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Peter Paul Biro v. Conde Nast

August 10, 2012


The opinion of the court was delivered by: J. Paul Oetken, District Judge:


This is a diversity action for defamation and injurious falsehood. Plaintiff Peter Paul Biro was the subject of an article written by Defendant David Grann that appeared in the July 12-19, 2010 issue of the New Yorker magazine, published by Defendant Conde Nast, a Division of Advance Magazine Publishers Inc. (See Second Amended and Supplemental Complaint, Dkt. No. 27, Ex. A (the "Article").) Biro alleges that the Article was false and defamatory in a variety of respects. After the suit was initiated, Biro identified several other individuals and businesses that had reported or otherwise commented on the content of the allegedly defamatory Article, and he sought leave to file a supplemental complaint adding those individuals and businesses as defendants. The Court granted this request (Dkt. No. 19), and on December 5, 2011, Plaintiff filed the Second Amended and Supplemental Complaint. (Dkt. No. 27 (the "Complaint").)

Two of the new defendants, Theresa Franks and Global Fine Art Registry LLC ("FAR") (collectively, for purposes of this motion, "Defendants") have moved to dismiss the complaint against them under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. (Dkt. No. 56.) Biro opposes this motion and cross-moves for payment of the costs of service of process. (Dkt. No. 64.)

For the reasons that follow, the motion to dismiss by Defendants Franks and FAR is denied without prejudice to renewal of the motion after the parties have engaged in limited jurisdictional discovery. Biro's motion for payment of costs is denied.

I. Background

A more complete factual background of the case and the Article is contained in the Court's opinion on the motion to dismiss filed by Defendants Advance and Grann, issued on August 9, 2012. (See Dkt. No. 70.) The parties' familiarity with this background is assumed. Set forth below are facts relevant to this motion.

Biro, the subject of the Article, is a citizen of Canada in the business of art restoration and authentication. He is well known in the art world for having developed scientific approaches to art authentication through the analysis of fingerprints. He brought suit against the author and publisher of the Article.

Defendant Franks is a citizen of the state of Arizona.

Defendant FAR is a limited liability company headquartered in Arizona.

Franks was quoted extensively in the Article, and, based on the Article, appears to have been instrumental in the research and investigation into the reliability of Biro's authentication methods and findings. (See Article at 23-26.)

The Complaint*fn1 alleges that on the FAR website, Franks, writing about the Article, states that she is grateful to the author David Grann for his fine work and for including some material and videos that were a result of the investigation that Fine Art Registry® conducted in reference to Peter Paul Biro and his amazing ability to discover fingerprints of the Masters on everything he examines. If a fingerprint is needed, he will find it. FAR® began its probe into Biro and his dealings back in 2007 with some amazing results. There are more questions raised here than answered, however there will be more revelations to come! (Comp. ¶ 152.)

Later, Franks posted several articles to her website discussing the instant lawsuit. The first was posted on June 29, 2011, several days after this action was commenced, and was entitled "Pinhead Peter Paul Biro Awakens Sleeping Giants-Sues New Yorker Magazine and Award-Winning Writer David Grann and Takes Swipe at Fine Art Registry®." (Comp. ¶ 162.) In the posting, she states that "[t]he Complaint contains outrageous and fallacious allegations against David Grann and the New Yorker, and other parties, with no basis whatsoever in fact," and that the complaint "is amusing, in that it is written and crafted by Biro's lawyer in such a way to make Biro appear frightfully shady and quite guilty of wrongdoing." (Id.) In the same post, Franks wrote:

As far as the integrity of David Grann and the New Yorker magazine goes, in all the interviews that Fine Art Registry has given over the years to the media, we never had the pleasure of participating in an investigative article in which the fact-checking and legal scrutiny was of such a high caliber and so thorough as it was with the New Yorker magazine.

David Grann is a consummate professional and the New Yorker is, and always has been a well-respected magazine since 1925.

(Declaration of Richard A. Altman, Dkt. No. 63 ("Altman Dec."), Ex. A at 30.)*fn2

Several weeks later, she posted about the case once again. The Complaint contains the following excerpt from that post:

Oh, yes, it's going to get very messy as Fine Art Registry begins to fully expose Biro's participation in what appears to be a cleverly orchestrated sucker game valued at around $360,000,000, give or take a few million here or a few million there. Fine Art Registry believes that to an enormous degree of reasonable probability (according to the overwhelming evidence we have on file), Biro is hoping to deflect possible lawsuits against him for fraud and maybe even eventual criminal implications, by accusing David Grann and the New Yorker magazine of defamation. In other words, Biro doesn't want you to pay any attention to what's going on behind the curtain. Look over here everyone! Perhaps Biro thought no one would notice his sleight of hand, his abracadabra, his hocus pocus. Heck, if he could dodge a bullet or two and quell the fears of a few pissed-off investors and at the same time ring the bell on a nice fat settlement from the New Yorker--well, what could be better? If he can just keep all the balls in the air--he just might be able to pull it off and then he would be set for life and wouldn't have to worry about all those pesky little Jackson Pollock fingerprints, hairs, and DNA he can't help but to discover on all those canvases and stretcher bars that magically materialize with frequency, using his specially designed super duper fingerprint detection formula that no other latent fingerprint examiner in the world has ever heard of. (Comp. ¶ 164.)

Plaintiff claims that these postings are false and defamatory.

II. Motion to Dismiss

A. Motion to Dismiss under 12(b)(2)

When responding to a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), the plaintiff bears the burden of showing that the court has jurisdiction over the defendants. See Grand River Enters. Six Nations, Ltd. v. Pryor, 425 F.3d 158, 165 (2d Cir. 2005).

"In deciding a pretrial motion to dismiss for lack of personal jurisdiction a district court has considerable procedural leeway. It may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion." Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir. 1981). "Personal jurisdiction is necessarily a fact-sensitive inquiry dependent on the particulars of the case before the court." Gucci Am., Inc. v. Frontline Processing Corp., 721 F. Supp. 2d 228, 240-41 (S.D.N.Y. 2010) (citing PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997)). "[P]rior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith legally sufficient allegations of jurisdiction, i.e., by making a prima facie showing of jurisdiction." Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 184 (2d Cir. 1998) (internal citations and quotation marks omitted). "A plaintiff can make this showing through his own affidavits and supporting materials, containing an averment of facts that, if credited, would suffice to establish jurisdiction over the defendant." Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 208 (2d Cir. 2001) (internal citations, quotation marks and alterations omitted). "[W]here the issue is addressed on affidavits, all allegations are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor." A.I. Trade Finance, Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993); see also Rubinbaum LLP v. Related Corporate Partners V, L.P., 154 F. Supp. 2d 481, 486 (S.D.N.Y. 2001) ("Because there has not been an evidentiary hearing in this case, the plaintiff need only make a prima facie showing of personal jurisdiction over the defendant to survive a motion to dismiss, and the pleadings and any supporting affidavits are to be interpreted in the light most favorable to the plaintiff.") (citing PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997)).

"Personal jurisdiction of a federal court over a non-resident defendant is governed by the law of the state in which the court sits-subject, of course, to certain constitutional limitations of due process." Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 510 (2d Cir. 1994); see also DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) ("In diversity cases arising in this Circuit, personal jurisdiction is determined by the law of the state in which the district court sits, which in this case is New York." (citation omitted). Thus, the Court must engage in a "two-part analysis." Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). First, the court must look to the relevant jurisdictional statute of the forum state, in this instance New York. Whitaker, 261 F.3d at 208 (quoting Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997)). Then, "[i]f the exercise of jurisdiction is appropriate under that statute, the court must decide whether such exercise comports with the requisites of due process." Id.

B. New York Jurisdictional Statutes

New York State provides for both general and specific personal jurisdiction. Under the general jurisdiction statute, set forth in Section 301 of New York Civil Practice Law and Rules ("CPLR"), a plaintiff need not "establish a connection between the cause of action and the foreign defendant's business activities within the State, because the authority of the New York courts is based solely upon the fact" that the defendant is present in New York. McGowan v. Smith, 52 N.Y.2d 268, 437 N.Y.S.2d 268, 419 N.E.2d 321, 323 (1981). Under the specific jurisdiction statute, set forth in CPLR § 302, a plaintiff may rely on a lesser showing of contact between the defendant and the state, but must establish that the cause of action arose out of the defendant's contacts with the state. Id.

Plaintiff asserts that there is personal jurisdiction over FAR under both statutes, and over Franks under the ...

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