Use of Virginia Computer Network Won’t Necessarily Confer Jurisdiction Over Nonresident

In cases of Internet defamation, the issue of personal jurisdiction comes up a lot. “Personal jurisdiction” refers to a court’s authority to make rulings that affect a person. This isn’t an issue when two Virginia residents are in litigation with each other, as state courts have the power to enter rulings that affect their residents, but when a Virginia resident files a libel lawsuit in Virginia against someone who doesn’t live here, a preliminary issue arises with respect to whether the Virginia court has the power to enter a judgment against the nonresident. If the court lacks personal jurisdiction over the defendant, the case will be dismissed. When defamatory statements are published online and are therefore accessible all over the world, Virginia courts struggle with trying to sort out whether it is constitutionally permissible to assert authority over a writer who has never stepped foot in Virginia.

The basic analysis requires two steps. First, the court must determine whether Virginia’s “long-arm statute” reaches the defendant. (Think of this law as one that describes the circumstances under which the state can reach out with a “long arm” to grab a defendant residing in another state and pull him into Virginia to require him to defend against a lawsuit). Next, assuming the long-arm statute does apply, the court must ensure that exercising personal jurisdiction over that defendant complies with the Due Process Clause of the United States Constitution.

The reason we see so much of this in Virginia is that, by some estimates, 70 percent of the world’s Internet traffic passes through Loudoun County, Virginia. Ashburn, Virginia, which is located within Loudoun County, has been dubbed “the center of the Internet.” The Virginia DMV offers an “Internet C@pital” license plate. Because of all the Internet traffic passing through Virginia, clever plaintiffs’ lawyers often argue that if a defamatory statement was posted on a website hosted by servers located on Virginia soil, the defendant–whether he was aware of it or not–committed a tortious act within Virginia, regardless of where in the world he was when he actually typed (or tapped, in today’s mobile world) out the statement claimed to be defamatory. internet-225x300 This argument has worked in the past, but as courts have become more comfortable applying defamation law in new settings, the idea that personal jurisdiction can be founded solely upon the fact that data passed through servers located in Virginia is being met with increasing skepticism.

Last month, Judge Stephen C. Shannon of the Circuit Court of Fairfax County flatly rejected the argument in the case of Kevin P. Lucido v. Jeffrey Neill Maxwell. The facts, as summarized by the court, are essentially these: Maxwell, the defendant, who lives in Tennessee, posted certain statements on an online game site known as Wrestler Unstoppable. The site is operated by Sports: Unstoppable, which is owned by Aurora Media, Inc., a company based in Reston, Virginia. Maxell allegedly wrote that the “owner” of Sports: Unstoppable (whom he did not identify by name) had sexually harassed “on[e] of the most respected ladies” at the company. He later allegedly clarified on Facebook that he was referring to both Kevin Lucido (the plaintiff) and his manager. Lucido lives in Virginia and is the founder and Chief Executive Officer of Aurora Media. Lucido sued Maxwell for defamation in Fairfax County, Virginia. In response to Maxwell’s motion to dismiss the case for lack of personal jurisdiction, Lucido argued that suing the Tennessee resident in Virginia was appropriate because Sports: Unstoppable uses Amazon Web Services to provide bandwidth and server hosting for the Wrestler Unstoppable website, and that the servers used by Amazon Web Services are physically located in Northern Virginia.

Lucido’s argument was based primarily on Section 8.01-328.1(A)(3) of the long-arm statute. This section authorizes Virginia courts to exercise long-arm jurisdiction over nonresident defendants if they have committed a tortious act (like defamation) inside Virginia. In Bochan v. La Fontaine (68 F. Supp. 2d 692 (E.D. Va. 1999)), the Eastern District of Virginia held that a defendant’s use of an AOL account, a Virginia-based service, to post defamatory statements constituted an “act” inside Virginia for purposes of the long-arm statute. Based on that court’s reasoning, Judge Shannon held that if Maxwell had indeed posted comments that passed through a Virginia-based server, “a post to the Wrestler Unstoppable online game site arguably would constitute an ‘act’ in Virginia under § 8.01-328.1(A)(3).”

But that is not the end of the matter. Remember that the personal-jurisdiction question involves a two-step inquiry. The second step involves measuring the exercise of personal jurisdiction against constitutional due-process standards. Due process only permits the exercise of personal jurisdiction over a defendant that has purposefully established “minimum contacts” with the forum state. To establish minimum contacts and satisfy the Due Process Clause, a plaintiff must show either (a) specific or (b) general jurisdiction. “Specific jurisdiction” refers to the exercise of personal jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum. “General jurisdiction” arises when a defendant’s contacts with the forum state are so “continuous and systematic” that the defendant may be subject to suit for causes of action entirely distinct from the in-state activities. Either way, minimum contacts must be sufficient, “such that [a defendant] should reasonably anticipate being haled into court there.” (See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). The plaintiff bears the burden of demonstrating personal jurisdiction once its existence is questioned by the defendant.

The due process analysis essentially involves examining whether any facts exist that would make it fair and reasonable under the circumstances to assert jurisdiction over the nonresident. Courts look at (1) the extent to which the defendant “purposefully availed” himself of the privilege of conducting activities in Virginia; (2) whether the plaintiff’s claims arise out of those activities directed at Virginia; and (3) whether the exercise of personal jurisdiction would be “constitutionally reasonable.” (See ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)). Considerations relevant to constitutional reasonableness include: “(1) the burden on the defendant of litigating in the forum; (2) the interest of the forum state in adjudicating the dispute; (3) the plaintiff’s interest in obtaining convenient and effective relief; (4) the shared interest of the states in obtaining efficient resolution of disputes; and (5) the interests of the states in furthering substantive social policies.” (See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). Judge Shannon framed the issue this way: “the Court needs to determine not only whether an injury is felt in Virginia, but also whether the offending party intended such harm to be felt in Virginia.”

Judge Shannon observed that the complaint was devoid of any factual allegations that would indicate Maxwell purposefully availed himself of the privilege of conducting activities in Virginia. While perhaps true that his online posts were stored on servers located in Virginia, there was no showing that Maxwell knew that the servers were in Virginia or that he otherwise intended to target Virginia or reach a Virginia audience. He hadn’t even identified Lucido or his company by name. Absent a compelling reason to find the Tennessee resident should have expected he would be sued in Virginia for his conduct, Judge Shannon granted Maxwell’s motion and dismissed the case for lack of personal jurisdiction.

Virginia’s long-arm statute also authorizes the exercise of jurisdiction over nonresident defendants who commit tortious acts outside the Commonwealth that cause injury inside Virginia, but this subsection (Section 8.01-328.1(A)(4)) can only be invoked if the defendant “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 Virginia. While Lucido argued that 8.01-328.1(A)(4) also supplied a basis for personal jurisdiction, the court easily rejected this argument as no facts were alleged to support these additional requirements.

 

Contact Us

Virginia: (703) 722-0588
Washington, D.C.: (202) 449-8555
Contact Information