Basile v. Prometheus Global Media LLC et al

Filing 27

MEMORANDUM Opinion and Order Signed by the Honorable John Z. Lee on 5/24/16.Mailed notice(ca, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NICOLE BASILE,
Plaintiff,
v.
PROMETHEUS GLOBAL MEDIA, LLC,
GREGG KILDAY, and TATIANA SIEGEL,
Defendants.

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15-cv-10138
Judge John Z. Lee

MEMORANDUM OPINION AND ORDER
Plaintiff Nicole Basile has sued Defendants Prometheus Global Media, LLC, Gregg
Kilday, and Tatiana Siegel for defamation per se and false light under Illinois law. Defendants
move to dismiss the complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(2) and improper venue under Rule 12(b)(3). Alternatively, Defendants move to
transfer venue to the Central District of California under 28 U.S.C. § 1404(a). For the reasons
stated herein, the Court grants the motion in part and denies it in part [18].
Factual Background
In late November 2014, Sony Pictures Entertainment fell victim to a cyberattack by
hackers, who released some of the company’s confidential data. This information included
unreleased films and personal information about its employees.
Sometime between December 3 and 12, 2014, Prometheus published an article written
and edited by Kilday and Siegel entitled, “Sony Hack: Studio Security Points to Inside Job.”
The article appeared in the printed version of The Hollywood Reporter, as well as in mobile and
tablet editions, and on The Hollywood Reporter website. Compl. ¶¶ 2, 3, 5; Kilday Decl. ¶¶ 6–7;

Siegel Decl. ¶¶ 4–5. The article falsely accused Basile as the individual responsible for the
cyberattack and identified her as a former Sony employee. Compl. ¶¶ 7–10.
As of December 2014, The Hollywood Reporter magazine had a total circulation of
72,000, including a circulation of approximately 1,300 in Illinois. Singer Decl. ¶¶ 12, 14.
During December 2014, the online version of the article received 82,808 total page views,
including 5,962 page views from readers in Illinois. Id. ¶¶ 15, 17.
Kilday resides and works in California. Kilday Decl. ¶¶ 3–4. Siegel lives in Rhode
Island and worked with The Hollywood Reporter’s office in Los Angeles, California, while
preparing the article. Siegel Decl. ¶¶ 3, 5. The editing and publishing of the article occurred in
the Los Angeles, California, office. Id. ¶ 8; Kilday Decl. ¶ 8.
As for Plaintiff, Basile was living in Deming, New Mexico, when the article was
published; she had been living there for a total of two months at the time. Pl.’s Decl. ¶ 17.
Within weeks after the article’s publication, Basile left New Mexico and began living with her
sister in Manhattan, Illinois. Id. ¶ 18. According to Basile, the article’s defamatory statements
caused her to suffer tremendous stress, and she began experiencing abdominal pain, eventually
requiring surgery on March 30, 2015, at the St. Joseph Medical Center in Joliet, Illinois. Id. ¶
20. In addition, Basile claims that, since the article was published, she has been unable to find
work in the film industry and was forced to work as a part-time waitress in Manhattan, Illinois.
Compl. ¶¶ 6, 13, 21. Basile believes that employers in the film industry have been unwilling to
hire her due to the false statements in the article. Compl. ¶¶ 6, 13.
Legal Standard
Defendants have moved to dismiss the complaint based on lack of personal jurisdiction
and improper venue under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3). In the

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alternative, Defendants have moved to transfer venue to the Central District of California under
28 U.S.C. § 1404(a).
When a defendant challenges personal jurisdiction under Rule 12(b)(2), the Court first
must decide whether any material facts are in dispute. Hyatt Int'l Corp. v. Coco, 302 F.3d 707,
713 (7th Cir. 2002). If such a dispute exists, the Court must hold a hearing at which the plaintiff
must establish personal jurisdiction by a preponderance of the evidence. Purdue Research
Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003). Where, as here, there are
no disputes of material facts, “the party asserting personal jurisdiction need only make out a
prima facie case of personal jurisdiction.” Hyatt, 302 F.3d at 713.
Similarly, when venue is challenged under Rule 12(b)(3), the “court takes all allegations
in the complaint as true, unless contradicted by the defendant’s affidavits.” Nagel v. ADM Inv’r
Servs., Inc., 995 F. Supp. 837, 843 (N.D. Ill. 1998).

The plaintiff bears the burden of

establishing that jurisdiction and venue are proper. Tamburo v. Dworkin, 601 F.3d 693, 700 (7th
Cir. 2010) (jurisdiction); Grantham v. Challenge-Cook Bros., Inc., 420 F.2d 1182, 1184 (7th Cir.
1969) (venue).
Under section 1404(a), a transfer to another venue may be appropriate “[f]or the
convenience of parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). When
considering a motion to transfer venue, courts should recognize the burden that transferring will
place on each party, and engage in a “case-by-case consideration of convenience and fairness.”
Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 977 (7th Cir. 2010).

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Analysis
I.

Motion to Dismiss for Lack of Personal Jurisdiction
Personal jurisdiction comes in two forms—general or specific.

“If the defendant’s

contacts are so extensive that it is subject to general personal jurisdiction, then it can be sued in
the forum state for any cause of action arising in any place. More limited contacts may subject
the defendant only to specific personal jurisdiction, in which case the plaintiff must show that its
claims against the defendant arise out of the defendant's constitutionally sufficient contacts with
the state.” uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010). “In either
case, the ultimate constitutional standard is whether the defendant had “certain minimum
contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’”

Id. (quoting International Shoe Co. v.

Washington, 326 U.S. 310, 316 (1945)). Basile concedes that general jurisdiction is absent here
and relies upon the theory of specific jurisdiction to establish personal jurisdiction over
Defendants.
A court may exercise specific jurisdiction over a defendant when “(1) the defendant has
purposefully directed his activities at the forum state or purposefully availed himself of the
privilege of conducting business in that state, and (2) the alleged injury arises out of the
defendant’s forum-related activities.” Tamburo, 601 F.3d at 702. Furthermore, because this
Court is sitting in diversity jurisdiction, it “must apply the personal jurisdiction rules of the state
in which it sits.” Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015). And
“[t]he governing statute in Illinois permits its courts to exercise personal jurisdiction up to the
limits of the Due Process Clause of the Fourteenth Amendment.” Id.; see 735 Ill. Comp. Stat.
5/2-209(c).

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In a defamation case such as this, any inquiry into personal jurisdiction must start with
Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774–75 (1984). In Keeton, the plaintiff, who
was a New York resident, brought a defamation case in a New Hampshire court against Hustler
Magazine, which was based in Ohio. The Supreme Court held that personal jurisdiction over
Hustler existed in New Hampshire because it regularly sold its magazines in New Hampshire.
“Such regular monthly sales of thousands of magazines cannot by any stretch of the imagination
be characterized as random, isolated, or fortuitous. It is, therefore, unquestionable that New
Hampshire jurisdiction over a complaint based on those contacts would ordinarily satisfy the
requirement of the Due Process Clause that a State’s assertion of personal jurisdiction over a
nonresident defendant be predicated on minimum contacts between the defendant and the State.”
Id., 465 U.S. at 775. The Court added, “There is no unfairness in calling [the magazine] to
answer for [its] contents . . . wherever a substantial number of copies are regularly sold and
distributed.” Id. at 781.
Although The Hollywood Reporter Magazine too is a nationally circulated publication,
Defendants argue that the Court should not apply Keeton, but the more rigorous test announced
in Calder v. Jones, 465 U.S. 783, 789 (1984). In Calder, the plaintiff brought a libel claim
against the National Enquirer, Inc., as well as the president of the National Enquirer and one of
its reporters, both of whom lived in Florida. Id. The individual defendants contested personal
jurisdiction (although the company did not), arguing that they had insufficient contacts with
California and were not responsible for the circulation of the article in California. Id. The
Supreme Court rejected these arguments, noting that the individual defendants had prepared the
article, which they knew would injure the plaintiff, and were aware that the “brunt of that injury
would be felt by [the plaintiff] in the State in which she lives and works and in which the

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National Enquirer has its largest circulation.”

Id. at 789–90.

“Under the circumstances,

petitioners must reasonably anticipate being haled into court there to answer for the truth of the
statements made in their article.” Id. at 791 (internal quotations omitted).
The Seventh Circuit has interpreted Calder to require “(1) intentional conduct (or
‘intentional and allegedly tortious’ conduct); (2) expressly aimed at the forum state; (3) with the
defendant’s knowledge that the effects would be felt—that is, the plaintiff would be injured—in
the forum state.” Tamburo, 601 F.3d at 703. But, in uBID, Inc. v. GoDaddy Grp., Inc., the
Seventh Circuit observed that it is unnecessary to proceed under Calder if a defendant has
sufficient contacts under the standard established in Keeton. See 623 F.3d 421, 427 n.1 (7th Cir.
2010) (“Because GoDaddy’s actual contacts with Illinois meet the constitutional standard for
minimum contacts under Keeton, we need not decide whether sufficient contacts should be
imputed under the Calder ‘express aiming’ test announced by the Supreme Court.”). With this
in mind, the Court will consider each Defendant separately.
A. Defendant Prometheus
Basile has made a prima facie showing that Prometheus has sufficient contacts with
Illinois under Keeton by purposefully directing its activities at Illinois and availing itself of the
privilege of conducting business in Illinois. First, it is undisputed that Prometheus circulates
approximately 1,300 copies of The Hollywood Reporter annually in Illinois. And, although
Prometheus argues that the number represents only 1.8% of its total circulation, the consistent
and regular nature of those sales demonstrate that Prometheus intentionally directs its business to
Illinois, and the sales of the magazine in Illinois cannot be considered a fortuitous event or

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random occurrence. 1 What is more, Prometheus’s own media kit boasts to its existing and
would-be advertisers that The Hollywood Reporter is distributed to industry moguls “in
metropolitan areas from coast to coast.” Pl.’s Resp. Mem., Ex. A, Media Kit, THR Circulation.
These materials further evidence Prometheus’s efforts to purposely target Chicago, as well as the
Illinois market, for distribution and sales of The Hollywood Reporter. Accordingly, the Court
finds that Prometheus has sufficient minimum contacts with Illinois.
But minimum contacts, alone, are not enough to establish specific personal jurisdiction.
Not only must Prometheus have minimum contacts with Illinois, but Basile’s claim must “arise
out of or relate to” those contacts. uBID, 623 F.3d at 429. How extensive the relationship
between the contacts and claim must be is a matter of some debate. “[S]ome circuits have
analogized the required relationship between contacts and claims to the tort concepts of but-for
and proximate causation.” Id., 623 F.3d at 430 (citing cases). For its part, the Seventh Circuit
declined to adopt either approach, finding the but-for test over-inclusive and the proximate
causation test under-inclusive. Id. Instead, it adopted the “quid pro quo” formulation espoused
by the Third Circuit in O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312 (3d Cir. 2007): “outof-state residents may avail themselves of the benefits and protections of doing business in a
forum state, but they do so in exchange for submitting to jurisdiction in that state for claims
arising from or relating to those activities.” Id. (citing O’Connor, 496 F.3d at 322). In the end,

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Prometheus relies on Scherr v. Abrahams, No. 97 C 5453, 1998 WL 299678 (N.D. Ill.
May 29, 1998), to argue that 1.8% of its total circulation is insufficient to demonstrate intent to
direct its activities to Illinois. But in Scherr, the sole basis for asserting personal jurisdiction
over the defendant was that it distributed fewer than 60 copies of the publication in Illinois every
other month. Id., 1998 WL 299678 at *3. Not only did Prometheus distribute more copies of its
magazine, but its promotional materials taut its efforts to distribute its magazine in cities “from
coast to coast.” Similarly, Chaiken v. VV Publ. Cop., 119 F.3d 1018 (2d Cir. 1997), involved
only a total of 183 copies of the foreign newspaper without any evidence that defendant
expressly aimed its actions at the forum state.
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the Seventh Circuit concluded that “[t]he precise causal relationship between contacts and claim
was not important; what was required was that the relationship be ‘intimate enough to keep the
quid pro quo proportional and personal jurisdiction reasonably foreseeable.”

Id. (citing

O’Connor, 496 F.3d at 323).
In this case, Prometheus argues that Basile’s claim is unrelated to its Illinois-based
conduct because its conduct was not aimed at Illinois in any way. To the contrary, Prometheus
distributes its magazine in Illinois, in part, because it wants to “reach to target a mix of industry
moguls, A-list celebrities and consumer influential in metropolitan areas from coast to coast.”
See Pl.’s Resp. Mem., Ex. A, Media Kit, THR Circulation. Basile alleges that her injury stems
from the fact that the purportedly defamatory statements were read by the exact industry
decisionmakers and insiders in Illinois that the magazine is intended to influence. Compl. ¶¶ 13,
19, 25. Given this, the relationship between Prometheus’s Illinois contacts and Basile’s claims is
“close enough to make the relatedness quid pro quo balanced and reasonable.” uBID, 623 F.3d
at 431.
For these reasons, the Court finds that Prometheus could reasonably anticipate being
haled into an Illinois court in an action based on the contents of its magazine.
B. Defendants Gregg Kilday and Tatiana Siegel
With regard to Defendants Kilday and Siegel, however, the Court reaches a different
conclusion. Basile has not made a prima facie showing that Kilday or Siegel has sufficient
contacts with Illinois under the tests articulated in Keeton or Calder.
First, neither Kilday nor |Siegel has ever lived or worked in Illinois. Kilday Decl. ¶ 11;
Siegel Decl. ¶ 11. Neither owns any property in Illinois. Kilday Decl. ¶ 11; Siegel Decl. ¶ 11.
Neither visited Illinois or contacted anyone in Illinois while researching and writing the article.

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Kilday Decl. ¶ 10; Siegel Decl. ¶ 9. Furthermore, Kilday is a film editor, Siegel is a senior film
writer, and there is nothing to indicate that either had any personal involvement with distributing
or circulating copies of the article in Illinois. Kilday Decl. ¶ 2; Siegel Decl. ¶ 2. As such, Basile
has not established that Kilday or Siegel have purposefully directed their activities at Illinois or
availed themselves of the privilege of conducting business in Illinois.
Nor do they meet the “express aiming” test employed by the Supreme Court in Calder.
The article does not mention or allude to Illinois, to anyone then-residing in Illinois, or any entity
known to conduct business in Illinois. Nor is there any indication that Kilday or Siegel were
aware that Basile was from Illinois, would relocate to Illinois after the article’s publication, or
had family in Illinois. The only connection (to use that term generously) Kilday or Siegel had
with Illinois for purposes of this litigation is that, shortly after the article was published, Basile
decided on her own accord to move to Illinois. Such a weak and tangential connection with
Illinois does not provide a reasonable basis for the Court to exercise personal jurisdiction over
Kilday and Siegel in Illinois. The Court therefore grants Defendants’ motion to dismiss as to
Kilday and Siegel, and the claims against them are dismissed without prejudice.
II.

Motion to Dismiss for Improper Venue
Next, Prometheus argues that venue is improper in the Northern District of Illinois

because it is not an Illinois resident and the events leading to the article’s publishing did not
occur in Illinois. A civil case can be filed in:
(1) a judicial district in which any defendant resides, if all defendants are residents
of the State in which the district is located; (2) a judicial district in which a
substantial part of the events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the action is situated; or (3) if
there is no district in which an action may otherwise be brought as provided in
this section, any judicial district in which any defendant is subject to the court’s
personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b).
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Basile alleges that the injury caused by Prometheus’s actions—specifically, the damage
to her employment opportunities and physical harm—has occurred in Illinois. The principal
injury giving rise to a defamation claim occurs where Basile’s reputation would suffer the most
harm—where she lives and works and where the people with whom she has personal or
commercial relationships reside. See Kamelgard v. Macura, 585 F.3d 334, 342 (7th Cir. 2009).
Here, Basile alleges that she has felt the sting of the defamatory statements in Illinois because
she lives here, she has unsuccessfully attempted to find work in her field here, and those with
whom she has close personal relationships live here. Pl.’s Decl. ¶¶ 18, 20–21. In addition, the
allegedly defamatory statements were distributed directly to Illinois via printed magazines and
other media. Thus, the Northern District of Illinois is the “judicial district in which a substantial
part of the events or omissions giving rise to the claim occurred.” See 28 U.S.C. § 1391(b)(2).
Therefore, venue is appropriate as to Prometheus in the Northern District of Illinois.
III.

Motion to Transfer Pursuant to 28 U.S.C. § 1404(a)
In the alternative, Prometheus contends that this suit should be transferred to the Central

District of California. For the convenience of parties and witnesses, and in the interests of
justice, a federal district court may transfer any civil action to any other district where it may
have been brought. 28 U.S.C. § 1404(a).
In evaluating a motion to transfer, courts look at two categories of interests: private and
public. See Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973, 979 (7th
Cir. 2010). Private interests include the convenience of the parties, availability and access to
witnesses, the location of material events, and the relative ease of access to sources of proof. See
id. at 978.

Public interests include the congestion of the respective dockets, each court’s

familiarity with the relevant law, the desirability of resolving controversies in each location, and
the relationship of the community to the controversy. See id.
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There is a strong presumption in favor of the plaintiff’s choice of forum if it is where the
plaintiff resides. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255–56 (1981). The party
seeking to transfer the case has the burden of showing that the transferee forum is clearly more
convenient. See Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989).
“Where the balance of convenience is a close call, merely shifting inconvenience from one party
to another is not a sufficient basis for transfer.” Research Automation, 626 F.3d at 979.
Here, Prometheus has not established that litigating in California is clearly more
convenient with respect to private interests. Indeed, transferring this case to California would
merely shift inconvenience from one party to another. In addition, Prometheus has not pointed
to any third-party witnesses that would be inconvenienced by litigating in Illinois. And, in this
age of electronic document transmission, the parties and Court can easily access any necessary
documents in Chicago just as well as in the Central District of California. And, while many of
the events surrounding the article’s publication took place in California, the principal injury to
Basile took place in Illinois. Accordingly, on balance, the private interests do not overcome the
strong presumption in favor of Basile’s choice of the forum.
Moreover, Prometheus has not shown that the public interests clearly favor transferring
the case to the Central District of California. On average it takes two months longer to resolve a
case short of trial and approximately one year longer to get to trial in the Northern District of
Illinois.

See http://www.uscourts.gov/statistics/table/na/federal-court-management-statistics/

2015/12/31-3. This factor weighs slightly in favor of transferring the case to California. On the
other hand, in diversity cases, it is often advantageous if the federal judges who preside over
cases are familiar with the applicable state law—here Illinois law; therefore, this factor weighs
slightly against transfer. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 221 (7th Cir. 1986).

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In addition, both California and Illinois have an interest in, and relationship to, the controversy.
As such, the Court finds that the public interest factors do not weigh in favor of or against
transfer.
Ultimately, Prometheus has failed to establish that the balance of the private and the
public interests strongly favors transferring this case to the Central District of California.
Accordingly, the motion to transfer is denied.
Conclusion
For the reasons stated herein, the Court grants in part and denies in part Defendants’
motion to dismiss, or in the alternative, to transfer [18]. With regard to Prometheus, the Court
denies the motion to dismiss for lack of personal jurisdiction and for improper venue and the
motion to transfer. The Court grants the motion to dismiss for lack of personal jurisdiction as to
Kilday and Siegel, and strikes as moot the motion to dismiss for improper venue and the motion
to transfer as to them. The claims against Defendants Kilday and Siegel are thus dismissed
without prejudice, and they are terminated as defendants.
IT IS SO ORDERED.

ENTERED 5/24/16

__________________________________
John Z. Lee
United States District Judge

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