Southern United States Trade Association v. John Doe 1 et al

Filing 60

ORDER & Reasons denying 56 Motion for Leave to Appeal. Signed by Judge Eldon E. Fallon on 7/14/11. (ala, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SOUTHERN UNITED STATES TRADE ASSOCIATION
VERSUS
UNIDENTIFIED PARTIES

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CIVIL ACTION
NO. 10-1669
SECTION “L” (4)

ORDER & REASONS
Before the Court is Defendant Sumit Guddh’s Motion to Certify the Court’s June 16,
2011 Order for Interlocutory Appeal (Rec. Doc. No. 56). The Court has reviewed the submitted
memoranda and the applicable law. For the following reasons, the motion is denied.
I. BACKGROUND AND PRESENT MOTION
This case arises out of allegedly defamatory statements posted by Defendant Sumit
Guddh on various Internet websites. In its Amended Complaint, Plaintiff Southern United States
Trade Association (SUSTA) states that it is a Louisiana nonprofit corporation that provides
assistance to U.S. businesses in exporting food and agricultural products. Plaintiff Jerry Hingle is
identified as the executive director of SUSTA, and Plaintiff Bernadette Wiltz is identified as the
deputy director. Plaintiffs allege that since April 2010, Defendant has posted numerous
defamatory statements about them on several websites, all with the intent to tarnish their
reputation. Plaintiffs have filed suit in this Court, seeking damages and an injunction barring
Defendant from engaging in the alleged tortious conduct.
On April 14, 2011, Defendant filed a motion to dismiss for lack of personal jurisdiction.
Defendant argued that under the Supreme Court’s decision in Calder v. Jones, 465 U.S. 783
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(1984), he does not have the minimum contacts with Louisiana for this Court to assert personal
jurisdiction over him. Defendant emphasized, among other things, that the contents of the
allegedly defamatory statements are not focused on Louisiana and that SUSTA’s operations
extend to a number of states other than Louisiana. Plaintiffs opposed the motion. Plaintiffs
asserted that Defendant’s prior dealings with SUSTA, and the contents of his statements, make it
clear that his statements were expressly aimed at Louisiana and that therefore, personal
jurisdiction is proper under Calder.
On June 16, 2011, this Court denied Defendant’s motion. Applying the Supreme Court’s
decision in Calder and Fifth Circuit precedent explaining the requirements of that case, the Court
found that Plaintiffs had established a prima facie case for personal jurisdiction. The Court noted
that the material presented by the parties, when viewed in the light most favorable to Plaintiffs,
supported the finding that the focal point of the statements was Louisiana. The Court also
concluded that the material, when viewed in the light most favorable to Plaintiffs, supported the
finding that the focal point of the alleged harm was Louisiana. Accordingly, the Court held that
Plaintiffs had made prima facie case for specific jurisdiction.
Defendant has now filed a Motion to Certify the Court’s June 16, 2011 Order for
Interlocutory Appeal (Rec. Doc. No. 56). In his brief, Defendant argues that this Court’s order
denying his motion to dismiss for lack of personal jurisdiction is suitable for immediate appellate
review. Defendant notes that the issue of personal jurisdiction involves “a controlling question of
law” and that its resolution would “materially advance the ultimate termination of the litigation.”
28 U.S.C. § 1292(b). Defendant also asserts that “there is substantial ground for difference of
opinion” as to several questions regarding the personal jurisdiction analysis. Id. Plaintiffs have

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filed an opposition to the motion. Plaintiffs argue that Defendant has not satisfied the stringent
criteria to obtain certification for interlocutory appeal.
II. LAW AND ANALYSIS
A. Interlocutory Appeals under 28 U.S.C. § 1292(b)
In general, only the final judgments of the federal district courts can be appealed. See,
e.g., United States v. Garner, 749 F.2d 281, 284-85 (5th Cir. 1985). This final-judgment rule,
embodied in 28 U.S.C. § 1291, reflects “a firm congressional policy against . . . ‘piecemeal’
appeals.” Henry v. Lake Charles Am. Press, LLC, 566 F.3d 164, 170-71 (5th Cir. 2009) (quoting
Abney v. United States, 431 U.S. 651, 656 (1977)). One exception to this general rule lies in 28
U.S.C. § 1292(b), which provides that a district court in a civil case may certify for appeal an
order that is not otherwise appealable if the district court is “of the opinion that such order
involves [1] a controlling question of law [2] as to which there is substantial ground for
difference of opinion and [3] that an immediate appeal from the order may materially advance
the ultimate termination of the litigation.”
Interlocutory appeals under this provision are appropriate only in “exceptional cases,”
Garner, 749 F.2d at 286; accord Clark-Dietz & Assocs.-Eng’rs., Inc. v. Basic Constr. Co., 702
F.2d 67, 69 (5th Cir. 1983), and “permission to appeal [under § 1292(b)] is granted sparingly,
not automatically,” Ala. Labor Council v. Alabama, 453 F.2d 922, 924 (5th Cir.1972). The
decision regarding whether to certify an order for interlocutory appeal under Section 1292(b)
rests within the discretion of the district court. Swint v. Chambers County Comm’n, 514 U.S. 35,
47 (1995) (“Congress . . . chose to confer on district courts first line discretion to allow
interlocutory appeals.”); 16 Charles Alan Wright & Arthur R. Miller, Federal Practice and

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Procedure § 3929 (2d ed. 1987) (“The initial determination that appeal is desirable is confided to
the discretion of the district judge . . . .”).
B. Personal Jurisdiction
Defendant has not demonstrated that this Court’s ruling on the issue of personal
jurisdiction raises a question as to which “there is substantial ground for difference of opinion.”
28 U.S.C. § 1292(b). “The threshold for establishing the ‘substantial ground for difference of
opinion’ . . . required for certification pursuant to § 1292(b) is a high one.” Judicial Watch, Inc.
v. Nat’l Energy Policy Dev. Group, 233 F. Supp. 2d 16, 19 (D.D.C. 2002). Indeed, “[a]n
interlocutory appeal assuredly does not lie simply to determine the correctness of a judgment.”
Clark-Dietz, 702 F.2d at 68. The mere fact that a party disagrees with the district court’s ruling is
insufficient to establish that there is a substantial ground for a difference of opinion. E.g., United
States ex rel. Branch Consultants, LLC v. Allstate Ins. Co., 668 F. Supp. 2d 780, 813-14 (E.D.
La. 2009); Bush v. Adams, 629 F. Supp. 2d 468, 475 (E.D. Pa. 2009); First Am. Corp. v. AlNahyan, 948 F. Supp. 1107, 1116 (D.D.C. 1996).
Instead, a substantial ground for difference of opinion exists if there is a “genuine doubt
as to the correct legal standard” to be applied. Kapossy v. McGraw-Hill, Inc., 942 F. Supp. 996,
1001 (D.N.J. 1996); accord Sims v. Sunnyside Land, LLC, 425 B.R. 284, 295 (W.D. La. 2010).
Such a circumstance can arise, for instance, if “the circuits are in dispute on the question and the
Court of Appeals of the circuit [encompassing the district court] has not spoken on the point . . .
or if novel and difficult questions of first impression are presented.” Ryan v. Flowserve Corp.,
444 F. Supp. 2d 718, 723-24 (N.D. Tex. 2006) (internal citation omitted); accord Couch v.
Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010).

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In addition, a party may argue that there is a substantial ground for difference of opinion
based on the divergent application of a legal standard. But the mere fact that “settled law might
be applied differently” is insufficient to show that there is a substantial ground for difference of
opinion. Couch, 611 F.3d at 633. Instead, a party seeking to pursue an interlocutory appeal must
show that “other courts have substantially differed in applying the standard.” Harter v. GAF
Corp., 150 F.R.D. 502, 518 (D.N.J. 1993) (emphasis added). If the application of the same legal
standard to similar facts has led to divergent outcomes, then the legal standard may have to be
further refined or clarified.
In this case, as the parties have observed, the question of whether there are sufficient
minimum contacts for this Court to assert personal jurisdiction over Defendant is governed by
the Supreme Court’s decision in Calder v. Jones, 465 U.S. 783 (1984). Since Calder itself was
decided, the Fifth Circuit has had several opportunities to clarify the requirements of that case.
See, e.g., Clemens v. McNamee, 615 F.3d 374, 380 (5th Cir. 2010); Fielding v. Hubert Burda
Media, Inc., 415 F.3d 419, 426 (5th Cir. 2005). This includes one case in which the alleged
defamation was carried out over the Internet. See Revell v. Lidov, 317 F.3d 467, 469 (5th Cir.
2002).
As this Court has explained, these precedents establish the rule that for personal
jurisdiction to be proper under Calder, the forum state must be the “focal point” of both the
allegedly defamatory statements and of the alleged harm. Id. at 474 & n.48. The element that the
forum state be the focal point of the statements “must be demonstrated by showing that (1) the
subject matter of and (2) the sources relied upon for [the allegedly defamatory statements] were
in the forum state.” Fielding, 415 F.3d at 426. Meanwhile, the element that the forum state be the

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focal point of the alleged harm requires a showing that the defendant knew that the “brunt of the
harm” would be borne in that state. Revell, 317 F.3d at 475. A showing that the forum state is
“the focal point of the tortious act . . . will ofttimes provide sufficient evidence” that the
defendant knew that the harm will be primarily borne in that state. Id. at 476.
In this case, Defendant argues that there are several questions related to this analytical
framework as to which “there is substantial ground for difference of opinion.” 28 U.S.C. §
1292(b). First, Defendant states that it is unclear whether the passive or interactive nature of a
website is a determinative factor in the personal jurisdiction analysis. This suggestion is not
persuasive. In support of his argument, Defendant has cited to Zippo Manufacturing Co. v. Zippo
Dot Com, Inc., 952 F. Supp. 1119, 1122 (W.D. Pa. 1997). There, the court concluded that “[a]
passive Web site that does little more than make information available to those who are
interested in it is not grounds for the exercise of personal jurisdiction.” Id. at 1124. As Plaintiffs
note, however, the decision in Zippo is not binding on this Court. What is controlling is the Fifth
Circuit’s treatment of the Zippo framework.
Perhaps in recognition of this notion, Defendant has cited to Mink v. AAAA Development
LLC, 190 F.3d 333 (5th Cir. 1999). In that case, the Fifth Circuit discussed Zippo with some
approval and accorded significant weight to the fact that the website at issue was passive. See id.
at 336-37. But, as this Court previously noted, Mink involved a copyright and patent
infringement case, and not a defamation case clearly governed by the Supreme Court’s decision
in Calder. See id. at 335. The Fifth Circuit precedent that clearly addresses the utility of the
Zippo framework in a defamation case – and that is therefore controlling – is Revell. See Revell,
317 F.3d at 469, 471-72. There, the Fifth Circuit indicated either that the interactivity of a

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website is irrelevant or that it is a single, non-dispositive factor. See id. at 473-76. The Court of
Appeals has never held in a defamation case that the passive or interactive nature of a website is
determinative of the personal jurisdiction inquiry. Defendant has failed to demonstrate that there
is “genuine doubt” as to this question. Kapossy, 942 F. Supp. at 1001.
Second, Defendant contends that there is also substantial ground for a difference of
opinion on the question of how to determine whether “an allegedly defamatory statement is
aimed at the forum state.” Def.’s Mem. at 4. Once again, it bears noting that the Fifth Circuit has
“spoken on the point.” Ryan, 444 F. Supp. 2d at 724. As noted above, the Court of Appeals has
held that the element that the forum state be the focal point of the statements “must be
demonstrated by showing that (1) the subject matter of and (2) the sources relied upon for [the
allegedly defamatory statements] were in the forum state.” Fielding, 415 F.3d at 426; see also
Clemens, 615 F.3d at 380. Fifth Circuit precedent on this question is clear.
Citing the decision in Schnapp v. McBride, 64 F. Supp. 2d 608 (E.D. La. 1998),
Defendant seems to suggest that courts may have “substantially differed in applying the
[aforementioned] standard.” Harter, 150 F.R.D. at 518. As Plaintiffs correctly observe, however,
Schnapp is factually distinguishable, and its outcome is reconcilable with that reached in this
case. In Schnapp, the allegedly defamatory statement did not focus on the plaintiff himself. See
Schnapp, 64 F. Supp. at 611. Here, however, the allegedly defamatory statements are focused on
Plaintiffs. The conclusion in Schnapp that there were no minimum contacts to support specific
jurisdiction does not indicate that “other courts have substantially differed in applying the
standard” established by the Fifth Circuit. Harter, 150 F.R.D. at 518.
Third, Defendant argues that it is unclear whether a court should find it significant that a

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defendant knows that the plaintiff resides in the forum state. The relevant body of binding
precedent on this issue is, once again, clear. In Calder itself, the Supreme Court found it
significant that the defendants “knew that the brunt of th[e] injury would be felt by [the plaintiff]
in the State in which she lives and works.” Calder, 465 U.S. at 789-90. Consistent with this
observation, the Court of Appeals has held that the defendant’s knowledge of the plaintiff’s
residence is a necessary, though not sufficient, factor for finding personal jurisdiction under
Calder. See Revell, 317 F.3d at 475-76. Defendant has not demonstrated that there is “genuine
doubt” as to this aspect of the Calder analysis. Kapossy, 942 F. Supp. at 1001.
In his brief, Defendant cites to Xcentric Ventures, LLC v. Bird, 683 F. Supp. 2d 1068 (D.
Ariz. 2010), for the proposition that a defendant’s knowledge of the plaintiff’s residence is
“irrelevant.” Def.’s Mem. at 4. Defendant misapprehends the analysis in that case. As Plaintiffs
observe, the court in Xcentric Ventures merely concluded that a defendant’s knowledge that the
plaintiff resides in the forum state is insufficient to support personal jurisdiction. Xcentric
Ventures, 683 F. Supp. 2st at 1075. The court did not hold that the defendant’s knowledge was
irrelevant. Even if it had, this Court would be bound to apply Fifth Circuit precedent, which, as
noted above, makes it clear that this factor is relevant in the personal jurisdiction analysis.
In sum, Defendant has not shown that this Court’s order denying his motion to dismiss
for lack of personal jurisdiction involves a question as to which “there is substantial ground for
difference of opinion.” 28 U.S.C. § 1292(b). Defendant has clearly registered his disagreement
with this Court’s disposition of his motion, but as noted above, the mere fact that a party
disagrees with a ruling is insufficient to establish the requisite “substantial ground for difference
of opinion.” E.g., Branch Consultants, 668 F. Supp. 2d at 813-14. The Court at this juncture is

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unable to conclude that Defendant has satisfied the requirements to obtain certification for
interlocutory appeal under 28 U.S.C. § 1292(b). Accordingly, the present motion must be denied.
III. CONCLUSION
For the foregoing reasons, IT IS ORDERED that Defendant’s Motion to Certify the
Court’s June 16, 2011 Order for Interlocutory Appeal (Rec. Doc. No. 56) is hereby DENIED.
New Orleans, Louisiana, this 14th day of July, 2011.

UNITED STATES DISTRICT JUDGE

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