United States District Court, S.D. New York
March 30, 2004.
PHILIP SELDON d/b/a BEST DEAL MAGAZINES and BIRDDOG ASSOCIATES, Plaintiffs, -against- DIRECT RESPONSE TECHNOLOGIES, INC. f/k/a DIRECT STUFF INC. d/b/a MYCOUPONS.COM, JASON WOLFE, BARB "DOE", and "JOHN DOE" 1-100, Defendants
The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge
OPINION AND ORDER
Philip Seldon, proceeding pro se, brings this diversity action
against Direct Response Technologies ("DRT") and Jason Wolfe
(collectively "defendants") alleging libel, violations of New York
General Business Law section 349, negligence, tortious interference with
business relations, and tortious interference with economic
advantage.*fn1 He seeks compensatory and punitive
damages. Defendants now move to dismiss the action for lack of
personal jurisdiction.*fn2 For the reasons set forth below, defendants'
motion is granted.
Philip Seldon is a citizen of the State of New York. See
Second Amended Complaint ("Compl.") ¶ 1. Seldon does business as
Birddog Associates, and Birddog Associates maintains the website
www.bestdealmagazines.com. Compl. ¶¶ 2, 4. DRT is a Delaware
corporation with its principal place of business in Pennsylvania.
See 56.1 Statement ¶ 3. Wolfe is the Chief Executive Officer
("CEO") of DRT, and a citizen of Pennsylvania. See Compl. ¶¶
Though the facts contained in the complaint are sparse and difficult to
follow, Seldon appears to allege that DRT maintains the website
www.mycoupons.com. The site includes message boards that allow users to
interact with each other, and post messages about online and offline
message boards"). See id. ¶¶ 11, 15. There are four
rules governing the message boards: (1) no defamation; (2) no vulgarity;
(3) no "destructive behavior"; and (4) no advertising. See id.
¶ 20. The Court's review of www.mycoupons.com reveals that the
website provides users with internet coupons that the site has discovered
via internet searches. Viewers can print the coupons, or access the
coupon codes, at no cost, though additional benefits are available to
paying members. Viewers can also subscribe to a "newsletter." Thus,
mycoupons.com has both passive and interactive content.
According to Seldon, on July 22-23, 2002, Tracy Lunt, a user, posted
(and DRT published) a message on the message boards, criticizing Seldon
and Best Deal Magazines. The posting warned others against giving money
to Best Deal Magazines, and claimed that Seldon threatened Lunt with
litigation if she refused to contribute $10,000 to his charity.*fn3
Seldon contends that the statement contained in Lunt's message is false
and defamatory. See id. ¶¶ 47-50. It is defendants' conduct
in publishing this allegedly defamatory material that gives rise to his
causes of action.
Seldon further alleges that Wolfe, acting in his capacity as CEO, has
solicited business in New York, and that Craig Campbell, a DRT executive,
solicited business in New York on January 22, 2002. See
id. ¶¶ 39, 40; see also Reply Affirmation of Philip
Seldon ("Reply Aff.") ¶¶ 5, 7. Finally, in his Reply Affirmation,
Seldon alleges that in March, 2002, he negotiated a contract with DRT,
the contract was sent to him at his New York office, and he submitted
payment to DRT in connection with the contract from his New York
office.*fn4 See id. ¶ 4. Seldon never describes the nature
of the alleged contract, but his submissions to the Court indicate that
this purported contract is the subject of an action against these very
defendants in Pennsylvania.*fn5 See id. ¶ 3. In any event,
the contract is not attached to the complaint, does not give rise to the
causes of action alleged, and apparently is unrelated to Seldon's claims.
II. APPLICABLE LAW
A. Legal Standard
Upon motion, a court is obligated to dismiss an action against a
defendant over which it lacks personal jurisdiction. See
Fed.R.Civ.P. 12(b)(2); see also In re Ski Train Fire in Kaprun, Austria on
November 11, 2000, 230 F. Supp.2d 403, 406 (S.D.N.Y. 2002).
Prior to discovery, a plaintiff challenged by a
jurisdiction testing motion may defeat the motion
by pleading in good faith legally sufficient
allegations of jurisdiction. At that preliminary
stage, the plaintiff's prima facie showing may be
established solely by allegations. After
discovery, the plaintiff's prima facie showing,
necessary to defeat a jurisdiction testing motion,
must include an averment of facts that, if
credited by the trier, would suffice to establish
jurisdiction over the defendant.*fn6
Ball v. Metallurgie Hoboken-Overpelt, S.A.,
902 F.2d 194
, 197 (2d Cir. 1990) (citation omitted); see also Metropolitan
Life Insur. Co. v. Robertson-Ceco. Corp., 84 F.3d 560, 566-67 (2d
Cir. 1995). Thus, although the court may consider materials outside of
the pleadings in considering a motion to dismiss pursuant to
Rule 12(b)(2), see Whitaker, 261 F.3d at 208; Hsin Ten,
138 F. Supp.2d at 452, it must credit the plaintiff's averments of
jurisdictional facts as true, see Met Life, 84 F.3d at 567.
The plaintiff bears the ultimate burden of establishing, by a
preponderance of the evidence, that the court has jurisdiction over
the defendant. See Kernan v. Kurz-Hastings, Inc., 175 F.3d 236
240 (2d Cir. 1999); Robinson v. Overseas Military Sales Corp.,
21 F.3d 502
, 507 (2d Cir. 1994).
B. Personal Jurisdiction
The determination of whether a federal court has personal jurisdiction
over a defendant is a two-step process. First, the court must
determine whether the plaintiff has shown that the defendant is subject
to personal jurisdiction under the forum state's laws. See Bensusan
Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997); Met
Life, 84 F.3d at 567. Second, the court must assess whether
its assertion of jurisdiction pursuant to the forum state's laws comports
with the requirements of due process.*fn7 See Bensusan, 126
F.3d at 27; Met Life, 84 F.3d at 567.
B. New York Law
In New York, sections 301 and 302(a) of the New York Civil Practice Law
and Rules ("C.P.L.R.") set forth the relevant law.
1. General Jurisdiction
Under section 301 of the C.P.L.R., New York subjects a foreign
corporation to general jurisdiction if it is "doing business" in the
state. See N.Y. C.P.L.R. § 301 (McKinney's 2003)*fn8. Under
this test, "a foreign corporation is amenable to suit in New York if it
is `engaged in such a continuous and systematic course' of `doing
business' here as to warrant a finding of its `presence' in this
jurisdiction." Aerotel Ltd. v. Sprint Corp., 100 F. Supp.2d 189,
191-92 (S.D.N.Y. 2000) (quoting Frummer v. Hilton Hotels Int'l
Inc., 19 N.Y.2d 533, 536 (1967)).
To determine whether a foreign corporation is doing business in New
York, courts focus on a traditional set of indicia: (1) whether the
company has an office in the state; (2) whether it has any bank accounts
or other property in the state; (3) whether it has a phone listing in the
state; (4) whether it does public relations work in the state; and (5)
whether it has individuals permanently located in the state to promote
its interests. See Wiwa v. Royal Dutch Petroleum Co.,
226 F.3d 88, 98 (2d Cir. 2000) (citing Hoffritz, 763 F.2d at
58; Frummer, 19 N.Y.2d at 537). However, these factors are only
intended to provide guidance they do not amount to a "formula"
for testing jurisdiction. As the Second Circuit has noted, "there is no
talismanic significance to any one contact or set of contacts that a
defendant may have with a forum state; courts should assess the
defendant's contacts as a whole" Met Life, 84 F.3d at 570
(emphasis in original); see also Landoil Res. Corp. v. Alexander
& Alexander, Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990)
("The Court must  analyze a defendant's connections to the forum state
`not for the sake of contact-counting, but rather for whether such
contacts show a continuous, permanent and substantial activity in New
York.'" (quoting Weinstein, Korn & Miller, New York Civil Practice,
¶ 301.16, at 3-32)).
B. Long-Arm Jurisdiction
1. Section 302(a)(1)
Under section 302(a)(1),*fn9 a court may exercise personal
jurisdiction over a nondomiciliary if "the nondomiciliary  transact[s]
business within the state, [and] the claim against the nondomiciliary 
arise[s] out of that business
activity." CutCo. Indus., Inc. v. Naughton,
806 F.2d 361, 365 (2d Cir. 1986). "A nondomiciliary `transacts business' under
C.P.L.R. 302(a)(1) when he `purposefully avails himself of the privilege
of conducting activities within New York, thus invoking the benefits and
protections of its laws.'" Id. (quoting McKee Elec. Co. v.
Rauland-Borg Corp., 20 N.Y.2d 377, 382 (1967)) (alterations
omitted); see also Fort Knox Music Inc. v. Baptiste,
203 F.3d 193, 196 (2d Cir. 2000) ("[T]he statute allows jurisdiction only
over a defendant who has purposefully availed himself of the privilege of
conducting activities within New York and thereby invoked the benefits
and protections of its laws.") (quotation marks and alteration omitted)).
A court's determination of whether a defendant "transacts business" in
New York is based on an assessment of the sum of the defendant's
activities. See Sterling Nat 7 Bank & Trust Co. of N.Y.
v. Fidelity Mortgage Investors, 510 F.2d 870, 873 (2d Cir. 1975).
2. Section 302(a)(2)
Under section 302(a)(2), personal jurisdiction over a non-domiciliary
may be asserted over a defendant that "commits a tortious act within the
state." N.Y. C.P.L.R. § 302(a)(2) (McKinney 2003). Notably, this
section explicitly excludes "cause[s] of action for defamation of
character arising from the act." Id. The Second Circuit has
interpreted section 302(a)(2) to "require that the tortious
act itself physically be performed within New York State."
Westvaco. Corp. v. Viva Magnetics Ltd., No. 00 Civ. 9399, 2002
WL 1933756, at *2 (S.D.N.Y. Aug. 20, 2002).
3. Section 302(a)(3)
Under section 302(a)(3), personal jurisdiction may be asserted over a
non-domiciliary if the non-domiciliary "commits a tortious act without
the state" injuring a person within New York, and either (i) "regularly
does or solicits business, or engages in any other persistent course of
conduct," or (ii) derives substantial revenue from interstate commerce
and expects or reasonably should expect the tortious act to have
consequences in the state. N.Y. C.P.L.R. § 302(a)(3) (McKinney 2003).
Like section 302(a)(2), section 302(a)(3) specifically excludes "cause[s]
of action for defamation of character arising from the act." Id.
C. Jurisdiction Based on Website Activity
"It is well settled that a court must examine the nature and quality of
a defendant's activity on its website to determine whether jurisdiction
is appropriate in New York." Alpha Int'l, Inc. v. T-Reprods.,
Inc., No. 02 Civ. 9586, 2003 WL 21511957, at *3 (S.D.N.Y. July 1,
2003) (quoting Mattel, Inc. v. Adventure Apparel, No. 00 Civ.
4085, 2001 WL 286728, at *3 (S.D.N.Y. Mar. 22, 2001)). Courts assessing
whether internet activity permits the exercise of personal
jurisdiction "have identified an array of fact patterns." Hsin
Ten, 138 F. Supp.2d at 456. At one end of the spectrum are
"passive" websites which display, but do not permit an exchange of,
information. "At the other end of the spectrum are cases in which the
defendant clearly does business over the Internet . . . Occupying the
middle ground are `interactive' websites, which permit the exchange of
information between the defendant and website viewers." Id.
"Most courts considering the significance of internet activity for the
exercise of personal jurisdiction have done so in the context of a
specific, rather than general, jurisdictional analysis." Citigroup
Inc. v. City Holding Co., 97 F. Supp.2d 549, 570-71 (S.D.N.Y.
2000). Thus, while a defendant's use of an interactive website may
support a finding of specific jurisdiction, Alpha Int'l, Inc.,
2003 WL 21511957, at *3; Zippo Mfg. Co. v. Zippo Dot Com,
952 F. Supp. 1119, 1124 (W.D. Pa. 1997); Hsin Ten, 138 F. Supp.2d at
456, it generally will not confer general jurisdiction over a defendant.
Where a cause of action arises from a posting on an internet website,
the fact that the posting appears on the website in every state will not
give rise to jurisdiction in every state. To the contrary, jurisdiction
will lie only if the posting is intended to target or focus on internet
users in the state where the cause of action is filed. See
Revell v. Lidov, 317 F.3d 467, 471 (5th Cir. 2002) (no
jurisdiction in Texas over New York defendant that maintained
website where purportedly defamatory article was published because there
was no evidence that the website targeted Texas internet users);
Barrett v. Catacombs Press, 44 F. Supp.2d 717, 729 (E.D.
Pa. 1999) (no jurisdiction in Pennsylvania over a nonresident defendant for
posting allegedly libelous information on an interactive website message
board because plaintiff failed to allege that defendant's comments
specifically targeted Pennsylvania users); Mallinckrodt Medical, Inc.
v. Sonus Pharmaceuticals, Inc., 989 F. Supp. 265 (D.D.C. 1998) (no
jurisdiction over nonresident defendant that purportedly posted
defamatory material on an AOL bulletin board where the material was not
sent to or from the District of Columbia and the subject of the message
was unrelated to the District of Columbia).
Seldon fails to allege sufficient facts giving rise to jurisdiction in
New York over DRT and Wolfe. According to Seldon, the defendants'
relationship with New York is, at most, limited to (1) occasional,
unspecified solicitation of business in New York; (2) negotiating from
Pennsylvania, via telephone, with Seldon, who was located in New York;
(3) mailing a proposed contract from Pennsylvania to Seldon, who was in
New York; and (4) maintaining
a website that contains interactive message boards.
A. There is No General Jurisdiction Over Defendants in New
Seldon has not alleged facts supporting jurisdiction pursuant to
section 301, because he has not alleged that defendants are "doing
business" in New York. Specifically, Seldon has not alleged that
defendants have an office in New York, have any bank accounts or other
property in New York, have a phone listing in New York, or permanently
use individuals in New York to promote DRT's interests. See
Wiwa, 226 F.3d at 98. Defendants do maintain a somewhat interactive
website that is available to New York users, but this alone does not give
rise to general jurisdiction. See Citigroup Inc., 97 F. Supp.2d
at 570-71. Given the lack of any allegation indicating a substantial
connection between defendants and New York, I cannot conclude that
defendants are "engaged in such a continuous and systematic course' of
`doing business' here as to warrant a finding of [their] `presence' in
this jurisdiction." Aerotel, 100 F. Supp.2d at 191-92 (quoting
Frummer v. Hilton Hotels Int'l Inc., 19 N.Y.2d 533, 536 (1967)).
B. There is No Long-Arm Jurisdiction Over Defendants
Although Seldon alleges that defendants solicit business in New York
and entered into a contract with him while he was in New York, Seldon's
causes of action do not arise out of any of this contract-related
activity. Instead, Seldon's
causes of action appear to arise entirely from defendants'
maintenance of a website that has interactive message boards available to
New York users. However, Seldon does not allege that the message boards
specifically target New Yorkers, or that defendants' publication of
Lunt's message on the boards was aimed at New York users. Thus, Seldon
fails to allege that defendants "purposefully availed [themselves] of the
privilege of conducting activities within New York, thus invoking the
benefits and protections of its laws," CutCo. Indus., 806 F.2d
at 365 (quoting McKee Elec. Co., 20 N.Y.2d at 382), because
interactive message boards alone do not give rise to long-arm
jurisdiction. See Revell, 317 F.3d at 471; Barrett,
44 F. Supp.2d at 729; Mallinckrodt Medical, 989 F. Supp. at
272-73. Therefore, section 302(a)(1) does not provide for jurisdiction
Finally, sections 302(a)(2) and (3) also fail to provide jurisdiction
over defendants because neither section 302(a)(2) or 302(a)(3) may be
invoked to support jurisdiction in defamation actions. See N.Y.
C.P.L.R. §§ 302(a)(2)-(3). Although Seldon also purports to state
causes of action for negligence, tortious interference with business
relations, and tortious interference with economic
advantage,*fn10 these claims do not result from a tortious act
physically performed by defendants within New York, as required by
section 302(a)(2). See Westvaco. Corp., 2002 WL 1933756, at *2.
And while the facts alleged in support of the negligence and tortious
interference claims may constitute tortious acts committed outside the
state that caused an injury in New York, Seldon has not alleged that
defendants either engaged in a persistent course of conduct in New York,
or derive substantial revenue from interstate commerce and expect or
reasonably should expect their tortious act to have consequences in the
state, as required by section 302(a)(3).
For the foregoing reasons, defendants' motion to dismiss for lack of
personal jurisdiction is granted, and this action is dismissed as against
DRT and Jason Wolfe. The Clerk of the Court is directed to close this
motion [docket # 17].