Hidria, USA, Inc. v. Delo

• Decision Date: 23 March 2016
• Docket Number: No. 5394.,Appellate Case No. 2013–000690.,5394.
• Citation: 783 S.E.2d 839,415 S.C. 533
• Parties: HIDRIA, USA, INC., Appellant, v. DELO, d.d., d/b/a Slovenske Novice, Respondent.
• Court: South Carolina Court of Appeals

415 S.C. 533

783 S.E.2d 839

HIDRIA, USA, INC., Appellant,

v.DELO, d.d., d/b/a Slovenske Novice, Respondent.

Appellate Case No. 2013–000690.

No. 5394.

Court of Appeals of South Carolina.

Heard Jan. 7, 2015.

Decided March 23, 2016.

Phillip E. Reeves and Nicholas Andrew Farr, both of Gallivan, White & Boyd, PA, of Greenville, for appellant.

Wallace K. Lightsey and Meliah Bowers Jefferson, both of Wyche Law Firm, of Greenville, for respondent.

MCDONALD

, J.

Appellant Hidria USA, Inc. (Hidria) appeals the circuit court's order of dismissal, arguing the court erred in finding it lacked personal jurisdiction over Respondent Delo, d.d., d/b/a Slovenske Novice (Delo). Hidria argues it produced the evidence necessary to support the court's exercise of personal jurisdiction based on Delo's sufficient contacts with South Carolina. Hidria asserts in the alternative that, even if Delo lacked sufficient minimum contacts with South Carolina, the circuit court erred in dismissing this case because Delo subjected itself to personal jurisdiction by intentionally targeting Hidria in South Carolina. We affirm.

FACTS/PROCEDURAL BACKGROUND

Hidria is a Delaware corporation with its headquarters and principal place of business located in Greenville County, South Carolina. This company, which provides business solutions for multiple industries, regularly transacts business in Greenville and employs persons there.

Delo, a corporation organized and existing under the laws of the Republic of Slovenia, is the publisher of Slovenske Novice, a daily newspaper printed and distributed primarily in Slovenia. Delo publishes a print and online version of the newspaper, and Slovenske Novice articles are available to anyone accessing the website. Both the print version and the online version are published only in Slovene, a language spoken primarily in Slovenia. Delo does not produce English translations of its publications.

This case arises from two articles published in Slovenske Novice —one on December 11, 2011, and one on April 23, 2012—discussing the "luxurious" lifestyle and business dealings of Slovenian businessman Edvard Svetlik. Hidria USA shares common ownership with Hidria, d.d., a Slovenian business entity controlled by Svetlik and his family. As Delo admits, the articles discuss Svetlik's "accumulation and distribution of wealth throughout his family in Slovenia, other European countries, and the United States of America, and compares the Svetlik family's luxurious lifestyle to that of their employees in Slovenia." The articles also reference Svetlik's various business interests, including Hidria.

While Delo denies that its reporter traveled to South Carolina to collect information for the articles, the Delo reporter admitted to corresponding with Hidria employee Darjan Lapanje in gathering information for the April 2012 article.¹ Additionally, the reporter gathered information from several websites maintained by South Carolina governmental entities.

In its March 7, 2012 complaint, Hidria alleged that South Carolina residents read the articles on Slovenske Novice 's website. According to Hidria, Delo "maliciously published the article knowing that it contained falsities concerning the persons and entities targeted therein." Hidria further contended that "[a]s a direct and proximate consequence of [Delo's] publication of the article, the business reputation of Hidria USA has been injured in that because of the irreparable harm to its image and brand ..., it has been damaged in its ability to sell and market its products." It is Hidria's position that Slovenske Novice targeted South Carolina citizens as potential subscribers by publishing articles with content concerning the State of South Carolina.

Delo—through the affidavit of its attorney, Nada Jakopec—admitted it cannot confirm the exact number of South Carolinians who accessed and read the articles at issue. Delo further admitted that it is possible that up to seven South Carolinians viewed the December 2011 article and up to three South Carolinians viewed the April 2012 article. Hidria General Manager Domen Boc?kor stated by affidavit that the two articles were "read by all of [Hidria's] employees located in South Carolina" and "by many employees of [Hidria's] customers in South Carolina which directly damaged [Hidria's] relationships with several customers."

Delo filed a motion to dismiss Hidria's complaint for lack of personal jurisdiction on June 15, 2012. Hidria filed an amended complaint on July 5, 2012, and Delo again moved to dismiss on July 23, 2012. While Delo's motion to dismiss was pending, Hidria served jurisdictional discovery on Delo. Delo failed to answer the discovery and, on August 10, 2012, Hidria moved to compel Delo to respond to the discovery requests or, in the alternative, to allow the parties to conduct jurisdictional discovery.

The circuit court heard the two pending motions—Delo's motion to dismiss and Hidria's motion to compel—on August 16, 2012. After hearing arguments and considering Hidria's discovery requests, the circuit court issued an order on October 15, 2012, permitting the parties to conduct discovery on the jurisdictional issues raised in Delo's motion to dismiss. The circuit court held its ruling on the motion to dismiss in abeyance pending completion of the jurisdictional discovery. Delo filed its answers to Hidria's discovery requests under seal. The circuit court subsequently granted Delo's motion to dismiss for lack of personal jurisdiction by order dated January 10, 2013.

On January 18, 2013, Hidria moved to reconsider. The circuit court denied Hidria's motion to reconsider on February 27, 2013. This appeal followed.

STANDARD OF REVIEW

The question of whether a court may exercise personal jurisdiction over a nonresident defendant is one that must be resolved upon the facts of each particular case. Moosally v. W.W. Norton & Co., 358 S.C. 320, 327, 594 S.E.2d 878, 882 (Ct.App.2004)

. "The decision of the trial court should be affirmed unless unsupported by the evidence or influenced by an error of law." Id.

"It is well-settled that the party seeking to invoke personal jurisdiction over a nonresident defendant via our long-arm statute bears the burden of proving the existence of personal jurisdiction." Id. "At the pretrial stage, the burden of proving personal jurisdiction over a nonresident is met by a prima facie showing of jurisdiction either in the complaint or in affidavits." Id. at 328, 594 S.E.2d at 882

. "When a motion to dismiss attacks the allegations of the complaint on the issue of jurisdiction, the court is not confined to the allegations of the complaint but may resort to affidavits or other evidence to determine jurisdiction." Sullivan v. Hawker Beechcraft Corp., 397 S.C. 143, 150, 723 S.E.2d 835, 839 (Ct.App.2012) (quoting Coggeshall v. Reprod. Endocrine Assocs. of Charlotte, 376 S.C. 12, 16, 655 S.E.2d 476, 478 (2007) ).

LAW/ANALYSIS

1. Requisite Minimum Contacts

Hidria argues the circuit court failed to apply the proper test in considering the question of personal jurisdiction. "Personal jurisdiction is exercised as ‘general jurisdiction’ or ‘specific jurisdiction.’ " Coggeshall, 376 S.C. at 16, 655 S.E.2d at 478

. In this case, Hidria concedes that South Carolina's courts do not have general jurisdiction over Delo; thus, our analysis focuses on specific jurisdiction.

"Specific jurisdiction is the State's right to exercise personal jurisdiction because the cause of action arises specifically from a defendant's contacts with the forum; specific jurisdiction is determined under [section 36–2–803 of the South Carolina Code

(2003) ]." Id. (citing Cockrell v. Hillerich & Bradsby Co., 363 S.C. 485, 491, 611 S.E.2d 505, 508 (2005) ). "The determination of whether a court may exercise personal jurisdiction over a nonresident involves a two-step analysis." Sullivan, 397 S.C. at 150, 723 S.E.2d at 839 (quoting Aviation Assocs. & Consultants, Inc. v. Jet Time, Inc., 303 S.C. 502, 505, 402 S.E.2d 177, 179 (1991) ). "The trial court must (1) determine whether the South Carolina long-arm statute applies and (2) whether the nonresident's contacts in South Carolina are sufficient to satisfy due process." Id. (citing Power Prods. & Servs. Co. v. Kozma, 379 S.C. 423, 431, 665 S.E.2d 660, 664 (Ct.App.2008) ).

South Carolina's long-arm statute provides, in relevant part, the following:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent as to a cause of action arising from the person's:

(1) transacting any business in this State;

....

(3) commission of a tortious act in whole or in part in this State;

(4) causing tortious injury or death in this State by an act or omission outside this State if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this State....

S.C.Code Ann. § 36–2–803(A)

(Supp.2015).

Courts have construed South Carolina's long-arm statute, which affords broad power to exercise personal jurisdiction over causes of action arising from tortious acts and injuries in South Carolina, to extend to the outer limits of the due process clause. See, e.g., Meyer v. Paschal, 330 S.C. 175, 181, 498 S.E.2d 635, 638 (1998)

; Hammond v. Cummins Engine Co., 287 S.C. 200, 203, 336 S.E.2d 867, 868 (1985) ; see also Cozi Invs. v. Schneider, 272 S.C. 354, 358, 252 S.E.2d 116, 118 (1979) (stating "South Carolina's Long–Arm Statute has been construed on several occasions as a grant of jurisdiction as broad as constitutionally permissible. Hence, the parameters of [the statute] are restricted only by due process limitations." (citations omitted)).

"Because we treat our long-arm statute as coextensive with the due process clause, the sole question becomes whether the exercise of personal jurisdiction in this case would violate the strictures of due process." Moosally, 358 S.C. at 329, 594 S.E.2d at 883

. "Due process...