Best Van Lines, Inc. v. Walker

• Decision Date: 26 June 2007
• Docket Number: Docket No. 04-3924-cv.
• Citation: 490 F.3d 239
• Parties: BEST VAN LINES, INC., Plaintiff-Appellant, v. Tim WALKER, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

490 F.3d 239

BEST VAN LINES, INC., Plaintiff-Appellant, v. Tim WALKER, Defendant-Appellee.

Docket No. 04-3924-cv.

United States Court of Appeals, Second Circuit.

Argued: April 27, 2006.

Decided: June 26, 2007.

Tim Walker, Waverly, IA, Defendant-Appellee, pro se.

Thomas Freedman (Terrence A. Oved, Darren Oved, Eric S. Crusius, on the brief), Oved & Oved, New York, NY, for Plaintiff-Appellant.

Slade R. Metcalf (Katherine M. Bolger, on the brief), Hogan & Hartson, LLP, New York, NY, amicus curiae in support of Defendant-Appellee.¹

Before: KEARSE, McLAUGHLIN, and SACK, Circuit Judges.

SACK, Circuit Judge.

The defendant, Tim Walker, a resident of Waverly, Iowa, is the proprietor of a not-for-profit internet website that provides information and opinions about household movers. In August 2003, Walker posted derogatory comments about the plaintiff, Best Van Lines, Inc. ("BVL"), a New York-based moving company. Walker asserted, at two different locations on his website, that BVL was performing household moves without legal authorization and without insurance that is required by law. Less than a month later, BVL brought suit against Walker in the United States District Court for the Southern District of New York alleging that the statements about it on the website were false, defamatory, and made with an intent to harm BVL. Compl. ¶¶ 21-30. BVL sought injunctive and monetary relief.

On May 4, 2004, the district court (Gerard E. Lynch, Judge) granted Walker's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2) on the ground that N.Y. C.P.L.R. § 302(a), the New York State "long-arm" statute, did not give the court personal jurisdiction over Walker. Best Van Lines, Inc. v. Walker, 03 Civ. 6585, 2004 WL 964009, at *1, 2004 U.S. Dist. LEXIS 7830, at *1 (S.D.N.Y. May 4, 2004). Having concluded that it lacked jurisdiction under the statute, the court found it unnecessary to consider whether asserting jurisdiction over Walker would violate his constitutional right to due process. Id. at *7, 2004 U.S. Dist. LEXIS 7830, at *24. Because BVL had not demonstrated a prima facie case supporting jurisdiction, the court also denied jurisdictional discovery.

We affirm.

BACKGROUND

The defendant, Tim Walker, is the proprietor of a website, "MovingScam.com" (the "Website"). He operates it from his home in Waverly, Iowa. As its name suggests, the Website provides consumer-related comments, most of them derogatory, about household movers in the United States. On or about August 5, 2003, Walker posted statements about BVL in the section of the Website called "The Black List Report." Under the heading "Editor's Comments," Walker wrote that "as of 8/5/2003 [BVL] was performing interstate moving services without legal authority from the Federal Motor Carrier Safety Administration, and did not carry Cargo insurance as required by law." Compl. ¶ 8. Walker made similar factual assertions in response to a question about BVL that was posted on the message-board section of the Website by a person whose whereabouts are not disclosed in the record.²

On August 26, 2003, BVL instituted this lawsuit against Walker by filing a complaint in the United States District Court for the Southern District of New York. In it, BVL alleges that the statements about it on the Website were false, defamatory, and made with an intention to harm it. Compl. ¶¶ 21-30. We assume at this stage of the proceedings that BVL's allegations are correct and can be proved. BVL seeks to have Walker enjoined from publishing further defamatory statements about BVL. It also seeks compensatory and punitive damages totaling $1.5 million.

Walker moved to transfer the action to the United States District Court for the Southern District of Iowa. BVL opposed the motion, but also treated it as a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Best Van Lines, 2004 WL 964009, at *1, 2004 U.S. Dist. LEXIS 7830, at *3. In his reply, Walker, representing himself, argued that N.Y. C.P.L.R. § 302(a)—New York's long-arm statute—did not give New York courts jurisdiction over him for purposes of this lawsuit. Id.

The district court granted what was construed to be Walker's motion to dismiss. The court concluded that BVL had failed to allege facts sufficient to show that Walker had transacted business for purposes of section 302(a)(1), or that its suit arose from any such transaction. Id. at *7, 2004 U.S. Dist. LEXIS 7830, at *24. The court found it unnecessary to address whether asserting jurisdiction over Walker would be consistent with the Fourteenth Amendment's Due Process guarantee. Id. It also denied permission to take jurisdictional discovery. Id. at *7-8, 2004 U.S. Dist. LEXIS 7830, at *24-25.

BVL appeals.

DISCUSSION

I. Standard of Review

We review a district court's dismissal of an action for lack of personal jurisdiction de novo. Sole Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC, 450 F.3d 100, 102 (2d Cir.2006). "In order to survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that jurisdiction exists." Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir.2006).

II. Personal Jurisdiction in New York

A. The Issue on Appeal

This appeal raises a single question: whether the United States District Court for the Southern District of New York had personal jurisdiction over Walker for purposes of entertaining this lawsuit. To answer that question, we look first to the law of the State of New York, in which the district court sits. Kronisch v. United States, 150 F.3d 112, 130 (2d Cir.1998). If, but only if, our answer is in the affirmative, we must then determine whether asserting jurisdiction under that provision would be compatible with requirements of due process established under the Fourteenth Amendment to the United States Constitution. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 315, 66 S.Ct. 154, 90 L.Ed.95 (1945).

Agreeing with the district court, we conclude that while New York appellate courts have not decided this precise issue, under well-settled principles of New York law, the district court did not have such jurisdiction. We therefore need not address the second question: whether, if New York law conferred it, asserting such jurisdiction would be permissible under the Due Process Clause of the Fourteenth Amendment to the United States Constitution.³ Still, because the analysis of the state statutory and federal constitutional limitations have become somewhat entangled in New York jurisprudence, we think it advisable to explore the relationship between the two in some detail.

B. Constitutional Limits on Personal Jurisdiction

In 1945, the Supreme Court held that states' power to exercise personal jurisdiction over defendants consistent with the federal Constitution was not contingent on those defendants' physical presence within the states' borders. Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154. Instead, in order to exercise personal jurisdiction over out-of-state defendants, the Due Process Clause of the Fourteenth Amendment requires only that the defendants have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. (citation omitted).

A court deciding whether it has jurisdiction over an out-of-state defendant under the Due Process Clause must evaluate the "quality and nature," Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), of the defendant's contacts with the forum state under a totality of the circumstances test, id. at 485-86, 105 S.Ct. 2174. The crucial question is whether the defendant has "purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws," id. at 475, 105 S.Ct. 2174 (quoting Hanson v. Denckla, 357 U.S 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)) (internal quotation marks omitted), "such that [the defendant] should reasonably anticipate being haled into court there," id. at 474, 105 S.Ct. 2174 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)) (internal quotation marks omitted).⁴

Applying these principles, in Keeton v. Hustler Magazine Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), the Supreme Court concluded that a New Hampshire federal district court had jurisdiction over the defendant magazine-publisher, an Ohio corporation with its principal place of business in California, id. at 772, 104 S.Ct. 1473. The Court based its conclusion on the fact that the defendant's magazine in which the alleged libel appeared had a monthly circulation in New Hampshire of 10,000 to 15,000. This established that the defendant "continuously and deliberately exploited the New Hampshire market," creating in the defendant a reasonable expectation that it might be haled into court there in an action based on the contents of the magazine. Id. at 781, 104 S.Ct. 1473.

Also invoking the minimum contacts rubric, in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984)—decided the same day as Keeton—the Court concluded that a California state court had personal jurisdiction over The National Enquirer, a nationally distributed weekly with editorial offices in Florida, and a reporter and an editor, both Florida residents, in a lawsuit based on an allegedly libelous story about the California activities of a California resident. Id. at 786, 788, 104 S.Ct. 1482. Employing what has since come to be called the "effects test," the Court reasoned that because "California is the focal point both of the story and of the harm suffered," jurisdiction over the defendants was "proper in California based on the `effects' of their Florida conduct in California." Id. at 789, 104 S.Ct. 1482. In the language of minimum...