Agard v. Hill, No. CIV 2-10-cv-0323-GEB-JFM (PS), 2010 U.S. Dist. LEXIS 35014 (E.D. Ca., April 9, 2010).

Plaintiff Cunina Agard is a wedding planner who was hired by Defendants Brett and Jennilee Hill but subsequently fired before the date of the wedding. A year and a half after the wedding, Defendants published statements on multiple websites regarding the Plaintiff and her services, which the Plaintiff contends were false. The statements were headed “Wedding Coordinator Warning.” While few specifics were given, the statements described the alleged process of suing, and collecting a judgment from, the Plaintiff, and made a claim that hiring Plaintiff would cause more problems “than any bride should have to deal with.” Specifically, Plaintiff contends that three (3) statements false statements were made: (1) “Ms. Agard moved multiple times,” (2) “We discovered that she is operating under a new name and location,” and (3) that Defendants had to fire Plaintiff “a couple months before the wedding due to issues that are too numerous and frustrating to go into at this moment.” Plaintiff also claims that Defendants approached various vendors known by Defendants to have business relationships with Plaintiff to discredit her professionally.

Plaintiff alleges that the false statements were made to portray her in a negative light and imply that she was actively trying to avoid service of the lawsuit and that she was trying to hide from her tarnished reputation and conceal her identity in a new location. Plaintiff sought regular damages of $300,000, special damages up to $425,000, and punitive damages to be determined by the court, for defamation and tortuous interference with contract or prospective economic advantage. Defendants also sued the Plaintiff in small claims court and were awarded a judgment of $4,000. Defendants filed a motion to dismiss Plaintiff’s claims.

In support of her claim of defamation, Plaintiff argued that Defendants maliciously published the aforementioned statements in an attempt to interfere with her business and that as a result, she suffered damages, loss of reputation, and was thereafter unable to work as a wedding planner in her county or the surrounding counties. Defendants argued that by way of collateral estoppels, the small claims judgment precluded Plaintiff from bringing such claims and that as statements made to “future brides” and as opinions, the statements were privileged.

The tort of defamation involves (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and that (5) has a natural tendency to injure or that causes special damages. Taus v. Loftus, 40 Cal.4th 683, 804 (Cal. 2007). Defamatory language not libelous on its face is not actionable unless the Plaintiff alleges and proves that he has suffered special damages as a proximate result thereof.” Cal. Civ. Code § 45. Malice or ill will is not an element of defamation. 5 Witkin, Summ. Of Cal. Law Torts § 529 at 782 (10th ed. 2005).

Whether or not a statement was made as an “opinion” is not alone dispositive of a finding of defamation. The question is resolved in a determination of whether a “reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.” Franklin v. Dynamic Details, Inc., 116 Cal. App. 4th 375, 385 (Cal. Ct. App. 2004). In determining actionable fact versus nonactionable opinion, the Ninth Circuit employs a 3-part test: (1) whether the general tenor of the entire work negates the impression that the defendant was asserting an objective fact, (2) whether the defendant used figurative or hyperbolic language that negates the impression, and (3) whether the statement in question is susceptible of being proved true or false. Gardner v. Martino, 563 F.3d 981, 987 (9th Cir. 2009). In essentially all cases1 the truth of the offensive statements is a complete defense against civil liability, regardless of bad faith or malicious purpose. Smith v. Maldonado, 72 Cal. App. 4th 637, 647 (Cal. Ct. App. 1999). The burden of pleading a proving truth is on the defendant.

Cal. Civ. Code § 47 provides that certain privilege exist as a defense to an action for defamation, however, the court refused to grant such a privilege because the Defendants failed to specifically allege which privilege granted by the statute they were afforded. Additionally, their argument that Plaintiff’s claim was barred by collateral estoppels was unpersuasive because the statements made by Defendants did not rely on any of the facts from the small claims action.

To succeed on a claim of intentional interference with prospective business advantage, the plaintiff must prove “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (Cal. 2003). Additionally, the plaintiff must also plead and prove that the defendant’s conduct was wrongful by some legal measure other than the fact of interference itself. By pleading that the Defendants’ statements were libelous, the court held that the Plaintiff successfully plead the elements for tortuous interference, including the requirement that Defendants’ conduct be wrongful in addition to the interference.

Defendants’ motion to dismiss was denied as to plaintiff’s libel claim for the first two statements and granted on the third, and denied as to plaintiff’s intentional interference claim.

Domain Names Are “Located” Where the Registrar is Located
Office Depo, Inc. v. Zuccarini, 2010 WL 669263, No. 07-16788 (9th Cir. Feb. 26, 2010).

Appellant Zuccarini registered the domain name “officdepo.com” and Office Depot subsequently brought, and won, an action against Zuccarini under the Anticybersquating Consumer Protection Act of 1999 (“ACPA”). Office Depot obtained a judgment against appellant, which it assigned to DSH. DSH sought to levy upon some of the other 248 domains owned by appellant and registered the judgment in the district court for the Northern District of California. The district court denied DSH’s request to compel the domain registrars to transfer Zuccarini’s property, holding that under California Code of Civil Procedure § 699.040, it could not order a third party to turn over property. DSH then moved for the appointment of a receiver who would obtain and sell the domains to satisfy the judgment. The district court granted the motion and Zuccarini appealed.

A district court can obtain quasi in rem jurisdiction over property held within its geographical borders, including intangible property. Under §§ 695.010(a) and 699.710 of the California Code of Civil Procedure, all property of a judgment debtor can be used to satisfy a writ of execution. The applicable state and federal provisions declare that if the domain names are property subject to execution, and if they are located in the Northern District of California, then the district court is an appropriate location to execute judgment on them through the appointment of a receiver.

“[A]ttaching a situs to intangible property is necessarily a legal fiction; therefore, the selection of a situs for intangibles must be context-specific, embodying a ‘common sense appraisal of the requirements of justice and convenience in particular conditions.’” Af-Cap Inc. v. Republic of Congo, 383 F.3d 361 (5th Cir. 2004). While California law does not specifically address the location of domain names, the ACPA states that a trademark owner in a cybersquatting action can proceed in rem against a squatter “in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain is located . . . “ 15 U.S.C. § 1125(d)(2)(A).

The court found the language of the ACPA persuasive and concluded that under California law, domain names are located where the registry is located for the purpose of asserting quasi in rem jurisdiction.

Individuals and businesses can be brought to court in states where they live or operate in commerce (personal jurisdiction). Additionally, both can agree to submit to jurisdiction in a forum state as part of a valid contract. What effect then does a website have? Is a page that can be accessed over the internet a “presence” in every state? Or is launching such a site some implicit agreement to litigate a dispute wherever a plaintiff may reside?

A foreign state can exercise personal jurisdiction over a non-resident for non-forum related activities when the individual or business has engaged in “systematic and continuous” activities in the forum state. This type of jurisdiction is known as general jurisdiction and can be exercised when a company does targeted business in a state, such as by opening a store or sending employees to make sales or perform services. A foreign state can exercise specific jurisdiction, however, when an entity’s activity within the state create sufficient “minimum contacts” with the state. Specific jurisdiction is what is invoked when a state exercises jurisdcition based on a website.

To satisfy the “minimum contacts” requirement, websites are divided into 3 categories:

Commercial Websites – which do a substantial volume of business over the internet, and through which customers in any location can immediately engage in business with the business owner;

Interactive Websites – which merely provide information, will almost never provide sufficient minimum contacts for jurisdiction. Such a website will only provide a basis for jurisdiction if there is an intentional tort such as defamation on the website, and if it is directed at the jurisdiction in question

Passive Websites – which permit the exchange of information between the website owner and visitors, may be subject to jurisdiction, depending on the website’s level of interactivity and commerciality, and the amount of contacts which the website owner has developed with the forum due to the availability of the website within the jurisdiction.

If you’re not sure which category your website falls into it may be time to consult with a local internet and e-commerce attorney.. For a quick and easy answer, the Minnesota District Court poses this question, is your website more of “less sophisticated than a typical teenager’s Facebook page”? If it is less sophisticated then chances are you are not subjecting yourself, or your company, to foreign jurisdiction.