Counsel for Plaintiff Deer Consumer Products Park & Jensen LLP Robert Knuts, Esq.
Counsel for Defendant Alfred Little Eaton & Van Winkle LLP Martin Garbus, Esq. Joseph T. Johnson, Esq.
HON. CAROL ROBINSON EDMEAD, J.S.C.
In this defamation action by plaintiff Deer Consumer Products, Inc. ("Deer"), defendant Alfred Little ("Little") (appearing pseudonymously) seeks (1) to dismiss the complaint against him pursuant to CPLR 3211 (a)(8) for lack of personal jurisdiction and (2) to appear and/or proceed anonymously.
Deer, a Nevada corporation doing business in Guandong, China, is a publicly traded  company which manufactures and sells small home appliances. Deer alleges that Little authored several defamatory reports,  published on a website operated by Seeking Alfa, Ltd. ("SAL"),  an Israel-based company, as part of an overall scheme to artificially drive down the price of Deer's common stock in order to profit on short sales.
In support of his motion to dismiss, Little first argues that Deer's complaint against him should be dismissed for lack of personal jurisdiction because he does not reside or maintain a domicile in New York,  has not visited the United States within the last 12 months and did not reside here at the time of the commencement of this action. Further, jurisdiction cannot be based on New York's long-arm statute since CPLR 302 ((a)(2), tortious acts within the state and (a)(3), tortious acts without the state) specifically exempt claims for defamation. Furthermore, he does not "transact business" in New York within the meaning of New York's long-arm statute CPLR § 302 (a)(1), since posting outside New York of allegedly defamatory material on a website which can be accessed in New York, without more, does not subject him, a non-domiciliary, to jurisdiction in this state. The alleged defamatory statements did not take place in New York, were not about a New York resident (Deer), were published by a non-domiciliary company (SAL), and there are no allegations that Little purposefully transacts business in New York, which is "substantially connected" to the alleged defamation.
Further, Little argues that the court should permit him to appear or, if necessary, to proceed anonymously because (1) of the risk of retaliatory physical harm to him and others if his identity is disclosed and (2) he has the First Amendment right to anonymous speech.
As to the first ground, Little asserts that because he had previously publicly exposed corporate and government fraud and corruption in China, and because of the "well-documented abuses of official authority and lack of rule of law [in China], [his] personal safety and well-being would be in serious jeopardy if [his] true identity is disclosed" (Little Affidavit, ¶5). Little submits an affidavit with his name redacted, in which he states that he is "personally aware of five incidents [of direct threats or actual physical violence] involving people with whom [he] ha[s] associated in researching certain companies. Little asserts, that one of those associates told him that "the company staff" threatened him and "demanded to disclose the true name of Alfred Little" and struck him in the head with a gun. Further, according to Little, another associate told Little that he was held captive in a hotel room for three hours, while "they" threatened him to disclose the name of the person who hired him to do the research of the company. Thus, argues, Little, there exists a real risk of retaliatory physical harm to him and "others" in China, since his personal enemies in China are known to abuse their government connections (Little Affidavit, ¶¶5-7). Little further argues that, at this pleading stage, plaintiff is not prejudiced by non-disclosure of his identity and, at the very least, the Court should issue a protective order limiting disclosure of Little's identity solely to the court, i.e., in camera.
As to his First Amendment right to anonymous speech, Little argues that since Deer cannot show that its defamation claim has merit, the court should grant Little the right to proceed under the fictitious name and at the same time deny Deer's request to disclose Little's identity.
Deer opposes the motion, arguing that personal jurisdiction over Little exists based on his residence (CPLR §301), since Little states in the defamation reports at issue in this suit and in his LinkedIn website profile that he resides in New York and Shanghai (exhibits 1-3; 4 to Affirmation of Robert Knuts). Alternatively, the court's jurisdiction over Little may be based on New York's long-arm statute, CPLR §302 (a)(1), since Little can be deemed "transacting business" in New York, first, by virtue of maintaining an interactive website [blog] alfredlittle.com, and second, by entering into a short-sale transaction of the shares of Deer, which is a U.S.-listed company, trading on NASDAQ (National Association of Securities Dealers Automated Quotations), the headquarters of which are located in New York (exhibits 2, 3, 7 to Knuts Affirmation). Further, there is a requisite "substantial relationship" between Little's short-selling transaction of Deer shares and his defamatory statements concerning Deer, since Little allegedly published those statements in order to manipulate the public market for Deer common stock and obtain illicit profits on his short sales. 
Deer further argues that, if its jurisdictional evidence is insufficient to determined jurisdiction at this time, the Court should deny the motion without prejudice to renew following discovery pursuant to CPLR § 3211(d), which permits disclosure of essential jurisdictional facts which are within the exclusive control of the moving party.
Further, Deer argues that the court should deny Little's request to proceed anonymously and require him to disclose his true name. Little presented no evidence, other than his unsupported self-serving affidavit, of fear of physical harm or retaliation to support his request. Little's identity is "material and necessary" to the prosecution of Deer's defamation claim and if the court permits Little to proceed anonymously, Deer would be severely prejudiced in its ability to test Little's contentions concerning his residence and business activities in New York.
Moreover, argues Deer, this case does not involve claims of a personal or sensitive nature since Little's use of "the global internet to author and publish the knowingly false information about Deer, in whose common stock he admittedly held a short position, and therefore, stood to gain financially from wide dissemination of his defamatory statements against Deer" (Complaint ¶ 17), is alone sufficient to demonstrate a public interest in Little's identity.
Furthermore, argues Deer, Little cannot use the First Amendment's protection of anonymous speech as a shield from his tortious acts. The defamation claim against Little has merit since the complaint alleges that Little falsely publicly accused Deer of engaging in a fraudulent land transaction in China, causing Deer to suffer substantial damages. And in any event, Little does not argue that the complaint fails to state a cause of action or dispute the facts therein.
In reply, Little argues that his affidavit alone establishes that he is not subject to New York courts' jurisdiction. The online "biographies" of Little, on which Deer relies, are not competent evidence, since they are unsworn and can be "fictionalized" just like his pseudonym; and are inadmissible hearsay as derived from unidentified and uncorroborated sources.
Little denies that there is any indication that he transacts business in New York. Deer's complaint does not contain allegations with respect to his website [blog] alfredlittle.com, and in any event, there are no allegations that Little distributed said statements to anyone in New York.
Further, that Little is a short-seller of Deer stock listed on the NASDAQ, is no basis to subject him to New York jurisdiction. The NASDAQ is a computerized stock quotation system with which investors can buy and sell stocks on its exchange. There is no evidence or allegation that Little traded Deer stock by contacting a broker in New York or that he owns a brokerage account in New York. And, Little's alleged transaction of business in New York through his website, or by virtue of short-selling Deer stock, has no connection to Deer's defamation claim (based on the reports posted on SAL's website),  since Deer failed to show that said claim arose from Little's alleged stock transaction in New York.
Further, it is apparent that Deer seeks to disseminate Little's identity. Deer ignores Little's concern about his and other's safety and does not offer any assurances of agreeing to maintain Little's anonymity during the pendency of this motion or preliminary stages of litigation. The lack of details in Little's motion is motivated by caution not to reveal the identities of those associated with him since disclosure of their names "will lead to him, putting them all in danger" (id., p. 11). And, any potential prejudice can be minimized by a protective order.
I. Personal Jurisdiction
As the party seeking to assert personal jurisdiction, plaintiff bears the ultimate burden of proof on this issue (see Jacobs v Zurich Ins. Co., 53 A.D.2d 524, 384 N.Y.S.2d 452 [1st Dept 1976]; Marist Coll. v Brady, 84 A.D.3d 1322, 1323, 924 N.Y.S.2d 529 [2d Dept 2011]). On a motion to dismiss, however, courts do not require that the plaintiff make a prima facie showing of personal jurisdiction. Rather, to defeat such motion, plaintiff must only demonstrate that facts "may exist" to exercise personal jurisdiction over the defendant (see American BankNote Corp. v Daniele, 45 A.D.3d 338, 340, 845 N.Y.S.2d 266 [1st Dept 2007]; Ying Jun Chen v Lei Shi, 19 A.D.3d 407, 796 N.Y.S.2d 126 [2d Dept 2005]; CPLR § 3211[d]). And, to the extent that, in opposition to a motion to dismiss, the plaintiff seeks disclosure on the issue of personal jurisdiction pursuant to CPLR § 3211(d) "the plaintiff [... ] only needs to set forth a sufficient start, and show that its position is not frivolous" (Peterson v Spartan Indus., 33 N.Y.2d 463, 467 ; see Shore Pharm. Providers, Inc. v Oakwood Care Ctr., Inc., 65 A.D.3d 623, 624 [2d Dept 2009]; American BankNote Corp. v Daniele, 45 A.D.3d 338, 340, 845 N.Y.S.2d 266 [1st Dept 2007][plaintiffs' pleadings, affidavits and accompanying documentation made a "sufficient start" to warrant further discovery on the issue of personal jurisdiction]).
A. CPLR § 301: Domicile or Presence
CPLR 301 provides that "[a] court may exercise such jurisdiction over persons, property, or status as might have been exercised heretofore." This section codifies a court's power to exercise a "territorial, " or "presence" jurisdiction over a defendant (see Vincent C. Alexander, Practice Commentaries to CPLR 301 ), based on his domicile, on any cause of action regardless of where the claim arose (id.). "Domicile is not necessarily synonymous with residence, and one can reside in one place but be domiciled in another. Domicile is established by physical presence in a place in connection with a certain state of mind concerning one's intent to remain there" (Mississippi Band of Choctaw Indians v Holyfield, 490 U.S. 30, 48 ). Thus, a person can have multiple residences but can have only one domicile (Antone v General Motors Corp., 1984, 64 N.Y.2d 20, 30, 484 N.Y.S.2d 514, 518 ).
When the domicile of a party, as here, is in doubt, its determination requires an evaluation of all the circumstances of the case, including "current residence; voting registration and voting practices; location of personal and real property; location of brokerage and bank accounts; membership in unions, fraternal organizations, churches, clubs, and other associations; place of employment or business; driver's license and automobile registration; payment of taxes. No single factor is conclusive" (Wiest v Breslaw, Not Reported in F.Supp.2d, 2002 WL ...