UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE
Scottsdale Capital Advisors Corp. and John Hurry
v. Civil No. 16-cv-545-JL Opinion No. 2017 DNH 186 The Deal, LLC and William Meagher
MEMORANDUM ORDER
This defamation action turns on whether this court has
specific personal jurisdiction over the defendants on the basis
of articles written by one and published by the other. The
plaintiffs, Scottsdale Capital Advisors Corp. and one of its
executive officers, John Hurry (collectively “Scottsdale”), have
brought this action based on an alleged injury wrought by a
publication, The Deal, LLC, and one of its writers, William
Meagher, through dissemination of three articles that,
plaintiffs allege, paint them in a false light. The plaintiffs
raise four state-law claims: defamation, invasion of privacy,
intentional interference with contractual relations, and
tortious interference with prospective economic advantage.
This court has subject-matter jurisdiction under 28 U.S.C.
§ 1332(a) (diversity). The defendants challenge this court’s
personal jurisdiction over them, however, and move to dismiss
the case on that basis. See Fed. R. Civ. P. 12(b)(2). After holding oral argument, permitting jurisdictional discovery, and
considering the parties’ supplemental briefing based on that
discovery, the court grants the defendants’ motion. Scottsdale
has failed to establish that defendants have the minimum
contacts with New Hampshire required for this court to exercise
personal jurisdiction over them in this action consistent with
the Fourteenth Amendment’s due process clause. Specifically,
the plaintiffs have not demonstrated that their claims are
related to the defendants’ forum-based activities or that the
defendants purposefully contacted New Hampshire such that they
could expect to answer for their actions here.
Applicable legal standard
“Personal jurisdiction implicates the power of a court over
a defendant . . . . [B]oth its source and its outer limits are
defined exclusively by the Constitution,” namely, the due
process clause of the Fourteenth Amendment. Foster–Miller, Inc.
v. Babcock & Wilcox Can., 46 F.3d 138, 143–44 (1st Cir. 1995)
(citing Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 702 (1982)); U.S. Const. amend. XIV. “To
establish personal jurisdiction in a diversity case, a plaintiff
must satisfy both the forum state’s long-arm statute and the Due
Process Clause of the Fourteenth Amendment.” C.W. Downer & Co.
v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir.
2 2014). New Hampshire’s applicable long-arm statute is
coextensive with federal due process limitations, allowing the
court to proceed directly to the due process inquiry. See
Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d 284, 287
(1st Cir. 1999).
To satisfy the requirements of due process, the defendants
must have sufficient “minimum contacts” with the forum “such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Int’l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945) (internal quotations
omitted). A court may exercise either general or specific
jurisdiction over the defendants. Scottsdale asserts that the
court has only specific jurisdiction over the defendants.1
Specific jurisdiction “is confined to adjudication of issues
1 Compl. (doc. no. 1-1) ¶¶ 6-8; Opp. to Mot. to Dismiss (doc. no. 18) at 6. Even had they asserted it, the plaintiffs have not demonstrated, and could not demonstrate, that this court has general jurisdiction over the defendants. “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). A corporation is “fairly regarded at home” for general jurisdiction purposes in its “place of incorporation and principal place of business.” Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). The defendants -- a resident of California and limited liability company which, like its sole member, is incorporated in Delaware and headquartered in New York -- have no such ties to New Hampshire.
3 deriving from, or connected with, the very controversy that
establishes jurisdiction.” Goodyear, 564 U.S. at 919 (internal
quotations omitted). “[T]he constitutional test for determining
specific jurisdiction . . . has three distinct components,
namely, relatedness, purposeful availment (sometimes called
‘minimum contacts’), and reasonableness.” Adelson v. Hananel,
652 F.3d 75, 80–81 (1st Cir. 2011) (internal quotations and
citations omitted).
Scottsdale bears the burden of demonstrating that these
three components are satisfied by “proffer[ing] evidence which,
if credited, is sufficient to support findings of all facts
essential to personal jurisdiction.”2 A Corp. v. All Am.
Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016) (quoting
Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008)).
“To satisfy the prima facie standard in a specific jurisdiction
case, a plaintiff may not rest on mere allegations but, rather,
must submit competent evidence showing sufficient dispute-
2 A district court may evaluate personal jurisdiction under one of three standards. See A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 & n.5 (1st Cir. 2016). The parties agree that the prima facie standard is appropriate here, and the defendants have not requested an evidentiary hearing. Under that standard, the plaintiffs need make only a prima facie showing that defendants are subject to personal jurisdiction. This is “the least taxing of these standards from a plaintiff's standpoint, and the one most commonly employed in the early stages of litigation.” Id. (quoting Rodriguez v. Fullerton Tires Corp., 115 F.3d 81, 83–84 (1st Cir. 1997)).
4 related contacts between the defendant and the forum.” Carreras
v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011). The
court “view[s] this evidence, together with any evidence
proffered by the defendant[s], in the light most favorable to
the plaintiff and draw[s] all reasonable inferences therefrom in
the plaintiff’s favor,” albeit without “credit[ing] bald
allegations or unsupported conclusions.” Id. This approach
informs the following factual summary.
Background
A. Genesis of the action
This dispute stems from a series of three articles written
by defendant Meagher and published by defendant The Deal in its
online business journal, The Deal Pipeline, on December 6, 2013,
March 20, 2014, and April 16, 2014.3 In these articles, Meagher
reported on an investigation by federal authorities, including
the Financial Industry Regulatory Authority (FINRA), into the
involvement of Scottsdale, a securities broker-dealer, in the
trading of stock in Biozoom Inc.4
3 Compl. (doc. no. 1-1) ¶¶ 9-11; Meagher Decl. Exs. A, B, C (doc. nos. 16-4, 16-5, 16-6). 4 In 2013, Scottsdale sued FINRA in Arizona, contending that FINRA’s investigations amounted to harassment. Scottsdale cited Meagher’s articles, and alleged their falsity, in its complaint in that action. See Meagher Decl. Ex. E (doc. no. 16-8) ¶¶ 192- 200, 208-209, 216.
5 The articles follow the course of the alleged investigation
and a related lawsuit, which Meagher characterized as a “pump-
and-dump case.”5 Meagher reported that individuals who traded in
Biozoom stock through Scottsdale “enjoyed perks that were not
available to other Scottsdale clients,” such as paying a lower
percentage per transaction than typical clients, placing orders
through instant messaging, and wiring funds to institutions
located outside the United States and Argentina, where the
clients were located.6 He cited a source familiar with the
investigations as indicating that “several red flags were raised
regarding the Biozoom trades at Scottsdale,” but that “no
follow-up occurred at the broker-dealer . . . .”7
Scottsdale filed this action on November 18, 2016, within
New Hampshire’s three-year statute of limitations for defamation
claims. See N.H. Rev. Stat. Ann. § 508:4, II. Scottsdale
alleges that all three articles contain false statements about
the plaintiffs.8 Specifically, it contends that the plaintiffs
“had not been under any criminal or regulatory investigation at
the time Mr. Meagher’s articles were published . . . . were not
5 Meagher Decl. Ex. B (doc. no. 16-5). 6 Meagher Decl. Ex. A (doc. no. 16-4). 7 Id. 8 Compl. (doc. no. 1-1) ¶¶ 9-12.
6 involved in any ‘pump and dump scheme’ and never gave special
treatment to Biozoom shareholders.”9
B. The parties’ contacts with the forum
Though not dispositive of the personal jurisdiction
question for the reasons discussed infra, the court notes, as an
initial matter, that none of the parties to this action
possesses substantial connections to this state. Meagher
resides in California and, by his own account, has never visited
New Hampshire.10 The Deal is a limited liability company formed
under the laws of Delaware, with offices in New York,
California, and Washington DC.11 It employs no New Hampshire
residents.12 Its sole member, The Street, Inc., likewise
organized under Delaware law, maintains its principal place of
business in New York, and has no New Hampshire office.13
Nor do the plaintiffs have any connections to New
Hampshire. Scottsdale is an Arizona corporation with its
principal place of business in that state.14 Hurry, one of its
9 Id. ¶ 12. 10 Meagher Decl. (doc. no. 16-3) ¶ 2. 11 Lundberg Decl. (doc. no. 16-2) ¶ 2-3. 12 Id. ¶ 4. 13 Id. ¶ 5; Aff’t of Jurisdictional Facts (doc. no. 15-1) ¶ 2. 14 Compl. (doc. no. 1-1) ¶ 1.
7 executive officers, resides and does business in Nevada.15 The
plaintiffs do not allege that they conduct any business in New
Hampshire or on behalf of any New Hampshire-based clients.
Simply put, as the plaintiffs conceded at oral argument, they
sued in New Hampshire because its statute of limitations does
not time-bar their claims.16
The parties agree, therefore, that the court’s analysis
must turn on the defendants’ business-related contacts with the
forum. The parties do not dispute that those contacts -- to the
extent they exist -- would arise out of The Deal’s publication
of its online business journal, The Deal Pipeline, and
specifically its publication of the three allegedly defamatory
articles, to any residents of New Hampshire. The jurisdictional
discovery conducted by the parties sketches the contours of that
publication in this state.
The Deal Pipeline is an online business journal.17
Institutional organizations and individuals (though
predominantly the former) must subscribe to The Deal Pipeline to
access its full content through The Deal’s online portal or to
15 Id. ¶ 2. 16See Hrg. Tr. (doc. no. 22) at 27-29. This bears little relevance to the personal-jurisdictional analysis, of course, though does merit consideration under the reasonableness factors, as discussed infra Part III.C.3. 17 Lundburg Decl. (doc. no. 16-2) ¶ 6.
8 receive email newsletters18 containing links to articles
published in The Deal Pipeline.19 Because content on The Deal
Pipeline sits behind a pay wall, it is accessible only to those
with whom The Deal has entered into a subscriber agreement.
At the time it published Meagher’s articles, and in the
time since, The Deal has had only one subscriber in New
Hampshire -- Dartmouth College.20 According to The Deal’s
records, no user accessed these three articles through the
Dartmouth subscription.21 Nor did either of the two users of the
Dartmouth subscription who had signed up to receive “The
DealFlow Report” at the time the articles were published open
the attachments containing links to the March 25 or April 22
articles; and no evidence suggests either opened the attachment
containing a link to the December 10 article.22 Indeed,
18The Deal’s email newsletter, “The DealFlow Report,” is circulated as an attachment to emails sent only to registered users of The Deal who have also signed up to receive this specific newsletter. 19 Id. ¶¶ 11-12. 20Id. ¶ 14; Susman Aff’t Ex. 1 (doc. no. 29-2) at 10. The plaintiffs focused their request for jurisdictional discovery on the subscriber agreement between The Deal and Dartmouth. 21 Lundburg Decl. (doc. no. 16-2) ¶¶ 18-22. 22Links to the articles also appeared in editions of The Deal’s email newsletter, “The DealFlow Report,” on December 10, 2013, March 25, 2014, and April 22, 2014. Susman Aff’t Ex. 1 (doc. no. 29-2) at 7-8.
9 according to data collected through Google Analytics,23 not a
single user who read these articles through The Deal’s online
portal was located in New Hampshire.24
Because no evidence suggests that anyone in New Hampshire
-- Dartmouth-affiliated or otherwise -- viewed the three
allegedly-defamatory articles, the plaintiffs focus on other
contacts between The Deal and Dartmouth. For example, The Deal
solicited Dartmouth’s subscription, and renewals thereof,
through emails and telephone calls specifically directed at
Dartmouth.25 Furthermore, during the time period between
January 1, 2013 and June 2017, 81 individuals were registered to
use The Deal’s online portal under Dartmouth’s subscription.26
Approximately 30 to 40 students each year were permitted to
access The Deal’s online portal via IP authentication (that is,
23Google Analytics is a service, offered by Google, that assists a website owner in tracking, reporting, and analyzing its website traffic. See Google Analytics Solutions - Analytics Features, https://www.google.com/analytics/analytics/features/ (last visited Sept. 5, 2017). 24 Susman Aff’t Ex. 1 (doc. no. 29-2) at 9. 25See, e.g., Susman Aff’t Ex. 3 (doc. nos. 29-4 and 29-5); id. Ex. 1 (doc. no. 29-2) at 4-5. 26Susman Aff’t Ex. 1 (doc. no. 29-2) at 5. There were only “30 active users” registered to access The Deal through Dartmouth’s subscription “[d]uring the time in which the [a]rticles were published,” however. Id.
10 without entering a log-in name or password).27 The Deal
registered a total of 7,232 “sessions” by Dartmouth users
visiting its online portal during this time period.28 The Deal
also communicated directly with between 32 and 48 individuals at
Dartmouth by email during this time,29 including regular
circulation of “The DealFlow Report” to the two Dartmouth-
affiliated individuals who had signed up for it.
Analysis
“[T]he constitutional test for determining specific
jurisdiction . . . has three distinct components, namely,
relatedness, purposeful availment (sometimes called ‘minimum
contacts’) and reasonableness.” Adelson, 652 F.3d at 80–81
(internal quotations and citations omitted). The court
addresses these components in that order, see United States v.
Swiss Am. Bank, Ltd., 274 F.3d 610, 621 (1st Cir. 2001) (quoting
Phillips Exeter Acad., 196 F.3d at 288), and concludes that the
27 Id. at 5-6. 28The Deal defines a “session” as “an interchange of information between the user’s machine and The Deal’s online portal.” Id. at 6. As such, each “session” does not necessarily correspond to a unique view of a published article, and certainly does not correspond to a unique viewer. 29See Susman Aff’t Ex. 4 (doc. nos. 29-6, 29-7, and 29-8). Plaintiffs explain that The Deal sent one email to “more than 32 members of the Dartmouth community,” and another “to more than 16 members” thereof. Susman Aff’t (doc. no. 29-1) ¶ 5. It is unclear to what extent those recipient lists overlapped.
11 plaintiffs have not made a prima facie showing that this court
may exercise personal jurisdiction over the defendants.
A. Relatedness
To satisfy the relatedness requirement, a suit must “arise
out of, or be related to, the defendant's in-forum activities
. . . .” Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 206
(1st Cir. 1994). The burden is on the plaintiffs to “show a
nexus between [his] claims and the defendants’ forum-based
activities. Although this is a ‘relaxed standard,’ it
nevertheless requires [the court] to hone in ‘on the
relationship between the defendant and the forum.’” A Corp.,
812 F.3d 54, 59 (1st Cir. 2016). This requirement “ensures that
the element of causation remains in the forefront of the due
process investigation” and “authorizes the court to take into
account the strength (or weakness) of the plaintiff's
relatedness showing in passing upon the fundamental fairness of
allowing the suit to proceed.” Ticketmaster-N.Y., 26 F.3d at
207.
Scottsdale focuses its relatedness argument on The Deal’s
ongoing business relationship in New Hampshire through its
subscription agreement with Dartmouth.30 If this action arose
30See Opp. to Mot. to Dismiss (doc. no. 18) at 13-14; Supp. Opp. (doc. no. 29) at 8-9.
12 out of that agreement itself -- that is, if this were an action
for breach of contract -- the court would evaluate the parties’
“‘prior negotiations and contemplated future consequences, along
with . . . the parties’ actual course of dealing . . . in
determining whether the defendant’ has minimum contacts with the
forum” arising from that contract. Swiss Am. Bank, 274 F.3d at
621 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478
(1985)). The existence of the contract, “by itself, cannot
automatically establish” the defendants’ contacts with the forum
giving rise to relatedness, however. Id. It is “but an
intermediate step serving to tie up prior business negotiations
with future consequences which themselves are the real object of
the business transaction.” Id. (quoting Burger King, 471 U.S.
at 479) (analyzing minimum contacts in the relatedness
context)).
The contract and The Deal’s efforts to obtain it are less
relevant in this instance because the plaintiffs’ cause of
action does not arise from the contract itself. It lies in tort
-- specifically, defamation arising from the publication of
purportedly defamatory news articles. “The tort of libel is
generally held to occur wherever the offending material is
circulated,” because the “reputation of the libel victim may
suffer harm even in a state where he has hitherto been
anonymous.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 777
13 (1984). The evidence establishes that the particular articles
at issue in this case -- the “offending material” -- though
theoretically accessible to Dartmouth-affiliated individuals
because of the subscription agreement, were never accessed by
any such individuals via that agreement, or by any other
individual in New Hampshire. Absent any viewing of the
allegedly-libelous statements in New Hampshire, the plaintiffs’
reputations in New Hampshire cannot have been blemished by the
articles’ publication.
The plaintiffs therefore have not met their burden of
demonstrating that their claims “directly arise out of, or
relate to” the defendants’ New Hampshire activity. See Sawtelle
v. Farrell, 70 F.3d 1381, 1389 (1st Cir. 1995); see also
Christian v. Barricade Books, Inc., 2003 DNH 78, 8-9 (Barbadoro,
J.) (relatedness requirement not satisfied where book sold into
New Hampshire was returned to the defendant, uncirculated).
Even had the plaintiffs carried that burden, their personal
jurisdiction argument would fail at the next step.
B. Purposeful availment
The purposeful availment element “is only satisfied when
the defendant purposefully and voluntarily directs his
activities toward the forum so that he should expect, by virtue
of the benefit he receives, to be subject to the court's
14 jurisdiction based on these contacts.” Swiss Am. Bank, 274 F.3d
at 624. The Supreme Court has adopted, and the First Circuit
Court of Appeals has employed, “an effects test for determining
purposeful availment in the context of defamation cases.”
Noonan v. Winston Co., 135 F.3d 85, 90 (1st Cir. 1998) (citing
Calder v. Jones, 465 U.S. 783, 789 (1984)). This test, unlike
that for relatedness, focuses on the location at which the
effects of the alleged defamation are directed and where they
are felt. Id. It is ordinarily “to be applied only after the
relatedness prong has already been satisfied.” Swiss Am. Bank,
274 F.3d at 623. While the plaintiffs have not made that
showing here, the court addresses the purposeful availment
element in the interest of completeness.
Scottsdale argues that the analysis outlined in Calder v.
Jones is inapposite here because, unlike the plaintiff in that
case, Scottsdale is not a resident of the forum.31 It argues,
instead, that the court should analyze this requirement under a
different defamation case, Keeton v. Hustler Magazine, Inc., 465
U.S. 770 (1984), which dealt with a non-forum plaintiff’s libel
claim.
31Opp. to Mot. to Dismiss (doc. no. 18) at 8 n.3. Scottsdale has offered no authority for this proposition, however. It distinguishes a recent decision by this court, Reynolds v. InVivo Therapeutics Holdings Corp., 2016 DNH 214, on the same grounds.
15 The court notes at the outset that the plaintiff’s
residence does not appear to be dispositive under either Calder
or Keeton.32 Rather, in finding personal jurisdiction, both
cases focus on the extent of the activities that an out-of-state
defendant intentionally directs toward the forum state and the
extent to which effects of that conduct were felt in the forum
state. Whether the plaintiff resides in the forum is only one
factor in that analysis.
The plaintiff in Calder, a libel action, resided in
California, where she bought suit against two reporters based in
Florida. 465 U.S. at 785. The Supreme Court found personal
jurisdiction over the defendants in California because
“California [was] the focal point both of the story and of the
harm suffered.” Id. at 789. The Court drew that conclusion
from the extent of the reporters’ Florida-based conduct directed
toward California and the extent of the effects of that conduct
on the plaintiff’s reputation in that state. Id. at 789.
In Keeton, the Supreme Court likewise focused on the extent
of the defendant’s contacts with the forum -- specifically, the
thousands of magazines containing the allegedly-libelous
statements that it circulated in New Hampshire -- and the
32It is worth noting that Calder and Keeton, both written by then-Justice Rehnquist, issued on the same day.
16 effects of those contacts on the plaintiff’s reputation in New
Hampshire. 465 U.S. at 773–74 (“Respondent's regular
circulation of magazines in the forum State is sufficient to
support an assertion of jurisdiction in a libel action based on
the contents of the magazine.”). The plaintiff’s residence in
New York did not prevent her reputation from being harmed in New
Hampshire when the defendant purposefully circulated a large
number of magazines in this state, regardless of whether the
defendant also circulated the magazines (and thus harmed the
plaintiff) in other states. Id.
Applying the same analysis here, the court finds that the
plaintiffs have not satisfied the purposeful availment prong.
First, the circulation of the allegedly-defamatory articles in
New Hampshire is negligible. See Noonan, 135 F.3d at 91 (“The
size of a distribution of offending material helps determine
whether a defendant acted intentionally.”). Though some 7,000
members of the Dartmouth community theoretically had access to
The Deal Pipeline, the plaintiffs do not dispute the defendants’
representation that only 30 users were signed up to use that
subscription to access The Deal’s online portal at the time the
articles were published, and that only two users actually
received an email newsletter containing active links to the
articles. Such “thin distribution may indicate a lack of
purposeful contact,” and it appears to do so here. Id.
17 Regardless of the number of individuals who could have
accessed the offending articles through Dartmouth’s subscription
to The Deal Pipeline, the evidence presented suggests that none
did. Unlike in Keeton and Calder, where New Hampshire residents
read the allegedly libelous statements, presumably, damaging the
plaintiffs’ reputations, Scottsdale’s reputation in New
Hampshire cannot be impacted by the statements allegedly
published in New Hampshire if no one in New Hampshire saw the
statements. Though this fact is most relevant to the
relatedness analysis, it also supports the defendants’ position
that they did not purposefully direct the effects of the
allegedly-defamatory statements toward New Hampshire, and that,
in fact, those statements had no effect on the plaintiffs’
reputations in New Hampshire.
Setting the effects test aside,33 plaintiffs suggest that
the defendants purposefully availed themselves of the forum
under the analysis set forth in Zippo Mfg. Co. v. Zippo Dot Com,
Inc., 952 F. Supp. 1119, 1127 (W.D. Pa. 1997). In light of the
clear precedent from the Supreme Court and First Circuit Court
of Appeals setting forth the analysis for determining purposeful
availment in defamation actions, the court is disinclined to
33See Supp. Obj. (doc. no. 29) at 4-7 (failing to discuss this standard).
18 import a new or different standard applied, in Zippo, to
determine whether a defendant conducted business in the forum in
the context of a trademark infringement action. Even if the
court were so inclined, Zippo is distinguishable because the
defendant had “sold passwords to approximately 3,000 subscribers
in Pennsylvania and entered into seven contracts with Internet
access providers to furnish its services to their customers in
Pennsylvania.” Zippo, 952 F. Supp. 1126. No such evidence of
extensive, purposeful contact with New Hampshire exists here.
In light of the undisputed evidence of limited activity
directed by Meagher and The Deal at New Hampshire, and the
absence of any evidence that such activity had any effect on the
plaintiffs’ reputations in New Hampshire, the plaintiffs have
not satisfied the purposeful availment element.34
C. Reasonableness
The final variable in the specific jurisdiction calculus is
“whether the exercise of jurisdiction is reasonable . . . .”
Noonan, 135 F.3d at 89. In assessing reasonableness, the court
takes into account the following considerations:
34Because the plaintiffs have not demonstrated that circulation of The Deal Pipeline in New Hampshire amounts to purposeful availment by The Deal, the court need not address whether such circulation can be imputed to Meagher, as the plaintiffs contend. See Opp. to Mot. to Dismiss (doc. no. 18) at 4 n.2; Reply (doc. no. 20) at 5 n.6.
19 (1) the defendant’s burden of appearing [in the forum state], (2) the forum state’s interest in adjudicating the dispute, (3) the plaintiff’s interest in obtaining convenient and effective relief, (4) the judicial system’s interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.
A Corp., 812 F.3d at 61 (quoting Downer, 771 F.3d at 69).
Where, as here, the plaintiffs fail to satisfy the first two
elements of the due process inquiry -- relatedness and
purposeful availment -- the court “need not dwell on these so-
called ‘gestalt’ factors.” Id.; see also Ticketmaster-N.Y., 26
F.3d at 210 (“[T]he reasonableness prong of the due process
inquiry evokes a sliding scale: the weaker the plaintiff’s
showing on the first two prongs (relatedness and purposeful
availment), the less a defendant need show in terms of
unreasonableness to defeat jurisdiction.”). On balance, these
factors weigh against finding jurisdiction, particularly in
light of the plaintiffs’ history of serial litigation invoking
these claims.35
35Neither party addresses the last two factors -- “the judicial system’s interest in obtaining the most effective resolution of the controversy, and the common interests of all sovereigns in promoting substantive social policies.” A Corp., 812 F.3d at 61. The court would consider them neutral in any case.
20 1. The defendants’ burdens of appearance
The defendants’ burdens of appearing in New Hampshire and
the inconvenience to the plaintiffs weigh somewhat against
finding jurisdiction here. While that burden on The Deal, a
corporate defendant located in New York, is not heavy, the
burden on Meagher, an individual residing in California, may be.
Ticketmaster-N.Y., 26 F.3d at 210 (“The burden associated with
forcing a California resident to appear in a Massachusetts court
is onerous in terms of distance . . . .”); but see Sawtelle, 70
F.3d at 1395 (“this factor becomes meaningful only where a party
can demonstrate a ‘special or unusual burden’”).
“As the First Circuit has explained, however, the ‘burden
of appearance’ factor is important primarily because ‘it
provides a mechanism through which courts may guard against
harassment.’” R&R Auction Co., LLC v. Johnson, 2016 DNH 40, 23
(Barbadoro, J.) (quoting Ticketmaster-N.Y., 26 F.3d at 211).
This is not the first action that Scottsdale has brought against
the defendants for defamation. In May 2016, Scottsdale sued the
defendants in New York, where The Deal is located. It withdrew
that action on the eve of the deadline for defendants’ motion to
dismiss, forcing the defendants to incur the expense of drafting
that motion unnecessarily, and then filed this action in New
21 Hampshire.36 Scottsdale also sued FINRA in Arizona over its
investigations of Scottsdale.37 The defendants here suggest that
“the Plaintiffs’ primary strategic purpose” for bringing both
the New York and New Hampshire actions “was to coerce Defendants
into revealing the identity of Mr. Meagher’s confidential source
in the hopes that this information would bolster their case
against FINRA in Arizona.”38 Scottsdale does not deny -- nor
even address -- this allegation in its objection and did not do
so at oral argument. This factor, therefore, weighs heavily
against the reasonableness of this court finding personal
jurisdiction.
2. The forum state’s adjudicatory interest
Nor does New Hampshire have a strong interest in exercising
jurisdiction here. “The forum state has a demonstrable interest
36Mem. in Supp. of Mot. to Dismiss (doc. no. 16-1) at 7-8. At oral argument, plaintiffs’ counsel explained that he withdrew the New York case and refiled in New Hampshire because plaintiffs “had given [defendants] multiple months and months and months of extensions to file their motion [to dismiss], and in fact we were on the verge of giving them another one, and at that point we decided it was better to just dismiss the case and refile it here . . . [b]ased on the statute of limitations.” Hrg. Tr. (doc. no. 22) at 28-29. The purported connection between extensions of deadlines and a decision to withdraw a case on statute of limitations grounds after such grants escapes the court. 37 Mem. in Supp. of Mot. to Dismiss (doc. no. 16-1) at 7-8. 38Id. at 8-9. Plaintiffs filed their Arizona suit in November 2014. Meagher Decl. Ex. E (doc. no. 16-8).
22 in exercising jurisdiction over one who causes tortious injury
within its borders.” Ticketmaster-N.Y., 26 F.3d at 211. That
interest is “far less compelling,” however, where, as here, “the
acts comprising the defendants’” allegedly culpable conduct
“occurred almost entirely outside of New Hampshire.” Sawtelle,
70 F.3d at 1395; see also R&R Auction, 2016 DNH 195, 24-25
(assigning little weight to this factor where tort occurred
outside New Hampshire). This factor thus also weighs against
finding jurisdiction or, at best, is neutral.
3. The plaintiffs’ interest in obtaining relief
Scottsdale argues that its “interest in obtaining
convenient and effective relief” is “the most important of the
gestalt factors” and weighs in its favor because the statutes of
limitations have run in other potential fora.39 This factor does
weigh in the plaintiffs’ favor, but not as heavily as the
plaintiffs contend.
Their complaint in the Arizona action demonstrates that
the plaintiffs were aware, and asserted the falsity, of the
allegedly defamatory statements by November 2014.40 As of that
date, even “New York’s draconian one-year statute of limitations
39 Obj. to Mot. to Dismiss (doc. no. 18) at 16-17. 40 Meagher Decl. Ex. E (doc. no. 16-8) ¶¶ 192-200, 208-209, 216.
23 for libel,”41 as the plaintiffs describe it, had not yet run.
The plaintiffs’ decision to wait two years before suing in New
Hampshire under identical facts as those asserted in their
Arizona complaint undermines their reliance on this factor.
Conclusion
Scottsdale has not satisfied any of the elements of the
personal jurisdiction inquiry. They have not shown relatedness
because their claim for defamation did not arise from, and was
not related to, the defendants’ meagre connections with New
Hampshire. Nor does The Deal’s subscription contract with
Dartmouth, representing a minimal distribution of that online
business journal in New Hampshire, amount to a purposeful
availment of the forum on the defendants’ part, especially when
that account never accessed the allegedly defamatory articles.
The reasonableness factors, weighing on balance against a
finding of jurisdiction, are not grounds for personal
jurisdiction where the plaintiffs have not demonstrated
reasonableness and purposeful availment. The defendants’ motion
to dismiss for lack of personal jurisdiction42 is, therefore,
GRANTED. The clerk shall enter judgment accordingly and close
the case.
41 Obj. to Mot. to Dismiss (doc. no. 18) at 16. 42 Document no. 16.
24 SO ORDERED.
Joseph N. Laplante United States District Judge
Dated: September 8, 2017
cc: George R. Moore, Esq. Steven H. Frackman, Esq. Charles J. Harder, Esq. Christopher D. Hawkins, Esq. Jordan Susman, Esq. Elizabeth A. McNamara, Esq. John M. Browning, Esq. Steven M. Gordon, Esq.