DEFENSE DISTRIBUTED; SECOND AMENDMENT FOUNDATION, INCORPORATED v. GURBIR S. GREWAL, Attorney General of New Jersey, in his official capacity
No. 19-50723
United States Court of Appeals, Fifth Circuit
August 19, 2020
United States Court of Appeals Fifth Circuit FILED August 19, 2020 Lyle W. Cayce Clerk
Before JONES, ELROD, and HIGGINSON, Circuit Judges.
EDITH H. JONES, Circuit Judge:
This appeal arises from the ongoing efforts of New Jersey’s Attorney General Gurbir Grewal and several of his peers to hamstring the plaintiffs’ distribution of materials related to the 3D printing of firearms. To defend against their efforts, the plaintiffs filed this lawsuit, alleging, inter alia, infringement of their First Amendment rights and state law claims. Grewal countered with a motion to dismiss for lack of personal jurisdiction. The district court, relying principally on this court’s decision in Stroman Realty, Inc. v. Wercinski, 513 F.3d 476 (5th Cir. 2008), granted Grewal’s motion. Stroman, however, is distinguishable from this case and does not compel
I
Plaintiff Defense Distributed is a Texas company operated for the purpose of promoting popular access to firearms. To carry out this purpose, it produces and makes accessible information related to the 3D printing of firearms and publishes and distributes such information to the public. Plaintiff Second Amendment Foundation, Inc. (“SAF”) is a nationwide, non-profit membership organization that “promotes the right to keep and bear arms by supporting education, research, publications, and legal efforts about the Constitution’s right to privately own and possess firearms and the consequences of gun control.” Across the nation, SAF members seek the digital firearms information created by Defense Distributed, circulate their own digital firearms information by utilizing Defense Distributed’s facilities, and republish digital firearms information independently.
Defense Distributed began distributing files related to the 3D printing of firearms in December 2012. It did so by publishing files to its defcad.org and defcad.com websites and letting visitors freely download them. It also distributed digital firearms information via mail and at a brick-and-mortar public library in Austin, Texas. Defense Distributed’s efforts were initially met with opposition from the United States Department of State.1 But, after a period of litigation, the parties reached a settlement agreement that granted Defense Distributed a license to publish its files.
Just before the Attorneys General sued in Washington, Defense Distributed and SAF brought the instant action in the Western District of Texas challenging select enforcement actions taken by the state Attorneys General. Of relevance to this appeal, plaintiffs alleged these actions by Grewal: (1) sending a cease-and-desist letter threatening legal action if Defense Distributed published its files; (2) sending letters to third-party internet service providers based in California urging them to terminate their contracts with Defense Distributed; (3) initiating a civil lawsuit against Defense Distributed in New Jersey;3 and (4) threatening Defense Distributed with criminal sanctions at a live press conference. Further, these actions, coupled with the injunctive orders issued in the Washington litigation, have
Grewal moved to dismiss for lack of personal jurisdiction.4 The plaintiffs, meanwhile, sought a preliminary injunction. After holding a hearing and considering the parties’ arguments, the court granted Grewal’s motion and dismissed the action without prejudice.
The district court’s order addressed two primary issues: judicial estoppel and minimum contacts. The plaintiffs had argued that Grewal should be judicially estopped from challenging the court’s jurisdiction because, in the Washington litigation, Grewal asserted that Defense Distributed had minimum contacts with Washington, and that argument was inconsistent with the position taken in Grewal’s motion to dismiss. The court disagreed, concluding that Grewal’s position in the Washington case “is in no way inconsistent with [his] argument here that [he] ha[s] no minimum contacts with Texas.”
Next, the court determined that the plaintiffs failed to establish that Grewal had “minimum contacts with the State of Texas.” The court found most instructive this court’s decision in Stroman, in which it was held that sending a cease-and-desist letter into Texas was, by itself, insufficient to exercise personal jurisdiction over an out-of-state defendant. Just as in Stroman, the court explained, Grewal did not “purposefully avail [himself] of the benefits of Texas law like someone actually ‘doing business’ in Texas” when he demanded that Defense Distributed cease publication of its materials. See Stroman,
The plaintiffs’ motion to alter or amend the judgment was denied, and they timely appealed.
II
In this court, the plaintiffs continue to press the arguments that the doctrine of judicial estoppel bars Grewal from arguing against personal jurisdiction, and Grewal has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas’s courts. We agree with the second argument and thus need not address the judicial estoppel claim.
“We review the district court’s dismissal for lack of personal jurisdiction de novo.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014). At the motion to dismiss stage, the plaintiffs bear the burden of presenting sufficient evidence to support a prima facie case of jurisdiction. Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir. 2000). We “accept the plaintiff’s uncontroverted, nonconclusional factual allegations as true and resolve all controverted allegations in the plaintiff’s favor.” Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 868 (5th Cir. 2001).
Personal jurisdiction exists where the forum state’s long-arm statute extends to the nonresident defendant and the exercise of jurisdiction comports
“The constitutional requirement for specific jurisdiction is that the defendant has ‘minimum contacts’ with the forum state such that imposing a judgment would not ‘offend traditional notions of fair play and substantial justice.’” Stroman, 513 F.3d at 484 (quoting Int’l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). This court has framed the inquiry as a three-step analysis: “(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.” Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006) (quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)).
The issue on appeal is whether Grewal has established sufficient minimum contacts with Texas. The parties’ arguments rely on the interpretation and application of three cases—Stroman; Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir. 1999); and Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482 (1984). Grewal argues that Stroman controls here and compels the conclusion that he lacks the minimum contacts necessary to justify the
Stroman Realty, Inc. was a Texas-based real estate firm that sought relief in Texas federal court from attempts by the Commissioner of the Arizona Department of Real Estate to exercise regulatory authority over the company’s timeshare sales business. Stroman, 513 F.3d at 479. “[T]he totality of the Commissioner’s contacts with Texas involve[d] a cease and desist order and correspondence with Stroman’s attorneys.” Id. at 485. This court concluded that “[b]ased on such minimal known contacts, . . . [the] nonresident state official . . . could not have reasonably anticipated being haled into federal court in Texas to defend her enforcement of an Arizona statute.” Id. at 484.
This court disagreed with Stroman’s invocation of the Calder “effects test,” as we observed that this circuit has “declined to allow jurisdiction for even an intentional tort where the only jurisdictional basis is the alleged harm to a Texas resident.” Id. at 486. “By seeking to regulate Stroman’s activities involving Arizona residents or property,” the court explained, “the Commissioner is not ‘expressly aim[ing]’ her actions at Texas.” Id. (alteration in original) (quoting Calder, 465 U.S. at 789). Rather, “it was Stroman who chose to market Arizona properties and transact business with Arizona residents. Arizona is simply attempting to uniformly apply its laws.” Id. Put another way, the nexus to Texas was “based entirely on the unilateral actions and decisions of Stroman, not the Commissioner.” Id. And “[i]n general, ‘[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.’” Id. (second alteration in original) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1239–40 (1958)). To embrace
The facts of this case bear a resemblance to those in Stroman. “[T]he totality of [Grewal’s] contacts with Texas involves a cease and desist order” sent to Defense Distributed. Id. at 484. And Grewal’s purpose in issuing the cease-and-desist letter ostensibly was to enforce New Jersey public nuisance and negligence laws (more on this below). Further, Grewal, like the Commissioner in Stroman, was sued in his official capacity and did not derive commercial benefits from performing his governmental function.
While acknowledging some of these factual similarities, the plaintiffs contend that Stroman is distinguishable principally because the cease-and-desist letter at issue in Stroman focused on activities occurring outside Texas whereas Grewal’s cease-and-desist letter focused on activities occurring inside Texas. But Stroman expressly forecloses this distinction. “Although it may be true that the Commissioner’s action against Stroman is based upon conduct which occurred entirely in Texas, we cannot find, as Stroman urges, that the Commissioner has purposefully directed her conduct at Texas. . . . [T]he Commissioner, by proceeding with the cease and desist order, is essentially asserting nationwide authority over any real estate transactions involving Arizona residents or property.” Id. at 485–86 (emphasis added).
The plaintiffs also maintain that Stroman is distinguishable because Grewal did more than just send a cease-and-desist letter. He “(1) obtained a nationwide injunction that governs the State of Texas itself and everyone in it, (2) threatened companies that contracted to provide internet security services for Defense Distributed, and last but not least, (3) stood at a live broadcast’s podium to call out Defense Distributed’s founder by name and promise that he would ‘come after’ ‘anyone who is contemplating making a printable gun’ and
Stroman, however, is distinguishable in at least two key respects. First, many of the plaintiffs’ claims are based on Grewal’s cease-and-desist letter. In contrast, Stroman’s claim was that “Arizona’s attempted exercise of regulatory jurisdiction to license timeshare resales violated the Commerce Clause by discriminatorily and unduly burdening nonresident participation in the interstate secondary timeshare market.” Stroman, 513 F.3d at 481. Stroman’s claim, in other words, was more a product of Arizona’s regulatory scheme than it was the cease-and-desist letter itself. Not so for the plaintiffs’ claims here, many of which are based on injuries stemming solely and directly from Grewal’s cease-and-desist letter. Grewal’s contact with Texas is more relevant to the personal jurisdiction inquiry than was the cease-and-desist letter analyzed in Stroman.
Second, and more important, Stroman found that the Arizona public official did not purposefully direct her conduct at Texas because she was simply “asserting nationwide authority over any real estate transactions involving Arizona residents or property.” Id. at 486. The contrary is alleged here.
Grewal’s conduct beyond sending the cease-and-desist letter confirms his intent to crush Defense Distributed’s operations and not simply limit the dissemination of digital files in New Jersey. Grewal’s enforcement actions are selective. He has not targeted the many similarly-situated persons who publish Defense Distributed’s files on the internet.7 Cf. id. (stressing that Arizona was “simply attempting to uniformly apply its laws”) (emphasis added). Instead, he has focused solely on Defense Distributed. Perhaps nowhere is this better illustrated than in Grewal’s efforts to enjoin the national distribution of Defense Distributed’s files by suing in Washington, far from his
Relatedly, the intended effects on the plaintiffs and, by extension, the intended effects on Texas residents who would benefit from the plaintiffs’ activities, are much greater than the effects at issue in Stroman. Whereas the Arizona Commissioner only requested that Stroman acquire a license before doing business in the state, Grewal seeks to bar Defense Distributed from publishing its materials anywhere, not just in New Jersey. Grewal’s actions, moreover, have all been taken in the name of law and order. He has projected himself across state lines and asserted a pseudo-national executive authority that the public official in Stroman never asserted. Because Stroman is distinguishable, and thus not dispositive, we consider the applicability of Wien Air Alaska and Calder.8
In Wien Air Alaska, this court considered whether the defendant, Brandt, had sufficient contacts with Texas to subject him to the jurisdiction of Texas’s courts. Relying largely on Calder’s “effects test,” the court concluded that he did. “Brandt performed several tortious actions outside of Texas directed towards Wien Air in Texas. These activities had foreseeable effects in the forum and were directed at the forum.” Wien Air Alaska, 195 F.3d at 212.
Similarly, Grewal’s communication with Defense Distributed, specifically the cease-and-desist letter delivered into Texas, itself gives rise to distinct tort causes of action.
Grewal argues that the plaintiffs cherry-picked this legal proposition and ignored glaring factual differences between Wien Air Alaska and this case. We disagree with Grewal’s initial assertion, but it is correct that the facts in the two cases are distinguishable. Even so, the principles articulated in Wien Air Alaska remain relevant, as do the principles announced in Calder.
Calder was a libel suit instituted by a California actress in California state court against a reporter and an editor, both of whom worked for the National Enquirer at its headquarters in Florida. Calder, 465 U.S. at 784–85. The plaintiff’s libel claims were based on an article written
Thirty years later, the Court revisited Calder and explained the scope of its holding:
The crux of Calder was that the reputation-based “effects” of the alleged libel connected the defendants to California, not just to the plaintiff. The strength of that connection was largely a function of the nature of the libel tort. . . . [T]he reputational injury caused by the defendants’ story would not have occurred but for the fact that the defendants wrote an article for publication in California that was read by a large number of California citizens. Indeed, because publication to third persons is a necessary element of libel, . . . the defendants’ intentional tort actually occurred in California. . . . In this way, the “effects” caused by the defendants’ article—i.e., the injury to the plaintiff’s reputation in
the estimation of the California public—connected the defendants’ conduct to California, not just to a plaintiff who lived there. That connection, combined with the various facts that gave the article a California focus, sufficed to authorize the California court’s exercise of jurisdiction.
Walden v. Fiore, 571 U.S. 277, 287–88, 134 S. Ct. 1115, 1123–24 (2014) (emphasis in original). Walden makes clear that Calder remains good law. But Walden also emphasizes that it is the defendant’s contacts with the forum state, and not just the plaintiff, that must drive the personal jurisdiction analysis. Id. at 285 (“[T]he plaintiff cannot be the only link between the defendant and the forum.”); id. at 286 (“A forum State’s exercise of jurisdiction over an out-of-state intentional tortfeasor must be based on intentional conduct by the defendant that creates the necessary contacts with the forum.”). It is insufficient for the defendant to simply have knowledge of a plaintiffs’ “strong forum connections.” Id. at 289. That is, “an injury is jurisdictionally relevant only insofar as it shows that the defendant has formed a contact with the forum State.” Id. at 290; see also Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cty., 137 S. Ct. 1773, 1780 (2017) (“[T]here must be an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.”) (alteration in original omitted) (internal quotation marks and citation omitted).
Returning to the present case, Grewal argues that, unlike in Calder, where the content of the article served as the basis for the libel claim, the plaintiffs attribute their injury to Grewal’s enforcement action and not the cease-and-desist letter. Grewal misreads the plaintiffs’ complaint: they allege that Grewal’s letter had a chilling effect on the exercise of their First Amendment rights (among other constitutional and Texas law violations). That chilling effect, in turn, caused them to cease publication and reduced
Grewal’s contacts with Texas, moreover, are more than a “mere fortuity,” as the district court found. Grewal intentionally mailed the cease-and-desist letter into Texas, a contact Walden specifically mentioned as relevant to the personal jurisdiction inquiry. See Walden, 571 U.S. at 285 (“[P]hysical entry into the State—either by the defendant in person or through an agent, goods, mail, or some other means—is certainly relevant contact.” (emphasis added)). Further, that contact alone gave rise to distinct tort causes of action. Grewal knew that the cease-and-desist letter would “have a potentially devastating impact” on the plaintiffs—and, by extension, those who wished to benefit from the plaintiffs’ activities, including Texas residents. Calder, 465 U.S. at 789. And he “knew that the brunt of [the] injury would be felt by [the plaintiffs] in [Texas].” Id. at 789–90; see also Wien Air Alaska, 195 F.3d at 211 (“The foreseeable effects of a tort ‘are to be assessed as part of the analysis of the defendant’s relevant contacts with the forum.’”) (emphasis in original) (quoting Allred v. Moore & Peterson, 117 F.3d 278, 287 (5th Cir. 1997)).
Based on the foregoing analysis, the principles discussed in Wien Air Alaska and Calder (and reaffirmed in Walden) control. Grewal has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas’s courts.10 Of course, minimum contacts in-and-of themselves are
III
Questions of personal jurisdiction typically do not lend themselves to broad generalizations. See Miss. Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1006 (5th Cir. 1982) (“[W]hether the minimum contacts are sufficient to justify subjection of the non-resident to suit in the forum is determined not on a mechanical and quantitative test, but rather under the particular facts upon the quality and nature of the activity with relation to the forum state.”). They require an understanding of particular facts and an application of general principles. Having carefully considered the facts of this case, we conclude that Stroman is distinguishable and thus not dispositive. Applying the principles discussed in Wien Air Alaska and Calder, we hold that jurisdiction over Grewal is proper. The judgment of the district court is REVERSED and the case is REMANDED for further proceedings.
I agree that the allegations of Attorney General Grewal attempting to prevent Texas residents from publishing files online to individuals outside of New Jersey constitute purposeful direction of his activities toward the State of Texas such that he should have “reasonably anticipate[ed] being haled into court” there. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Unlike the Commissioner of the Department of Real Estate in Stroman Realty, Incorporated v. Wercinski, who was “simply attempting to uniformly apply its [state] laws” against those who “chose to market Arizona properties and transact business with Arizona residents,” Grewal is alleged to have attempted to reach conduct that did not involve New Jersey residents or assets at all.1 513 F.3d 476, 486 (5th Cir. 2008). Thus, I agree that jurisdiction exists in this case where it did not in Stroman. But I find the limiting principles given in Stroman protecting state government officials, as should be assured reciprocally for Attorneys General from our three states, vitally important and binding in this circuit even after our holding today.
I disfavor parallels between this case and Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir. 1999) or Calder v. Jones, 465 U.S. 783 (1984). Wien Air Alaska involved a commercial dispute that is largely incomparable to the state law enforcement in this case. As we pointed out in Stroman, “the
The comparison to Calder is similarly inapt, above all if it is offered by litigants to diminish the state sovereignty principles underlying Stroman. That case involved personal jurisdiction based on the “effects” of the commercial defendant’s conduct in the forum, rather than the typical minimum contact test. 465 U.S. at 789. This form of jurisdiction is “rare,” and the Supreme Court has moved away from an effects-based analysis, instead requiring “active minimum contacts with the forum state.” Stroman, 513 F.3d at 486, 489. In Walden v. Fiore, the Court explained that Calder should not be interpreted to confer jurisdiction whenever an individual is accused of committing a tort against a resident of the forum state:
Calder made clear that mere injury to a forum resident is not a sufficient connection to the forum. Regardless of where a plaintiff
571 U.S. 277, 290 (2014). We have repeatedly refused to find jurisdiction based on conduct toward an individual who happens to be located in a state—even conduct that causes injury—where the conduct is not expressly aimed at the state. See Stroman, 513 F.3d at 486 (“We have declined to allow jurisdiction for even an intentional tort where the only jurisdictional basis is the alleged harm to a Texas resident.”); Wien Air Alaska, 195 F.3d at 212 (“Foreseeable injury alone is not sufficient to confer specific jurisdiction, absent the direction of specific acts toward the forum.”); see also Walden v. Fiore, 571 U.S. 277, 285 (2014) (“[O]ur ‘minimum contacts’ analysis looks to the defendant’s contacts with the forum State itself, not the defendant’s contacts with persons who reside there.”). Therefore, I do not agree that Grewal’s cease-and-desist letter had a strong enough “effect” in Texas to create jurisdiction.
Calder was unique in that there was evidence in the record that the defendant’s conduct affected not only the plaintiff but also at least 600,000 others in the forum state. Calder, 465 U.S. at 785 (stating that the circulation of the National Enquirer in California was 600,000 at the time of the alleged tort); see also Walden, 571 U.S. at 287 (“The strength of th[e] connection [in Calder] was largely a function of the nature of the libel tort.”). Conversely, Grewal’s cease-and-desist letter injured only the plaintiffs because it threatened enforcement against only them.2 Plaintiffs cannot rely on their
The majority contends that this is the unique case in which the effect in the forum is significant enough to create jurisdiction because the plaintiffs’ injuries are more directly attributable to the letter itself than in Stroman. This characterization is in tension with Stroman’s holding that “[t]here is no question that the underlying cause of action ‘arises’ out of the Commissioner’s cease and desist order to Stroman in Texas.” Stroman, 513 F.3d at 487. The majority does not explain how this letter more directly causes the plaintiffs’ alleged injuries than the letter in Stroman, above all when Grewal’s letter begins: “You are directed to cease and desist from publishing printable-gun computer files for use by New Jersey residents.” (emphasis added). I am therefore unconvinced that “effects” jurisdiction based on Grewal’s alleged tort is appropriate; I would instead employ the traditional minimum contacts analysis to find that the aggregate of Grewal’s alleged conduct affirmatively reached out into Texas by attempting to enforce state law even when New Jersey citizens or property were not involved.