Sandoval v. Does
| Decision Date | 30 November 2021 |
| Docket Number | 5:20-CV-00579-BO |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | Tacho M. Sandoval, Plaintiff, v. John Does 1-3, Defendants. |
Plaintiff Tacho M. Sandoval claims that three users of an internet message board have sullied his reputation by falsely accusing him of securities fraud. But he does not know who to name as defendants since the statements' authors are known only by their pseudonymous usernames. To remedy this problem Sandoval sought permission to subpoena the message board to learn who made the defamatory statements. The court allowed him to do so but allowed the authors to challenge the subpoenas before iHub disclosed their identities.
One of the Defendants, who is known by the nom de plume Cartman316 has taken the court up on that invitation. He asks the court to quash the subpoena directed at his information for two reasons. He first argues that the court lacks subject-matter jurisdiction since the complaint does not establish complete diversity between the parties. And then he argues that revealing his identity would violate his First Amendment rights.
The court disagrees with both arguments. The court has subject-matter jurisdiction at this point because the complaint establishes minimal jurisdiction between the parties. Thus the court can authorize discovery to learn the Defendants' names.
And ultimately, the First Amendment does not prevent Sandoval from learning Cartman's identity. Both Fourth Circuit precedent and the First Amendment's original public meaning establish that, based on the facts here, the amendment provides only limited protection for Cartman's identity. Given that Sandoval has stated a defamation claim against Cartman, his right to pursue his claim trumps Cartman's right to anonymity.
So the court will deny the motion to quash and require the disclosure of Cartman's identity. The court will however, limit the dissemination of Cartman's identity to ensure that the loss of the right to anonymity goes no further than necessary to allow Sandoval to pursue his claim.
Investorshub.com (iHub) is a website that allows its users to “gather and share market insights in a dynamic environment using an advanced discussion platform.” About Investors Hub, https://investorshub.advfn.com/boards/about.aspx (last visited Oct. 27, 2021). One aspect of that discussion platform is a message board about Clean Coal Technologies, Inc. Compl. ¶ 1, D.E. 1.
Sandoval claims that three posters on the CCTI message board-Cartman, FullestDisclosure, and MoMoneyRules-defamed him by falsely accusing him of securities fraud. Id. ¶¶ 1, 11. As for Cartman, the allegedly defamatory post said:
As if “because it's the law” has ever been management's guiding force.
What a joke. They must think shareholders are morons, especially after that little paid pump they executed last fall with slimy insider Nacho Sandoval[1]
This statement, Sandoval claims, alleges that he “participated in illegal securities fraud with [CCTI] by manipulating the company's” share price “through a ‘pump they executed last fall[.]” Id. ¶ 45. Sandoval says that this suggestion is false and that he has “never engaged in any form of market manipulation with his [CCTI] shares, including the alleged ‘pumping' or ‘dumping' of his shares, neither alone, nor in concert with [CCTI].” Id. ¶ 72. He also claims that Cartman's statement has damaged his “professional and personal reputations” and will continue to do so. Id. ¶ 74.
After suing, Sandoval asked the court to allow him to subpoena iHub to learn the Defendant's identities. Mot. for Leave to Conduct Early Discovery, D.E. 12. The court did so but allowed the Defendants to challenge the subpoenas before iHub revealed their identities. Jan. 25, 2021 Order, D.E. 14.
And Carman did just that. He moved to quash the subpoena arguing that the court lacked jurisdiction and that Sandoval had not shown that he has a right to learn Cartman's identity. D.E. 18. Sandoval responded and the court held a hearing on the matter. After reviewing the parties' arguments, the court denies Cartman's motion.
Cartman asks the court to quash the subpoena requiring iHub to disclose his identity and related information to Sandoval for two reasons. He first claims that the court lacks subject-matter jurisdiction since the complaint does not establish complete diversity between the parties. Next he argues that disclosing his identity would violate his First Amendment right to speak anonymously since Sandoval has not established a prima facie case of defamation against him. For the reasons described below, neither argument is persuasive.
Cartman says the court should quash the subpoena because it lacks subject-matter jurisdiction over this case.[2] He points out that the complaint does not describe his citizenship or the citizenship of MoMoneyRules. According to Cartman, since Sandoval has not affirmatively alleged complete diversity between the parties, he has not established that the court has subjectmatter jurisdiction over the dispute. Cartman believes that shortcoming entitles him to have the subpoena quashed.
But this argument is unpersuasive. The complaint alleges (and Cartman does not contest) that there is at least minimal diversity between the parties. Given that fact, the court has the authority to allow discovery on jurisdictional issues, such as the citizenship of parties. Plus, the court has tools available to address the presence of non-diverse defendants. So Cartman's jurisdictional concerns do not provide a basis to quash the subpoena.
Unlike their state counterparts, federal courts have jurisdiction over only a limited set of cases and controversies. They are “constrained to exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). And when questions arise over the existence of subject-matter jurisdiction, the party invoking the court's authority must prove that the court can hear the case. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).
Sandoval claims this court has jurisdiction to hear this case through what is known as diversity jurisdiction. Compl. ¶ 2. Diversity jurisdiction exists if the amount at issue exceeds $75, 000 and the opposing parties are citizens of different states. 28 U.S.C. § 1332. If a party is a natural person, the court will consider the party a citizen of a state if the party is “both a citizen of the United States and a domiciliary of that State.” Johnson v. Advance Am., 549 F.3d 932, 937 n.2 (4th Cir. 2008). A party is a domiciliary of a state where they have a “physical presence” and an “intent to make the State a home.” Id. Diversity jurisdiction also requires complete diversity between the parties, meaning each plaintiff must be a citizen of a different state than each defendant. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).
Cartman says that the complaint does not establish diversity jurisdiction. He points out that it is silent about his citizenship and the citizenship of MoMoneyRules. Thus, the argument goes, Sandoval has not shown that there is complete diversity and, as a result, the court lacks jurisdiction over this dispute.
In support of his position Cartman offers two cases from the District of Columbia. He first points to Vogel v. Go Daddy Group, Inc., 266 F.Supp.3d 234 (D.D.C. 2017), an opinion involving a motion to amend a complaint. Vogel initially sued GoDaddy and four John Doe defendants for defamation. Id. at 236. While Vogel tried to learn the Doe Defendants' identities through preservice discovery, an amici challenged the court's jurisdiction. Id. It argued that the complaint “does not allege complete diversity amongst the parties; GoDaddy purportedly is immune from suit, and diversity jurisdiction does not exist when the only remaining defendants are the unnamed Doe Defendants.” Id. This was a problem because, as the court noted, a case “invoking a federal court's diversity jurisdiction cannot be brought solely against Doe defendants because their place of citizenship is not known.” Id. at 238.
In response, Vogel asked to amend his complaint to dismiss GoDaddy and add information about the citizenship of the Doe Defendants based on the IP addresses he uncovered through discovery. Id. at 237. For reasons not relevant here, the court held that he could not rely on the IP addresses to establish the Doe Defendants' citizenship. Id. at 240. It then concluded that it lacked jurisdiction because Vogel “ha[d] not plausibly alleged whether the Doe Defendants are citizens of states other than” his own. Id. at 240.
The court also rejected Vogel's request to conduct more discovery to learn the Doe Defendants' citizenship. It noted that it “originally could allow Plaintiff to take early discovery because GoDaddy's presence as a defendant created diversity jurisdiction.” Id. at 240. But since the proposed amended complaint no longer included GoDaddy, that diversity of citizenship no longer existed. Id. Thus, Vogel could not “continue to use the tools of discovery otherwise available to a plaintiff properly in federal court to uncover the requisite jurisdictional facts.” Id. at 240-41. The court then dismissed the action for lack of subject-matter jurisdiction. Id. at 241.
Cartman also relies on Sinclair v. TubeSockTedD, 596 F.Supp.2d 128 (D.D.C 2009). In Sinclair, the plaintiff subpoenaed three websites to learn the identity of individuals who allegedly...
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