In the on-going struggle for courts to clearly define the limits of personal jurisdiction for content posted and transmitted over the Internet, the Tenth Circuit reigned in the breadth of such non-territorial activities by requiring an Internet user to "intentionally direct" activities or content to a particular state to sufficiently confer personal jurisdiction on the forum. Shrader v. Biddinger, 633 F.3d 1235 (10th Cir. 2011). In doing so, the Court dismissed a pro se plaintiff's complaint for defamation, invasion of privacy and intentional infliction of emotional distress filed against a former business associate who authored an allegedly defamatory email about the Plaintiff and sent the email to the Plaintiff's customers.
Greg Shrader, an Oklahoma resident, produced books and courses for market traders and had partnered with William Stewart to edit and publish his materials through Stewart's Internet-based companies. After the partnership unraveled, Stewart wrote an email explaining why he terminated their business relationship and sent the email to a list of Shrader's customers. The email was then posted on a traders' forum and remained there for a period of time. Shrader filed suit against Stewart alleging that the email was defamatory and further sued the individual who posted the email to the forum, and the forum itself for failing to promptly remove the allegedly defamatory content. All three defendants, none of whom resided or conducted business in Oklahoma, filed motions to dismiss based on lack of personal jurisdiction. After the District Court for the Eastern District of Oklahoma granted all three motions, Shrader appealed to the Tenth Circuit.
Setting forth the traditional due process analysis for personal jurisdiction, the Court opined that these "pre-internet" principles fail to sufficiently guide the jurisdictional analysis in this case because "in a sense, the internet operates 'in' every state regardless of where the user is physically located, potentially rendering the territorial limits of personal jurisdiction meaningless." Thus, a person's act of merely placing content on the Internet would subject that person to the jurisdiction of every state where that content could potentially be accessed. The Court concluded that in order "[t]o avoid this untenable result, it is necessary to adapt the analysis of personal jurisdiction to this unique circumstance by placing emphasis on the internet user or site intentionally directing his/her/its activity or operation at the forum state rather than just having the activity or operation accessible there."
In fleshing out these principles, the Court was guided by the ALS Scan's test for specific jurisdiction arising out of Internet activity. The test required that an individual defendant expressly aim electronic activity to a particular state, and further rejected the notion that the passive act of merely placing content on the Internet would subject the user to the jurisdiction of each state in which the electronic signal could be transmitted or received.
Applying these principles to each defendant, the Court first analyzed whether the Wave59 forum, the Internet forum where the allegedly defamatory email was posted, could be subject to jurisdiction in Oklahoma. Because of the passive nature of the allegations against Wave59 and the fact that the forum did not target Oklahoma residents or businesses, the Court quickly found that the Wave59 defendants were not subject to general or specific jurisdiction based on their operation of the forum. Furthermore, the Court found that Wave59 could not be subject to general jurisdiction based on its operation of a commercial website. Acknowledging that operation of a commercial site that sells products in a particular state can subject the operator to jurisdiction in that forum, the Court further found that this may occur "only when the defendant has actually and deliberately used its website to conduct commercial transactions on a sustained basis with a substantial number of residents of the forum." Noting that Plaintiff had not sufficiently alleged that the website engaged in such persistent activity in Oklahoma, the Court held that the Wave59 defendants were not subject to personal jurisdiction in the forum.
Turning to Defendant Biddinger, who posted the email to the Wave59 site, the Court noted that the act of "posting allegedly defamatory comments or information on an internet site does not, without more, subject the poster to personal jurisdiction wherever the posting could be read." Citing the Calder effects test, providing that defamatory statements may give rise to personal jurisdiction if they are directed at a resident of the forum state, the Court announced a more restrictive version of the test and held "that the forum state itself must be the focal point of the tort," rather than the individual resident of the forum. Applying these principles, the Court held that the "geographically-neutral content of the message posted" by Biddinger was insufficient to confer jurisdiction on the Oklahoma court.
Finally, the Court considered whether Stewart himself could be subject to personal jurisdiction in Oklahoma for authoring the allegedly defamatory email sent to Shrader's customers. Based on its jurisdictional analysis of the Wave59 defendants, the Court first quickly dismissed the argument that Stewart could be subject to general jurisdiction based on his operation of a commercial website because it was not shown that Stewart was deliberately and actively "conduct[ing] commercial transactions on a sustained basis with a substantial number of residents of the forum."
Next, the Court analyzed whether Stewart's business relationship with Shrader could subject him to general jurisdiction in Oklahoma. Noting that a defendant's contractual or business relationship with a resident of the forum will not automatically subject that defendant to the general jurisdiction of the forum state, the Court held that in light of Stewart's sporadic and isolated contacts with Oklahoma through his limited business relationship with Shrader, there was insufficient evidence to subject him to general jurisdiction in Oklahoma.
Finally, the Court considered specific jurisdiction based on Stewart's allegedly defamatory email. Shrader alleged that Stewart sent the email to several thousand customers in Oklahoma and that Stewart did so knowing that those customers were located in Oklahoma. Opining that this allegation might have sufficed for purposes of specific jurisdiction, the Court further acknowledged Stewart's affidavit denying Shrader's allegations that he knowingly sent emails to Oklahoma residents. Furthermore, in light of any evidence to the contrary and the fact that Stewart sent the email in "bulk fashion" without knowing whether any recipients were Oklahoma residents, the Court held that Stewart could not be subject to specific jurisdiction and dismissed all claims based on a lack of personal jurisdiction.