Assef et al v. Does 1-10

Filing 46

ORDER re 37 MOTION for Default Judgment by the Court as to Defendant Doe 1 aka [e-mail] filed by Nicholas Assef, Lincoln Crowne & Company Pty Ltd. Responses due by 8/22/2016. Signed by Judge Maria-Elena James on 8/8/2016. (mejlc3, COURT STAFF) (Filed on 8/8/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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NICHOLAS ASSEF, et al.,

Case No. 15-cv-01960-MEJ

Plaintiffs,
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ORDER VACATING HEARING AND
ORDERING FURTHER BRIEFING

v.
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Re: Dkt. No. 37

DOES 1-10,
Defendant.

United States District Court
Northern District of California

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This matter is currently scheduled for a hearing on August 11, 2016 regarding the motion

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for default judgment filed by Nicholas Assef and Lincoln Crowne & Co. (“Plaintiffs”). Pursuant

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to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court finds this matter

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suitable for disposition without oral argument and hereby VACATES the August 11, 2016

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hearing; however, the Court orders Plaintiffs to provide further briefing on the five issues listed

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below:

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(1) Defendant agreed to a forum selection clause when he accepted Google’s Terms of

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Service in 2007. Plaintiffs are not parties to that contract but nonetheless attempt to use the forum

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selection clause to support the Court’s exercise of personal jurisdiction over Defendant in this

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action. Plaintiffs cite Scott USA Inc. v. Patregnani, 2015 WL 1736496 (D. Id. Apr. 16, 2015) for

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the proposition that courts can use a forum selection clause to establish a defendant’s consent to

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their jurisdiction even though the plaintiff was not a party to the agreement. See Mot. at 6-7. In

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that case, however, the Idaho court found the non-party was bound because it was “‘closely

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related’ to the dispute such that it becomes ‘foreseeable’ that it will be bound.” 2015 WL

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1736496, at *3 (quoting Manetti-Farrow, Inc. v. Gucci Am., Inc., 858 F.2d 509, 513 (9th Cir.

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1988)). Specifically, the Idaho court found there could “be little doubt that [the third party] is

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‘closely related’ to the dispute between [plaintiff] and [defendant]. This dispute . . . arises out of

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[third party’s] alleged breach of its credit agreement with [plaintiff,] which [defendant]

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guaranteed. Thus, it is eminently foreseeable that [third party] would be bound by a forum

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selection clause that references [third party] specifically—even if [third party] was not a signatory

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to the Personal Guarantee signed by [defendant.]” Id. Plaintiffs should provide further legal

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support for their contention that personal jurisdiction based on Defendant’s consent exists under

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the circumstances here, i.e., where an unrelated third party uses a forum selection clause as the

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means to establish personal jurisdiction over a defendant who agreed to that clause in a contract

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with an entity that is not a party to the present dispute.

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(2) To establish personal jurisdiction exists under a minimum contact analysis, Plaintiffs

United States District Court
Northern District of California

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must show Defendant purposefully directed his activities toward California. See Schwarzenegger

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v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (tort claims—such as defamation—

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are generally analyzed under the “purposeful direction” test). To determine whether a defendant

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“purposefully directs his activities at a forum state,” courts apply the “effects” test articulated in

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Calder v. Jones, 465 U.S. 783 (1984). See Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir.

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2002). The “effects” test requires that the defendant allegedly must have “(1) committed an

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intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows

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is likely to be suffered in the forum state.” Id. In Walden v. Fiore, 134 S. Ct. 1115, 1123-24

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(2014), the Supreme Court revisited personal jurisdiction and the Calder test, and clarified that the

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relevant inquiry was the defendant’s contact with the forum, not with plaintiff: “mere injury to a

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forum resident is not a sufficient connection to the forum” to establish minimum contact exists.

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Courts must look to defendant’s contacts with the forum state itself, not with the persons who

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reside there. Plaintiffs should clarify why they believe Defendant purposefully directed his

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activities at California, particularly as Plaintiffs are Australian residents and the blog at issue here

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does not appear connected to California in any manner besides being hosted by Google.

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(3) Ninth Circuit courts apply state law to determine whether the speech at issue is

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defamatory. Lee Myles Assocs. Corp., v. Paul Rubke Enters., 557 F. Supp. 2d 1134, 1139 (S.D.

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Cal. 2008). Under California law, the elements of defamation are: “(a) a publication that is (b)
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false, (c) defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure or that

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causes special damage.” Kechara House Buddhist Ass’n Malaysia v. Does, 2015 WL 5538999, at

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*4 (N.D. Cal. Sept. 18, 2015). To make a prima facie defamation case, Plaintiffs bear the burden

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of establishing each element, but Plaintiffs have not addressed whether the blog statements are

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unprivileged. “One potential issue is the First Amendment. . . . In the context of default judgment

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for alleged defamation on gripe sites, the situation is not just about notice pleading and service on

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a defaulting defendant. It necessarily implicates whether the allegations establish a claim at all

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because some speech is protected by the First Amendment. The analysis turns on what the speech

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is.” Wilens v. Doe Defendant No. 1, 2015 WL 4606238, at *15 (N.D. Cal. July 31, 2015). Why is

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the speech at issue here unprivileged?
(4) A court may deny a motion for default judgment where a statute of limitations defense

United States District Court
Northern District of California

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is apparent on the face of the complaint. Joe Hand Promotions, Inc. v. Tu Minh Nguyen, 2011 WL

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1642306, at *2 (N.D. Cal. May 2, 2011) (citations omitted). The Complaint alleges Defendants

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posted the Blog in 2007 and Plaintiffs discovered it the same year. Compl. ¶ 14. For purposes of

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the statute of limitations, the Ninth Circuit has held that the publication date of a webpage is the

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date the allegedly defamatory statements were first posted. See Roberts v. McAfee, Inc., 660 F.3d

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1156, 1167 (9th Cir. 2011). Under California law, the statute of limitations for defamation is one

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year. Cal. Civ. Proc. Code § 340. Plaintiffs filed this action in 2015. Is a statute of limitations

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defense to the defamation claim not apparent on the face of the complaint?

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(5) If Plaintiffs’ motion for default judgment is granted, how could a court order Google,

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Inc.—a non-party to this action—to remove the offending blog or transfer ownership of the blog

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to Plaintiffs?

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The supplemental brief shall be no longer than eight pages and shall be filed no later than

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August 22, 2016. Upon receipt of Plaintiffs’ additional briefing, the matter will be deemed under

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submission.

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IT IS SO ORDERED.

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Dated: August 8, 2016
______________________________________
MARIA-ELENA JAMES
United States Magistrate Judge

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United States District Court
Northern District of California

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