Tuesday, July 06, 2010
Litigation
Ohio Supreme Court Finds Personal Jurisdiction Over Out-of-State Internet Poster
Kauffman Racing Equipment, L.L.C. v. Roberts, 2010-Ohio-2551 (June 10, 2010)
In a recent 4-2 decision*, the Ohio Supreme Court held that an Ohio court may exercise personal jurisdiction over a nonresident who makes comments on the Internet concerning an Ohio resident with the intent to cause harm.
The Case
The plaintiff, Kauffman Racing Equipment, L.L.C. (Kauffman), an Ohio limited liability company, manufactures engine blocks and other high-performance automobile equipment. The defendant, Scott Roberts (Roberts) is a Virginia resident who had never physically entered Ohio. Roberts purchased a Pontiac engine block from Kauffman's website, and later requested a refund, claiming that the block was defective. Kauffman found that substantial alterations were made to the block and refused to refund Roberts. Roberts subsequently made numerous postings to websites related to the automobile racing industry. Roberts's postings asserted that the block was "junk" and indicated his explicit desire to extract revenge upon Kauffman through his posts.
After receiving inquiries about the comments from at least five Ohio residents, Kauffman sued Roberts in Knox County Common Pleas Court alleging defamation and intentional interference with contracts and business relationships. The trial court dismissed the action for lack of personal jurisdiction. The Fifth District Court of Appeals reversed and held that the trial court had personal jurisdiction over Roberts.
The Ohio Supreme Court accepted Roberts's appeal to determine "whether an Ohio court can properly assert personal jurisdiction over a nonresident defendant when jurisdiction is predicated on that defendant's publication of allegedly defamatory statements on the Internet." The Court applied the two-pronged Ohio personal jurisdiction test, examining:
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whether the long-arm statute and applicable rule of civil procedure confer jurisdiction, and, if so;
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whether the exercise of jurisdiction would deprive the nonresident defendant of due process under the Fourteenth Amendment to the United States Constitution.
The Findings
The Court found that personal jurisdiction would be proper pursuant to R.C. § 2307.382(A)(3) and Civil Rule 4.3(A)(6), which allow jurisdiction and service of process over a nonresident who causes "tortious injury by an act or omission in this state." Roberts argued that he did not direct the allegedly tortious statements to Ohio or publish them in the state. But the Court analogized to a previous case in which it held that sending a letter to an Ohio resident was sufficient to confer jurisdiction in a defamation action. Fallang v. Hickey, 40 Ohio St. 3d 106 (1988). Kauffmann had established that at least five Ohio residents saw Roberts's statements, which was sufficient to demonstrate that the comments were “published” in Ohio.
The Court also found that even if Roberts had not published his statements within Ohio, R.C. § 2307.382(A)(6) and Civil Rule 4.3(A)(9) would subject him to personal jurisdiction. Those provisions allow jurisdiction over a person that causes "tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in this state." The Court found that Roberts's statements were made outside of Ohio with the purpose of injuring an Ohio resident and there was a reasonable expectation that the injury would occur in Ohio.
The Court further found that exercising personal jurisdiction over Roberts did not violate his Fourteenth Amendment due process rights because Roberts made his postings with the intent of injuring an Ohio resident. To reach this finding, the Court applied a three-part test:
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the defendant must purposefully avail himself of the privilege of acting in Ohio;
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the cause of action must arise from the defendant's activities in Ohio; and
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the acts or consequences of the defendant's acts must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
As to the first prong of the test, the Court explained: "Roberts intended the effects of his conduct to be felt in Ohio. His statements were communicated with the very purpose of having their consequences felt by [Kauffman] in Ohio." The Court also noted that the posts were read by Ohio residents and that Roberts knew that Kauffman's business reputation was centered in Ohio. Roberts's comments also met the second prong because Kauffman's cause of action arose from the allegedly defamatory statements, which were based on Roberts's contacts with Ohio. Roberts's actions satisfied the third prong because the state's "legitimate interest in protecting the business interests of its citizens" made the exercise of jurisdiction over Roberts reasonable. The Court thus affirmed the exercise of jurisdiction over Roberts.
The Impact
The effects of Kauffman are difficult to predict. In a dissent joined by Justice Lanzinger, Justice O'Donnell critiqued the majority for "extend[ing] the personal jurisdiction of Ohio courts to cover any individual in any state who purchases a product from an Ohio company and posts a criticism of it on the Internet with the intent to damage the seller." The case appears to be limited to situations where the statement is made with the intent to injure. Time will tell whether the decision provides a route to relief for Ohio companies subject to attack from defamatory Internet postings originating outside of Ohio.
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For additional information and discussion on this topic, please get in touch with one of the attorneys below or your regular Calfee contact:
Christopher S. Williams
216.622.8441
cwilliams@calfee.com
Kimberly Moses
216.622.8814
kmoses@calfee.com
Maura L. Hughes
216.622.8335
mhughes@calfee.com
Thank you to Kevin P. Shannon for his efforts in drafting this alert.
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