[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
AUG 1, 2006
No. 06-11888 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 04-00047-CV-FTM-29-SPC
WHITNEY INFORMATION NETWORK, INC.,
a Colorado corporation,
Plaintiff-Appellant,
versus
XCENTRIC VENTURES, LLC,
an Arizona limited liability company,
BADBUSINESSBUREAU.ORG,
an Arizona limited liabiity company,
ED MAGEDSON, an individual,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(August 1, 2006)
Before CARNES, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
Plaintiff Whitney Information Network, Inc. (“Whitney”) appeals from the
district court’s order granting Defendants Xcentric Venture’s (“Xcentric”),
badbusinessbureau.org’s, and Ed Magedson’s (“Magedson”) combined motion to
dismiss for lack of personal jurisdiction. We vacate and remand for further
proceedings.
I. BACKGROUND
Whitney states that it provides “post-secondary educational and training
products and services in the areas of real estate investing, business development,
financial investment and asset protection real estate to students world-wide.”
Among other things, Whitney conducts monthly real estate training programs and
advertises its services through infomercials and on various websites. Whitney also
purports to own statutory and common law rights in various marks that are used in
connection with its educational and training services. When these marks are
entered into an Internet search engine, Whitney states, one of the search results that
appears is a website operated by Defendants.
Defendants operate the websites “www.ripoffreport.com” and
“ripoffrevenge.com,” and allegedly “hold themselves out to the public as a
‘worldwide consumer reporting website and publication, by consumers for
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consumers’ to file and document consumer complaints about ‘companies or
individuals who rip off consumers.’” According to Whitney, Defendants solicit
consumers to submit complaints about any company that has “ripped” the
consumers off, and Defendants then choose to publish certain of these complaints
on their website “www.ripoffreport.com,” thereby implying that the companies
named in the complaints are “ripping off” consumers. Whitney contends that
Defendants do not attempt to verify consumer complaints for accuracy, and seek to
“extort” money from companies complained about on Defendants’ website by
offering to cease publication of the complaints in exchange for a fee.
Complaining that Defendants’s use of its marks was causing consumer
confusion and harming its reputation, Whitney (along with its CEO Russ Whitney)
sued Defendants in federal district court, asserting claims for violations of the
Lanham Act, 15 U.S.C. § 1051 et seq., common law trademark infringement, and
defamation per se of a business reputation. Defendants moved to dismiss for lack
of personal jurisdiction, arguing that their activities did not satisfy Florida’s long-
arm statute, and that the exercise of jurisdiction would offend due process. The
district court concluded that the undisputed facts alleged in the complaint,
including Defendants’ continued publication of infringing marks in Florida on their
websites, satisfied Florida’s long-arm statute, and that the exercise of personal
3
jurisdiction over Defendants would not offend due process. See Whitney Info.
Network, Inc. v. Xcentric Ventures, LLC, 347 F. Supp. 2d 1242, 1244-46 (M.D.
Fla. 2004). Accordingly, the court denied the motion to dismiss. Id. at 1246.
The case was then reassigned to a different district judge and Defendants
moved to dismiss under Fed. R. Civ. P. 12(b)(6), asserting that the complaint failed
to state a claim under the Lanham Act or for common law trademark infringement,
and that the defamation claim was barred by the Communications Decency Act
(“CDA”), 47 U.S.C. § 223 et seq. The district court agreed and dismissed the
complaint without prejudice. With respect to the defamation claim, the court found
that, based on the allegations of the complaint, Defendants did not author the
messages located on their website, but merely published the comments of third-
party consumers who felt defrauded. As a result, the court explained, Defendants
were immune from liability under the CDA because Ҥ 230(c)(1) immunizes a
service provider from liability for information developed by a third party that is
published on the Internet.” See Batzel v. Smith, 333 F.3d 1018, 1026-34 (9th Cir.
2003); Ben Ezra, Weinstein, & Co., Inc., 206 F.3d 980, 986 (10th Cir. 2000); Zeran
v. Am. Online, Inc., 129 F.3d 327, 331 (4th Cir. 1997).
Plaintiffs filed a motion for reconsideration and for an enlargement of time
to file an amended complaint, noting that the district court’s dismissal had been
4
without prejudice. The court denied reconsideration as to its previous order, but
granted Plaintiffs time to file an amended complaint. The amended complaint
contained significant changes, naming Whitney as the sole plaintiff, eliminating the
Lanham Act and common law trademark infringement claims, and adding new
allegations in support of the defamation claim. These allegations claimed, inter
alia, that Defendants tailored and rewrote consumer complaints submitted by third
parties to make it appear that, regardless of the true nature of the complaint, the
company complained of (i.e., Whitney) was “ripping off” customers. See, e.g.,
Pl.’s Am. Compl. ¶¶ 38-39. This tailoring and rewriting allegedly included the
addition of words such as “ripoff,” “dishonest,” and “scam.” See id. Furthermore,
Whitney claimed that Defendants knowingly fabricated entire consumer
complaints, “which were then attributed to people with false names or
‘anonymous’ titles from fictional locations around the United States . . . and were
false and slanderous.” Id. ¶ 40.
Defendants responded by moving to dismiss the amended complaint for lack
of personal jurisdiction, claiming that the grounds previously relied upon by the
district court for finding jurisdiction no longer existed. Whitney’s defamation
claim, Defendants asserted, “is brought by a Colorado corporation that does
business all over the country and did not suffer the brunt of the harm in Florida.”
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Furthermore, Defendants argued, Florida’s long-arm statute was not satisfied
because they had committed no tort, for the CDA “prohibits publisher liability for
defamation where the claim is against an interactive computer service.” In support
of this argument, Defendants submitted the declarations of Defendant Magedson
and Ben Smith, who provided technology services to Defendant Xcentric.
Magedson declared that neither he nor any agent of Xcentric “authored the
statements that are the subject of this lawsuit,” while Smith declared that the IP
addresses1 of those computers that posted the complaints or rebuttals at issue did
not match the IP address of any computer used by Xcentric or its agents. Whitney
responded by arguing, inter alia, that Magedson’s declaration was insufficient to
controvert all jurisdictional allegations of the amended complaint, and that Smith’s
declaration reached the merits of Whitney’s claim, thereby “making it
inappropriate on a motion to dismiss under Rule 12(b)(2), and more suited to a
summary judgment motion . . . .”
The district court agreed that Whitney had not satisfied the requirements of
Florida’s long-arm statute, and granted the motion to dismiss on that basis. Given
the protection afforded Defendants under the CDA, the court stated, “[Whitney’s]
new allegations that Defendants were the authors of some of the statements on
1
Smith explained in his declaration that “[a]n IP address is a unique address that
identifies the computer that the submission came from.”
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their website are essential to the survival of its argument in support of personal
jurisdiction.” If Defendants did not “author” the statements, the court reasoned,
“then they are immune under the [CDA], did not commit a tortious act in the state
of Florida, and the Court lacks personal jurisdiction over them.” The court agreed
that the allegations of Whitney’s amended complaint made a prima facie case for
jurisdiction, but found that Defendants’ declarations–particularly that of Ben
Smith–caused the burden to shift back to Whitney to prove jurisdiction by means
of an affidavit or other sworn statement. Whitney had produced no such materials,
the court explained, and therefore failed to carry its burden. Having concluded that
Whitney did not satisfy the requirements of Florida’s long-arm statute, the court
declined to perform a due process analysis and dismissed the amended complaint
with prejudice. Whitney now appeals that dismissal.
II. STANDARD OF REVIEW
We review a dismissal for lack of personal jurisdiction de novo. Alexander
Proudfoot Co. World Headquarters L.P. v. Thayer, 877 F.2d 912, 916 (11th Cir.
1989). “When a district court does not conduct a discretionary evidentiary hearing
on a motion to dismiss for lack of jurisdiction, the plaintiff must establish a prima
facie case of personal jurisdiction over a nonresident defendant.” Madara v. Hall,
916 F.2d 1510, 1514 (11th Cir. 1990). “A prima facie case is established if the
7
plaintiff presents enough evidence to withstand a motion for a directed verdict.”
Id.
“[We] must construe the allegations in the complaint as true, to the extent
they are uncontroverted by defendant’s affidavits or deposition testimony.” Morris
v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988). If a plaintiff pleads sufficient
material facts to establish a basis for personal jurisdiction and a defendant then
submits affidavits controverting those allegations, “the burden traditionally shifts
back to the plaintiff to produce evidence supporting jurisdiction[,] unless those
affidavits contain only conclusory assertions that the defendant is not subject to
jurisdiction.” Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d 1264, 1269
(11th Cir. 2002); see Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d
1247, 1249 (11th Cir. 2000) (per curiam). When the plaintiff’s complaint and
supporting evidence conflict with the defendant’s affidavits, we must construe all
reasonable inferences in favor of the plaintiff. Meier, 288 F.3d at 1269; Madara,
916 F.2d at 1514.
III. DISCUSSION
The determination of whether a court has personal jurisdiction over a given
defendant involves a two-part inquiry. Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358
F.3d 1312, 1319 (11th Cir. 2004). First, the court determines “whether the
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exercise of jurisdiction is appropriate under the forum state’s long-arm statute.”
Id. Second, the court must examine whether the exercise of personal jurisdiction
would violate the Fourteenth Amendment’s Due Process Clause, “which requires
that the defendant have minimum contacts with the forum state and that the
exercise of jurisdiction over the defendant does not offend traditional notions of
fair play and substantial justice.” Id. (internal quotes omitted).
Here, the sole issue raised on appeal is whether the district court erred in
determining that Whitney failed to satisfy the requirements of Florida’s long-arm
statute. The only portion of the long-arm statute upon which Whitney relied was
Fla. Stat. § 48.193(1)(b), which “provides for the assertion of jurisdiction over an
out-of-state defendant who commits a tortious act in Florida.” Horizon Aggressive
Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1168 (11th Cir. 2005).2 We
must construe the provisions of the long-arm statute as the Florida Supreme Court
2
The statute states in relevant part:
(1) Any person, whether or not a citizen or resident of this state, who personally or
through an agent does any of the acts enumerated in this subsection thereby submits
himself or herself and, if he or she is a natural person, his or her personal
representative to the jurisdiction of the courts of this state for any cause of action
arising from the doing of any of the following acts:
...
(b) Committing a tortious act within this state.
Fla. Stat. § 48.193(1)(b).
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would. Id. at 1166-67. “‘[C]ommitting a tortious act’ in Florida under section
48.193(1)(b) can occur through the non-resident defendant’s telephonic, electronic,
or written communications into Florida,” so long as the plaintiff’s cause of action
arises from the communications. Wendt v. Horowitz, 822 So. 2d 1252, 1260 (Fla.
2002) (quoting Fla. Stat. § 48.193(1)(b)). The district court found–and Defendants
do not dispute on appeal–that the allegations of Whitney’s amended complaint, if
taken as true, satisfied the requirements of § 48.193(1)(b) as to each of the
Defendants. This was so, the court explained, because the amended complaint,
unlike the original complaint, alleged that Defendants “were the authors of some of
the statements on their website,” not merely publishers of third-party statements.
Under the CDA, “[n]o provider or user of an interactive computer service shall be
treated as the publisher or speaker of any information provided by another
information content provider.” 47 U.S.C. § 230(c)(1) (emphasis added).3 “No
3
The CDA defines the term “interactive computer service” as “any information service,
system, or access software provider that provides or enables computer access by multiple users
to a computer server, including specifically a service or system that provides access to the
Internet and such systems operated or services offered by libraries or educational institutions.”
47 U.S.C. § 230(f)(2). Whitney does not dispute on appeal that Defendants Xcentric or
badbusinessbureau.org qualified as a “provider or user of an interactive computer service” under
§ 230(c)(1). Cf. Batzel, 333 F.3d at 1030 (“There is . . . no need here to decide whether a listserv
or website itself fits the broad statutory definition of ‘interactive computer service,’ because the
language of § 230(c)(1) confers immunity not just on ‘providers’ of such services, but also on
‘users’ of such services.”). Whitney does contend, however, that Defendant Magedson could not
have qualified for CDA immunity because he “submitted no evidence to establish himself as an
‘interactive computer service.’” Although we need not address this argument because Whitney
raises it for the first time in its reply brief, see Bauknight v. Monroe County, Fla., 446 F.3d 1327,
1329 n.2 (11th Cir. 2006), we note that § 230(c)(1) requires only that Magedson have been a
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cause of action may be brought and no liability may be imposed under any State or
local law that is inconsistent with this section.” Id. § 230(e)(3). An “information
content provider” is “any person or entity that is responsible, in whole or in part,
for the creation or development of information provided through the Internet or
any other interactive computer service.” Id. § 230(f)(3). By alleging that
Defendants authored some of the statements posted on the website, Whitney
indicated that Defendants were themselves an “information content provider” and
thus not necessarily immune under the CDA. The court further determined,
however, that the Smith and Magedson declarations controverted these critical
allegations about authorship, and thereby shifted the burden back to Whitney “to
substantiate [its] jurisdictional allegations by affidavits or other competent proof,
and not merely [to] reiterate the factual allegations in the complaint.” Future Tech.
Today, 218 F.3d at 1249 (internal quotes omitted). In producing no such evidence,
the court held, Whitney failed to carry this burden and Defendants were therefore
entitled to dismissal.
A defendant’s filing of an affidavit contesting jurisdictional allegations
shifts the burden back to the plaintiff (to support those allegations with evidence)
only when the defendant’s affidavit is legally sufficient to effect the shift. See
“provider or user” of an interactive computer service, not the service itself.
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Acquadro v. Bergeron, 851 So. 2d 665, 671 (Fla. 2003); Horizon Aggressive
Growth, 421 F.3d at 1168-69. The mere assertion of a legal conclusion, for
example, is insufficient to shift the burden back to the plaintiff. See, e.g.,
Acquadro, 851 So. 2d at 672 (explaining that defendant’s statement in her affidavit
that she “did not make defamatory statements” about the plaintiff was insufficient
to shift the burden back to plaintiff); Posner v. Essex Ins. Co., 178 F.3d 1209, 1215
(11th Cir. 1999) (per curiam) (explaining that statements which, though presented
in the form of factual declarations, are in substance legal conclusions do not
“trigger a duty for Plaintiffs to respond with evidence of their own supporting
jurisdiction”). On appeal, Whitney contends that Defendants’ declarations were
insufficient to shift the burden of proof because those declarations contained
conclusory denials and failed to contest all relevant allegations of the amended
complaint. Defendants maintain that the declarations adequately disputed any
claim that they “authored” the complaints or rebuttals about Whitney on their
website. As Whitney produced no evidence to the contrary, Defendants argue,
they were clearly entitled to CDA immunity and thus committed no tort for
purposes of § 48.193(1)(b). Having reviewed the declarations, we disagree that
they were adequate to shift the burden back to Whitney. Thus, it is not clear that
Defendants were entitled to CDA immunity.
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Magedson states that agents of Xcentric “do not choose which stories to
post,” that they “review the reports before posting solely to redact profanity,
obscenity and personal contact information,” and that they “are instructed never to
add content to a report.” While these statements may describe Xcentric’s review
practices and what its agents are generally instructed to do, the statements make no
representation about what actually occurred with respect to the website postings
about Whitney. Magedson also declares summarily that neither he nor any agent
of Xcentric “authored the statements that are the subject of this lawsuit,” but he
does not explain how he has knowledge as to the actions of Xcentric’s agents.
Even if this conclusory denial can be said to challenge Whitney’s allegation that
Defendants fabricated some of the consumer complaints posted on their website, it
does not controvert Whitney’s allegations that Defendants tailored complaints
submitted by other individuals, adding words such as “ripoff,” “dishonest,” or
“scam.” Indeed, Magedson’s own representation about Xcentric’s policy regarding
redactions implies that Xcentric’s agents had the power to edit consumer
complaints before they were posted.4
Defendants contend that Magedson’s assertions about authorship are
supported by the Smith declaration, because Smith found that none of the captured
4
Magedson also conceded that he “do[es] not personally review all of the postings that
are made on Rip-off Report before they are posted.”
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IP addresses of computers from which reports were posted about Whitney on
Defendants’ website matched the IP address of “any computer used by Xcentric or
its agents . . . .” Smith further states that he did not recognize the contact
information provided by any of the persons who submitted consumer complaints
about Whitney as belonging to agents of Xcentric. The implication is that
Defendants did not fabricate and post any of the consumer complaints at issue,
because if they had done so the IP addresses of their computers would have
appeared during Smith’s examination, or he would have recognized their contact
information. However, Smith admits that he was unable to obtain IP addresses
corresponding to three of the consumer complaints at issue. Furthermore, it is not
clear that the IP addresses of computers used by Xcentric’s agents would have
even appeared during Smith’s search if those computers were used merely to revise
consumer complaints submitted by others, rather than to submit a fabricated
complaint.5
As indicated above, the CDA defines an “information content provider” as
“any person or entity that is responsible, in whole or in part, for the creation or
5
Whitney suggests that Xcentric’s agents might have used non-work computers and
assumed names as a subterfuge for submitting fabricated complaints, such as by logging on a
computer at an internet cafe under an assumed name. Whitney did not allege this in its amended
complaint, however, and it is not a defect in Defendants’ evidence, but rather mere speculation
on the part of Whitney that we give little weight.
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development of information provided through the Internet or any other interactive
computer service.” 47 U.S.C. § 230(f)(3) (emphasis added). For the reasons
stated, Defendants’ declarations do not adequately rebut the allegations of the
amended complaint insofar as it pleads Defendants’ involvement in creating or
developing the alleged defamatory content of consumer complaints posted on their
website. Thus, whether Defendants were entitled to CDA immunity remained in
question, as did the issue of whether their conduct was tortious. Cf. Hy Cite Corp.
v. badbusinessbureau.com, L.L.C., 418 F. Supp. 2d 1142, 1148-49 (D. Ariz. 2005)
(declining to grant defendants’ motion to dismiss based on CDA immunity because
plaintiffs alleged that defendants added editorial comments, titles, and original
content to third-party complaints posted on defendants’ website). The district
court therefore erred when it shifted the burden of proof to Whitney based on
Defendants’ declarations and then granted Defendants’ motion to dismiss based on
Whitney’s failure to substantiate its allegations with evidence. Taking the
allegations of the amended complaint as true to the extent they were not
controverted by Defendants’ declarations, and construing all reasonable inferences
in favor of Whitney, see Madara, 916 F.2d at 1514, we conclude that Whitney
would have survived a motion for directed verdict on whether it satisfied
§ 48.193(1)(b) of Florida’s long-arm statute. See Carruthers v. BSA Adver., Inc.,
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357 F.3d 1213, 1215 (11th Cir. 2004) (per curiam) (“A directed verdict is only
proper when the facts and inferences so overwhelmingly favor the verdict that no
reasonable juror could reach a contrary decision.”) (citation omitted). As the
district court declined to address whether the exercise of personal jurisdiction over
Defendants would violate due process (an issue not briefed on appeal), we vacate
the district court’s judgment and remand for further proceedings.
IV. CONCLUSION
The district court erred in concluding that Whitney failed to satisfy
§ 48.193(1)(b) of Florida’s long-arm statute with respect to Defendants, and thus
erred in dismissing the amended complaint for lack of personal jurisdiction on that
basis. Whether the exercise of personal jurisdiction over Defendants would violate
due process, however, is yet to be resolved. Accordingly, we vacate the judgment
of the district court and remand the case for further proceedings consistent with
this opinion.
VACATED AND REMANDED.
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