Owens v. Lead Stories, LLC

• Decision Date: 20 July 2021
• Docket Number: C.A. No. S20C-10-016 CAK
• Parties: CANDACE OWENS, in her individual capacity, and CANDACE OWENS, LLC, a Delaware limited liability company, Plaintiffs, v. LEAD STORIES, LLC, a Colorado limited liability company, and GANNETT SATELLITE INFORMATION NETWORK, LLC d/b/a USA TODAY, a Delaware limited liability company, Defendants.
• Court: Delaware Superior Court

CANDACE OWENS, in her individual capacity, and CANDACE OWENS, LLC,a Delaware limited liability company, Plaintiffs, v. LEAD STORIES, LLC, a Colorado limited liability company,and GANNETT SATELLITE INFORMATION NETWORK, LLC d/b/a USA TODAY, aDelaware limited liability company, Defendants.

C.A. No. S20C-10-016 CAK

SUPERIOR COURT OF THE STATE OF DELAWARE

Submitted: June 11, 2021

July 20, 2021

Defendant Lead Stories, LLC's Motion to Dismiss for Lack of Personal Jurisdiction under Delaware Superior Court Civil Rule 12(b)(2)

Defendants' Motions to Dismiss for Failure to State a Claim under Delaware Superior Court Civil Rule 12(b)(6)

MEMORANDUM OPINION AND ORDER

Sean J. Bellew, Esquire, Bellew LLC, 2961 Centerville Road, Suite 302, Wilmington, DE 19808, Attorney for Plaintiffs.

Todd V. McMurtry, Esquire and Jeffrey A. Standen, Esquire, Hemmer DeFrank Wessels, PLLC, 250 Grandview Drive, Suite 500, Fort Mitchell, KY 41017, Attorneys for Plaintiffs (Pro Hac Vice).

John P. Coale, Esquire, 2901 Fessenden Street, NW Washington, DC 20008, Attorney for Plaintiffs (Pro Hac Vice).

Garvan McDaniel, Esquire, Hogan McDaniel, 1311 Delaware Avenue, Wilmington, DE 19806, Attorney for Defendant Lead Stories, LLC.

Craig Weiner, Esquire and Reena Jain, Esquire, Akerman LLP, 1251 Avenue of the Americas, 37th Floor, New York, NY 10020, Attorneys for Defendant Lead Stories, LLC (Pro Hac Vice).

Steven T. Margolin, Esquire, Lisa Zwally Brown, Esquire and Samuel L. Moultrie, Esquire; Greenberg Traurig, LLP, The Nemours Building, 1007 North Orange Street, Suite 1200, Wilmington, DE 19801, Attorneys for Defendant Gannett Satellite Information Network, LLC.

Michael J. Grygiel, Esquire and Cynthia Neidl, Esquire, Greenberg Traurig, LLP, 54 State Street, 6th Floor, Albany, NY 12207, Attorneys for Defendant Gannett Satellite Information Network, LLC (Pro Hac Vice).

Michael Pusateri, Esquire, Greenberg Traurig, LLP, 2101 L Street, NW, Suite 1000, Washington, DC 20037, Attorney for Defendant Gannett Satellite Information Network, LLC (Pro Hac Vice).

KARSNITZ, J.

INTRODUCTION

Today's world of technological wizardry presents endless opportunities for conflict and battle like Kilkenny cats. Social influencers can sway opinions of millions of people controlling politics and money. Those with substantial control over social media like Facebook struggle to control fact from fiction. The case before me presents one battle in the social media wars. It also presents a real-life struggle affecting reputations, the ability to earn substantial income, and the ability to fact-check.

The political aspects of this case are manifest but must be ignored in favor of application of the law. The law and courts in general are often slow to react to changing times. By way of example, the jurisdictional principles I struggle with in this Opinion were not originally designed for the digital world but are evolving and adapting.

Elements of free speech also pervade this case. While many have argued that those private actors who control aspects of the internet should have their control limited, as the law currently exists, private actors are not constrained by First Amendment constitutional principles. I leave to further debate the question of whether these private actors should be otherwise restricted in their control of content.

One final preliminary note. I have no doubt the parties to this suit have divergent views on many things. I also have no doubt they have acted in good faithin their efforts to promote their views as shown by their conduct which forms the factual basis for this lawsuit.

PERSONAL JURISDICTION OVER LEAD STORIES, LLC

Today I am asked to determine the constitutionally permissible reach of the Delaware long-arm statute¹ through cyberspace. This case stands at the intersection of the traditional law of personal jurisdiction, particularly with respect to interstate commerce in tangible goods and services, and the modern use of websites on the Internet to publish, disseminate and sell information. As this Court has stated:

The pending motions [to dismiss] require this Court to probe questions of personal jurisdiction at perhaps their most theoretical. Courts across the country increasingly are confronted with cases challenging online conduct and must determine issues of personal jurisdiction over actors engaged in such conduct. These cases highlight the reality that the Internet, which increasingly forms an important part of our day-to-day interactions, exists outside of the state boundaries that define considerations of jurisdiction.²

However, in my view, the fact that the product allegedly causing the tortious injury in this case is modern - digital information disseminated through the Internet - does not necessarily require a departure from the more traditional jurisprudence of personal jurisdiction, or a unique or even different jurisdictional analysis. I am not deciding this case using, as the determinative factor, the fact that the productallegedly causing tortious injury is electronic media, as opposed to any other form of media or a tangible physical object. An entity's reaching beyond its state's borders, allegedly causing tortious injury in Delaware by an act committed in Delaware, should not be treated differently for personal jurisdiction purposes merely because the act is committed over the Internet.

BACKGROUND

Defendant Lead Stories, LLC, a Colorado limited liability company ("Lead Stories") has a contract with Facebook, Inc., a Delaware corporation ("Facebook") to regularly transmit fact-checking stories over the Internet to Facebook. Facebook may in turn use those stories to place covers over its users' Facebook webpages, warning about the veracity of the users' posts on those webpages. Some of these stories have been about Candace Owens, in her individual capacity, and Candace Owens, LLC, a Delaware limited liability company (collectively, "Plaintiffs"), and warning covers have been placed over their Facebook webpages. Such warning covers appear on Facebook webpages worldwide, including those seen in Delaware. Plaintiffs assert a variety of tort claims, addressed later in this Opinion, against Lead Stories for injury allegedly arising out of these facts.

On October 18, 2020, Plaintiffs filed a Complaint against, inter alia, Defendant Lead Stories. On December 18, 2020, Lead Stories filed a Motion to Dismiss the Complaint as against Lead Stories under Delaware Superior Court CivilRule 12(b)(2) for lack of personal jurisdiction over Lead Stories. On February 24, 2021, I heard oral argument on this Motion. This is my decision on that Motion.

SUMMARY

Plaintiffs, on the one hand, tell me that the foregoing facts are sufficient in and of themselves to give me jurisdiction over Lead Stories. Lead Stories, on the other hand, essentially argues that Plaintiffs' argument cannot withstand the constitutional rigors of personal jurisdiction analysis. Lead Stories tells me that it has no presence in Delaware for purposes of general (or "all purpose") jurisdiction, and that strict "but for" causation by Lead Stories of Plaintiffs' alleged injury within Delaware is required to confer specific (or "case limited") jurisdiction. In my view, there is a more nuanced, middle ground between these two approaches. In that middle ground, questions of personal jurisdiction are best resolved by a common sense, fact-driven analysis.

Although the development of the law, including Delaware law, regarding the permissible reach of personal jurisdiction based on the use of the Internet is in its infancy, the standard I adopt is well articulated as follows:

[T]he likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.³

Using this standard, I have examined the level of interactivity and the commercial nature of the exchange of information that occurred on the Facebook website, using the Lead Stories information, to determine the exercise of personal jurisdiction. I have determined that the nature and quality of this commercial activity warrants that I can constitutionally exercise personal jurisdiction over Lead Stories.

In addition to this standard, the lodestar for me in the exercise of personal jurisdiction is whether two values are upheld: treating Lead Stories fairly, and protecting "interstate federalism;" i.e., preventing a State with little legitimate interest in a case from encroaching on a State more affected by the controversy.⁴ In my view, Lead Stories had, or should have had, fair warning that its fact-checking stories, as used by Facebook, might subject it to jurisdiction in Delaware.⁵ Moreover, in my view, Delaware has a greater interest than Colorado in the outcome of this case.⁶ A denial of jurisdiction would lead to an unfair and inefficient result, because it would require Plaintiffs to pursue multiple causes of actions in different jurisdictions, with the possibility of inconsistent results and the certainty of increased costs.

Finally, Delaware courts have consistently held that our long-arm statute is tobe construed broadly to confer personal jurisdiction to the maximum extent possible under the due process clause.⁷

ANALYSIS

Standard of Review

Pursuant to Delaware Superior Court Civil Rule 12(b)(2), Plaintiffs bear the burden of establishing that I have personal jurisdiction over Lead Stories.⁸ Personal jurisdiction over a nonresident defendant is proper where: (1) Delaware's long-arm statute applies; and (2) the Court's exercise of jurisdiction does not violate constitutional due process.⁹ Plaintiffs must make a specific showing that Delaware maintains jurisdiction under its long-arm statute.¹⁰

Pursuant to Delaware's long-arm statute, I may exercise general or specific personal jurisdiction over a non-resident defendant when the party maintains the requisite minimum contacts with Delaware enumerated in the statute.¹¹ General...