4th Circuit Rules in Internet Jurisdiction Case

December 13, 2002. The U.S. Court of Appeals (4thCir) issued its opinion [12 pages in PDF] in Young v. New Haven Advocate, holding that a court in Virginia does not have jurisdiction over two small newspapers, and their editors and reporters, located in Connecticut, who wrote allegedly defamatory stories about a Virginia prison warden and published them on the Internet. The Court held that the web publication did not establish minimum contacts because the newspapers are not directed at a Virginia audience.

Background. Stanley Young is the warden at the Wallens Ridge State Prison, in Big Stone Gap, Virginia. The state of Connecticut contracted with the state of Virginia to have Connecticut prisoners housed at Wallens Ridge. The New Haven Advocate and the Hartford Courant are newspapers based in the state of Connecticut. Both maintain web sites in which they publish stories. Both published stories which made statements regarding Wallens Ridge and Warden Young.

District Court. Young filed a complaint in U.S. District Court (WDVa) against the New Haven Advocate, the Hartford Courant, and individual editors and writers employed by each, alleging defamation. The defendants moved to dismiss the complaint on the ground that the District Court lacked personal jurisdiction over them. The District Court denied the motion. It held that the publication of news stories on the Internet about Virginia and available to web users in Virginia, which allegedly caused harm to reputation in Virginia, established minimum contacts with Virginia.

Appeals Court. The Court of Appeals reversed. It held that "The facts in this case establish that the newspapers’ websites, as well as the articles in question, were aimed at a Connecticut audience. The newspapers did not post materials on the Internet with the manifest intent of targeting Virginia readers. ... In sum, the newspapers do not have sufficient Internet contacts with Virginia to permit the district court to exercise specific jurisdiction over them."

The Court's analysis began, of course, with the Supreme Court's analysis of the Due Process limitations upon the exercise of personal jurisdiction announced in International Shoe v. Washington, 326 U.S. 310 (1945). The Appeals Court wrote that "The question, then, is whether the defendant has sufficient ``minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’´´ (Brackets in original. Citation to International Shoe omitted.)

The Court also applied the analysis contained in its more recent treatment of the subject in ALS Scan, Inc. v. Digital Service Consultants, Inc., 293 F.3d 707 (4th Cir. 2002). In ALS Scan the Court found that there was not jurisdiction over an out of state web host in an online copyright infringement action. See, stories titled "Internet Shoes: Two Appeals Courts Address Internet Based Personal Jurisdiction", "Fourth Circuit Holds No Personal Jurisdiction Over Out of State Web Host", and "DC Circuit Suggests Personal Jurisdiction Over Out of State Online Brokerage" in TLJ Daily E-Mail Alert No. 452, June 17, 2002.

The Court wrote that in ALS Scan, "we held that ``specific jurisdiction in the Internet context may be based only on an out-of-state person’s Internet activity directed at [the forum state] and causing injury that gives rise to a potential claim cognizable in [that state].´´ Id. at 714." (Brackets in original.)

The Court continued that "When the Internet activity is, as here, the posting of news articles on a website, the ALS Scan test works more smoothly when parts one and two of the test are considered together. We thus ask whether the newspapers manifested an intent to direct their website content -- which included certain articles discussing conditions in a Virginia prison -- to a Virginia audience. As we recognized in ALS Scan, ``a person's act of placing information on the Internet´´ is not sufficient by itself to ``subject[ ] that person to personal jurisdiction in each State in which the information is accessed.´´ Id. at 712. Otherwise, a ``person placing information on the Internet would be subject to personal jurisdiction in every State,´´ and the traditional due process principles governing a State's jurisdiction over persons outside of its borders would be subverted." (Brackets in original.)

"Thus, the fact that the newspapers' websites could be accessed anywhere, including Virginia, does not by itself demonstrate that the newspapers were intentionally directing their website content to a Virginia audience. Something more than posting and accessibility is needed to ``indicate that the [newspapers] purposefully (albeit electronically) directed [their] activity in a substantial way to the forum state ... The newspapers must, through the Internet postings, manifest an intent to target and focus on Virginia readers." (Brackets and parentheses in original.)

Finally, the Court concluded by stating that "We therefore turn to the pages from the newspapers' websites that Warden Young placed in the record, and we examine their general thrust and content. The overall content of both websites is decidedly local, and neither newspaper’s website contains advertisements aimed at a Virginia audience."

Australia Ruling. The 4th Circuit's analysis conflicts with that of an opinion issued on December 10 by the High Court of Australia in Dow Jones v. Gutnick. That case involved three procedural issues (jurisdiction, choice of law, and convenient forum) in a tort action brought in Australia for an allegedly defamatory news story published on the Internet by Dow Jones, a U.S. publisher. The Court held that because of publication on the Internet, the Australian courts have jurisdiction, that Australian law applies, and that the case should proceed in the trial court in the Australian state of Victoria.

The Australian Court wrote in the Gutnick case that "defamation is to be located at the place where the damage to reputation occurs. ... In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done. Ordinarily then, that will be the place where the tort of defamation is committed."

The Center for Democracy and Technology (CDT) stated in a release that the 4th Circuit opinion "protects and promotes free speech on the Internet". It added that the "Australian decision raises serious questions and concerns about Internet free speech internationally, and is in tension with the 4th Circuit's decision". The CDT participated as amicus curiae in the 4th Circuit case.

TLJ Commentary. It might be noted that one of the reasons that the defendants did not have "minimum contacts" with the state of Virginia was because they had minimum journalistic standards. Neither publication maintained an office or bureau in Virginia. Neither had any employees or stringers in Virginia. And, even thought they wrote stories about Virginia prison facilities and conditions, neither publication ever sent a reporter to Virginia. The Court's opinion states that their sole reportorial efforts connected to Virginia were "a few telephone calls" to "a spokesman for the Virginia Department of Corrections".

So, while hypothetically, any opinion holding that the Connecticut newspapers are subject to the jurisdiction of Virginia would have created a disincentive for news organizations to report and disseminate news on the Internet, the opinion, as actually written, may create a perverse incentive for web based publications to refrain from thorough investigation of the out of state news that they report, for fear that the actions that go into a thorough investigation may also constitute the minimum contacts that subject them to litigation in other states.