United States District Court, Southern District of New York
July 7, 2003
POMPEYO ROA REALUYO, PLAINTIFF,
CARLOS VILLA ABRILLE, PHILIPPINE DAILY INQUIRER, INQ 7 INTERACTIVE, INC., AND BELINDA OLIVARES-CUNANAN, DEFENDANTS.
The opinion of the court was delivered by: John Koeltl, United States District Judge
OPINION AND ORDER
Pompeyo Roa Realuyo ("the plaintiff") brings this diversity action against Carlos Villa Abrille ("Villa Abrille"), the Philippine Daily Inquirer ("PDI"), INQ 7 Interactive, Inc. ("INQ 7"), and Belinda Olivares-Cunanan ("Olivares-Cunanan") (collectively, "the defendants"). The plaintiff alleges that Olivares-Cunanan wrote a newspaper article in which Villa Abrille defamed the plaintiff and which PDI and INQ 7 published. The plaintiff seeks damages of at least $100 million in addition to attorneys' fees and costs. The defendants contend that this Court lacks personal jurisdiction over them, and move for dismissal pursuant to Fed.R.Civ.P. 12(b)(2). The defendants alternatively move for dismissal pursuant to the doctrine of forum non conveniens.
The relevant facts, as alleged in the Amended Complaint and the affidavits and declarations submitted by the parties in connection with the current motions, are as follows. The plaintiff is a United States citizen, resident of New Jersey, and a practicing attorney with offices in the Southern District of New York. (Aff. of Pompeyo Roa Realuyo sworn to Nov. 22, 2002 ("Pl.'s Aff.") ¶ 12.) He recently moved to New York after his home in New Jersey burned down, but does not indicate whether he intends to become either a resident or domiciliary of New York State. (Id.)
Defendant Villa Abrille is the former Philippine Ambassador to Argentina. He is a citizen of the Philippines who resides in Argentina and maintains a residence in the Philippines. (Declaration of Carols Villa Abrille dated Nov. 14, 2002 ("Villa Abrille Decl.") ¶¶ 2-3.) He neither owns any real property nor maintains any offices in New York. (Id. ¶¶ 5-7.)
Defendant PDI is an English language daily newspaper incorporated and headquartered in the Philippines. (Declaration of Raul J. Palabrica dated Oct. 30, 2002 ("Palabrica Decl.") ¶ 3.) Besides the Philippines, PDI is distributed in hard-copy in Bahrain, Hong Kong, Italy, Kuwait, Oman, Qatar, Saudi Arabia, Singapore, Taiwan, and the United Arab Emirates. (Id.) PDI owns no property, employs no agents, and maintains no bank accounts in New York. (Id. ¶¶ 4-6.) PDI only sends its employees to the United States to cover the Philippine president's occasional visits there. (Id. ¶ 8.) PDI does business with two corporations that maintain offices in New York: PDI purchases news content from the Associated Press ("AP"), and hires Orientation Global Network, Inc. ("Orientation Global") to distribute PDI's news content to third parties. (Id. ¶ 9; Defs.' Mem. Supp. Mot. to Dismiss at 3.) These corporations had no involvement in the publication or distribution of the allegedly defamatory article at issue here. (Palabrica Decl. ¶ 12.)
Defendant INQ 7 is an internet news service of which PDI owns 10 percent.*fn1 (Decl. of Javier Vincente D. Rufino dated Oct. 30, 2002 ("Rufino Decl.") ¶¶ 2-3.) INQ 7 publishes news of the Philippines in the English language. The news articles and other content that appears on the website include content appearing in PDI, including the article at issue in this case. (Id. ¶¶ 3, 10.) The INQ 7 website is maintained on computer network servers located in the Philippines. All of the content for the website is prepared in the Philippines by INQ 7 employees located there. (Id. ¶¶ 3-4.) INQ 7 owns no property, employs no agents, and maintains no bank accounts in New York. (Id. ¶¶ 5-6.) INQ 7 offers a free e-mail bulletin service to its users. (Id. ¶ 9.) Of 6,732 registered users worldwide, 332 list a New York State address. (Id.) INQ 7 has two business contacts with New York State corporations: an advertising agency occasionally purchases space on the site, and Global Vision New Media, Inc. purchases news content from INQ 7 for distribution to other news companies. (Id. ¶ 12.) As far as INQ 7 knows, Global Vision did not purchase the article at issue here. (Id.)
Defendant Olivares-Cunanan is an opinion columnist for PDI who wrote the allegedly defamatory article at issue here. (Declaration of Belinda Olivares-Cunanan dated Oct. 30, 2002 ("Olivares-Cunanan Decl.") ¶¶ 2, 5.) She is a resident of the Philippines who claims never to have done any business in New York State. (Id. ¶ 2.) Olivares-Cunanan maintains no residence or office, and owns no property or assets, in the United States. (Id. ¶ 8.)
On October 29, 2001, the allegedly defamatory article appeared in PDI and on the INQ 7 website. (Pl.'s Aff. ¶ 7; Palabrica Decl. ¶ 12.) The article is entitled "Villa-Abrille responds to charges against him." The article stated that "some time in April 1997, a certain New York based Filipino lawyer named Pompeyo Realuyo supposedly wrote a letter to then Foreign Secretary Domingo Saizon, raising allegations about the conduct of the Philippine ambassador." The article describes the allegations as "Villa-Abrille had been on the payroll of Manila Rep. Mark Jimenez, when he was doing extensive business in South America, to the tune of 5,000 dollars a month in retainer fees." Villa-Abrille responded to the allegations. In the course of doing so, Villa-Abrille referred to the plaintiff as "a character with a `shady reputation' . . . an extortionist of sorts." (Declaration of Susan R. Schick dated Nov. 14, 2002 ("Schick Decl.") Ex. 1.) Villa Abrille is described as being "advised . . . not to respond [to the plaintiff's calls] due to the [plaintiff's] reputation for extortion." (Id.) The plaintiff filed this action on July 1, 2002.
The defendants move to dismiss the complaint for lack of personal jurisdiction. A district court has "broad discretion" in deciding such a motion, including the discretion to conduct an evidentiary hearing if the Court believes one is warranted. See CutCo Indus. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986). See also Clarendon Nat. Ins. Co. v. Lan, 152 F. Supp.2d 506, 515 (S.D.N.Y. 2001). To survive a motion to dismiss where no evidentiary hearing is held, the plaintiff need only make a prima facie case that the defendants are subject to the Court's personal jurisdiction. See PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997); Rubinbaum LLP v. Related Corporate Partners V, L.P., 154 F. Supp.2d 481, 486 (S.D.N.Y. 2001). The Court must construe the pleadings and supporting affidavits in the light most favorable to the plaintiff. See id.
A district court sitting in diversity must apply the forum state's law in determining whether it has personal jurisdiction over a defendant. See CutCo Indus., 806 F.2d at 365; Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963) (en banc); Clarendon, 152 F. Supp.2d at 515. The Court must determine whether the forum state's law allows the exercise of personal jurisdiction and, if so, whether doing so comports with constitutional due process guarantees. See Int'l Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945); Clarendon, 152 F. Supp.2d at 515.
New York State provides for both general and specific personal jurisdiction. The general provision, found in New York Civil Practice Law and Rules ("CPLR") § 301, empowers a court to "exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." CPLR § 301. Interpreting this provision, the New York Court of Appeals has concluded that a non-domiciliary defendant "is amenable to suit in New York courts under CPLR 301 if it has engaged in such a continuous and systematic course of `doing business' here that a finding of its `presence' in this jurisdiction is warranted." Landoil Resources Corp. v. Alexander & Alexander Servs., Inc., 565 N.E.2d 488, 490 (N.Y. 1990) (citations omitted). See also Frummer v. Hilton Hotels Int'l, Inc., 227 N.E.2d 851, 853 (N.Y. 1967); Simonson v. Int'l Bank, 200 N.E.2d 427, 429 (N.Y. 1964)). The test for "doing business" is fact-sensitive, see Landoil, 565 N.E.2d at 490, but even fairly substantial contacts can fail to satisfy the statute. See, e.g., id. at 491 (finding foreign corporation's underwriting of insurance policies sold in New York insufficient to constitute "doing business"). Factors to consider in a "doing business" inquiry include whether the defendant maintains offices and bank accounts, employs agents, and regularly solicits business in New York. See, e.g., Bryant v. Finnish Nat'l Airline, 208 N.E.2d 439, 441-42 (N.Y. 1965). As for "presence," the non-domiciliary must be present in New York "not occasionally or casually, but with a fair measure of permanence and continuity." Tauza v. Susquehanna Coal Co., 115 N.E. 915, 917 (N.Y. 1917) (Cardozo, J.). See also Landoil, 565 N.E.2d at 490.
There is no personal jurisdiction over any of the defendants under CPLR § 301 because none of them is present in New York as presence has been interpreted by the New York courts.
Taking the plaintiff's allegations to be true, the defendant Villa Abrille, neither a resident nor domiciliary of New York, pays for his son's New York apartment, maintains a bank account in the state, and travels to New York in connection with a beef exporting business. (Pl.'s Aff. ¶¶ 2-3, 6.) These contacts are insufficient to bring Villa Abrille within the scope of CPLR § 301. These contacts do not have the that fair measure of permanence and continuity such that Villa-Abrille could be considered "present" in New York to the extent that he could be sued in New York for anything he did throughout the world no matter how unconnected with New York. Simply paying a child's rent cannot reasonably constitute "doing business" under New York law. See, e.g., First Capital Asset Mgmt., Inc. v. Brickellbush, Inc., 218 F. Supp.2d 369, 393 (S.D.N.Y. 2002) (finding that foreign defendant's ownership and sale of a New York apartment, unspecified business transactions and New York bank accounts, did not constitute "doing business" under CPLR § 301); Falik v. Smith, 884 F. Supp. 862, 866 (S.D.N.Y. 1995) (finding that foreign defendant's agreement to indemnify third party for legal expenses arising out of New York lawsuit did not constitute "doing business" under CPLR § 301). Likewise, maintaining a single bank account — when it is not used to house "substantially all" of a defendant's business funds — will not support the exercise of general personal jurisdiction. See First Capital Asset Mgmt., Inc., 218 F. Supp.2d at 393; Georgia-Pacific Corp. v. Multimark's Int'l, Ltd., 706 N.Y.S.2d 82, 83 (App.Div. 2000). Lastly, Villa Abrille's business trips to New York regarding the beef exporting enterprise are also insufficient bases for subjecting him to personal jurisdiction. See, e.g., Savoleo v. Couples Hotel, 524 N.Y.S.2d 52, 52 (App.Div. 1988). Viewed in their totality, Villa Abrille's contacts with New York are insufficient to establish the kind of continuous and systematic presence that CPLR § 301 requires.
PDI, a foreign corporation headquartered in the Philippines, published the allegedly defamatory article. It owns no property, employs no agents, and maintains no bank accounts in New York. The plaintiff attempts to assert CPLR § 301 jurisdiction over PDI based on PDI's relations with two businesses that maintain New York offices. PDI buys news content from AP and pays Orientation Global to distribute PDI content to third parties. (Pl's Aff. ¶ 10; Palabrica Decl. ¶ 9.) These contacts, standing alone, fail to establish jurisdiction under CPLR 301. See Rolls-Royce Motors, Inc. v. Charles Schmitt & Co., 657 F. Supp. 1040, 1045-46 (S.D.N.Y. 1987) (noting that New York law is "clear that purchases in New York by a foreign defendant corporation of a major share of the merchandise to be sold at its place of business outside the state, even if systematic . . . do not warrant a finding that the defendant was present within the jurisdiction of New York" and collecting cases); Arbitron Co. v. E.W. Scripps, Inc., 559 F. Supp. 400, 402-03 (S.D.N.Y. 1983) (finding that newspaper's parent corporation purchasing of computer and advertising services in New York insufficient to constitute "doing business" under CPLR § 301); Dero Enterp., Inc. v. Georgia Girl Fashions, Inc., 598 F. Supp. 318, 321 (S.D.N.Y. 1984); see also Diesel Sys., Ltd. v. Yip Shing Diesel Eng'g Co., Ltd., 861 F. Supp. 179, 181-82 (E.D.N.Y. 1994) (finding foreign corporation's practice of purchasing goods from New York insufficient to establish personal jurisdiction).
The plaintiff also argues that PDI should be subject to jurisdiction in New York under CPLR § 301 because of its relationship with INQ 7, in particular, its 10% stock ownership. But a minority stock ownership standing alone is insufficient to establish jurisdiction under CPLR 301. For a parent corporation to be held to be doing business in New York, based on the presence of a subsidiary in New York, the subsidiary must be an agent or a "mere department" of the foreign parent. Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998). In this case, there is no proffer that INQ 7 was a subsidiary, an agent, or a mere department of PDI. In any event, INQ 7 could not be a basis for the presence of INQ 7 because INQ 7 itself has insufficient presence in this state for purposes of jurisdiction under CPLR § 301.
INQ 7, a foreign corporation, also owns no property, employs no agents, and maintains no bank accounts in New York. The plaintiff attempts to assert CPLR § 301 jurisdiction over INQ 7 based on INQ 7's relationships with New York corporations and the registered users of its website. INQ 7 sells advertising space on its website to a New York advertising agency, and sells content to Global Vision New Media, Inc., a news distributor. (Rufino Decl. ¶ 12.) In addition, up to 332 of INQ 7's 6,732 registered users, who register to receive e-mail bulletins of news articles on the website but who pay no fee for the service, live in New York. Like those of PDI, these contacts fail to satisfy CPLR 301. See Cornell v. Assicurazioni Generali, S.p.A., Nos. 97 Civ. 2262, 98 Civ. 9186, 2000 WL 284222, at *2 (S.D.N.Y. Mar. 16, 2000) (collecting cases and noting that "a firm does not `do business' in New York simply because New York citizens can contact the firm via the worldwide web"); Meteoro Amusement Corp. v. Six Flags, No. 02 Civ. 990, 2003 WL 21221959, at *5 (N.D.N.Y. May 27, 2003) ("[C]ourts in this circuit have repeatedly found that ownership and operation of a website within the district, without more, is not enough . . . for doing business pursuant to CPLR section 301."); In re Ski Train Fire in Kaprun, Austria, No. 01 Civ. 7342, 2003 WL 1807148, at *6 (S.D.N.Y. Apr. 4, 2003).
Olivares-Cunanan, the author of the article at issue here, claims never to have visited New York on assignment from PDI. (Olivares-Cunanan Decl. ¶ 2.) The plaintiff disputes this claim, asserting that Olivares-Cunanan has visited several times to cover visits of the president of the Philippines. (Pl.'s Aff. ¶ 8.) Even if these visits had occurred, such contacts fall far short of CPLR 301's requirements. See Liquid Carriers Corp. v. Am. Marine Corp., 375 F.3d 951, 953 (2d Cir. 1967); Rolls Royce, 657 F. Supp. at 1046; Savoleo, 524 N.Y.S.2d at 52 ("The mere periodic sending of corporate officers or employees into the State on corporate business is not enough to predicate a finding that a foreign corporate defendant is present for jurisdictional purposes.").
In sum, there is no jurisdiction under CPLR § 301 over any of the of the defendants. Therefore, this Court lacks general personal jurisdiction over the defendants.
New York also provides for specific personal jurisdiction, and the plaintiff argues that all of the defendants except Villa Abrille are subject to specific jurisdiction pursuant to CPLR 302(a)(1). That section authorizes jurisdiction where the defendant "transacts any business within the state or contracts anywhere to supply goods or services in the state." CPLR § 302(a)(1). As with all of the CPLR § 302 jurisdictional bases, the cause of action must arise from the specific jurisdictional basis, in this case, the defendant's specific business transactions in New York. See CPLR § 302(a). The New York Court of Appeals has interpreted this provision to require a defendant to have "engaged in purposeful activities" in New York, and that there be a "substantial relationship between the transaction and the claim asserted." Kreutter v. McFadden Oil Corp., 522 N.E.2d 40, 43-44 (N.Y. 1988).
Under the first prong of § 302(a)(1) jurisdiction, transacting business "has been interpreted to require a certain quality, rather than a specific quantity, of contacts with New York." Broad Horizons, Inc. v. Central Crude Ltd., No. 94 Civ. 1593, 1994 WL 623075, at *2 (S.D.N.Y. Nov. 9, 1994) (citation omitted); see also Int'l Customs Assocs., Inc. v. Ford Motor Co., 893 F. Supp. 1251, 1259 (S.D.N.Y. 1995), aff'd, 201 F.3d 431 (2d Cir. 1999); Cavalier Label Co., Inc. v. Polytam, Ltd., 687 F. Supp. 872, 876 (S.D.N.Y. 1988). "A nondomiciliary transacts business under CPLR § 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." CutCo Indus. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986) (quotations and citations omitted). "Whether or not the contacts are of the appropriate nature must be determined by an analysis of the totality of the circumstances." United States Theatre Corp. v. Gunwyn/Lansburgh Ltd. P'ship, 825 F. Supp. 594, 596 (S.D.N.Y. 1993) (citations omitted). See also Clarendon Nat'l Ins. Co. v. Lan, 152 F. Supp.2d 506, 516 (S.D.N.Y. 2001).
It is plain that there is no specific personal jurisdiction under CPLR § 302(a)(1), for defamation based on the allegedly defamatory article because that claim did not arise from the defendants' specific business transactions in New York.*fn2
With respect to PDI, the two corporations with which PDI does business had nothing to do with the publication or distribution of the article at issue here. (Palabrica Decl. ¶ 12.) The article was not provided to PDI by Associated Press and there is no evidence it was distributed by Orientation Global. (Id.) The plaintiff does not disagree. Consequently, PDI is not subject to jurisdiction under CPLR § 302(a)(1).*fn3
INQ 7 is similarly beyond the coverage of CPLR § 302(a)(1). The specific business transactions that INQ 7 has with New York business are not such that the claim of defamation can be said to arise from those relations such that there is a "substantial relationship between the transaction and the claim asserted." Kreutter, 522 N.E.2d at 43. The New York advertising agency that buys space on the website is not alleged to have anything to do with the article here, nor has the plaintiff disputed INQ 7's claim that the New York news distributor did not purchase the article for redistribution to other media outlets. (Rufino Decl. ¶ 12.)
That leaves the issue of whether the sheer availability of the article on INQ's website, where it can be downloaded in New York at no cost, and the existence of 332 non-paying e-mail registrants, could be considered the transaction of business in New York and whether the claim of defamation arose from that availability.
In Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549 (S.D.N.Y. 2000), the Court addressed the question of what type of internet activity would be sufficient to permit the exercise of personal jurisdiction over a defendant pursuant to CPLR § 302(a)(1). The Court found that the various uses of an internet website fall within three basic categories along a spectrum. At one end of the spectrum are the uses of the internet where the "defendant makes information available on what is essentially a `passive' web site" and the defendant's use of the website is akin to taking out an advertisement in a newspaper with national circulation. Id. at 565. The use of a passive website traditionally did not create personal jurisdiction over a defendant under § 302(a)(1). Id. (collecting cases).
The other end of the spectrum are those cases where the defendant "clearly does business over the internet, and where it knowingly and repeatedly transmits computer files to customers in other states." Id. This category can be the basis for specific jurisdiction under § 302(a)(1) for a claim arising from that business activity. The third category of internet activity that the Court identified was a "middle category" on the spectrum where "the defendant maintains an interactive web site which permits the exchange of information between users in another state and the defendant." Id. The existence of jurisdiction in this middle category of cases depends on the nature and the frequency of activity of the defendant. Citigroup, 97 F. Supp. at 565.
In Citigroup, a defendant, City National Bank ("City National"), maintained two websites related to City National's mortgage lending activities. One website involved more than the posting of information regarding mortgages, and permitted customers in New York to apply for mortgages, to speak to representatives regarding mortgage applications, and to email representatives from City National. Id. The Court found that City National's activity in connection with the mortgage lending business fell within the middle category on the spectrum of possible internet uses, and that the level and nature of the activity engaged in by City National with respect to possible borrowers residing in New York subjected City National to personal jurisdiction under CPLR 302(a)(1) for those activities. Id. at 565-66.
In this case, the record reflects that there was no interaction between readers and the defendant INQ 7 in connection with the article. In this regard the web site could be considered to be a passive one, and therefore could not be considered the transaction of business so as to create jurisdiction under § 302(a)(1).
In addition, INQ 7 does have links to other websites that sell merchandise. (Rufino Decl. ¶ 8.) But INQ 7 does not sell any of its own products and does not ship any products to New York. INQ 7 is paid an advertising fee for allowing the links to be used but does not receive any share of the revenue derived by the advertisers from the sale of the products. (Id.) While those advertising links may cause the web site to fall within the middle ground of possible jurisdiction, the claim in this case, unlike the claim in Citigroup, does not arise from that set of interactive links. It arises solely from the aspect of the website from which anyone — in New York or throughout the world — could view and download the allegedly defamatory article. Because the publication of the article was not the transaction of business in New York or contracting to supply goods or services in New York, it cannot be the basis of jurisdiction under CPLR 302(a)(1). Cf. Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 156 (2d Cir. 1996) (holding that defendant did not "transact business" under § 302(a)(1) where defendant's alleged defamation of his employer was unrelated to the defendant's business activities in New York).
Olivares-Cunanan is also not subject to jurisdiction under CPLR 302(a)(1). Not only is it unclear, as noted above, whether she has ever even traveled to New York on business, but it is undisputed that none of those visits gave rise to the claim here. Olivares-Cunanan interviewed Villa Abrille in Argentina and the article was date-lined "Buenos Aires." (Olivares-Cunanan Decl. ¶ 5.) There are no facts or allegations that the article was prepared or developed in New York. The reporter's activities did not involve New York and therefore could not give rise to jurisdiction under CPLR § 302(a)(1).
CPLR § 302(a)(1) reaches none of the defendants here. Therefore, this Court lacks specific personal jurisdiction.
There is no basis for personal jurisdiction over any of the defendants under New York law. Moreover, the exercise of jurisdiction in this case would violate the constitutional guarantee of due process because it fails to comply with "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945). See also Burnham v. Superior Court, 495 U.S. 604, 618 (1990); Asahi Metal Industry Co., Ltd. v. Superior Court, 480 U.S. 102, 105 (1987); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). That would be an independent, alternative basis for dismissal.
Under the Due Process clause, where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, (1) the defendant must have "purposefully directed" its activities to residents of the forum state, (2) the litigation must result from alleged injuries that "arise out of or relate to" those activities, and (3) the exercise of jurisdiction must be reasonable such that the exercise of jurisdiction would comport with "fair play and substantial justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 477 (1985). For the reasons explained above in analyzing the New York long-arm statute, specific jurisdiction would fail the constitutional test for due process because the defamation claim in this case did not arise out of or relate to any activities the defendants purposefully directed to the residents of New York. Moreover, the exercise of specific jurisdiction also fails to meet the third prong of the due process inquiry — the reasonableness requirement.
The "concept of `fair play and substantial justice' may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities." Burger King, 471 at 477-78. Factors regarding the fairness of asserting jurisdiction include "the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies." Id. at 477 (quoting World-Wide Volkswagen, 444 U.S. at 292) (internal quotations omitted).
Given these factors, exercising personal jurisdiction over the defendants in this case for this claim would be unconstitutional.
Each defendant would bear a substantial burden in litigating in New York. PDI and INQ 7 are Philippine corporations with no offices or employees in New York. (Palabrica Decl. ¶¶ 3, 5; Rufino Decl. ¶¶ 2, 5.) Olivares-Cunanan is a resident of the Philippines and claims never to have visited New York on business. (Olivares-Cunanan Decl. ¶ 2.) Finding the time and money to travel to New York for a potentially lengthy court action would certainly impose a great burden on these defendants. The burden is conceivably less onerous for Villa Abrille, whom the plaintiff claims visits New York often to see his children. (Pl.'s Aff. ¶ 3.) Villa Abrille is still, however, a citizen of the Philippines residing in Argentina. (Villa Abrille Decl. ¶ 2.) Although his burden in litigating a New York action might be less than that of his fellow defendants, it is still sizeable. In situations like these, the Supreme Court recommends transfer to a venue more convenient to the defendants. See Burger King, 471 U.S. at 477 (A "defendant claiming substantial inconvenience may seek a change of venue."). There is no change of venue that would be more convenient in the United States, but these considerations would also support a dismissal on the grounds of forum non conveniens. As the Supreme Court acknowledged, the transfer provision under 28 U.S.C. § 1404(a) for the convenience of parties and witnesses "embodies in an expanded version the common-law doctrine of forum non conveniens, under which a court in appropriate circumstances may decline to exercise its jurisdiction in the interest of the `easy, expeditious and inexpensive' resolution of a controversy in another [foreign] forum." Id. at 477 n. 20 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). The defendants' forum non conveniens motion is considered below.
New York has at most a minor interest in adjudicating this dispute. None of the defendants is a citizen of the state, nor even of the United States. The plaintiff claims to have recently moved to New York after his home in New Jersey burned down, but he does not indicate whether this is a temporary arrangement or one that will lead to New York becoming his place of domicile. (Pl.'s Aff. 1 12.) The claim itself involves an article published in a newspaper that does not even reach American shores, transmitted to New York computers by a foreign corporation doing a negligible amount of business in the state.
The plaintiff has an interest in obtaining convenient and effective relief, but his convenience must be measured against the other fairness factors here.
The interstate judicial system's interest does not meaningfully factor into the balance here, because the choice of forum is New York or the Philippines, and New York's interest is meager.
Likewise, the shared states' interest in furthering substantive social policies does not come into play because if New York has little interest here, it cannot be said that any other state has any more interest in adjudicating this dispute.
The Supreme Court has previously found, in a pair of decisions, Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), and Calder v. Jones, 465 U.S. 783 (1984), that subjecting out of state defendants to personal jurisdiction for claims of libel brought by plaintiffs in the states in which the plaintiffs resided and in which the libelous content was circulated is consistent with due process. In Keeton, the plaintiff, a New York resident, sued Hustler Magazine, Inc. ("Hustler") in New Hampshire for libel in connection with a series of articles published by Hustler. 465 U.S. at 772. Hustler was an Ohio Corporation, with its principal place of business in California, and its contacts with New Hampshire consisted solely of the sale in the state of 10 to 15,000 copies of its magazine every month. Id. The Supreme Court found that Hustler's "regular circulation of magazines in the forum State is sufficient to support an assertion of jurisdiction in a libel action based on the contents of the magazine." Id. at 773-74. The Court reasoned that because Hustler "continuously and deliberately exploited the New Hampshire market" it could anticipate being sued in New Hampshire for the contents of its magazine, regardless of the fact that the magazine was also available throughout the United States. Id. at 781.
In Calder, the plaintiff, a resident of California, sued the defendants for libel in connection with an article published in the National Enquirer and distributed in California. 465 U.S. at 784. The plaintiff sued the reporter who wrote the article, who was a resident of Florida that traveled frequently to California, and the editor and president of the National Enquirer, who was also a Florida resident. Id. at 785. The Court found that the exercise of jurisdiction over these two defendants by the state court in California was consistent with due process, reasoning that the defendants engaged in "allegedly tortious actions aimed at California." Id. at 789 (punctuation omitted). The alleged act of libel directed at the plaintiff was an "injury that would be felt by [the plaintiff] in the State in which she lives and works and in which the National Enquirer has its largest circulation." Id. at 790. Consequently, given the allegations of intentional acts directed at the plaintiff in California, the Court concluded that the defendants could reasonably expect to be sued in California, regardless of where the article was written or where the defendants resided. Calder, 465 U.S. at 790.
The nature of the contacts of the defendants PDI, INQ 7, or Olivares-Cunanen with New York are unlike the contacts of the defendants in either Calder or Keeton. PDI does not have any hard-copy circulation or indeed any news sales in New York, and unlike either Hustler or the National Enquirer, could not be said to be continuously or deliberately exploiting the market in which the article was being circulated, New York. See Keeton, 465 U.S. at 781. There is no showing that PDI derives any revenue from New York subscribers and the numbers of PDI readers in New York is small in comparison to the overall number of individuals who read PDI's articles published on INQ 7. Consequently, PDI could not be said to reasonably anticipate being haled into New York courts, given the nature of its circulation. Similarly, Olivares-Cunanen, as a writer who works for PDI, could not reasonably expect to be sued in New York, given the nature of PDI's circulation.
Finally, with respect to INQ 7, the fact that the allegedly libelous article is published on a website available to readers in New York is insufficient to exercise jurisdiction over INQ 7 consistent with due process. The "application of Calder in the [i]nternet context requires proof that the out-of-state defendant's [i]nternet activity is expressly targeted at or directed to the forum state." Young v. New Haven Advocate, 315 F.3d 256, 262-63 (4th Cir. 2002). In Young, the Court of Appeals for the Fourth Circuit found that although the defendant newspaper had placed an allegedly defamatory article, concerning the plaintiff's activities in Virginia, on a website accessible to Virginia readers, without any allegation or evidence that the posting was intentionally directed to Virginia residents, exercising jurisdiction over the defendant newspaper and its employees would not be consistent with due process. Id. at 263-64. "Something more than posting and accessibility is needed to `indicate that the [newspapers] purposefully (albeit electronically) directed [their] activity in a substantial way to the forum state.'" Id. at 263 (quoting Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998)). In this case, there is no prima facie showing that the defendant INQ 7's posting was directed towards the potential New York audience, so as to defame the plaintiff in the forum state. Extending Calder to the present case would result in a defendant who simply places allegedly defamatory information on a passive internet web state being "subject to personal jurisdiction in every State . . ." Young, 315 F.3d at 263 (quotations omitted). The defendant INQ 7 could not reasonably expect to be haled into New York based on the posting of an allegedly defamatory article, given the nature of the allegations in this case, the passive and comparatively few contacts of INQ 7 with subscribers located in New York, and the absence of any allegation of purposeful contact with respect to the forum state.
Thus, even if this Court could exercise personal jurisdiction over the defendants pursuant to New York law, doing so would violate the constitutional need to be mindful of traditional notions of fair play and substantial justice. See, e.g., Young, 315 F.3d at 263-64.*fn4
The defendants alternatively move to dismiss the complaint pursuant to the doctrine of forum non conveniens. "[T]he doctrine of forum non conveniens contemplates the dismissal of lawsuits brought by plaintiffs in their favored forum in favor of adjudication in a foreign court. Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 101 (2d Cir. 2000). Pursuant to the recent decisions of the Court of Appeals for the Second Circuit, resolution of a motion to dismiss based on forum non conveniens requires a three step analysis: first, determination of the degree of deference to be afforded to the plaintiff's choice of forum; second, analysis of whether an adequate alternative forum exists; and third, consideration of the private and public factors enumerated by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). See Iragorri v. United Tech. Corp., 274 F.3d 65, 73-74 (2d Cir. 2001) (en banc). Each step is discussed below.
As an initial matter, the Court must determine the degree of deference that should be afforded to the plaintiff's choice of forum in this case. See Iragorri, 274 F.3d at 70-73; accord Monegasque de Reassurances S.A.M. v. NAK Naftogaz of Ukraine, 311 F.3d 488, 498 (2d Cir. 2002); Dirienzo v. Philip Services Corp., 294 F.3d 21, 28 (2d Cir. 2002); Base Metal Trading SA v. Russian Aluminum, 253 F. Supp.2d 681, 693 (S.D.N.Y. 2003); Varnelo v. Eastwind Transport, Ltd., No. 02 Civ. 2084, 2003 WL 230741, at *6 & n. 13 (S.D.N.Y. Feb. 3, 2003). In Gulf Oil, the Supreme Court instructed that "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Gulf Oil, 330 U.S. at 508. The Second Circuit Court of Appeals has interpreted the Supreme Court's instruction to mean that "a court reviewing a motion to dismiss for forum non conveniens should begin with the assumption that the plaintiff's choice of forum will stand unless the defendant meets the burden of demonstrating" the factors discussed below. Iragorri, 274 F.3d at 71.
In Iragorri, the Court of Appeals clarified the degree of deference that courts should afford to a United States resident's choice of forum when that plaintiff files suit in a district other than the one in which the plaintiff resides. Iragorri, 274 F.3d at 71. The Court of Appeals sought guidance from two types of the Supreme Court's prior forum non conveniens cases, those involving a plaintiff who sued in a home forum, and those cases in which a foreign plaintiff brought suit in the United States. Id. at 71-72. Based on those precedents, the Court of Appeals concluded that:
The more it appears that a domestic or foreign
plaintiff's choice of forum has been dictated by
reasons that the law recognizes as valid, the greater
the deference that will be given to the plaintiff's
forum choice. Stated differently, the greater the
plaintiff's or the lawsuit's bona fide connection to
the United States and to the forum of choice and the
more it appears that considerations of convenience
favor the conduct of the lawsuit in the United
States, the more difficult it will be for the
defendant to gain dismissal for forum non
conveniens. . . . On the other hand, the more it
appears that the plaintiff's choice of a U.S. forum
was motivated by forum-shopping reasons . . . the
less deference the plaintiff's choice commands. . . .
Id. at 71-72.
The plaintiff here is an American citizen who works in New York, and is a resident of New Jersey, and recently moved to New York. (Pl.'s Aff. ¶ 12.) The plaintiff brought this action in the Southern District of New York.
The plaintiff's forum choice here merits great deference. The plaintiff's choice resembles a scenario the Iragorri Court imagined. The Court there posited that great deference would attach to the forum choice of a "plaintiff residing in New Jersey, who brought suit in the Southern District of New York, barely an hour's drive from the plaintiff's residence, because the defendant was amenable to suit in the Southern District but not in New Jersey." Id. at 72-73. The Court explained that a plaintiff's decision "to sue the defendant where the defendant has established itself and is thus amenable to suit . . . [does] not ordinarily indicate a choice motivated by desire to impose tactical disadvantage on the defendant." Id. at 73. Although the defendants here are far from being "established" in New York, this district is surely a more likely forum than New Jersey, with which the defendants appear to have no contact at all. It is therefore entirely reasonable that the plaintiff attempted suit in New York rather than in another state. In sum, this is a case in which the plaintiff's forum choice is a product of legitimate convenience considerations and, as such, deserves great deference.
The next step in the Court's forum non conveniens inquiry is to determine the availability of an adequate alternative forum. Ordinarily, this requirement "will be satisfied when the defendant is `amenable to process' in the other jurisdiction. In rare circumstances, however, where the remedy offered by the other forum is clearly unsatisfactory, the other forum may not be an adequate alternative. . . ." Acuinda v. Texaco, Inc., 303 F.3d 470, 476-77 (2d Cir. 2002) (quoting Piper, 454 U.S. at 255 n. 22). For the purposes of this case, all of the defendants have consented to suit in the Philippines.
The Philippines offers an adequate alternate forum for this case. All the defendants reside there and its laws support the availability of the plaintiff's cause of action in the Philippines. In correspondence submitted after the motion to dismiss was fully briefed, the plaintiff disputes that the Philippines is an adequate alternative forum in which to litigate this case, based upon allegations that the Philippines would not hear a case first brought in another country, that the Philippine courts are inadequate, and that there are political and security problems in the Philippines. The defendants have responded with a more persuasive expert affidavit showing the adequacy of the Philippine courts and the fact that those courts would hear this case. (See Decl. of Thomas O. Del Castillo Jr., dated June 5, 2003.) Multiple courts have dismissed cases on forum non conveniens grounds, after finding that the Philippines represents an adequate alterative forum. See, e.g., Transunion Corp. v. Pepsico, Inc., 640 F. Supp. 1211, 1215 (S.D.N.Y. 1986) (Weinfeld, J.), aff'd 811 F.2d 127 (2d Cir. 1987) (per curiam); Cruz v. Maritime Co. of Philippines, 549 F. Supp. 285, 289 (S.D.N.Y. 1982) (Leval, J.); Contact Lumber Co. v. P.T. Moges Shipping Co., Ltd., 918 F.2d 1446, 1450 (9th Cir. 1990). The only case cited by the plaintiff suggesting that the Philippines is an inadequate forum, Martinez v. Dow Chemical Co., 219 F. Supp.2d 719 (E.D. La. 2002), is clearly in the minority, and the weight of authority in this Circuit holds that the Philippines is an adequate forum. To the extent that the plaintiff argues that the Philippines is besiged with problems, including possible corruption in the Philippine courts, those alleged problems do not rise to the level of showing that the Philippines is an inadequate forum. See Base Metal, 253 F. Supp. at 706-09.
The fact that the Philippines is an adequate forum is reinforced by the fact that all the defendants have explicitly consented to jurisdiction in the Philippines and all the defendants have waived any statute of limitations defenses which arose after the current suit was brought. The plaintiff indicates that the defendants cannot waive the statute of limitations defense and the Philippine courts would not hear this case, regardless of any purported waiver by the defendants. Any problem with the Philippine courts not being amenable to hearing a case in which the statute of limitations has expired but the defense is waived, or indeed any basis for the Philippine courts not hearing this case, is alleviated by the fact that this Court has the power to enter a conditional dismissal of this case, allowing the plaintiff to return to this Court if the plaintiff pursued a claim in the Philippines within 60 days of the final dismissal and provided that the Philippine courts did not hear the case. However, because this case is being dismissed for lack of personal jurisdiction, and not solely on the grounds of forum non conveniens, it is not necessary to reach the question of whether a conditional dismissal is necessary.
Having considered the plaintiff's choice of forum and having found the Philippines to be an adequate alternative forum, the Court now weighs the remaining private and public interest factors set forth by the Supreme Court in Gilbert, 330 U.S. at 508-09. The private factors to be considered in this case are 1) the relative ease of access to sources of proof; 2) the convenience of willing witnesses; 3) the availability of compulsory process for attaining the attendance of unwilling witnesses; and 4) the other practical problems that make trial easy, expeditious, and inexpensive. See Gilbert, 330 U.S. at 508; accord Aguinda, 303 F.3d at 479. "In applying these factors, the court should focus on the precise issues that are likely to be actually tried, taking into consideration the convenience of the parties and the availability of witnesses and the evidence needed for the trial of these issues." Monegasque, 311 F.3d at 500 (internal quotation marks omitted).
The private interest factors favor dismissal for forum non conveniens. Because the allegedly defamatory article was written and edited if at all in Argentina and in the Philippines by a reporter who works primarily in the Philippines, and because the defendants have a substantial connection to the Philippines, and little or no connection to the United States, the witnesses and relevant documentary evidence are likely to be in the Philippines. As explained above, the defendants' relationship with the Philippines, and the fact that none of the defendants regularly conduct business in the United States in any systematic fashion indicates that litigating this dispute in New York would, in terms of both cost and money, be substantially inconvenient for the defendants. A libel suit would necessarily be focused on the reporter's interview of the Ambassador, what was said, what was reported, and the editing process of the article. All of the witnesses to that process would be available in the Philippines. The lawsuit may also involve the substance of the article and the truth of the contents of the article. The article itself contains allegations about activities in the Philippines, including activities of Philippine political figures. The plaintiff has not come forward with any indication that any witnesses or documents would be found in New York, other than the plaintiff's own presence, and does not explain why proceeding with this litigation in this Court would not be inconvenient and a hardship for the defendants. Finally, there is no basis to conclude that this Court could compel the presence of any of the witnesses for the purposes of this case. Consequently, the private interest factors counsel in favor of the dismissal of the case for forum non conveniens. See, e.g., Transunion Corp., 640 F. Supp. at 1216-17.
Similarly, an assessment of the public interest factors also counsels in favor of dismissal for forum non conveniens. The public interest factors to be evaluated are 1) court congestion; 2) avoiding difficult problems in conflict of laws and the application of foreign law; 3) the unfairness of imposing jury duty on a community with no relation to the case; and 4) the interest of communities in having local disputes decided at home. See Gilbert, 330 U.S. at 509; Aguinda, 303 F.3d at 480. New York has little or no relationship to this case, outside of the fact that the plaintiff practices law in New York and currently resides here. The dispute involves a claim of defamation in connection with an interview that was conducted in Argentina, published in the Philippines and that involved Filipino politics, and therefore the action's connection with New York is too insignificant to justify citizens of this district resolving the factual issues in dispute. See, e.g., Base Metal, 253 F. Supp.2d at 712. In addition, the case is likely to involve the application of the law of defamation of the Philippines, and the possibility of the application of this body of foreign law, while not dispositive, favors dismissal. Transunion, 640 F. Supp. at 1218; see also Base Metal, 253 F. Supp.2d at 712. Finally, as explained above in connection with the due process arguments, the interest of the Philippines in resolving this dispute is far greater than the plausible interest that New York has in connection with a claim of defamation arising out of an interview conducted abroad and printed in a foreign newspaper and involving allegations of corruption and Philippine politics.
An "action should be dismissed only if the chosen forum is shown to be genuinely inconvenient and the selected forum significantly preferable." Iragorri, 274 F.3d at 74-75. The only factor in the balance here that recommends suit in New York is the convenience to the plaintiff. Although his forum choice warrants great deference, it is in this case outweighed by every other consideration. As the Court of Appeals explained in Iragorri, "neither the plaintiff's citizenship nor residence, nor the degree of deference given to her choice of forum, necessarily controls the outcome . . . There is no rigid rule of decision protecting U.S. citizen or resident plaintiffs from dismissal for forum non conveniens." 274 F.3d at 74 (citations and quotations omitted). Accordingly, the defendants' alternative motion for dismissal pursuant to the doctrine of forum non conveniens would also warrant dismissal.
For the reasons explained above, the defendants' motion for dismissal for lack of personal jurisdiction is granted. The Court has carefully considered all the arguments presented by the parties. Any argument not expressly discussed above is either moot or without merit. The Clerk of the Court is directed to enter judgment dismissing the complaint and closing the case.