Scottsdale Capital Advisors Corp. v. Deal, LLC
887 F.3d 17
1st Cir.2018Background
- The Deal, LLC (Delaware LLC, NY principal place) published three subscriber-only articles by William Meagher allegedly defaming Scottsdale Capital Advisors and its officer John Hurry. The Deal distributed the articles via a subscriber web portal and as PDF email attachments to newsletter subscribers.
- Plaintiffs (Arizona corporation and its Nevada citizen officer) sued in New Hampshire state court; defendants removed and moved to dismiss for lack of personal jurisdiction. Plaintiffs obtained limited jurisdictional discovery (interrogatories and document requests only).
- The Deal had one institutional subscriber in New Hampshire: Dartmouth College. Dartmouth paid for a campus subscription that allowed faculty/students to sign up for portal access and optional emailed newsletters; 30 Dartmouth users signed up for portal access and 2 for the newsletter during the relevant period.
- Analytics established no Dartmouth (or other New Hampshire) user accessed the three articles on the subscriber portal; two emailed PDFs were never opened, and data is inconclusive for the first emailed article. Twenty-one views occurred on a free parent-company website (parent not sued).
- The district court dismissed for lack of personal jurisdiction: plaintiffs failed to show the claims “arise out of or relate to” defendants’ New Hampshire contacts; forum circulation was negligible and purposeful availment was not established; gestalt factors made jurisdiction unreasonable. The First Circuit affirmed on the relatedness ground.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New Hampshire courts have specific personal jurisdiction over defendants for defamation | Keeton permits jurisdiction based on circulation in the forum; plaintiffs argue Dartmouth subscription (and emailed circulation) suffices | No one in New Hampshire actually read the contested articles via the Dartmouth subscription; mere availability/circulation without readership does not establish relatedness | No specific jurisdiction: plaintiffs failed to show the claim "arises out of or relates to" defendants' forum contacts because publication to third parties in the forum was not proved |
| Whether forum contacts (recruiting Dartmouth subscriber) constitute purposeful availment | Plaintiffs argue ongoing solicitation of Dartmouth shows purposeful availment | Defendants argue recruitment of a single institutional subscriber with minimal downstream readership is insufficient | Court did not decide purposefulness definitively; declined jurisdiction on relatedness alone and expressed reservations about district court's purposeful-availment analysis |
| Whether limited jurisdictional discovery left a prima facie basis for jurisdiction | Plaintiffs say discovery did not establish readership but leave doubt supporting jurisdiction | Defendants point to analytics showing no reads and lack of evidence that emailed attachments were opened | Plaintiffs failed prima facie burden: discovery did not produce evidence that anyone in NH read the articles via Dartmouth subscription |
| Whether circulation alone (without proof of readership) can establish defamation-relatedness | Plaintiffs rely on Keeton (large magazine circulation) to say circulation suffices | Defendants say publication requires communication to and understanding by a third party; without proof of apprehension there is no publication | Court distinguishes Keeton (large magazine circulation permitting presumption of readership) and requires proof or reasonable inference of third-party apprehension; circulation alone here insufficient |
Key Cases Cited
- A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54 (1st Cir. 2016) (test for specific personal jurisdiction: relatedness, purposeful availment, reasonableness)
- Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138 (1st Cir. 1995) (prima facie method for resolving jurisdictional facts without an evidentiary hearing)
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (distinction between general and specific personal jurisdiction)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (foundational standard for personal jurisdiction)
- Walden v. Fiore, 134 S. Ct. 1115 (2014) (defamation causes reputational injury only if communicated to and understood by third persons)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) (forum circulation of a mass-market magazine supported personal jurisdiction where circulation made readership reasonably likely)
- Mass. School of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26 (1st Cir. 1998) (relatedness inquiry: cause in fact and legal cause for tort claims)