("At the very least, the
23 interactivity of the [defendant's] site brings this case within
24 the middle category of internet commercial activity. Moreover,
25 the interaction is both significant and unqualifiedly commercial
26 in nature and thus rises to the level of transacting business
27 required under CPLR § 302(a)(1)."); Realuyo, 2003 WL 21537754, at
28 *6-*7, 2003 U.S. Dist. LEXIS 11529, at *20-*22 (declining to
29 exercise jurisdiction over defendant newspaper/website proprietor
12
Ultimately, the Zippo court did not itself rely on this
approach to evaluate the defendant's contacts with Pennsylvania.
The defendant had sold passwords to its news-services website to
3,000 Pennsylvania subscribers and had contracted with seven
Internet access providers in Pennsylvania. Id. at 1126. The
court found that such "conduct[] of electronic commerce with
Pennsylvania residents constitutes the purposeful availment of
doing business in Pennsylvania." Id. at 1125-26.
27
1 because its website, on which alleged libel was posted, was
2 "passive"; having 332 non-paying email registrants in New York
3 was insufficient to establish jurisdiction under Section
4 302(a)(1)). In Lenahan Law Offices, LLC v. Hibbs, 04-cv-6376,
5 2004 WL 2966926, at *6 (W.D.N.Y. Dec. 22, 2004), the plaintiff
6 argued that the defendant's website, which contained allegedly
7 defamatory material about the plaintiff, fell into the "middle
8 range" of the Zippo sliding scale because the website permitted
9 the defendant to answer questions posted by users. The court
10 rejected that argument, concluding that such low-level
11 interactivity was insufficient to support jurisdiction. "Absent
12 an allegation that Hibbs is projecting himself into New York,
13 this Court cannot exercise specific personal jurisdiction over
14 him." Id. Even if such interactivity could constitute
15 "transacting business" under section 302(a)(1), the court
16 concluded, the plaintiff had failed to show that its cause of
17 action "arose" from such transactions since the allegedly
18 defamatory material was posted on a passive portion of the
19 website. Id.
20 While analyzing a defendant's conduct under the Zippo
21 sliding scale of interactivity may help frame the jurisdictional
22 inquiry in some cases, as the district court here pointed out,
23 "it does not amount to a separate framework for analyzing
24 internet-based jurisdiction." Best Van Lines, 2004 WL 964009, at
25 *3, 2004 U.S. Dist. LEXIS 7830, at *9. Instead, "traditional
26 statutory and constitutional principles remain the touchstone of
28
1 the inquiry." Id. As the Zippo court itself noted, personal
2 jurisdiction analysis applies traditional principles to new
3 situations. Zippo, 952 F. Supp. at 1123 ("[A]s technological
4 progress has increased the flow of commerce between States, the
5 need for jurisdiction has undergone a similar increase." (quoting
6 Hanson, 357 U.S. at 250-51) (internal quotation marks omitted)).
7 We think that a website's interactivity may be useful for
8 analyzing personal jurisdiction under section 302(a)(1), but only
9 insofar as it helps to decide whether the defendant "transacts
10 any business" in New York -- that is, whether the defendant,
11 through the website, "purposefully avail[ed] himself of the
12 privilege of conducting activities within New York, thus invoking
13 the benefits and protections of its laws." Cutco Indus. v.
14 Naughton, 806 F.2d 361, 365 (2d Cir. 1986); see also Deutsche
15 Bank, 7 N.Y.3d at 71-72, 850 N.E.2d at 1143, 818 N.Y.S.2d at 167
16 (determining that there was jurisdiction over a sophisticated
17 institutional trader from Montana who "knowingly initiat[ed] and
18 pursu[ed] a negotiation with [plaintiff] in New York [via instant
19 messaging] that culminated in the sale of $15 million in bonds,"
20 thus "enter[ing] New York to transact business").13
13
The spectrum may also be helpful in analyzing whether
jurisdiction is permissible under due process principles. We
note that the court in Zippo and most, if not all, of the courts
that subsequently adopted the Zippo sliding scale were evaluating
whether jurisdiction in those cases comported with due process,
under state long-arm statutes that recognized jurisdiction
coterminous with the extent allowed by the federal Constitution.
See, e.g., Young, 315 F.3d at 261. We make no comment at this
point on the relevance of the Zippo sliding scale in New York in
evaluating whether the exercise of jurisdiction would be
29
1 III. Long-Arm Jurisdiction over Walker
2 To decide this appeal, then, we must determine whether
3 the conduct out of which BVL's claim arose was a "transact[ion
4 of] business" under section 302(a)(1). In other words, were
5 Walker's internet postings or other activities the kind of
6 activity "by which the defendant purposefully avail[ed him]self
7 of the privilege of conducting activities within the forum State,
8 thus invoking the benefits and protections of its laws," McKee,
9 20 N.Y.2d at 382, 229 N.E.2d at 608, 283 N.Y.S.2d at 37-38
10 (internal quotation marks omitted), and over which the New York
11 legislature intended New York courts to have jurisdiction? BVL
12 argues that there are three different factual bases for an
13 affirmative conclusion.
14 A. The "Black List Report"
15 BVL first asserts that Walker's inclusion of a report
16 on BVL in his "Black List Report" contained allegedly false and
17 defamatory statements about BVL. Compl. ¶ 7. As we have seen,
18 New York case law establishes that making defamatory statements
19 outside of New York about New York citizens does not, without
20 more, provide a basis for jurisdiction, even when those
21 statements are published in media accessible to New York readers.
22 Walker's "Black List Report" seems to be exactly that --
23 allegedly defamatory statements posted on a website accessible to
24 readers in New York. As with the column in Realuyo, Walker's
consistent with due process.
30
1 listing of BVL on his Black List arises "solely from the aspect
2 of the website from which anyone –- in New York or throughout the
3 world –- could view and download the allegedly defamatory
4 article." Realuyo, 2003 WL 21537754, at *7, 2003 U.S. Dist.
5 LEXIS 11529, at *21; see also McBee v. Delica Co., Ltd., 417 F.3d
6 107, 124 (1st Cir. 2005) ("[T]he mere existence of a website that
7 is visible in a forum and that gives information about a company
8 and its products is not enough, by itself, to subject a defendant
9 to personal jurisdiction in that forum."); Jennings v. AC
10 Hydraulic A/S, 383 F.3d 546, 549-50 (7th Cir. 2004) (similar);
11 ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707,
12 713-15 (4th Cir. 2002) (similar); Competitive Techs., Inc. v.
13 Pross, 14 Misc. 3d 1224(A), 2007 WL 283075, at *3, 2007 N.Y.
14 Misc. LEXIS 217, at *9 (Sup. Ct. Suffolk County, Jan. 26, 2007)
15 ("[I]n order to exercise personal jurisdiction over a
16 non-resident defendant, something more than the mere posting of
17 information on a passive web site is required to indicate that
18 the defendant purposefully directed his activities at the forum
19 state." (citation omitted)).
20 Moreover, the nature of Walker's comments does not
21 suggest that they were purposefully directed to New Yorkers
22 rather than a nationwide audience. Material on the Website
23 discusses interstate moving companies located in many states for
24 the putative benefit of potential persons in many states who will
25 undergo household moves. Compl. ¶ 2. Walker's comments
26 therefore do not establish that, for purposes of section
31
1 302(a)(1), he "purposefully avail[ed] himself of the privilege of
2 conducting activities within New York, thus invoking the benefits
3 and protections of its laws." Cutco Indus., 806 F.2d at 365
4 (alterations and internal quotation marks omitted) (emphasis
5 added).14
6 We conclude that posting the "Black List Report" does
7 not constitute "transact[ing] business" under section 302(a)(1).
8 B. Walker's Answer to a User's Question
9 We reach the same conclusion with respect to Walker's
10 allegedly defamatory statement about BVL posted as a response to
11 a user's question. We fail to perceive why the fact that a
12 statement was or was not in response to a question from someone
13 somewhere else would, alone, make a difference. Prompted or
14 otherwise, New York courts require more than "the mere utterance
15 of the libelous material," Legros, 38 A.D.2d at 55, to constitute
16 "transact[ing] business" under section 302(a)(1). See Kim, 230
14
We express no view, of course, as to whether the Black
List postings might have satisfied the minimum contacts
requirement under the constitutional "effects test" employed in
Calder, 465 U.S. at 789-90, or the analysis in Keeton, 465 U.S.
at 773-74, 781, based on the defendant's magazine's in-state
monthly circulation and the defendant's accompanying continuous
and deliberate exploitation of the in-state market. We think it
worth noting nonetheless that the Keeton analysis is roughly
similar to the inquiry under section 302(a)(1), which focuses on
transactions of business within the state. Calder's "effects
test," by contrast, is not relevant to the New York long-arm
statute analysis under section 302(a)(1). New York courts would
evaluate personal jurisdiction asserted on the basis of allegedly
tortious conduct committed outside the state and targeted at
alleged New York victims under section 302(a)(3). And Section
302(a)(3), which is roughly analogous to the "effects test" in
Calder, specifically exempts defamation from its reach.
32
1 A.D.2d at 290, 658 N.Y.S.2d at 504; Yanni v. Variety, Inc., 48
2 A.D.2d 803, 369 N.Y.S.2d 448 (1st Dep't 1975) (finding no
3 jurisdiction over an out-of-state defendant who placed an
4 allegedly defamatory advertisement in a California newspaper);
5 Strelsin, 36 A.D.2d 923, 320 N.Y.S.2d 885.
6 C. Website Donations
7 The final factual basis asserted by BVL for
8 jurisdiction over Walker here is the portion of the Website
9 through which Walker accepts donations. This feature is the most
10 "interactive" on the Website, which may place it at the "clearly
11 do[ing] business" end of the Zippo spectrum. Zippo, 952 F. Supp.
12 2d at 1124. And particularly if one were to use the Zippo
13 framework, it might constitute doing business in New York. But
14 here, even if that were enough to render it "transact[ing] any
15 business within the state" under section 302(a)(1), BVL's claim
16 does not "arise from" the Website's acceptance of donations for
17 the purposes of section 302(a)(1). There is no "articulable
18 nexus, or a substantial relationship," Henderson, 157 F.3d at 123
19 (internal quotation marks omitted), between the donations and the
20 allegedly defamatory conduct. See Realuyo, 2003 WL 21537754, at
21 *6, 2003 U.S. Dist. LEXIS 11529, at *16-17; Bassili v. Chu, 242
22 F. Supp. 2d 223, 229 (W.D.N.Y. 2002).
23 BVL asserts that the Website's "primary function and
24 business is to publish negative information about companies,
25 including a 20 percent New York base, and the Website's visitors
26 make donations solely because of the overwhelming negative
33
1 comments and content on the website." Appellant's Br. in
2 Response to Br. by Amicus Curiae at 22-23 (emphasis omitted).
3 But this nexus –- between allegedly tortious conduct and the
4 revenue transactions required to support such conduct –- is so
5 attenuated, the relationship between the quest for funds and the
6 lawsuit for which jurisdiction is sought so insubstantial, that
7 the nexus or relationship cannot alone be a sufficient basis upon
8 which to establish jurisdiction over the defendant for purposes
9 of this case. See Realuyo, 2003 WL 21537754, at *7, 2003 U.S.
10 Dist. LEXIS 11529, at *21 (noting that although the defendant's
11 website's advertising links may have been "interactive," the
12 defamation claim did not arise from such links); Hy Cite Corp. v.
13 Badbusinessbureau.com, L.L.C., 297 F. Supp. 2d 1154, 1165 (W.D.
14 Wis. 2004) (explaining that a sale on the website had
15 insufficient nexus to defamation and trademark infringement
16 claims when "[t]he only relationship between the sale and the
17 lawsuit is that the sale occurred through the website"). The
18 donation section of the Website, unrelated to the publication
19 that underlies this lawsuit, therefore does not provide the
20 district court with jurisdiction under section 302(a)(1).
21 IV. Due Process Analysis
22 As we have noted, New York law has relied significantly
23 on due process cases in developing its jurisprudence under its
24 long-arm statute. We have therefore discussed them here. But we
25 do so only as a means of understanding New York State long-arm
26 jurisdiction. Nothing in this opinion is intended, or should be
34
1 read, to indicate our view as to whether jurisdiction in this
2 case would have passed Fourteenth Amendment muster. Neither
3 should anything we have said be interpreted to indicate our
4 position with respect to due process principles recently
5 developed in the internet context by other circuits in decisions
6 such as Revell v. Lidov, 317 F.3d 467 (5th Cir. 2002), and Young
7 v. New Haven Advocate, 315 F.3d 256 (4th Cir. 2002).
8 V. Jurisdictional Discovery
9 BVL argues that it is entitled to jurisdictional
10 discovery on the issue of personal jurisdiction. We review for
11 abuse of discretion the district court's decision not to permit
12 jurisdictional discovery because BVL failed to establish a prima
13 facie case of personal jurisdiction. First City, Texas-Houston,
14 N.A. v. Rafidain Bank, 150 F.3d 172, 175 (2d Cir. 1998). We
15 conclude that the district court acted well within its discretion
16 in declining to permit discovery because the plaintiff had not
17 made out a prima facie case for jurisdiction. See Jazini v.
18 Nissan Motor Co., 148 F.3d 181, 186 (2d Cir. 1998) (finding that
19 the district court did not err in denying jurisdictional
20 discovery where the plaintiffs did not establish a prima facie
21 case that the district court had jurisdiction over the
22 defendant); Lehigh Valley Indus. v. Birenbaum, 527 F.2d 87, 93-94
23 (2d Cir. 1975) (similar). We therefore affirm the district
24 court's decision declining to order jurisdictional discovery.
35
1 CONCLUSION
2 For the foregoing reasons, we affirm the judgment of
3 the district court.
36
Best Van Lines, Inc. v. Walker
Combined Opinion