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BEST VAN LINES, INC. v. WALKER

May 4, 2004.

BEST VAN LINES, INC., Plaintiff, -V- TIM WALKER, Defendant


The opinion of the court was delivered by: GERARD E. LYNCH, District Judge

OPINION AND ORDER

This defamation action in diversity arises out of defendant's publication on his website, MovingScam.com, of certain allegedly false information about plaintiff Best Van Lines, Inc. ("BVL"). Defendant, who is pro se, has moved this court by letter for dismissal based on lack of personal jurisdiction and, in the alternative, for a transfer of venue to the Northern District of Iowa.*fn1 Because it the Court lacks personal jurisdiction over the defendant, the motion to dismiss will be granted. I. Background

  Defendant Timothy Walker, a college student at Wartburg College in Waverly, Iowa, runs a consumer information website focused on exposing allegedly unfair practices of moving companies.*fn2 According to Walker, he created the site after a moving company (other than the plaintiff) cheated him on a move from Virginia to Nevada. (Reply at 1.) The complaint alleges that Walker posted information about BVL on MovingScam.com on or about August 5, 2003. The complained-of postings included a "Black List Report" on BVL, as well as a response posted by Walker to a consumer question regarding BVL, asserting that the company was out of compliance with various regulatory and licensing provisions. Upon learning of these postings, BVL contacted Walker's web hosting service, Edurus, to request that Walker's website be shut down. Walker claims that he removed the offending material from the site on August 25, 2003, after Edurus informed him that BVL was threatening litigation. (Walker Aff. at ¶ 5.) All told, the complained-of material was publicly posted for only twenty days.

  On August 26, 2003, BVL sued Walker for defamation in the Southern District of New York, asserting $500,000 in damages. Walker then sent a letter requesting that the case be transferred to the Southern District of Iowa, where he resides. BVL opposed transfer, arguing that its place of business and principal witnesses are in New York. In addition, BVL treated Walker's letter-motion as a motion to dismiss for lack of personal jurisdiction, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, asserting jurisdiction under New York CPLR § 302(a)(1) based on Walker's operation of the MovingScam website. Walker's reply brief then argued at length that personal jurisdiction was lacking, as he had no business contacts with New York, does not own property in New York, and "has never set foot in New York except once during 1999 when [he] attended a professional conference." (Reply at 2.)

 II. Personal Jurisdiction

  A. Legal Standard

  On a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), the plaintiff bears the burden of establishing jurisdiction. In re Magnetic Audiotape Antitrust Litigation, 334 F.3d 204, 206 (2d Cir. 2003). District courts have considerable discretion in determining how best to handle jurisdictional questions: they may decide the matter on the pleadings and affidavits, or through an evidentiary hearing, which in turn may be based either solely upon papers or through a proceeding at which evidence is taken. CutCo Industries. Inc. v. Naughton, 806 F.2d 361, 364-65 (2d Cir. 1986). The burden of proof required to demonstrate jurisdiction varies depending on the method the court uses for determining whether jurisdiction exists. Id. Where the court relies on affidavits and pleadings, before any discovery has taken place, the plaintiff "need only allege facts constituting a prima facie showing of personal jurisdiction." In establishing its prima facie case, the plaintiffs may rely on the complaint, affidavits, and other supporting materials, Marine Midland Bank. N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981), and courts must "construe the pleadings and affidavits in plaintiff's favor at this early stage." PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997): see also Hoffritz for Cutlery, Inc. v. Amajac. Ltd., 763 F.2d 55, 57 (2d Cir. 1985) (allegations of jurisdictional fact must be construed in the light most favorable to the plaintiff). "In contrast, when an evidentiary hearing is held, the plaintiff must demonstrate the court's personal jurisdiction over the defendant by a preponderance of the evidence." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996); see also CutCo, 806 F.2d at 364-65 (same).

  A federal court sitting in diversity may exercise jurisdiction over a foreign defendant if, first, the defendant is amenable to process under the law of the forum state, Omni Capital Int'l Ltd, v. Rudolf Wolff & Co., 484 U.S. 97, 105 (1987); Metropolitan Life Ins. 84 F.3d at 567, and second, the exercise of personal jurisdiction comports with due process under International Shoe Co, v. Washington, 326 U.S. 310 (1945), and its progeny. See Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963) (en banc) ("[T]he amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits, with `federal law' entering the picture only for the purpose of deciding whether a state's assertion of jurisdiction contravenes a constitutional guarantee."); Clarendon Nat'l Ins. Co. v. Lan, 152 F. Supp.2d 506, 515 (S.D.N.Y. 2001).

  Personal jurisdiction is asserted over defendant in this case under New York Civil Practice Law and Rules § 302(a)(1), New York's long-arm statute, which confers specific jurisdiction over "any non-domiciliary [who] transacts any business within the state or contracts anywhere to supply goods or services in the state." N.Y. CPLR § 302(a)(1). "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, 806 F.2d at 365 (alterations in original), quoting McKee Electric Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 382 (1967). Furthermore, jurisdiction is only proper under this statutory provision where the cause of action "arises out of the subject matter of the business transacted." Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549, 564 (S.D.N.Y. 2000); CutCo, 806 F.2d at 365 (same). "A suit will be deemed to have arisen out of a party's activities in New York if there is an articulable nexus, or a substantial relationship, between the claim asserted and the actions that occurred in New York."*fn3 Henderson v. I.N.S., 157 F.3d 106, 123 (2d Cir. 1998), citing Kronisch v. United States, 150 F.3d 112, 130 (2d Cir. 1998) (internal quotations omitted).

  Determining whether personal jurisdiction exists has become increasingly complex in the internet age. Although Second Circuit case law provides little guidance through this territory, Judge Sweet has aptly summarized the state of the law as it has developed around the country:
[T]he courts have identified a spectrum of cases involving a defendant's use of the internet. At one end are cases where the defendant makes information available on what is essentially a `passive' web site. This use of the internet has been analogized to an advertisement in a nationally-available magazine or newspaper, and does not without more justify the exercise of jurisdiction over the defendant. At the other end of the spectrum are cases in which the defendant clearly does business over the internet, such as where it knowingly and repeatedly transmits computer files to customers in other states. Finally, occupying the middle ground are cases in which the defendant maintains an interactive web site which permits the exchange of information between users in another state and the defendant, which depending on the level and nature of the exchange may be a basis for jurisdiction.
Citigroup, 97 F. Supp.2d at 565 (citations omitted); see also Zippo Mfg. Co. v. Zippo Dot Com. 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) (outlining framework for analyzing internet jurisdiction cases). Although this "sliding scale" model provides a useful guide to how courts have approached such claims in the recent past, it does not amount to a separate framework for analyzing internet-based jurisdiction, and traditional statutory and constitutional principles remain the touchstone of the inquiry. See Hy Cite Corp. v. Badbusinessbureau.com. L.L.C., 297 F. Supp.2d 1154, 1160-61 (W.D. Wise. 2004) (rejecting notion that sliding scale framework represents a "specialized test" for internet jurisdiction, but finding that "[t]he website's level of interactivity may be one component of a determination whether a defendant has availed itself purposefully of the benefits or privileges of the forum state"); Winfield Collection. Ltd, v. McCauley, 105 F. Supp.2d 746, 750 (E.D. Mich. 2000) ("[T]he need for a special Internet-focused test for `minimum contacts' has yet to be established. . . .[T]he ultimate question can still as readily be answered by determining whether the defendant did, or did not, have sufficient `minimum contacts' in the forum state.").

  B. Exercise of Jurisdiction over Defendant

  In asserting jurisdiction in the present case, plaintiff argues that defendant's website falls into the third, "middle ground" category of interactive websites because it includes "interactive communications with prospective BVL customers," allows viewers to post comments, and solicits donations. (P. Opp. 3-4; Compl. ¶ 7, 9). Plaintiff claims that defendant thus "does business" in New York for purposes of CPLR § 302(a). Defendant challenges personal jurisdiction on the ground that his website is primarily passive, that it is not a commercial enterprise, and that outside of the general availability of the website to New York visitors, he has had no further contacts with New York. While it is true that the website has certain interactive components, thus arguably placing it within the "middle ground," jurisdiction does not automatically follow from this categorization. Rather, although interactive websites may often support a finding of personal jurisdiction, Hsin Ten Enterprise USA. Inc. v. Clark Enterprises. 138 F. Supp.2d 449, 456 (S.D.N.Y. 2000), whether or not jurisdiction may be exercised depends upon the quantity and quality of a defendant's contacts with the forum state, in line with statutory authority and due process principles. The proper assertion of jurisdiction in this case thus depends on the actual interaction between New York viewers and Walker's website, and the nexus between those interactions and the asserted injury.*fn4

  The plaintiff's opposition papers indicate three interactions that might serve as potential bases for jurisdiction under CPLR § 302: the posting of the Black List Report, the editorial response to the visitor's question regarding BVL, and the solicitation of donations. Each will be analyzed in turn. 1. The Black List Report

  The first basis for personal jurisdiction is Walker's posting of the "MovingScam.com Black List Report" on BVL on or about August 5, 2003. The posting claimed, inter alia, that BVL "was performing interststate moving services without legal authority from the Federal Motor Carrier ...


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