716 F.3d 322 (4th Cir. 2013), 11-2406, Unspam Technologies, Inc. v. Chernuk

Docket Nº:11-2406.
Citation:716 F.3d 322
Opinion Judge:NIEMEYER, Circuit Judge:
Party Name:UNSPAM TECHNOLOGIES, INC., d/b/a Project Honey Pot; John Doe, on behalf of himself and all others similarly situated, Plaintiffs-Appellants, v. Andrey CHERNUK, d/b/a Toronto Pharmacy; Boris Livshits, d/b/a Toronto Pharmacy; Zao Raiffeisenbank; Bank Standard Commercial Bank Closed Joint-Stock Company; Azerigazbank; DnB Nord Banka, Defendants-Appelle
Attorney:Jon Linden Praed, Internet Law Group, Arlington, Virginia, for Appellants. Craig Brian Whitney, Morrison & Foerster, LLP, New York, New York, for Appellees. Jennifer Ancona Semko, Edwin B. Swan, Baker & McKenzie, LLP, Washington, D.C., for Appellees Bank Standard Commercial Bank Closed Joint-Stoc...
Judge Panel:Before NIEMEYER, SHEDD, and AGEE, Circuit Judges. Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge SHEDD and Judge Agee joined.
Case Date:May 03, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
FREE EXCERPT

Page 322

716 F.3d 322 (4th Cir. 2013)

UNSPAM TECHNOLOGIES, INC., d/b/a Project Honey Pot; John Doe, on behalf of himself and all others similarly situated, Plaintiffs-Appellants,

v.

Andrey CHERNUK, d/b/a Toronto Pharmacy; Boris Livshits, d/b/a Toronto Pharmacy; Zao Raiffeisenbank; Bank Standard Commercial Bank Closed Joint-Stock Company; Azerigazbank; DnB Nord Banka, Defendants-Appellees,

and

John Doe(s), Injuring PHP and its Members by Harvesting Email Addresses, and Transmitting Spam; St. Kitts-Nevis-Anguilla National Bank Limited; Rietumu Bank, Defendants.

No. 11-2406.

United States Court of Appeals, Fourth Circuit.

May 3, 2013

Argued: Jan. 30, 2013.

Page 323

ARGUED:

Jon Linden Praed, Internet Law Group, Arlington, Virginia, for Appellants.

Page 324

Craig Brian Whitney, Morrison & Foerster, LLP, New York, New York, for Appellees.

ON BRIEF:

Jennifer Ancona Semko, Edwin B. Swan, Baker & McKenzie, LLP, Washington, D.C., for Appellees Bank Standard Commercial Bank Closed Joint-Stock Company and Azerigazbank; Andrew P. Sherrod, Hirschler Fleischer, PC, Richmond, Virginia, Owen J. McKeon, Gibbons PC, Newark, New Jersey, for Appellee.

ZAO Raiffeisenbank; James E. Hough, Morrison & Foerster, LLP, New York, New York, for Appellee DNB Nord Banka.

Before NIEMEYER, SHEDD, and AGEE, Circuit Judges.

Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge SHEDD and Judge Agee joined.

OPINION

NIEMEYER, Circuit Judge:

The issue presented in this appeal is whether the district court erred in dismissing a complaint against four foreign banks for lack of personal jurisdiction. The complaint alleges an international conspiracy of foreign banks, corrupt Internet Payment Service Providers, and illegal prescription drug dealers (" pharmacists" ) to sell illegal prescription drugs over the Internet.

One plaintiff, John Doe, an Arlington, Virginia resident, purchased prescription drugs online from the " Canadian Pharmacy," paying for the drugs with his Visa debit card. When the drugs never arrived, he canceled the transaction at his United States-based bank that issued his debit card, and the bank refunded his payment. Thereafter, he received a voluminous number of spam emails for prescription drugs. And the other plaintiff, Unspam Technologies, Inc., doing business as Project Honey Pot (hereafter " Project Honey Pot" ), is a Delaware corporation that was formed to pursue the enforcement of Internet spam laws by tracing and identifying spam emails, including solicitations for illegal prescription drugs.

The plaintiffs commenced this case as a putative class action, naming as defendants two " pharmacists," who were Russian citizens, and six foreign banks. They alleged that the defendants participated in a global Internet conspiracy to sell illegal prescription drugs, in violation of the laws of the United States and Virginia. The two pharmacists were dismissed, one voluntarily and the other for lack of service, and two of the six banks were also dismissed voluntarily. The district court dismissed the other four banks for lack of personal jurisdiction.

Challenging the dismissal of the four banks on appeal, the plaintiffs contend that the district court erred in failing to recognize that, because the banks were alleged to be part of a global conspiracy, any single member's constitutionally sufficient contacts with Virginia would subject every coconspirator to personal jurisdiction in Virginia. The plaintiffs, however, rest application of their theory of jurisdiction on only supposition and speculation about a conspiracy and the grossly attenuated contacts of its members with Virginia. Therefore, they have failed to show that any of the banks has constitutionally sufficient contacts with Virginia, or with the United States, to subject them to personal jurisdiction in a court in Virginia. Accordingly, we affirm.

I

In October 2007, John Doe attempted to buy prescription drugs from an online pharmacy called " Canadian Pharmacy." He paid for the drugs with his Visa debit

Page 325

card, issued to him by a United States-based bank. After several weeks, when Doe had not received his drugs, he attempted to contact the pharmacy directly, but was unsuccessful. He then notified his bank, which credited his account for the full purchase price and assigned him a new Visa debit card. Since that transaction, Doe claims that he has received a voluminous number of spam emails.

Project Honey Pot maintains a network of spam-tracking " honey pots," with the sole purpose of tracking and identifying spam emails in an effort to combat such emails. It claims that its network has " allow[ed] spammers, phishers, and other e-criminals to be tracked throughout their entire ‘ spam life cycle.’ " Project Honey Pot claims to have processed, on its Virginia servers, spam emails from online pharmacies associated with a global conspiracy to sell illegal prescription drugs over the Internet.

Project Honey Pot and Doe commenced this action, seeking an injunction against spam email that solicits illegal prescription drugs, as well as damages, and claiming that " [l]awsuits of this kind are another effective way of deterring harvesters [of email addresses] and the spammers who buy their harvested email lists." Project Honey Pot states that since it started collecting data in 2004, it has " identified over 80 million spam servers, over 96 thousand harvesters [of email addresses], over 14 million dictionary attackers, and since April 2007, has identified over 348 thousand comment spam server IP addresses."

The plaintiffs claim, based on Internet research conducted by it and others and the comparison of telephone numbers and transaction identifiers, that the defendant pharmacists Andrey Chernuk and Boris Livshits were behind " Canadian Pharmacy." They allege that Chernuk and Livshits used not only " Canadian Pharmacy" but other similar trade names to solicit the sale of illegal prescription drugs— sales made without valid prescriptions and sales of counterfeit drugs marketed with false advertising. The plaintiffs also claim that the defendant pharmacists have a relationship with a Russian-based Internet Payment Service Provider called Chronopay and that Chronopay, in turn, has contracts with...

To continue reading

FREE SIGN UP