Planet Aid, Inc. et al v. Reveal, Center for Investigative Reporting et al
Filing
21
MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 6/26/2017. (dass, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
PLANET AID, INC., et al.,
:
Plaintiffs,
:
v.
:
Civil Action No. GLR-16-2974
REVEAL, CENTER FOR
:
INVESTIGATIVE REPORTING, et al.,
:
Defendants.
MEMORANDUM OPINION
THIS MATTER is before the Court on Defendants’, Reveal, the
Center for Investigative Reporting (“Reveal”), Matt Smith, and
Amy Walters, Motion to Dismiss for Lack of Personal Jurisdiction
and Improper Venue (ECF No. 11).
Plaintiffs’,
Planet
Aid,
Inc.
Also before the Court is
(“Planet
Aid”)
and
Lisbeth
Thomsen, Motion for Leave to File a Sur-Reply (ECF No. 15).
This
defamation
action
Planet Aid in 2016.
arises
from
Reveal’s
reporting
about
The Motions are ripe for disposition, and
no hearing is necessary.
See Local Rule 105.6 (D.Md. 2016).
For the reasons outlined below, the Court will grant the Motions
and transfer this case to the United States District Court for
the Northern District of California.
BACKGROUND1
I.
Reveal
is
a
California-based
not-for-profit
organization that conducts investigative reporting.
¶
8,
ECF
No.
11-11).2
Smith
and
Walters
are
news
(Pyle Decl.
Reveal
staff
reporters who are domiciled in California and work at Reveal’s
Emeryville, California offices.
(Smith Decl. ¶¶ 2–5, ECF No.
11-12; Walters Decl. ¶¶ 2–6, ECF No. 11-13).
website,
which
is
(Pyle Decl. ¶ 7).
supported
by
servers
based
Reveal has a
in
Emeryville.
In the spring and summer of 2016, Reveal
published on its website a series of articles and podcasts about
Planet Aid; these publications are the subject of this lawsuit.
(Compl. ¶¶ 49–55, ECF No. 1).
Planet Aid is a charitable organization with operations in
at least twenty-one states and affiliates in sixteen African
countries.
(Id. ¶¶ 17, 19).
business is Maryland.3
Planet Aid’s principal place of
(Id.).
1
Planet Aid has approximately
Unless otherwise indicated, the following facts are
uncontroverted and the Court construes them in favor of
jurisdiction. New Wellington Fin. Corp. v. Flagship Resort Dev.
Corp., 416 F.3d 290, 294 (4th Cir. 2005) (citations omitted).
2
A court is permitted to consider evidence outside the
pleadings when resolving a Rule 12(b)(2) motion.
See Section
II.B.1 infra.
3
The parties dispute where Planet Aid has its principal
place of business. The Complaint alleges Planet Aid’s principal
place of business is Maryland. (Id. ¶ 17). Defendants contend
Planet Aid’s principal place of business is Massachusetts. For
the purposes of Defendants’ Motion, the Court infers that Planet
Aid’s principal place of business is Maryland.
See New
Wellington, 416 F.3d at 294.
2
seventy-five
processing
employees
center
for
between
its
clothing
partnerships and donor programs.
two
and
Maryland
an
locations:
office
that
a
manages
(Neltrup Decl. ¶¶ 5, 9, 10,
ECF No. 13-19).
A.
Reveal’s Reporting on Planet Aid
Smith and Walters investigated Planet Aid in 2015 and 2016.
(See Walters Decl. ¶ 8; Smith Decl. ¶ 7).
York,
Washington,
D.C.,
California,
They traveled to New
South
Africa,
Malawi,
Mexico, and Denmark to interview people for articles they were
writing about Planet Aid.
(Id.).
They also called to interview
people
United
States
located
in
other
cities,
southern
and
central Africa, Denmark, China, the United Kingdom, and Mexico.
(Id.).
Smith and Walters emailed two Planet Aid employees in
Maryland in 2015 and 2016,
requesting to set up interviews.
(Lichtenberg Decl. Exs. A–C, ECF No. 13-22 through 24; Teppih
Decl.
¶
4,
ECF
interviews were
No.
13-25).
conducted
Smith Decl. ¶ 7).
Despite
in Maryland.
these
attempts,
no
(Walters Decl. ¶ 8;
Smith and Walters traveled to Maryland and
photographed Planet Aid’s building, but never used the photo for
their stories.
(Id.).
On March 19, 2016, Reveal published its first report on
Planet Aid by posting an hour-long podcast entitled, “Alleged
Cult
Leader
website
Plays
(“March
Shell
19
Game
with
Podcast”).
3
U.S.
Foreign
(Compl.
Ex.
A
Aid”
on
[“March
its
19
Article”], ECF No. 1-2).
The March 19 Podcast stated that a
Federal Bureau of Investigation report linked Planet Aid to a
Danish
money
laundering
organization
Group,” who some describe as a cult.
called
Aid’s
Teachers
activities
Group,
as
in
well
Africa
as
the
government’s awareness of each.
Transcripts).
“Teachers
(Compl. Ex. G [“March 19
Podcast Transcripts”] at 8, ECF No. 1-2).
Planet
the
The podcast described
and
relationship
extent
of
the
with
United
the
States
(See generally March 19 Podcast
The March 19 Podcast asserted that Planet Aid
stole money from the United States Department of Agriculture
(“USDA”),
directed
it
to
other
countries,
Planet Aid employee salaries to the USDA.
and
misrepresented
(Id.).
On May 28, 2016, Reveal published an update of the March 19
Podcast (“May 28 Podcast”), which included the same material as
the
March
additional
55).
19
Podcast
investigation
as
well
its
as
new
reporters
information
conducted.
from
(Compl.
an
¶
Reveal recorded, edited, and posted the March 19 and May
28 Podcasts (collectively, the “Podcasts”) in California.
Decl.
¶¶
7,
10).
The
Podcasts
through programs such as iTunes.
were
available
for
(Pyle
download
(Id. ¶ 7).
On March 19, 2016 and May 23, 2016, coinciding with the
release of the Podcasts, Reveal published on its website several
news articles describing Planet Aid’s international activities.
(Compl. ¶ 51).
Reveal also published other articles on its
4
website that mention Planet Aid (collectively, the “Articles”).
(Id.).
The Articles maintained that Planet Aid committed fraud
and redirected to other countries 50% to 70% of the $130 million
the USDA gave Planet Aid.
(Id. ¶ 185).
U.S.
were
government
officials
fraud and tax evasion.
(Id.).
investigating
Planet
Aid
for
Smith and Walters wrote, edited,
and posted the Articles in California.
B.
They also stated that
(Pyle Decl. ¶ 10).
NBC 4’s Reporting on Planet Aid
Apart
from
their
own
reporting
for
Reveal,
Smith,
and
Walters gave an interview to a reporter with NBC’s Washington
D.C. affiliate (“NBC 4”), who did its own investigation into
Planet
Aid.
(Walters
Decl.
¶
9;
Smith
Decl.
¶
8).
interview took place in Reveal’s Emeryville newsroom.
NBC
4
is
based
in
Washington,
D.C.
(Compl.
¶
The
(Id.).
55).
The
principal reporter on NBC 4’s Planet Aid investigation was Tisha
Thompson, a member of
NBC 4’s I-Team and Maryland resident.
(Compl. ¶ 55; Rosenthal Decl. ¶ 28, ECF No. 13).
NBC 4 aired two television stories on Planet Aid, one on
May
23,
2016
--
the
same
day
Reveal
published
a
series
of
articles on Planet Aid -- and the other on May 24, 2016 (“NBC 4
Broadcasts”).
(See generally Compl. Ex. H).
Also on May 24,
2016, NBC 4 published an article on its website entitled “Behind
the
Bins:
Former
Experience.”
Planet
(Id.).
Aid
Employees
Describe
‘Cult-like’
The same day, Thompson tweeted at two
5
Twitter
where
users,
Planet
(Rosenthal
indicated
@RoseRiverFamily
Aid
Decl.
a
clothing
Ex.
donation
and
@CordellTraffic,
donation
F,
ECF
No.
box
was
located
boxes
13-6).
in
are
asking
located.
@RoseRiverFamily
Waldorf,
@CordellPugh said there was one in Bethesda, Maryland.
Maryland;
(Id.).
The NBC 4 Broadcasts stated that Planet Aid was a Marylandbased charity and featured a former employee who worked in one
of Planet Aid’s Maryland locations.
(Compl. ¶ 59).
The NBC 4
Broadcasts described Reveal’s investigation, including Reveal’s
reporting that Planet Aid employees were required to contribute
significant
portions
(Compl. at 62).
of
their
salary
to
the
Teachers
Group.
The NBC 4 Broadcasts aired a clip from Smith’s
interview in which she stated that Planet Aid had been putting
out “fraudulent propaganda.”
(Pls. Opp. Mot. Dismiss at 6, ECF
No. 13-27 (citing News4 at 6: Behind the Bins: What Did Planet
Aid Do With Your Taxpayer Dollars?, (NBC television broadcast
May 23, 2016), https://tinyurl.com/htu2lvy [“May 23 Broadcast”]
at
4:11)).
The
NBC
4
Broadcasts
asserted
that
Planet
Aid
required African villages to buy water pumps, even though the
villages could not afford it.
encouraged
viewers
to
stop
(Id. at 4:15).
donating
(Compl. ¶ 59).
6
clothing
NBC 4 reporters
to
Planet
Aid.
C.
Reveal’s Distribution of the Reports
In addition to posting the Podcasts on its website, Reveal
syndicated the March 19 Podcast and the May 28 Podcast to more
than
364
radio
stations
nationwide
through
Exchange (“PRX”), a distribution platform.
10).
the
Public
Radio
(Pyle Decl. ¶¶ 7,
Among these radio stations were four Maryland stations
that broadcasted the Podcasts: Baltimore’s WYPR-FM, Frederick’s
W228AM, Ocean City’s WRAU, and Paramount’s W228AB.
Decl. Ex. K, ECF No. 13-11).
(Rosenthal
Washington, D.C.’s WAMU radio
station also broadcasted the Podcasts into Maryland.
¶ 56).
(Compl.
Aside from airing the March 19 Podcast and the May 28
Podcast, these five radio stations re-aired the May 28 Podcast
on June 2, 2016.
Walters
(Id. ¶ 55).
tweeted
some
of
the
Articles
Twitter users in April and June of 2016.
and
Podcasts
to
On April 13, 2016,
American University’s Career Services Twitter account tweeted a
job opening for an International Development Associate position
in Planet Aid’s Elkridge, Maryland office.
E, ECF No. 13-5).
(Rosenthal Decl. Ex.
Walters replied to the tweet on April 16,
2016 with, “@AU_SIScareers Thought you’d be interested [in] our
latest podcast on @PlanetAid” and included a link to the March
19 Podcast.
(Id.).
On April 25, 2016 another Twitter user,
@chipmunk07, tweeted, “Thrift shopping with me this evening at
our
local
@planetaid!!
Come
7
out!
#baltimore
#bmore
#baltimorecity.”
Walters
replied
(Rosenthal
to
the
Decl.
tweet
Ex.
D,
similarly
ECF
with,
No.
13-4).
“@chipmunk07
Thought you’d be interested our latest podcast on @PlanetAid”
and included a link to the March 19 Podcast.4
on
June
12,
2016,
Twitter
Finally,
@LBRConsulting
user
(Id.).
tweeted,
“@planetaid SO IMPRESSED with store in Catonsville, MD. Clean,
well[-]organized, excellent service, great deals. THANK YOU!!!!”
(Rosenthal Decl. Ex. C, ECF No. 13-3).
Walters replied to the
tweet on June 20, 2016 with, “@LBRConsulting @planetaid Check
out
our
Planet
Aid
investigation”
and
included
Reveal’s website where the Articles could be found.
D.
a
link
to
(Id.).5
Procedural History
Planet Aid and Thomsen filed the present action on August
25, 2016.
(ECF No. 1).
In their fifteen-count Complaint, they
allege: Civil Conspiracy (Count I); Defamation (Counts II–XII);
False Light (Count XIII); Tortious Interference with Prospective
Economic
XV).
Advantage
(Compl.).
dismiss
all
(Count
On
Counts
improper venue.
XIV);
October
for
31,
lack
(ECF No. 11).
and
of
Unjust
2016,
Enrichment
Defendants
personal
(Count
moved
jurisdiction
to
and
On November 17, 2016, Plaintiffs
filed an Opposition, (ECF No. 13), and on December 5, 2016,
Defendants filed a Reply, (ECF No. 14).
4
On December 7, 2016,
The date of this tweet is not clear from the record.
It is unclear from the record which specific article or
series of articles the link made available.
5
8
Plaintiffs
filed
a
Motion
for
Leave
to
File
a
Sur-Reply
in
Opposition to the Motion to Dismiss, (ECF No. 15); it was fully
briefed as of December 12, 2016.
II.
A.
(See ECF Nos. 16, 19).
DISCUSSION
Motion for Leave to File Sur-Reply
“Unless otherwise ordered by the court, surreply memoranda
are
not
2016).
permitted
to
Typically,
be
filed.”
“[s]urreplies
Local
may
Rule
be
105.2(a)
permitted
(D.Md.
when
the
moving party would be unable to contest matters presented to the
court for the first time in the opposing party’s reply.”
Khoury
v. Meserve, 268 F.Supp.2d 600, 605 (D.Md. 2003) (citing Lewis v.
Rumsfeld, 154 F.Supp.2d 56, 61 (D.D.C. 2001)).
Here,
the
Court
concludes
that
the
moving
parties,
Plaintiffs, are contesting matters that Defendants presented to
the Court for the first time in their Reply.
Defendants, for
the first time in their Reply, argue the following: (1) Walters
was unaware her tweets were sent to Maryland residents; (2) PRX,
rather than Defendants, distributed the Podcasts in Maryland,
rendering
those
contacts
irrelevant
to
the
jurisdictional
analysis; and (3) there should be an evidentiary hearing to
resolve the state of Planet Aid’s principal place of business,
in the event the Court views that issue as dispositive.
In
their proposed Sur-Reply, Plaintiffs respond to all three of
Defendants’
new
arguments,
contending
9
that
the
tweets
that
Walters replied to make it clear that the Twitter users live in
Maryland,
PRX
is
Reveal’s
partner,
entitled to an evidentiary hearing.
and
Defendants
are
not
Because Plaintiffs would be
unable to contest Defendants’ new arguments without a Sur-Reply,
the
Court
will
grant
Plaintiffs’
arguments in Plaintiffs’ Sur-Reply
Motion
and
consider
the
when resolving Defendants’
Motion to Dismiss.
B.
Motion to Dismiss for Lack of Personal Jurisdiction
1.
Standard of Review
Defendants
because
the
Federal
Rule
argue
Court
of
the
Court
lacks
Civil
should
personal
Procedure
dismiss
the
jurisdiction
12(b)(2)
dismiss for lack of personal jurisdiction.
governs
Complaint
over
them.
motions
to
When a non-resident
defendant challenges a court’s power to exercise jurisdiction,
“the jurisdictional question is to be resolved by the judge,
with the burden on the plaintiff ultimately to prove grounds for
jurisdiction by a preponderance of the evidence.”
Carefirst of
Md., Inc. v. Carefirst Pregnancy Ctrs. Inc., 334 F.3d 390, 396
(4th Cir. 2003) (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d
56, 59–60 (4th Cir. 1993)).
“Yet when, as here, the district
court decides a pretrial personal jurisdiction dismissal motion
without an evidentiary hearing, the plaintiff need prove only a
prima facie case of personal jurisdiction.”
10
Mylan Labs., 2 F.3d
at 60 (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.
1989)).
In determining whether the plaintiff has proved a prima
facie case of personal jurisdiction, the Court “must draw all
reasonable inferences arising from the proof, and resolve all
factual disputes, in the plaintiff’s favor.”
886 F.2d at 676).
Id. (citing Combs,
That is, a court must draw the most favorable
inferences in favor of jurisdiction.
at 294 (citations omitted).
New Wellington, 416 F.3d
Additionally, a court is permitted
to consider evidence outside the pleadings when resolving a Rule
12(b)(2) motion.
Structural Pres. Sys., LLC v. Andrews, 931
F.Supp.2d 667, 671 (D.Md. 2013) (citing Silo Point II LLC v.
Suffolk Const. Co., 578 F.Supp.2d 807, 809 (D.Md. 2008)).
2.
Analysis
When determining whether it has personal jurisdiction over
a party, “a federal court applies the law of the state in which
it sits.”
CoStar Realty Info., Inc. v. Field, 612 F.Supp.2d
660, 670 (D.Md. 2009) (citing Carefirst of Md., Inc., 334 F.3d
at 396).
A federal district court may only exercise personal
jurisdiction over a nonresident defendant when such exercise (1)
is
authorized
satisfies
the
under
due
the
state’s
process
long-arm
requirements
of
Amendment to the United States Constitution.
statute
the
and
(2)
Fourteenth
Carefirst, 334
F.3d at 396 (citing Christian Sci. Bd. of Dirs. of the First
11
Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001)).
Maryland’s long-arm statute is coextensive with the limits of
personal
jurisdiction
Constitution.
But
this
by
the
due
process
clause
of
the
Mohamed v. Michael, 370 A.2d 551, 553 (Md. 1977).
does
analyses.
set
not
mean
courts
may
simply
equate
the
two
Mackey v. Compass Mktg, Inc., 892 A.2d 479, 493 n.6
(Md. 2006) (holding that courts may not “dispense with analysis
under the long-arm statute.”).
At least one reason for this is
that there may be cases when the facts satisfy constitutional
due
process
but
do
not
satisfy
Maryland’s
long-arm
statute.
Dring v. Sullivan, 423 F.Supp.2d 540, 545 (D.Md. 2006).
precise
description
of
the
relationship
between
A more
the
two
doctrines is that “to the extent that a defendant's activities
are covered by the statutory language, the reach of the statute
extends to the outermost boundaries of the due process clause.”
Id.
(quoting
Joseph
M.
Coleman
&
Assocs.,
Ltd.
v.
Colonial
Metals, 887 F.Supp. 116, 118–19 n.2 (D.Md. 1995).
Here, the Court concludes that even if Maryland’s long-arm
statute
authorizes
exercising
satisfy
personal
the
Amendment.
Amendment,
personal
due
jurisdiction
over
process
a
Process
Due
nonresident
over
Defendants,
Defendants
requirements
the
Under
while
jurisdiction
of
Clause
defendant’s
the
of
the
does
not
Fourteenth
Fourteenth
physical
presence
within the forum state is not required for the court to exercise
12
personal
jurisdiction,
the
defendant
must
generally
have
sufficient “minimum contacts” so that “the maintenance of the
suit
does
not
offend
substantial justice.”
traditional
notions
of
fair
play
and
Walden v. Fiore, 134 S.Ct. 1115, 1121
(2014) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945)) (internal quotation marks omitted).
The defendant’s contacts may form the basis of general or
specific
jurisdiction.
With
general
jurisdiction,
the
defendant’s contacts with the state are not the basis for the
suit and the “jurisdiction over the defendant must arise from
the defendant’s general, more persistent, but unrelated contacts
with the state.”
Carefirst, 334 F.3d at 397.
Conversely, with
specific jurisdiction, the defendant’s contacts form the basis
of the suit.
Id.
Here, Defendants’ contacts with Maryland
arose from their stories about Planet Aid, and those stories
form the basis of this action.
Thus, the Court must determine
whether Plaintiffs have proved a prima facie case of specific
jurisdiction.
See Mylan Labs., 2 F.3d at 60 (citing Combs, 886
F.2d at 676).
The United States Court of Appeals for the Fourth Circuit
has developed a three-prong test for specific jurisdiction in
which
the
defendant
conducting
Court
considers:
purposefully
activities
“(1)
availed
in
the
13
the
itself
extent
of
State;
the
(2)
to
which
privilege
whether
the
of
the
plaintiff[’s] claims arise out of those activities directed at
the State; and (3) whether the exercise of personal jurisdiction
would be constitutionally reasonable.”
F.3d
at
278
(quoting
ALS
Consulting Eng’rs, 561
Scan,
Inc.
v.
Digital
Serv.
Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)).
The
Fourth Circuit cautions courts to examine the quality and nature
of the contacts rather than “merely . . . count the contacts and
quantitatively
compare
this
case
to
other
preceding
cases.”
Carefirst, 334 F.3d at 397 (quoting Nichols v. G.D. Searle &
Co., 783 F.Supp. 233, 238 (D.Md. 1992)).
When claims arise out
of a single contact, that single contact may be sufficient to
create jurisdiction as long as exercising jurisdiction would not
offend
“fair
play
and
substantial
justice.”
Id.
(citing
Nichols, 783 F.Supp. at 238).
Plaintiffs
reasons
--
Maryland,
assert
first,
and
specific
Planet
second,
Aid
jurisdiction
suffered
Defendants
the
and
sufficient minimum contacts with Maryland.
exists
most
third
for
injury
parties
two
in
had
The Court considers
these arguments in turn.
a.
Planet Aid’s Injury in Maryland from Defendants’
Allegedly Tortious Conduct
Plaintiffs
argue
that
Maryland’s
interest
in
exercising
jurisdiction over parties that commit torts within it warrants
exercising
jurisdiction
here,
relying
14
on
Keeton
v.
Hustler
Magazine, Inc., 465 U.S. 770 (1984).
Plaintiffs misread Keeton.
The Court in Keeton found that specific jurisdiction was present
because of defendant National Inquirer’s “regular circulation of
magazines in the forum State,” New Hampshire.
74.
Keeton
cited
New
Hampshire’s
465 U.S. at 773–
“significant
interest
in
redressing injuries” that occurred there, but only in response
to the lower court’s view that jurisdiction was not present
because of New Hampshire’s “minimal” interest.
Id. at 775–76.
Here, there are no allegations before the Court that Defendants
circulate
their
articles
or
podcasts
in
Maryland
regularly.6
Thus, the Court will not exercise specific jurisdiction over
Defendants simply because Planet Aid allegedly suffered the most
injury in Maryland.
b.
Contacts with Maryland
Plaintiffs
exercise
of
argue
specific
that
two
sets
jurisdiction.
of
contacts
First,
support
Plaintiffs
the
offer
contacts made by third parties in an alleged conspiracy with
Defendants, and second, contacts made by Defendants themselves.
The Court considers these contacts in turn.
6
Of course, Plaintiffs point to the five radio stations
that may broadcast Reveal’s podcasts in Maryland from PRX.
As
the Court will describe below, however, the Court cannot impute
PRX’s contacts with Maryland to Defendants.
See Section
II.B.2.b.i infra.
15
i.
Defendants
Conspiracy Theory of Jurisdiction
argue
that
because
some
contacts
supporting
jurisdiction are contacts that third parties -- PRX, NBC 4, and
Thompson -- made with Maryland, they cannot support specific
jurisdiction over Defendants.
Plaintiffs argue that under the
“conspiracy theory” of jurisdiction, the actions of PRX, NBC 4,
and Thompson may be imputed onto Defendants for the purposes of
personal jurisdiction.
The Court concludes that applying the
conspiracy theory of jurisdiction here does not comport with the
Constitution’s due process requirements.
Under
Maryland
law,
a
court
may
exercise
personal
jurisdiction over a defendant involved in a conspiracy when “a
co-conspirator
performs
jurisdictionally
furtherance of the conspiracy.”
No.
CCB-15-2556,
(citing
Mackey
(2006)).
2016
v.
WL
97833,
Compass
sufficient
acts
in
Wings to Go, Inc. v. Reynolds,
at
Mktg.,
*2
(D.Md.
Inc.,
Jan.
892
A.2d
8,
2016)
479,
487
When analyzing whether exercising jurisdiction over a
defendant under the conspiracy theory of jurisdiction comports
with
due
process
requirements,
the
“pertinent
question”
is
whether a defendant “has fair warning that his participation
could
subject
him
to
the
jurisdiction
of
a
foreign
forum.”
Wings to Go, 2016 WL 97833, at *4 (quoting Compass Mktg., Inc.
v. Schering-Plough Corp., 438 F.Supp.2d 592, 596 (D.Md. 2006))
(internal
quotation
marks
omitted).
16
“[T]his
question
is
answered
by
(quoting
the
very
Compass
quotation
nature
Mktg.,
marks
of
438
a
conspiracy
theory.”
F.Supp.2d
For
omitted).
at
court
the
596)
Id.
(internal
to
exercise
jurisdiction under the conspiracy theory, a defendant must have
had
a
“reasonable
expectation,
at
the
time
the
[defendant]
agreed to participate in the conspiracy, that acts to be done in
furtherance of the conspiracy by another co-conspirator would be
sufficient”
to
subject
jurisdiction in the forum.
the
co-conspirator
to
personal
Compass Mktg., 438 F.Supp.2d at 596
(citing Mackey, 892 A.2d at 487).
Here, the Court concludes that Defendants could not have
had a reasonable expectation that, when partnering with PRX to
air stories about Planet Aid, airing those stories
would
enough to subject PRX to personal jurisdiction in Maryland.
is undisputed that PRX
distributed
PRX’s
could
not
nationwide
have
had
a
distribution
(Pyle Decl. ¶¶ 7, 10).
reasonable
of
It
the Podcasts to over 364
radio stations across the United States.
Defendants
be
the
expectation
Podcasts
would
that
be
sufficient to subject PRX to personal jurisdiction in Maryland
merely because five of those 364 radio stations would broadcast
the Podcasts into Maryland.
Plaintiffs rely primarily on Calder v. Jones, 465 U.S. 783
(1984),
to
argue
that
in
defamation
actions,
nationwide
distribution of the defamatory material still supports personal
17
jurisdiction in a particular forum.7
Plaintiffs’ reliance on
Calder is misplaced.
In
Calder,
the
Court
concluded
that
jurisdiction
over
defendants existed in California because “California [was] the
focal point both of the story and of the harm suffered.”
U.S. at 789.
story
Yet unlike in Calder, where the allegedly libelous
“concerned
resident,”
instead
465
here,
focused
the
California
activities
of
a
California
the Podcasts did not focus on Maryland
on
Planet
Aid’s
international
dealings,
and
with
only incidental concern for Planet Aid’s activities in Maryland.
See 465 U.S. at 788.
The Podcasts focused on Planet Aid’s
relationship with the Teachers Group -- a Danish organization -accused Planet Aid of stealing and redirecting money from the
USDA to other countries, and described Planet Aid’s activities
in
Africa.
(See
generally
March
19
Podcast
Transcripts).
Indeed, the title of the March 19 Podcast was, “Alleged Cult
Leader
Article
Plays
at
Shell
1).
Game
And
with
unlike
U.S.
in
Foreign
Calder,
Aid.”
where
the
(March
19
allegedly
libelous story “was drawn from California sources,” the Podcasts
7
Plaintiffs rely on Calder to argue generally in favor of
exercising personal jurisdiction over Defendants, rather than in
favor of exercising jurisdiction over Defendants under the
conspiracy theory of jurisdiction.
Because their argument
addresses whether Defendants could reasonably expect the Court
to exercise personal jurisdiction over PRX, the Court will
consider Plaintiffs’ argument under the conspiracy theory of
jurisdiction.
18
were drawn from a variety of sources in addition to Maryland
sources.
See 465 U.S. at 788–89.
Smith and Walters interviewed
sources from across the United States and several countries.
(See Walters Decl. ¶ 8; Smith Decl. ¶ 7).
could
not
would
subject
Court
have
will
reasonably
PRX
not
to
expected
personal
impute
PRX’s
that
Because Defendants
partnering
jurisdiction
in
contacts
with
with
PRX
Maryland,
the
Maryland
to
Defendants.
The Court further concludes that Defendants could not have
had a reasonable expectation that, when partnering with NBC 4 to
air stories about Planet Aid, airing those stories would be
enough to subject NBC 4 to personal jurisdiction in Maryland.
NBC 4 is a television station that is based in Washington, D.C.
and
aired
the
(Compl. ¶ 55).
two
NBC
4
Broadcasts
from
Washington,
D.C.
Defendants, therefore, could not have had a
reasonable expectation that airing the NBC 4 Broadcasts from
Washington, D.C. would subject NBC 4 to jurisdiction in Maryland
simply because the two NBC 4 Broadcasts could also be viewed in
Maryland.
Plaintiffs rely on Calder for the proposition that even if
a party circulates allegedly defamatory statements nationwide, a
court can exercise personal jurisdiction over the party as long
as the party circulates the statements in the court’s forum.
Plaintiffs interpret Calder too broadly.
19
In Calder, the Court
found
that
defendants
jurisdiction
circulated
existed
the
not
allegedly
simply
defamatory
because
the
statements
in
California, but because “California [was] the focal point both
of the story and of the harm suffered.”
465 U.S. at 789.
Here,
like with the Podcasts, Maryland was not the focal point of the
NBC 4 Broadcasts.
While the NBC 4 Broadcasts acknowledge that
Planet Aid is a Maryland-based charity and featured a former
Maryland employee, (Compl. ¶ 59), the focus of the stories was
on Reveal’s investigation into Planet Aid’s relationship with
the Teachers Group and Reveal’s allegations that Planet Aid was
misusing USDA money.
4
Broadcasts
also
(See generally May 23 Broadcast).
asserted
Planet
Aid
was
The NBC
requiring
African
villages to buy water pumps from it that they could not afford.
(May 23 Broadcast at 4:15).
Because Defendants could not have
reasonably expected that partnering with NBC 4 would subject NBC
4
to
personal
jurisdiction
in
Maryland,
the
Court
will
not
impute NBC 4’s contacts with Maryland to Defendants.8
In sum, the Court will not impute PRX’s or NBC 4’s contacts
with
Maryland
theory
of
to
Defendants
jurisdiction
because
here
does
8
applying
not
the
comport
conspiracy
with
the
Defendants, moreover, could not have had a reasonable
expectation that, when partnering with Thompson to report on
Planet Aid, Thompson’s tweets would subject Thompson to personal
jurisdiction in Maryland.
For reasons the Court will describe
infra, even assuming that the Twitter users reside in Maryland,
Thompson’s tweets are insufficient minimum contacts between
Defendants and Maryland.
20
Constitution’s due process requirements.
Accordingly, the Court
will consider only Defendants’ own contacts with Maryland.
ii.
Defendants’ Contacts with
Calder’s “Effects Test”
Maryland
under
Plaintiffs’ remaining two arguments in favor of exercising
jurisdiction
are
based
on
Calder and its progeny.
the
“effects
test”
established
by
Under that test, the plaintiff must
show that:
(1) the defendant committed an intentional
tort; (2) the plaintiff felt the brunt of
the harm in the forum, such that the forum
can be said to be the focal point of the
harm; and (3) the defendant expressly aimed
his tortious conduct at the forum, such that
the forum can be said to be the focal point
of the tortious activity.
Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 280
(4th
Cir.
2009)
(quoting
Carefirst,
334
F.3d
at
398
n.7)
(internal quotation marks omitted).
Plaintiffs make two arguments based on the effects test.
First, Plaintiffs argue that Smith and Walters’s virtual contact
with Maryland residents is sufficient for the Court to exercise
specific
jurisdiction
over
Defendants.
Plaintiffs
highlight
that Walters tweeted the Podcasts and the Articles at Twitter
users who appear to reside in Maryland, that Walters replied to
a tweet advertising a job opening in Planet Aid’s Elkridge,
Maryland office with a link to the March 19 Podcast, and that
Walters and Smith emailed Maryland residents as part of their
21
investigation.
be
Maryland
Defendants argue that the Twitter users may not
residents
and
that
the
virtual
contact
is
insufficient for the Court to exercise specific jurisdiction.
Because
Plaintiffs
jurisdiction,
must
requiring
prove
the
only
Court
to
a
prima
make
facie
all
case
of
inferences
in
favor of jurisdiction, the Court infers that the Twitter users
are Maryland residents.9
See Mylan Labs., 2 F.3d at 60 (citing
Combs, 886 F.2d at 676); see also New Wellington, 416 F.3d at
294 (citations omitted).
The Court still concludes, however,
that Smith and Walters’s virtual contact with Maryland residents
is insufficient for the Court to exercise specific jurisdiction.
Plaintiffs rely mostly on First American First, Inc. v.
National Association
of Bank Women, 802 F.2d 1511
(4th Cir.
1986), for the proposition that even when a defamatory statement
is distributed nationwide, sending the statement to persons in
the
forum
state
is
sufficient
for
that
state
to
exercise
jurisdiction under the effects test.
Plaintiffs overlook that
the
found
court
in
First
American
First
that
jurisdiction
existed not simply because the defendant sent the defamatory
9
The Court makes this inference because these two tweets
suggest that the Twitter user who posted the tweet was present
in Maryland at the time of the post.
(See Rosenthal Decl. Ex.
D-1) (“Thrift shopping with me this evening at our local
@planetaid!! Come out! #baltimore #bmore #baltimorecity.”)
(emphasis added); Rosenthal Decl. Ex. C (“@planetaid SO
IMPRESSED
with
store
in
Catonsville,
MD.
Clean,
well[]organized, excellent service, great deals. THANK YOU!!!!”)
(emphasis added)).
22
statement to persons in
the forum state, Virginia, but
also
because the plaintiff lived and worked in Virginia, and all the
officers
and
activities
of
his
business
--
which
was
incorporated in Virginia -- resided and took place in Virginia,
respectively.
First Am. First, 802 F.2d at 1516–17.
Plaintiffs further overlook that district courts have later
observed, “[s]ince New American . . . the Fourth Circuit has
seemed to require more than the Calder ‘effects-test’ to hold
exercises
of
constitutional.”
jurisdiction
over
foreign
tortfeasors
Cole-Tuve, Inc. v. Am. Mach. Tools Corp., 342
F.Supp.2d 362, 367 (D.Md. 2004); see also, e.g., Chattery Int’l,
Inc. v. JoLida, Inc., No. WDQ-10-2236, 2011 WL 1230822, at *16
(D.Md. Mar. 28, 2011) (“The Fourth Circuit has interpreted the
‘effects’ test narrowly.”).
The Fourth Circuit requires that
for a state to exercise jurisdiction, the plaintiff must not
only feel
the alleged injury
there,
but also those injuries
“must ultimately be accompanied by the defendant’s own contacts
with the state.”
Consulting Engineers Corp., 561 F.3d at 281
(quoting ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 626
(4th
Cir.
1997))
(internal
quotation
marks
omitted).
The
Supreme Court later endorsed this interpretation of the effects
test.
that
See Walden, 134 S. Ct. at 1125 (“. . . Calder made clear
mere
injury
to
a
forum
resident
connection to the forum.”).
23
is
not
a
sufficient
The Court concludes that the Fourth Circuit’s test in ALS
Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707 (4th
Cir.
2002),
is
most
appropriate.
In
ALS
Scan,
the
Fourth
Circuit adapted the effects test to the Internet context.
See
Young v. New Haven Advocate, 315 F.3d 256, 263 (4th Cir. 2002)
(“In ALS Scan we went on to adapt the traditional standard . . .
for establishing specific jurisdiction so that it makes sense in
the Internet context.”); see also Zippo Mfg. Co. v. Zippo Dot
Com, Inc., 952 F.Supp. 1119 (W.D.Pa. 1997) (first applying the
test ALS Scan later adopted).
In that context, the plaintiff
must show that the defendant “(1) directs electronic activity
into the State, (2) with the manifested intent of engaging in
business or other interactions within the State, and (3) that
activity creates, in a person within the State, a potential
cause of action cognizable in the State's courts.”
Carefirst,
334 F.3d at 399 (quoting ALS Scan, 293 F.3d at 714).
Here,
Walters
tweeted
the
Podcasts
and
the
Articles
at
Twitter users who reside in Maryland, and Walters replied to a
tweet
advertising
a
job
opening
in
Planet
Aid’s
Maryland office with a link to the March 19 Podcast.
Decl. Exs. C through E).
two
Maryland
residents
Elkridge,
(Rosenthal
In addition, Walters and Smith emailed
as
part
of
their
(Lichtenberg Decl. Exs. A–C; Teppih Decl. ¶ 4).
24
investigation.
On one hand, this virtual contact does direct electronic
activity into Maryland under ALS Scan’s first prong.
On the
other hand, it is far less clear whether the virtual contact
here is enough to satisfy the first prong.
Courts in the Fourth
Circuit have applied ALS Scan and its progeny only to websites
themselves -- not
Internet
and
sending links to
making
other
website content over the
virtual
residents of a forum state.10
contacts
directly
In fact, the Supreme Court in
Walden left the very issue of virtual contacts open.
S.Ct.
at
1125
different
n.9
(“[T]his
questions
‘presence’
and
whether
conduct
with
case
does
and
how
translate
not
a
into
See 134
present
the
very
defendant's
virtual
‘contacts’
with
a
particular State . . . We leave questions about virtual contacts
for another day.”).
Generally, for a court to exercise specific jurisdiction
consistent
conduct
State.”
with
must
due
create
process,
a
“the
substantial
defendant’s
connection
suit-related
with
the
forum
Walden, 134 S. Ct. at 1121 (emphasis added); see also
Young, 315 F.3d at 263 (holding that when a defendant posts news
10
The parties do not offer any cases where non-residents
sent website content or made other virtual contacts directly to
residents of a forum state.
After its own exhaustive search,
the most similar case the Court found was Dring v. Sullivan, 423
F.Supp.2d 540 (D.Md. 2006).
In Dring, the non-resident
defendant sent an allegedly defamatory email to an email
listserv with several dozen members.
423 F.Supp.2d at 542–43.
Only about four percent of the listserv’s members were Maryland
residents, however. Id. at 548.
25
articles on a website, the first and second prongs of the ALS
Scan
test
newspaper
require
the
purposefully
plaintiff
to
show
that
directed
electronic
the
Internet
activity
“in
a
substantial way to the forum state” (quoting Panavision Int’l,
L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998) (emphasis
added)).
The
defendant’s
contacts
“must
have
been
so
substantial that ‘they amount to a surrogate for presence and
thus
render
the
exercise
of
sovereignty
just.’”
Consulting
Engineers, 561 F.3d at 277–78 (quoting ESAB Group, 126 F.3d at
623).
But to be sure, the connection “need not be as extensive
as is necessary for general jurisdiction.”
ESAB Group, 126 F.3d
at 625.
Because a substantial connection is required, before the
advent of the Internet, courts in the Fourth Circuit held that
communications made by non-residents from outside of Maryland to
a
Maryland
resident,
jurisdiction.
alone,
are
insufficient
exercise
Leather Masters (PVT), Ltd. v. Giampier Ltd., 836
F.Supp. 328, 331 (D.Md. 1993) (citing
Craig v. General Fin.
Corp., 504 F.Supp. 1033, 1038 (D.Md. 1980).
Leather
to
Masters,
the
conversations, and
defendant’s
For example, in
“correspondence,
telephone
[fax] communications” with the plaintiff’s
agent in Maryland were insufficient to establish jurisdiction
consistent
telephonic
with
due
requests
process.
for
Id.
information
26
Similarly,
from
“occasional
Maryland-based
investigation
services
over
insufficient as well.
a
period
of
years”
have
been
Stover v. O'Connell Assocs., Inc., 84
F.3d 132, 137 (4th Cir. 1996); see also Russell v. Med. Bus.
Bureau, LLC, No. RDB-12-2983, 2013 WL 3805118, at *3 (D.Md. July
19,
2013)
plaintiff
(concluding
initiated
that
with
one
the
telephone
defendant
conversation
was
the
insufficient
to
establish jurisdiction).
The Court concludes that these pre-Internet cases involving
communications made from outside Maryland to Maryland residents
also
apply
Walters’s
to
the
virtual
virtual
contact
contacts
is
here.
insufficient
Thus,
for
Smith
the
Court
and
to
exercise jurisdiction consistent with due process because they
do
not
establish
a
substantial
connection
with
Maryland.
Sending three tweets and four emails related to the Podcasts and
the Articles over a period of a year and a half are not “so
substantial that ‘they amount to a surrogate’” for Smith and
Walters’s presence in Maryland.
See Consulting Engineers, 561
F.3d at 277–78 (quoting ESAB Group, 126 F.3d at 623).
In the
same way that occasional telephonic requests for information,
mail
correspondence,
Maryland
to
jurisdiction,
Maryland
so,
or
fax
communication
residents,
too,
are
is
Walters’
27
from
insufficient
tweets
on
outside
to
two
of
exercise
or
three
different
days11
occasional
email
from
California,
requests
Maryland residents.
for
or
Smith
interviews
from
and
Walters’s
California,
to
See Leather Masters, 836 F.Supp. at 331;
see also Stover, 84 F.3d at 137.
Because Smith and Walters’s
virtual contacts are insufficient to demonstrate a substantial
connection with Maryland, the Court will not exercise specific
jurisdiction over Defendants on this basis.12
Turning to Plaintiffs’ second argument based on the effects
test,
Plaintiffs
argue
that
Planet
Aid’s
principal
place
of
business in Maryland, the Podcasts and the Articles’ focus on
Maryland,
and
their
reliance
satisfy the effects test.
on
Maryland
sources,
together,
The Court disagrees.
In making this second argument, Plaintiffs rely heavily on
analogizing the present case to Calder to argue that Defendants’
contacts satisfy the effects test.
To review, the Supreme Court
in
over
Calder
held
that
jurisdiction
defendants
existed
in
California because “California [was] the focal point both of the
11
Walters sent one tweet on April 16, 2016 and a second one
on June 20, 2016. (Rosenthal Decl. Exs. C, E). It is unclear
from the record when Walters sent the third tweet.
(See
Rosenthal Decl. Ex. D).
12
For the aforementioned reasons, the Court further
concludes that Thompson’s tweets to Maryland residents are
insufficient for the Court to exercise jurisdiction consistent
with due process.
On, May 24, 2016, Thompson tweeted at two
Twitter users, @RoseRiverFamily and @CordellTraffic, asking
where
Planet
Aid
clothing
donation
boxes
are
located.
(Rosenthal Decl. Ex. F). Like Walters’s tweets, Thompson’s two
tweets related to the NBC 4 Broadcasts sent on the same day do
not demonstrate a substantial connection with Maryland.
28
story
and
of
the
harm
suffered.”
465
U.S.
at
789.
Even
assuming that Planet Aid’s principal place of business is in
Maryland -- making Maryland arguably the focal point of the harm
suffered -- as explained above, Maryland was not the focus of
the Podcasts and the Articles.
The focus of the Podcasts and
the Articles was Planet Aid’s relationship with the Teachers
Group and allegations of Planet Aid defrauding the USDA, with
only incidental concern for Planet Aid’s activities in Maryland.
And as explained above, the Podcasts and the Articles were not
drawn only, or even primarily, from Maryland sources, but from a
variety of sources from across the United States and several
countries in addition to Maryland.
Thus, the Court concludes
that Plaintiffs fail to satisfy the effects test and will not
exercise jurisdiction over Defendants on this basis.
In
sum,
the
Court
concludes
that
Plaintiffs
failed
to
establish a prima facie case in favor of jurisdiction based on
the
conspiracy
Accordingly,
theory
the
of
Court
jurisdiction
further
or
concludes
the
effects
that
test.
exercising
jurisdiction over Defendants does not comport with due process
and the Court will grant Defendants’ Motion.
c.
Venue
Because Plaintiffs have not made a prima facie showing that
the Court possesses personal jurisdiction over Defendants, the
Court must either dismiss the case so that Plaintiffs may re29
file in a more appropriate jurisdiction, or transfer the case to
another district court “if it be in the interest of justice.”
28 U.S.C. § 1406(a); see, e.g., Broadnax Bey v. Pedersen, No.
DKC 15-3073, 2016 WL 3181763, at *4 (D.Md. June 8, 2016).
The
Fourth Circuit has read § 1406(a) to authorize “transfer ‘for
any reason which constitutes an impediment to a decision on the
merits in the transferor district but would not be an impediment
in the transferee district.’”
*4
(quoting
Estate
of
Broadnax Bey, 2016 WL 3181763, at
Bank
v.
Swiss
286 F.Supp.2d 514, 522 (D.Md. 2003)).
Valley
Farms
Co.,
Lack of jurisdiction is
one such “impediment,” and whether to dismiss or transfer an
action
under
discretion.
§
1406(a)
is
within
the
district
court’s
Id. (citing Bank, 286 F.Supp.2d at 522).
Here, Defendants argue that the case should be transferred
to the United States District Court for the Northern District of
California.
California
The Court agrees.
citizens.
(Pyle
Walters Decl. ¶¶ 2–6).
California.
Reveal, Smith, and Walters are
Decl.
¶
5,
Smith
Decl.
¶¶
2–5;
They work out of offices in Emeryville,
(Smith Decl. ¶ 2; Walters Decl. ¶ 2).
Reveal
recorded the Podcasts, wrote the Articles, and edited and posted
both in Emeryville.
(Pyle Decl. ¶¶ 7, 10).
The Podcasts and
the Articles were posted on Reveal’s website, which is supported
by servers in Emeryville.
(Pyle Decl. ¶ 7).
Thus, the Court
will exercise its discretion under § 1406(a) to transfer the
30
case
to
the
Northern
District
of
California,
where
personal
jurisdiction and venue are proper.
III. CONCLUSION
For the foregoing reasons, the Court will GRANT Plaintiffs’
Motion for Leave to File a Sur-Reply (ECF No. 15) and GRANT
Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction
and Improper Venue (ECF No. 11).
case
to
the
United
States
District of California.
The Court will TRANSFER this
District
Court
for
the
Northern
A separate Order follows.
Entered this 26th day of June, 2017
/s/
________________________
George L. Russell, III
United States District Judge
31
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