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Opinion Corp. v. Roca Labs, Inc.

United States District Court, S.D. New York

January 30, 2015

OPINION CORP., Plaintiff,
v.
ROCA LABS, INC., et al., Defendants.

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge.

This declaratory judgment action is a defensive action by Plaintiff Opinion Corp., which owns and operates a consumer review website called "PissedConsumer.com." Plaintiff seeks a declaration that it is not liable to Defendants Roca Labs, Inc. ("Roca Labs") and Roca Labs Nutraceuticals USA, Inc. ("RLN") for posting negative consumer reviews about Defendants' product, the "Gastric Bypass Alternative." Defendants move to dismiss for lack of personal jurisdiction. For the following reasons, Defendants' motion is denied, and the case is transferred to the United States District Court for the Middle District of Florida.

BACKGROUND

The facts and quotations below are taken from Plaintiff's Amended Complaint ("Complaint") and assumed to be true for purposes of this motion.

Plaintiff Opinion Corp. is a New York corporation with its principal place of business in New York, New York.[1] Plaintiff owns and operates "PissedConsumer.com" (the "Web Site"), a consumer review site that "permits third party users... to post comments and criticisms of businesses and individuals." Plaintiff "does not, as a rule, edit, confine or vet the content of users' posts for accuracy."

Both Defendants are Florida corporations with their principal place of business in Sarasota, Florida. RLN describes itself on its website as the inventor of the "Gastric Bypass Alternative, " a nutraceutical product purported to be the "strongest non-surgical weight loss [nutraceutical product] in the world." "RLN sells [this product] to buyers nationwide, including, upon information and belief, in the State of New York, through its website."

When purchasing RLN's product, consumers are presented with - and presumed to agree to - terms and conditions on RLN's website. These terms include that customers "will not speak, publish, cause to be published, print, tweet, review, blog, or write negatively about RLN, or our products or employees in any way."

The Complaint alleges that "numerous dissatisfied customers have posted complaints" - including "[o]n information and belief, citizens of the State of New York" - on Plaintiff's web site. The Complaint estimates that approximately 71, 000 individuals have read negative reviews posted about Defendants on the Web Site. The Complaint further avers, "Upon information and belief, citizens of the State of New York have sought consumer reviews of the product in order to make informed decisions as to purchasing or using the product."

In a letter dated August 4, 2014, (the "First Demand Letter"), counsel purporting to represent Roca Labs wrote to Plaintiff and demanded that Plaintiff remove complaints about Defendants from the Web Site. The First Demand Letter "explicitly threatened litigation against plaintiff, was purposely directed at plaintiff in New York and towards New York and had the intent and effect of chilling the First Amendment rights of plaintiff, a New York corporation, as well as those citizens of the State of New York." The Complaint further alleges that the First Demand Letter "placed plaintiff, a New York corporation, in reasonable apprehension of an immediate and imminent frivolous lawsuit by Roca Labs in Florida, which is an inconvenient forum for plaintiff."

In a letter dated August 7, 2014, (the "Second Demand Letter") Roca Labs wrote to Plaintiff that "Roca has suffered damages in excess of $40 million" and accused Plaintiff of infringing trademarks and copyrights claimed by Defendants. In the Second Demand Letter, Defendants "demanded that, in order to avoid litigation, [Plaintiff] remove all postings about Roca Labs from [the Web Site], identify anonymous complainants and pay $100, 000 to Roca Labs to cover past expenses and future monitoring.'"

On August 12, 2014, Plaintiff filed this action, and subsequently filed the Amended Complaint on September 30, 2014. The Complaint alleges that the Court has personal jurisdiction over Defendants "because they are doing business in the State of New York or otherwise have engaged in acts and conduct purposefully directed toward plaintiff, a New York company whose principal place of business is in the State of New York." The Complaint further asserts that personal jurisdiction exists "because [Defendants] have purposefully availed themselves of the privilege of doing business in New York by entering into multiple contracts with New York residents, selling a significant number of products in New York, and further by virtue of their efforts to enforce contracts against New York residents."

On August 15, 2014 - shortly after this action was filed - Defendants filed an action against Plaintiff in Florida, based in part on the facts described above.

STANDARD

Defendants ask the Court to dismiss this action for lack of personal jurisdiction over them. "On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has [personal] jurisdiction over the defendant." Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996) (citing Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994)). "Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Id. at 566 (citation omitted). Where "a court relies on pleadings and affidavits, rather than conducting a full-blown evidentiary hearing, ' the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant." Distefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (citation omitted); accord Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999). "Such a showing entails making legally ...


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