These days, virtually anybody can write something online and have it go viral in a matter of hours. A person’s or a business’s reputation can be ruined in a matter of days by somebody’s thoughtless or malicious remarks. So, what is a person to do? Sometime, a lawsuit for defamation might be an answer. However, when a defamatory and damaging statement is made online, one question arises with frequency – where can the defamed party file the lawsuit? Obviously, it is more convenient to file it in the state where the defamed party lives or conducts business, but is that always possible?
The Fifth Circuit Court of Appeals recently considered whether Louisiana plaintiffs could file a lawsuit in their home state against California defendants who made allegedly defamatory statements about the plaintiffs online. Because the Louisiana long-arm statute is coextensive with the Due Process Clause limits, just like the Texas long-arm statute, the Court of Appeals’s analysis, applies to Texas as well.
In Herman v. Cataphora, the plaintiffs’ steering committee in In Re: Chinese-Manufactured Drywall Products Liability Litigation in the Eastern District of Louisiana hired Cataphora for litigation support. When their relationship soured, Cataphora filed and won a breach of contract lawsuit against the steering committee in the Northern District of California. Afterwards, a technology counsel for Cataphora gave an interview to Above the Law about the lawsuit and stated (presumably referring to the plaintiffs’ steering committee) that “[t]hese guys are the worst of hypocrites you can possibly find. They claim to be trying to help the little guy, but what they are doing is trying to put more money in their own pockets.” The interview took place in California and was quoted on the Above the Law website, which is published by Breaking Media, Inc., headquartered in new York.
Two of the steering committee members sued Cataphora and the technology counsel in the Eastern District of Louisiana for defamation and interference with prospective advantage. The defendants moved to dismiss for lack of personal jurisdiction or to transfer to a proper venue. Without holding an evidentiary hearing, the district court dismissed the case due to lack of personal jurisdiction and ordered a transfer under 28 U.S.C. § 1406(a) to the Northern District of California. The plaintiffs appealed the dismissal order.
The Fifth Circuit held that Louisiana lacked personal jurisdiction over the defendants and explained that when it comes to defamatory statements, the main question is whether the statements are directed at the forum state. Even when a plaintiff feels the harm from the defamatory statements in his home state, it is not enough to gain personal jurisdiction over the defendants in another state, if the statements focus on activities and events outside the forum state. Thus, even if the plaintiffs in Herman made a prima facie showing that the harm caused by the defendants’ statements would be felt in Louisiana where they practiced law, this was not enough, and “[w]ithout a showing that the statements’ focal point was Louisiana . . . the district court lacked personal jurisdiction over the defendants.” Specifically, the following factors were lacking to establish specific personal jurisdiction over the defendants in Louisiana:
Due to these factors, the Court of Appeals proceeded to remand the case back to the trial court and order it to transfer the controversy to the Northern District of California.
BOTTOM LINE: Unless a defendant who makes defamatory statements about a business or person located in Texas also happens to have “continuous and systematic contacts” with Texas, i.e., general personal jurisdiction, a plaintiff in this state will have to show that the defamatory remarks were directed at Texas, or Texas activities were the “focal point” of such remarks, in order to be able to sue the defendant in Texas. Plaintiffs, of course, always have an option of suing defendants in their home states.
Leiza Dolghih is a partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice. His practice includes commercial, intellectual property and employment litigation. You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.