601 F.3d 693 (7th Cir. 2010), 08-2406, Tamburo v. Dworkin

Docket Nº:08-2406.
Citation:601 F.3d 693
Opinion Judge:SYKES, Circuit Judge.
Party Name:John F. TAMBURO doing business as Man's Best Friend Software and Versity Corporation, Plaintiffs-Appellants, v. Steven DWORKIN, Kristen Henry, Roxanne Hayes, Karen Mills, and Wild Systems Pty Ltd., Defendants-Appellees.
Attorney:Ian Brenson (argued), Lagrange, IL, for Plaintiffs-Appellants. Charles L. Mudd, Jr. (argued), Mudd Law Offices, Chicago, IL, for Defendants-Appellees.
Judge Panel:Before BAUER, KANNE, and SYKES, Circuit Judges.
Case Date:April 08, 2010
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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601 F.3d 693 (7th Cir. 2010)

John F. TAMBURO doing business as Man's Best Friend Software and Versity Corporation, Plaintiffs-Appellants,


Steven DWORKIN, Kristen Henry, Roxanne Hayes, Karen Mills, and Wild Systems Pty Ltd., Defendants-Appellees.

No. 08-2406.

United States Court of Appeals, Seventh Circuit.

April 8, 2010

Argued Feb. 26, 2009.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Ian Brenson (argued), Lagrange, IL, for Plaintiffs-Appellants.

Charles L. Mudd, Jr. (argued), Mudd Law Offices, Chicago, IL, for Defendants-Appellees.

Before BAUER, KANNE, and SYKES, Circuit Judges.

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SYKES, Circuit Judge.

John Tamburo, an Illinois resident who operates a dog-breeding software business in Illinois, filed suit in the Northern District of Illinois alleging federal and state antitrust violations and several intentional tort claims under Illinois law. His claims arise out of a dispute over the contents of a dog-pedigree software program he developed by lifting data from the defendants' websites. He alleges the defendants used the Internet to retaliate against him for copying their online data, which he contends was in the public domain. The defendants are a Canadian proprietor of a dog-pedigree website who has never visited or transacted business in Illinois; three Americans who likewise maintain dog-pedigree websites and are residents of Colorado, Michigan, and Ohio with only sporadic contacts with Illinois; and an Australian software company with insignificant sales in Illinois. This appeal requires us to apply long-established rules for asserting personal jurisdiction over foreign defendants to the relatively new setting of torts committed over the Internet.

Tamburo alleges that the individual Canadian and American defendants engaged in a concerted campaign of blast emails and postings on their websites accusing him of stealing their data and urging dog enthusiasts to boycott his products. He also claims they sent some of these messages to the owner of the Australian company, who reposted them to a private dog-breeder listserve. These emails and Internet postings, Tamburo claims, violate federal and state antitrust laws, were defamatory and tortiously interfered with his software business, and constituted a civil conspiracy to boot. The defendants moved to dismiss for lack of personal jurisdiction and alternatively for failure to state a claim. The district court dismissed the case against all defendants for lack of personal jurisdiction.

We affirm in part and reverse in part. First, Tamburo's federal and state antitrust allegations are woefully inadequate under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); we affirm the dismissal of those claims on the alternative basis that they fail to state a claim. Without a viable federal claim, personal jurisdiction is determined under Illinois' long-arm statute, which authorizes jurisdiction to the full extent permitted by the United States Constitution. 735 ILL. COMP. STAT.. 5/2-209(c). General personal jurisdiction is lacking here; none of the defendants has continuous and systematic contacts with Illinois.

Applying Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), we conclude that specific personal jurisdiction lies in Illinois over the individual Canadian and American defendants on Tamburo's intentional tort claims. These defendants are alleged to have used their websites-or in the case of the Canadian defendant, blast emails to the online dog-pedigree community-to defame and tortiously generate a consumer boycott against Tamburo, knowing that he lived and operated his software business in Illinois and would be injured there. Indeed, some of the messages specifically listed Tamburo's Illinois address and urged readers to harass him. This is enough for a prima facie case of personal jurisdiction under Calder's " express aiming" test for personal jurisdiction in intentional-tort cases. The case for personal jurisdiction over the Australian company is much weaker. Tamburo alleged only that the owner of the company received messages from the other defendants and reposted them on a private listserve. There is no allegation that he disseminated the messages more broadly or that he knew that Tamburo operated his business in Illinois. Accordingly, Tamburo's allegations are insufficient to establish a prima

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facie case for specific personal jurisdiction over the Australian company.

I. Background1

John Tamburo, doing business as Man's Best Friend Software, lives and operates his business in Illinois. He designs software for use by dog breeders and noncommercial dog enthusiasts.2 One of his products, an online database called The Breeder's Standard, provides customers with access to dog-pedigree information. To create the database, Tamburo developed an automated computer program that scanned the Internet for information about dog pedigrees. He then incorporated the data he retrieved into The Breeder's Standard.

Defendants Kristen Henry, Roxanne Hayes, Karen Mills, and Steven Dworkin are proprietors of public websites that provide free access to dog-pedigree information. Henry, a Colorado citizen and resident, also breeds and shows dogs. Hayes, a Michigan citizen and resident, raises, shows, and " places" dogs but does not commercially breed them. Mills, a citizen and resident of Ohio, raises and shows dogs. Dworkin, a Canadian citizen who resides in Ottowa, also raises and shows dogs.3

Tamburo pulled much of the information included in The Breeder's Standard from the websites operated by Henry, Hayes, Mills, and Dworkin. In retaliation Henry, Hayes, and Mills posted statements on their websites accusing Tamburo of " theft," " hacking," and " selling stolen goods," and calling on readers to boycott his products. They also posted Tamburo's Illinois address on their websites and urged readers to contact him to harass him and otherwise complain. Dworkin retaliated in a different way. First, he emailed Tamburo and demanded that he remove the " blatent [sic] theft of data" from The Breeder's Standard " within 5 days." If Tamburo failed to do so, Dworkin threatened to " publish to each and every dog[-]based list the sleazy methods" of Tamburo's operation. When Tamburo did not comply, Dworkin emailed " all persons who had a free online database of dog pedigrees on the Internet" saying that Tamburo's product contained pedigree data that was " stolen," " mined," and " harvested" for improper " commercial use," and suggested that all proprietors of online dog-pedigree databases " band together to stop this theft" of their data.

The fifth defendant is Wild Systems Pty Ltd., an Australian software company that offers a pedigree software program called Breedmate. Wild Systems also runs a private online Yahoo! email listserve for customers who have purchased the Breedmate software. Ronald DeJong, the owner and president of Wild Systems, manages this email list and must approve any message sent to it. The individual defendants sent DeJong messages for posting on the Breedmate listserve; these messages, like the others, protested that Tamburo had stolen their data. DeJong in turn transmitted these messages to the Breedmate listserve. Later, DeJong and

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the individual defendants organized a closed Internet chat group-called the " APDUG Group" 4-for users of Alfirin software, a product used to manage dog-pedigree databases. In messages posted to the APDUG Group, the individual defendants again accused Tamburo of " theft," " selling stolen goods," and " hacking."

Tamburo sued the five defendants in the Northern District of Illinois, seeking a declaratory judgment that he did not violate any federal law by incorporating the defendants' databases into his software. He also sought damages for federal and state antitrust violations and asserted claims for defamation, tortious interference with existing contracts and prospective economic advantage, trade libel, and civil conspiracy under Illinois law. 5

The defendants moved to dismiss the complaint for lack of personal jurisdiction and failure to state a claim. See FED.R.CIV.P. 12(b)(2), 12(b)(6). The district court concluded that personal jurisdiction was lacking as to all defendants and dismissed the case without considering the alternative failure-to-state-a-claim arguments. Tamburo moved for reconsideration, asking the court to transfer the case to the Western District of Michigan. This motion was denied and Tamburo appealed.

II. Discussion

A. Antitrust Claims

In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court clarified the pleading requirements for antitrust claims: " [A] formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Id. at 555-56, 127 S.Ct. 1955 (citations and all caps omitted). " Because § 1 of the Sherman Act does not prohibit [all] unreasonable restraints of trade ... but only restraints effected by a contract, combination, or conspiracy, ... [t]he crucial question is whether the challenged anticompetitive conduct stem[s] from independent decision or from an agreement, tacit or express...." Id. at 553, 127 S.Ct. 1955 (internal quotation marks and citations omitted) (alterations in original). Accordingly, a complaint alleging an antitrust claim must contain " enough factual matter (taken as true) to suggest that an agreement was made." Id. at 556, 127 S.Ct. 1955. In addition, depending on the nature of the claim, the complaint must plausibly plead the existence of an antitrust injury; this requires factual allegations suggesting that the " claimed injuries are of the type the antitrust laws were intended to prevent and reflect the anticompetitive effect of...

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