755 F.2d 371 (4th Cir. 1985), 84-1619, Blue Ridge Bank v. Veribanc, Inc.

Docket Nº:84-1619.
Citation:755 F.2d 371
Party Name:BLUE RIDGE BANK, Appellant, v. VERIBANC, INC., Appellee.
Case Date:February 22, 1985
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 371

755 F.2d 371 (4th Cir. 1985)

BLUE RIDGE BANK, Appellant,

v.

VERIBANC, INC., Appellee.

No. 84-1619.

United States Court of Appeals, Fourth Circuit

February 22, 1985

Argued Dec. 6, 1984.

Page 372

James W. Haskins, Martinsville, Va. (George O. Burpeau, III, Young, Haskins, Mann, Gregory & Young, Martinsville, Va., on brief), for appellant.

L. Thompson Hanes, Roanoke, Va. (George W. Wooten, Woodward, Fox, Wooten & Hart, P.C., Roanoke, Va., on brief), for appellee.

Before SPROUSE and CHAPMAN, Circuit Judges, and DUPREE, Senior United States District Judge for the Eastern District of North Carolina, sitting by designation.

CHAPMAN, Circuit Judge:

Appellant Blue Ridge Bank is a corporation domiciled and doing business in Virginia. It brought this action for defamation against Veribanc, Inc. a corporation domiciled and doing business in Massachusetts. Jurisdiction is based on diversity of citizenship. Veribanc moved to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). From the order granting dismissal Blue Ridge has appealed. We reverse.

Veribanc is a corporation which analyzes financial information gathered from the Federal Reserve Board. Banks from around the country send information to the Federal Reserve Board which releases this information three months later in the form of raw computer data. Veribanc gathers the information, analyzes it, and distributes its analysis to its customers. Veribanc's customers consist mostly of money market and cash managers.

From June 1982 to November 1983 Veribanc received 4,900 orders from around the country. Of these orders 57, or 1.16 percent of the total, originated in Virginia. Veribanc earned $2,539 from the Virginia orders, or 1.42 percent of the total dollar volume of its business. Veribanc is not qualified to do business in Virginia; has advertised only in the Banker and Tradesmen which has a circulation in New England and in the Medical/Surgeon's Economics; has not made any direct mail solicitations in Virginia; has not advertised in any publications of general circulation in Virginia; has no offices or agents in Virginia; and has not sent anyone to Virginia to solicit new clients.

Like the other banks, Blue Ridge sent its report of condition and report of income to the Federal Reserve Board. Veribanc received this information and analyzed it and determined that Blue Ridge was one of 126 banks which faced zero equity within twelve months. The Chicago Tribune Syndicate purchased this analysis for Dan Dorfman, a financial columnist based in New York City. Dorfman used the analysis to write an article which appeared in the Richmond Times-Dispatch edition of May 22, 1983, under the headline "Possible Bank Flops." The article, based on the analysis supplied by Veribanc to Dorfman, is alleged to be false in stating that the bank had a $476,000 annualized net loss and would reach zero equity within eleven months.

In the course of the negotiations between the Chicago Tribune...

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