LOSTUTTER v. OLSEN et al
Filing
57
MEMORANDUM OPINION AND ORDER signed by JUDGE THOMAS D. SCHROEDER on 8/24/2017. For the reasons stated herein, Defendants' motion to dismiss for lack of subject matter jurisdiction (Doc. 13) is DENIED; Defendant Olsen's motion to dismiss bas ed on insufficient service of process (Doc. 13) is GRANTED, and the action against him is DISMISSED WITHOUT PREJUDICE; Defendant Goddard's motion to dismiss (Doc. 13) based on insufficient service of process and lack of personal jurisdiction is DENIED, the motion to dismiss (Doc. 13) for failure to state a claim on which relief can be granted is GRANTED as to Counts I through IV and DENIED as to Counts V and VI; Plaintiff's motion for extension of time (Doc. 32) is GRANTED; Plaintiff& #039;s motion to strike (Doc. 29) is DENIED AS MOOT; Defendant McKee's motion for sanctions in the form of attorney's fees (Doc. 48) is DENIED; Defendant's counsel's motion to withdraw as counsel (Doc. 50) is MOOT as to Defendants McKee and Olsen and DENIED WITHOUT PREJUDICE as to Defendant Goddard; Defendants' motion for a "gatekeeper" order (Doc. 13) is DENIED WITHOUT PREJUDICE; Defendants' motion to strike (Doc. 26) is DENIED; Plaintiff's motion for contempt or arrest (Doc. 35) is DENIED; and Plaintiff's motion for a temporary restraining order and preliminary injunction (Doc. 16) is DENIED. (Engle, Anita)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
DERIC JAMES LOSTUTTER,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
THOMAS OLSEN; ALEXANDRIA
GODDARD; and MICHELLE MCKEE,
Defendants.
1:16-cv-1098
MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
Deric
James
Lostutter,
Defendants,
all
residents
principally
through
their
proceeding
of
different
use
website www.DericLostutter.org.
of
the
pro
se,
States,
claims
that
defamed
him,
unauthorized
eponymous
In this court, the parties have
engaged in a nearly non-stop campaign of motions and filings, of
which the following require resolution: Defendants’ motion to
dismiss and motion for gatekeeper order (Doc. 13); Lostutter’s
motion for preliminary injunction or temporary restraining order
(Doc. 16); Defendants’ motion to strike several of Lostutter’s
“notices
of
filing”
(Doc.
26);
Lostutter’s
motion
to
strike
Defendants’ motion to dismiss (Doc. 29); Lostutter’s motion for
extension of time to serve Defendant Alexandria Goddard (Doc. 32);
Lostutter’s motion for contempt or in the alternative for the
issuance of a warrant for arrest (Doc. 35); Defendant Michelle
McKee’s motion for attorneys’ fees (Doc. 48); and Defendants’
counsel’s motion to withdraw (Doc. 50).
Lostutter
has
recently
voluntarily
dismissed
the
action
against Defendant McKee (Doc. 45), so the motions are moot as to
her.
For the reasons that follow, the court finds that Defendant
Thomas Olsen has not been properly served with process, and the
action will be dismissed without prejudice as to him.
As to the
remaining action against Defendant Goddard, the court grants her
motion to dismiss for failure to state a claim as to all of
Lostutter’s claims except those for libel per se and libel per
quod.
I.
The remainder of the parties’ motions will be denied.
BACKGROUND
The allegations of the complaint are difficult to follow and
presume knowledge of events it does not fully describe.
As best
as can be ascertained and viewed in the light most favorable to
Lostutter, the complaint alleges the following:
Lostutter styles himself as a women’s rights advocate who,
through his cyber-technology skills, exposes wrongdoing.
Among
his actions was the use of his computer skills to unearth technical
information related to the prosecution of two high school football
players accused of raping a 16-year-old in Steubenville, Ohio, and
school administrators who covered it up.
His activities were
featured in the media, most notably in Rolling Stone Magazine and
on CNN.
(Doc. 1 ¶ 10.)
As a consequence of his covert computer
2
actions, he was charged with felony crimes and was ultimately
convicted and sentenced to federal prison, where he presently
resides.
When not in prison, Lostutter resides in Forsyth County,
North Carolina.
Lostutter
(Id. ¶ 4.)
claims
that
Defendants,
who
reside
States, have engaged in a scheme to defame him.
in
various
Defendant Olsen
is a resident of Escambia County, Florida, and a member of the
internet
“hacking
activist
group,
‘Anonymous.’”
(Id.
¶ 5.)
Defendant Goddard is a resident of Franklin County, Ohio, and is
an online blogger and the founder of Xander Business Group.
¶ 6.)
(Id.
McKee, whom Lostutter recently dismissed from the action,
is a resident of Pierce County, Washington.
(Id. ¶ 7.)
Defendants’ alleged defamation campaign traces its start to
April
2015,
when
Olsen
created
a
website
entitled
DericLostutter.org in an effort to post negative information about
Lostutter
and
to
confuse
the
website, DericLostutter.com.
public
over
Lostutter’s
actual
According to Lostutter, Olsen has
resisted his request and efforts to remove the site.
have used DericLostutter.org to upload
Defendants
“pornographic content”
relating to Lostutter for the purpose of harassing, degrading, and
embarrassing him.
(Id. ¶ 14.)
On May 9, 2016, Defendants “hatched a plot to falsely label
the Plaintiff threatening, including false threats of rape and
violence . . . using what appears to be Facebook Message generators
3
to imitate Plaintiff[‘s] Facebook page, typing ridiculous threats,
encouraging the readers of the blog to send the fabrications to
Plaintiff’s local police department and the F.B.I. in an attempt
to have Plaintiff arrested and damage the Plaintiff’s good name.”
(Id. ¶ 15.)
as
An article about Lostutter was linked to the webpage
“deric-threatens-to-rape-and-film-stab-a-girl-threatens-her-
kid.”
(Id.)
Defendants also “targeted” Lostutter’s Kernersville,
North Carolina business, known as TechAssist, resulting in a
“catastrophic loss of clientele and forcing Plaintiff to close the
doors.”
(Id. ¶ 16.)
(It appears that Lostutter’s business was a
brick-and-mortar store located in Kernersville, North Carolina.
(Doc. 1 ¶ 16.)) Defendants posted false accusations that Lostutter
kept clients’ electronic devices he was servicing.
(Id. ¶ 17.)
Lostutter claims a “projected” loss of “$80,000 in revenue for the
fiscal year of 2016.”
(Id. ¶ 18.)
On December 15, 2015, Defendants engaged in a campaign to
label Lostutter a “rapist.”
on
the
(Id. ¶ 21.)
DericLostutter.org
They posted an article
website
located
at
http://DericLostutter.org/blog/2015/12/15/when-the-kitchen-getshot-just-make-rape-threats/,
which
allegedly
details
a
false
account of Lostutter sexually assaulting a former girlfriend. (Id.
¶ 21.)
After Defendants accused Lostutter of seeking to profit from
the stillborn death of his daughter in January 2016, Lostutter
4
sought and obtained ex parte protection orders
from a North
Carolina State court against Defendants Olsen and McKee.
¶¶ 22-24.)
(Id.
Thereafter, McKee allegedly provided false information
about Lostutter (including allegations of “grifting”1) to the local
district attorney in Forsyth County, North Carolina, in connection
with Lostutter’s proceedings against her.
Without
offering
supporting
(Id. ¶¶ 30-31.)
factual
explanation,
the
complaint alleges that Defendants have charged that “Plaintiff is
a
scam
artist”
donations.”
and
is
(Id. ¶ 35.)
“ripping
people
off
and
embezzling
Defendants Goddard and McKee have also
allegedly “repeatedly faxed/emailed/mailed multiple authorities
and solicited help of other people to maliciously prosecute the
Plaintiff.”
(Id. ¶¶ 42, 43.)
Defendant Olsen has allegedly
threatened violence against Lostutter, and all three Defendants
have
“repeatedly
retaliated
against
Plaintiff.”
(Id.
¶ 45.)
Defendant Goddard has “sexually harassed” Lostutter on Twitter.
(Id. ¶ 46.)
Lostutter brings six claims in his complaint: negligence per
se – cyber stalking-harassment (count 1); negligence per se – cyber
stalking – false statement (count 2); cyber stalking – false
statement – threatening language (count 3); false designation of
1
“Grifting” is obtaining money through “petty or small-scale swindling.”
Old
English
Oxford
Dictionary,
https://en.oxforddictionaries.com/definition/grift.
5
origin in violation of North Carolina law, citing “U.S.C. § 1125”
(count 4); libel per se (count 5); and libel per quod (count 6).
Lostutter seeks $1 million in damages, which includes “future
damages,” payment of “reputation management services” to restore
his reputation, the removal of all disparaging content from the
internet
involving
him,
and
various
injunctive
relief.
In
addition, Lostutter has moved for a temporary restraining order
and/or preliminary injunction.
(Doc. 16.)
Defendants move to dismiss on several grounds, but since
Lostutter has dismissed Defendant McKee, the allegations as to
only Defendants Olsen and Goddard remain.
These Defendants argue
that dismissal is warranted for lack of subject matter jurisdiction
as to the amount in controversy; lack of personal jurisdiction
(both general and specific) over them; improper service; and
failure to state a claim upon which relief can be granted.
They
also seek entry of a “gatekeeper” order to prevent further lawsuits
by Lostutter.
(Doc. 13.)
Lostutter has filed a response but
addresses only the personal jurisdiction and service of process
issues, and he opposes the entry of a gatekeeping order.
(Docs.
18, 19.)
II.
ANALYSIS
A.
Subject Matter Jurisdiction
Defendants argue that Lostutter has not met the amount-incontroversy requirement for diversity jurisdiction and thus that
6
this court lacks subject matter jurisdiction over the action.
(Doc. 14 at 10-11.)
a limitation on
argument first.
Because subject matter jurisdiction serves as
the court’s power, the
court addresses that
ESAB Grp., Inc. v. Arrowood Indem. Co., No. 4:09-
CV-1701-JMC-TER, 2011 WL 13176143, at *3 (D.S.C. Feb. 23, 2011)
(“Because
ESAB
challenges
this
Court’s
subject-matter
jurisdiction, the Court must address that issue prior to reaching
ZIP’s personal jurisdiction and forum non conveniens arguments.”);
see also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89
(1998) (“The requirement that jurisdiction be established as a
threshold matter ‘spring[s] from the nature and limits of the
judicial power of the United States’ and is ‘inflexible and without
exception.’” (citing Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S.
379, 382 (1884))).
The party seeking to invoke the court’s jurisdiction bears
the
burden
jurisdiction.
of
establishing
the
court’s
subject
matter
McNutt v. Gen. Motors Acceptance Corp., 298 U.S.
178, 189 (1936).
For diversity jurisdiction, the amount in
controversy must exceed $75,000.
28 U.S.C. § 1332(a).
Courts
apply the “legal certainty” test in determining whether the amount
in controversy requirement is met.
St. Paul Mercury Indem. Co. v.
Red Cab Co., 303 U.S. 283, 289 (1938).
“[T]he court should look
to the face of the complaint itself to determine whether it is a
legal certainty that plaintiff’s claims do not reach the required
7
amount.”
Shanaghan v. Cahill, 58 F.3d 106, 112 (4th Cir. 1995).
“Unless
the
claim
for
an
amount
over
the
jurisdictional
prerequisite is made in bad faith, or unless it is plain from the
complaint that an amount less than the jurisdictional amount is
all that is at issue, the district court has jurisdiction over the
case.”
Id.; Lunsford v. Cemex, Inc., 733 F. Supp. 2d 652, 657
(M.D.N.C. 2010) (“The amount claimed in the complaint controls
when assessing the amount in controversy, unless it appears to a
legal certainty on the face of the complaint that the claim is for
less
than
the
jurisdictional
amount.”).
“[T]he
legal
impossibility of recovery must be so certain as virtually to
negative the plaintiff’s good faith in asserting the claim.
If
the right of recovery is uncertain, the doubt should be resolved,
for jurisdictional purposes, in favor of the subjective good faith
of the plaintiff.”
Cir. 1957).
McDonald v. Patton, 240 F.2d 424, 426 (4th
In determining whether the threshold amount is met,
a plaintiff may aggregate separate claims for damages as long as
they are not actually one claim with separate legal theories of
recovery.
Shanaghan v. Cahill, 58 F.3d 106, 109 (4th Cir. 1995).
Here, Lostutter’s verified complaint alleges $1,000,000 in
damages, based in part on a “projected [loss of] $80,000 in revenue
[to Opsec CyberSecurity Solutions, LLC d/b/a TechAssist] for the
8
fiscal year 2016,”2 as well as damage to his reputation from false
claims of rape and sexual assault.
(Doc. 1 ¶ 18.)
Although
Defendants do not argue it,3 the complaint alleges the business is
a North Carolina limited liability company.
(Doc. 1 ¶ 4.)
Under
North Carolina law, a limited liability company is a separate
entity from its owners.
N.C. Gen. Stat. § 57D-2-01(a).
complaint further alleges it is Lostutter’s business.
¶ 16 (“his DBA”); id. ¶ 17 (“Plaintiff’s business”).)
The
(Doc. 1
Thus, it is
unclear how much of the business’s revenue is attributable to
Lostutter as his loss, as opposed to that of his business (which
is not named as a plaintiff).
In any event, Defendants offer no authority to suggest that
Lostutter’s
certainty.
reputational
loss
is
insufficient
to
a
legal
Between the reputational loss alleged and whatever
loss Lostutter derives from his business, he has facially alleged
an
adequate
jurisdictional
amount
which
Defendants
have
not
demonstrated fails to reach the threshold to a legal certainty.
Should
Defendants
argument.
determine
otherwise,
they
may
renew
their
Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567,
574 (2004) (noting that the court’s subject matter jurisdiction at
2
Lostutter also alleges that his business is suffering “an immediate
loss of $4,000 per month.” (Id.) The term of the “fiscal year” is not
specified.
3
Defendants do argue that Lostutter has failed to plead any other
information relating to the “profit, ownership, or potential future of
his business.” (Doc. 14 at 11.)
9
the time of the filing of the complaint is always subject to later
attack).
Defendants’ motion to dismiss for lack of subject matter
jurisdiction is therefore denied at this time.
B.
Service of Process
Defendants Olsen and Goddard maintain they have not been
properly served with process and move to dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(5).
Lostutter contends he
has submitted evidence of proper service as to both.
Service of process is governed by Federal Rule of Civil
Procedure 4(e)(1), which provides in part that an individual can
be served by “following state law for serving a summons in an
action brought in courts of general jurisdiction in the state where
the district court is located or where service is made.”
North
Carolina Rule of Civil Procedure 4(j)(1)(d) in turn provides in
relevant part that a natural person can be served “[b]y depositing
with a designated delivery service authorized pursuant to 26 U.S.C.
§ 7502(f)(2) a copy of the summons and complaint, addressed to the
party to be served, delivering to the addressee, and obtaining a
delivery receipt.”
The burden of proving service under Rule 4
rests with the plaintiff.
476 (D. Md. 2006).
O’Meara v. Waters, 464 F. Supp. 2d 474,
While mere technicalities ordinarily should
not stand in the way of finding proper service and courts will
liberally construe the rules when actual notice occurs, “the rules
10
‘are there to be followed, and plain requirements may not be
ignored.’”
Garvey v. Seterus, Inc., No. 5:16CV00209-RLV, 2017 WL
2722307, at *5 (W.D.N.C. June 23, 2017) (citations omitted).
As to Olsen, Lostutter has filed an affidavit of service
claiming to have served him through United Parcel Service (“UPS”),
with
signature
confirmation.
Olsen
argues
that
Lostutter’s
affidavit fails to list the address where the summons and complaint
were delivered or where, when, or by whom they were received.
(Doc. 14 at 13.)
Attached to Lostutter’s affidavit is a receipt
from UPS, which clearly shows a delivery address of 348 West Herman
Street in Pensacola, Florida, as well as a delivery time and date.
(Doc. 18 at 7-8.)
While the shipment receipt purports to require
“signature confirmation,” and the UPS “Proof of Delivery” receipt
shows that signature was “required,” the receipt shows only that
delivery was “Left At:
Reception” at 10:04 a.m.
(Doc. 6 at 5.)
This fails to comply with North Carolina’s Rule 4, which requires
that the summons and complaint be “deliver[ed] to the addressee.”
N.C. R. Civ. P. 4(j)(1)(d).
Moreover, there is no evidence that
anyone at reception signed for the delivery and, if so, who they
were and whether they were authorized to accept service on behalf
of Olsen.
Cf. Baker v. Joseph, 938 F. Supp. 2d 1265, 1268–69 (S.D.
Fla. 2013) (service of process held insufficient under New York
law where plaintiffs affixed process on defendant’s residence door
and later claimed, without proof, to have attempted service on
11
adult male at defendant’s residence); Williams v. Hetzel, No. 12–
CV–23300–UU, 2012 WL 2577042, at *1 (W.D.N.C. July 3, 2012)
(finding
defendant
named
in
individual
capacity
not
properly
served where process was sent via certified mail to defendant’s
office, but was not signed for by defendant).
Service also appears to be defective under Florida law.
Florida permits service “by delivering a copy of [the summons] to
the person to be served with a copy of the complaint, petition, or
initial pleading or paper or by leaving the copies at his or her
usual place of abode with any person residing therein who is 15
years of age or older and informing the person of their contents."
Fla. Stat. § 48.031(1)(a); Thomas v. Derryberry, No. 8:16-CV-3482T-33AEP,
2017
WL
2448177,
(quashing service).
at
*2–3
(M.D.
Fla.
June
6,
2017)
There is no evidence this was done, and
leaving a copy with the receptionist is insufficient.
Schupak v.
Sutton Hill Assocs., 710 So. 2d 707, 708-09 (Fla. App. 1998)
(holding that service on doorman at residence fails to comply with
Fla Stat. § 48.031(1)).
Finally, there is no evidence that
Lostutter complied with any of the provisions of Federal Rule of
Civil Procedure 4(e)(2), which provides alternate means of service
by way of personal service, leaving a copy with a someone at the
defendant’s personal abode, or delivering a copy to an authorized
agent for service of process.
Thus,
contrary
to
Lostutter’s
12
argument
that
Olsen
was
properly served at his home (Doc. 18 at 3), there is no evidence
that Olsen in fact was properly served with process.
For these
reasons, service of process is insufficient as to Defendant Olsen.
Because this defect is capable of being cured, the motion to
dismiss as to him will be granted without prejudice.
As to Defendant Goddard, Lostutter does not dispute that she
was not served properly within the initial 90 days of issuance of
the summons on September 2, 2016.
(See Doc. 18 at 2-3.)
However,
on November 29, 2016, Lostutter timely moved for an extension of
time to serve her under Rule 4(m) (Doc. 32) and contends he in
fact personally served her by sheriff on December 9, 2016, at her
home in Dublin, Ohio (Doc. 39).
Goddard does not dispute this
later service.
Personal service by sheriff is permitted under North Carolina
law, N.C. R. Civ. P. 4(a) (who may serve), as well as under federal
law,
Fed.
R.
Civ.
P.
4(j)(1)(a)(personal
(permitting personal service).
service)
&
4(e)(2)
Moreover, although no party has
addressed the point, Ohio law appears to permit service on an
individual by sheriff as well.
Ohio R. Civ. P. 4.1 (B) & (C);
Rhodes v. Valley Greyhound Lines, 98 Ohio App. 187, 190, 128 N.E.2d
824, 827 (1954) (upholding personal service by sheriff).
Here, Lostutter filed an affidavit from a deputy sheriff in
Franklin County, Ohio, stating that he received the summons and
complaint on November 15, 2016, and personally served the documents
13
on Goddard at her residence on December 9, 2016, at 12:08 p.m.
(Doc. 39.)
Thus, service appears to be proper, and the only issue
is whether service is effective when a plaintiff timely seeks an
extension of time to serve under Rule 4(m) and serves a defendant
within that additional time but before the court acts on the motion
for extension.
Rule 4(m) provides that if a plaintiff does not serve a
defendant within 90 days after the complaint is filed, the court
on motion or on its own after notice to the
plaintiff – must dismiss the action without prejudice
against that defendant or order that service be made
within a specified time.
But if the plaintiff shows
good cause for the failure, the court must extend the
time for service for an appropriate period.
While Rule 4(m) does not define “good cause,”4 it is generally
regarded to mean “reasonable and diligent efforts . . . to effect
service prior to the” deadline.
Chen v. Mayor & City Council of
Baltimore, 292 F.R.D. 288, 293 (D. Md. 2013) (citation omitted).
4
After Henderson v. United States, 517 U.S. 654, 662 (1996) (citing the
Advisory Committee’s Notes on the 1993 Amendments to Rule 4 when noting
that district courts may enlarge time “even if there is no good cause
shown”), and subsequent revisions to Rule 4(m), the Fourth Circuit’s
decision in Mendez v. Elliot, 45 F.3d 75 (4th Cir. 1995) (holding that
a district court lacks discretion to enlarge time absent a showing of
good cause), no longer appears binding.
See, e.g., LHF Productions,
Inc. v. Does, Civil Action No. 3:16CV284, 2016 WL 7423094, at *6 (E.D.
Va. Dec. 22, 2016) (finding that Rule 4(m) unambiguously permits an
extension of time to serve process regardless of whether a plaintiff can
show good cause). Because the court finds good cause here, it need not
consider the court’s authority to extend time without such a showing.
14
In
an
unpublished
case,5
the
Fourth
Circuit
has
recently
articulated several factors to consider in assessing whether good
cause has been shown.
See Scott v. Md. State Dep’t of Labor, 673
F. App’x 299, 305-06 (4th Cir. 2016) (listing the factors of
whether delay was outside plaintiff’s control, the defendant was
evasive,
the
plaintiff
acted
diligently
or
made
reasonable
efforts, the plaintiff is pro se, the defendant will be prejudiced,
the
plaintiff
asked
for
an
extension
of
time
under
Rule
6(b)(1)(A)), petition for cert. filed, __ U.S.L.W. __ (June 23,
2017) (No. 16-1546).
Courts have specifically found that failure
to obtain service due to a defendant’s evasion constitutes good
cause.
Ruiz Varela v. Sanchez Velez, 814 F.2d 821, 823 (1st Cir.
1987) (citing cases).
Here, Lostutter, who is proceeding pro se, timely moved for
an extension (although not citing Rule 6(b)(1)(A)) and stated that
while he tried to serve Goddard, she evaded his service attempts
on
three
occasions
litigation.
and
has
(Doc. 32 at 1-2.)
a
history
of
doing
so
8.)
There
is
also
other
Lostutter has included evidence of
his initial September 6, 2016 attempt to serve Goddard.
at
in
evidence
that
Goddard
was
(Doc. 6
aware
of
Lostutter’s action against her and thus had incentive to evade
5
The Fourth Circuit does not ordinarily accord precedential value to
its unpublished opinions but has noted that they “are entitled only to
the weight they generate by the persuasiveness of their reasoning.” See
Collins v. Pond Creek Mining Co., 468 F.3d 213, 219 (4th Cir. 2006)
(citation omitted).
15
service.
(Doc. 32 at 2 (noting that before service Goddard had
posted the complaint on her website prinniefied.com and retained
counsel).)
Her knowledge of the action also suggests she was not
prejudiced by any delay.
These various factors weigh in favor of finding good cause.
Yongo v. Nationwide Affinity Ins. Co. of Am., No. 5:07-CV-94-D,
2008 WL 516744, at *9 (E.D.N.C. Feb. 25, 2008) (finding good cause
in
light
of
plaintiff’s
diligent,
repeated
efforts
to
serve
defendants, application for new summons less than a month after
expiration of service deadline, and pro se status); Selman v. Am.
Sports Underwriters, Inc., 697 F. Supp. 225, 235 (W.D. Va. 1988)
(denying motion to dismiss for insufficient service of process;
good cause found where defendants received actual notice of action,
plaintiff had been diligent and given reasonable effort by making
multiple attempts at service, and had a good faith belief that
service was accomplished).
Thus, the court will grant the motion for extension of time
(Doc. 32) and deny the motion to dismiss for insufficient service
of process as to Defendant Goddard.6
C.
Personal Jurisdiction
Defendants
next
argue
that
6
the
court
lacks
personal
Lostutter’s motion to strike Defendants’ motion to dismiss (Doc. 29)
is denied as moot and because it is an improper procedural device to
oppose a motion to dismiss.
16
jurisdiction over them.
Given the court’s dismissal of Olsen,
this contention pertains to Goddard as the only Defendant who has
been properly served.
Defendants argue that this court cannot exercise “general
jurisdiction” over them because they have no ties whatsoever to
the State of North Carolina, and that it cannot exercise “specific
jurisdiction” over them because none of the alleged wrongdoing was
directed to the State of North Carolina.
Rather, they contend,
Defendants carried out their actions via an internet webpage that
is
available
everywhere.
Lostutter
responds
that
Defendants
purposefully directed online content into the State and used the
DericLostutter.org
website
in
a
fashion
that
intentionally
optimized keyword search engines for his name, his business, and
the city of Winston-Salem, North Carolina.
Lostutter
bears
the
burden
of
(Doc. 18 at 2.)
establishing
jurisdiction by a preponderance of the evidence.
personal
See Universal
Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014).
“When, however, as here, a district court decides a pretrial
personal jurisdiction motion without conducting an evidentiary
hearing, the plaintiff need only make a prima facie showing of
personal jurisdiction.”
Carefirst of Md., Inc. v. Carefirst
Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003).
“In
deciding whether the plaintiff has proved a prima facie case of
personal jurisdiction, the district court must draw all reasonable
17
inferences
arising
from
the
proof,
and
disputes, in the plaintiff’s favor.”
resolve
all
factual
Mylan Labs., Inc. v. Akzo,
N.V., 2 F.3d 56, 60 (4th Cir. 1993); accord Carefirst, 334 F.3d at
396.
If the existence of jurisdiction turns on disputed factual
questions, the court may resolve the challenge on the basis of an
evidentiary hearing or, if a prima facie demonstration of personal
jurisdiction has been made, it can proceed “as if it has personal
jurisdiction over th[e] matter, although factual determinations to
the contrary may be made at trial.”
Pinpoint IT Servs., L.L.C. v.
Atlas IT Exp. Corp., 812 F. Supp. 2d 710, 717 (E.D. Va. 2011)
(citing 2 James Wm. Moore et al., Moore’s Federal Practice ¶ 12.31
(3d ed. 2011)).
evidentiary
Nevertheless, either at trial or at a pretrial
hearing,
the
plaintiff
must
eventually
prove
the
existence of personal jurisdiction by a preponderance of the
evidence. New Wellington Fin. Corp. v. Flagship Resort Dev. Corp.,
416 F.3d 290, 294 n.5 (4th Cir. 2005).
“Under Federal Rule of Civil Procedure 4(k)(1)(A), a federal
court may exercise personal jurisdiction over a defendant in the
manner provided by state law.”
ALS Scan, Inc. v. Dig. Serv.
Consultants, Inc., 293 F.3d 707, 710 (4th Cir. 2002); see also
Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014) (“Federal courts
ordinarily follow state law in determining the bounds of their
jurisdiction
over
persons.”).
To
determine
whether
personal
jurisdiction is proper, the court engages in a two-part inquiry:
18
first, North Carolina’s long-arm statute must provide a statutory
basis for the assertion of personal jurisdiction; and, second, the
exercise of personal jurisdiction must comply with due process.
See Carefirst, 334 F.3d at 396; Pan-Am. Prods. & Holdings, LLC v.
R.T.G. Furniture Corp., 825 F. Supp. 2d 664, 677 (M.D.N.C. 2011).
In Christian Science Board of Directors of the First Church of
Christ, Scientist v. Nolan, 259 F.3d 209 (4th Cir. 2001), the
Fourth Circuit held that N.C. Gen. Stat. § 1-75.4(1)(d) runs
coextensively with the Due Process Clause, thereby collapsing the
two-step process “into a single inquiry” as to whether the nonresident defendant has such “minimal contacts” with North Carolina
that exercising jurisdiction over the defendant does not offend
“traditional notions of fair play and substantial justice.”
259
F.3d at 215 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945)).
Universal Leather, 773 F.3d at 558–59 (confirming
that the issue of specific jurisdiction under N.C. Gen. Stat. § 175.4(1)(d) “merges” the two-prong test “into the single question”
of whether a defendant has “sufficient contacts with North Carolina
to satisfy constitutional due process”).
Under the Due Process Clause, personal jurisdiction over a
defendant may be either general or specific.
See Goodyear Dunlop
Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). General
personal jurisdiction requires “continuous and systemic” contacts
with the forum state.
Helicopteros Nacionales de Colombia, S.A.
19
v.
Hall,
466
U.S.
408,
414-16
(1984).
Specific
personal
jurisdiction over a defendant can be exercised where the defendant
has “purposefully established minimum contacts in the forum State”
such “that [it] should reasonably anticipate being haled into court
there.”
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)
(internal quotation marks and citations omitted).
Lostutter fails to identify the basis on which this court may
exercise jurisdiction over Goddard.
Instead, he contends that
“Defendants, through DericLostutter.org and its content, use[d]
[Lostutter’s] business, name, and terms such as Winston-Salem,
North Carolina as keywords for search engine optimization.”
18 at 1.)
He reasons that Defendants purposely directed online
content to North Carolina, giving this court jurisdiction.
at 2.)
(Doc.
(Id.
He does not claim that Goddard had any regular and systemic
contact with the State of North Carolina to make the exercise of
general
jurisdiction
constitutional.
She
is
not
from
North
Carolina, and there is no evidence in the record to support the
exercise of general jurisdiction.
Instead, Lostutter appears to be advancing an argument for
specific jurisdiction, and the court will analyze the motion
accordingly.
Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 188-89
(4th Cir. 2016) (declining to review whether court had general
personal jurisdiction over defendant when plaintiff only claimed
20
that
district
court
had
specific
personal
jurisdiction
over
defendant).
Specific jurisdiction requires “that the relevant conduct
have such a connection with the forum state that it is fair for
the defendant to defend itself in that state.”
CFA Inst. v. Inst.
of Chartered Fin. Analysts of India, 551 F.3d 285, 292 n.15 (4th
Cir. 2009).
A court may exercise specific jurisdiction when the
cause of action “arises out of the defendant’s contacts with the
forum.”
Saudi v. Northrop Grumman Corp., 427 F.3d 271, 276 (4th
Cir. 2005).
Whether jurisdiction is appropriate depends on the
facts and circumstances of each case.
See Walden v. Fiore, 134
S. Ct. 1115, 1121 (2014) (holding that the specific jurisdiction
inquiry
necessitates
a
study
of
the
connections
defendant and the forum and litigation).
between
the
Exercise of specific
jurisdiction requires consideration of three factors: “(1) the
extent to which the defendant purposefully availed itself of the
privilege of conducting activities in the forum state; (2) whether
the plaintiff’s claims arise out of those activities; and (3)
whether the exercise of personal jurisdiction is constitutionally
reasonable.”
Tire Eng’g & Distrib., LLC v. Shandong Linglong
Rubber Co., 682 F.3d 292, 301-02 (4th Cir. 2012) (per curiam); see
also Universal Leather, 773 F.3d at 559.
satisfied.
Each prong must be
Consulting Eng’rs Corp. v. Geometric Ltd., 561 F.3d
273, 278-79 (4th Cir. 2009).
When specific jurisdiction is
21
asserted, jurisdiction must be established for each claim alleged.
N.C. Mut. Life Ins. Co. v. McKinley Fin. Serv., Inc., 386 F. Supp.
2d 648, 656 (M.D.N.C. 2005).
A court may, however, exercise
“pendent personal jurisdiction” over any claim that arises out of
a common nucleus of operative facts as the claim over which the
court has personal jurisdiction.
N.C. Mut. Life Ins. Co., 386 F.
Supp. 2d at 656.
The
“purposeful
availment”
requirement
ensures
that
“a
defendant will not be haled into a jurisdiction solely as a result
of random, fortuitous, or attenuated contacts.”
U.S.
at
475
(internal
quotation
marks
Burger King, 471
omitted).
Rather,
a
defendant’s conduct and connection to the forum must be “such that
[it] should reasonably anticipate being haled into court there.”
Universal Leather, 773 F.3d at 559 (quoting Fed. Ins. Co. v. Lake
Shore Inc., 886 F.2d 654, 658 (4th Cir. 1989)).
If a defendant
has created a “substantial connection” to the forum, then it has
purposefully
availed
business there.
itself
of
the
privilege
of
conducting
See Diamond Healthcare of Ohio, Inc. v. Humility
of Mary Health Partners, 229 F.3d 448, 450 (4th Cir. 2000); ESAB
Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 625 (4th Cir. 1997)
(holding that “contacts related to the cause of action must create
a ‘substantial connection’ with the forum state, although this
connection need not be as extensive as is necessary for general
jurisdiction” (citation omitted)).
22
The connection to the forum
“must arise out of contacts that the defendant himself creates
with the forum State.”
Walden, 134 S. Ct. at 1122 (quoting Burger
King, 471 U.S. at 475) (emphasis in original) (internal quotation
marks omitted).
In ALS Scan, the Fourth Circuit addressed “when electronic
contacts
with
a
State
are
jurisdiction over a defendant.
sufficient”
to
exercise
293 F.3d at 713.
personal
The court cited
to the model established in Zippo Manufacturing Company v. Zippo
Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).
F.3d at 714.
examining
ALS Scan, 293
The Zippo model created a “sliding scale” for
personal
jurisdiction
in
the
context
of
electronic
contacts with a forum state:
At one end of the spectrum are situations where a
defendant clearly does business over the Internet. If
the defendant enters into contracts with residents of a
foreign jurisdiction that involve the knowing and
repeated transmission of computer files over the
Internet, personal jurisdiction is proper.
At the
opposite end are situations where a defendant has simply
posted information on an Internet Web site which is
accessible to users in foreign jurisdictions. 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.
The middle ground is occupied by interactive Web sites
where a user can exchange information with the host
computer. In these cases, the exercise of jurisdiction
is determined by examining the level of interactivity
and commercial nature of the exchange of information
that occurs on the Web site.
Id. at 713–14 (quoting Zippo, 952 F. Supp. at 1124).
Zippo, the Fourth Circuit held that
23
Applying
a State may, consistent with due process, exercise
judicial power over a person outside of the State when
that person (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.
Id. at 714.
When
applying
that
test
to
a
case
involving
claims
of
trademark infringement, the Fourth Circuit in ALS Scan found that
the alleged Internet activity was “at most[] passive” and that no
personal
select
jurisdiction
or
knowingly
existed
because
transmit”
the
the
defendant
“did
infringing
not
material
“specifically to” the forum State “with the intent of engaging in
business or any other transaction” in the forum State.
Id. at
714–15.
The Fourth Circuit decisions have applied ALS Scan’s threeprong test on at least two occasions.
In Young v. New Haven
Advocate, the Fourth Circuit found that a district court lacked
specific jurisdiction over a Virginia libel suit against two
Connecticut newspapers.
315 F.3d 256, 261–64 (4th Cir. 2002).
The newspapers in question had posted on their websites an article
about a Virginia prison that discussed allegedly harsh conditions
there, including cruelty by prison guards.
Id. at 259.
claimed
he
that
the
articles
implied
that
was
a
The warden
racist
who
encouraged prisoner abuse. Id. Examining the website in question,
24
the Fourth Circuit concluded that “neither newspaper’s website
contain[ed] advertisements aimed at a Virginia audience” and that
the newspapers posted their articles with an intent to target a
Connecticut — not Virginia — audience.
Id. at 263–64.
As a
result, the Fourth Circuit held, “[T]he newspapers do not have
sufficient Internet contacts with Virginia to permit the district
court to exercise specific jurisdiction over them.”
Id. at 264.
The second case — Carefirst of Maryland, Inc. v. Carefirst
Pregnancy Centers, Inc. — was a trademark infringement case.
There, a Maryland corporation had sued an Illinois corporation in
Maryland because of alleged trademark infringement on the Illinois
corporation’s website.
334 F.3d at 393–95.
The Fourth Circuit
examined whether the Illinois corporation, through its website,
“expressly aimed its trademark-infringing conduct at the forum
state” and determined that the corporation had not done so.
at 398, 401.
persuasive
Id.
In reaching its conclusion, the Fourth Circuit found
that
the
website
was
only
“semi-interactive,”
containing “features that make it possible for a user to exchange
information
with
the
host
computer,”
with
little
“concrete
evidence” of exchanges between Maryland residents and the Illinois
corporation and that the content on the website had “a strongly
local character” and was aimed at an Illinois audience.
Id. at
400–01; accord Rao v. Era Alaska Airlines, 22 F. Supp. 3d 529, 539
(D. Md. 2014) (“These cases demonstrate that the Fourth Circuit
25
has been notably reluctant to extend personal jurisdiction to outof-state defendants based on little more than their presence on
the Internet.”).
Applying the ALS Scan test to the present case, the court
concludes Lostutter has made a prima facie showing of this court’s
personal jurisdiction over Goddard. There is evidence of the first
and
third
factors:
Lostutter
alleges
that
Goddard
directed
electronic activity into North Carolina by posting defamatory
material on a website accessible in North Carolina; and
postings
created
for
Lostutter,
a
North
Carolina
the
resident,
potential causes of action for libel and alleged cyber-stalking
and false use of Lostutter’s name arising out of that same conduct.
ALS Scan, 293 F.3d at 714.
As to the second factor, there is a prima facie showing to
support Lostutter’s allegation that Goddard had a “manifested
intent of engaging in business or other interactions” in North
Carolina.
ALS Scan, 293 F.3d at 714.
It does not appear that
Goddard intended to engage in business in North Carolina herself,
but several of the posts in question, some of which Goddard
allegedly made personally under the name “p33p,” evince an intent
to discourage Lostutter’s customers from doing business with him,
referring to his business by name and location.
(E.g., Doc. 20-
15 at 16-17 (“TechAssist PC and Cell Phone Repair – Kernersville
NC Deric Lostutter Accused of Ripping of [sic] the Elderly”); id.
26
at 7 (“TechAssist Closes Shop & Keeps Customer’s Phone”); id. at
11 (“ANOTHER Disgruntled Customer at TechAssistPC and Cell Phone
Repair – Kernersville NC”); id. at 21 (“Another Client Scammed by
Deric”); id. at 24 (“Deric Scams Another Client” Say It Ain’t
So!”);
id.
at
Discussion”).)
30-35
(“KYAnonymous
Scams
Yet
Another
Client-
In part because Lostutter’s business was a brick-
and-mortar store located in Kernersville, North Carolina (Doc. 1
¶ 16), Defendants’ attempts to disrupt his business were likely
aimed
at
North
Carolina.
In
this
regard,
the
case
is
distinguishable from those where business is conducted only online
and regularly attracts customers from other States.
Apart from his allegations regarding Defendants’ interference
with
his
business,
Lostutter
also
alleges
that
Defendants
encouraged online readers to contact North Carolina authorities to
have him investigated.
readers
to
contact
For example, he alleges they urged online
law
enforcement
in
Kernersville,
Carolina, in an attempt to have him arrested.
North
(Id. ¶ 15.)
And as
part of the alleged coordinated effort, Olsen even allegedly
published the contact information for various federal and North
Carolina-based law enforcement and business regulators - such as
the Federal Bureau of Investigation, the Northwest North Carolina
Better Business Bureau, and the North Carolina Department of Public
Safety
-
to
contact
business practices.
about
Lostutter’s
(Doc. 20-15 at 37.)
27
allegedly
fraudulent
While ALS Scan’s test controls, this case differs from its
facts.
In that case, the defendant was an Internet Service
Provider and merely provided bandwidth for a company whose website
contained
photographs
trademark.
that
were
293 F.3d at 714-15.
alleged
to
have
infringed
a
Here, Defendants, including
Goddard, allegedly created the objectionable content and posted it
online, targeting it to a North Carolina audience.
Similarly,
Carefirst.
this
case
is
distinguishable
from
Young
and
The postings at issue here are at least two steps
removed from the materials in Young and Carefirst: First, the
articles are
Carolina,
not
whereas
aimed at a discreet audience
the
articles
in
Young
were
outside
written
North
for
Connecticut readers (where the forum state was Virginia), 315 F.3d
256, 263–64, and the website in Carefirst was aimed at Illinoisans
(where the forum state was Maryland), 334 F.3d at 400-01.
In other
words, this case differs from those because the website’s target
audience was not contained to a locality outside North Carolina.
Second, the articles in this case are directed at a particular
group inside North Carolina.
Of course, the audience for the
website as a whole may have been nationwide and not specific to a
particular State.
But, as discussed above, much of the content
was aimed toward a North Carolina store with North Carolina
customers.
This case is instead similar to Calder v. Jones, in which the
28
Supreme
Court
held
that
a
California
court
could
assert
jurisdiction over Florida defendants on the basis of a single,
libelous newspaper article.
465 U.S. 783 (1984).
The Court
reasoned that California served as the “focal point both of the
story and of the harm suffered,” with the material drawn from
California sources and the defendants’ actions expressly aimed at
California audiences.
Id. at 789.
In addition, the defendants
committed their actions intentionally, knowing that the brunt of
the injury would be felt in California.
Id. at 789-90.
In this
case, Lostutter alleges and has provided a prima facie showing
that
he
was
the
target
of
the
objectionable
posts
and
that
Defendants knew that their conduct would have effects on him and
on his business in North Carolina.
The court therefore finds that Lostutter has made a prima
facie showing of sufficient contacts between Goddard and North
Carolina that she could have reasonably expected to be haled into
a North Carolina court for her actions.
The motion to dismiss as
to her will therefore be denied, yet Lostutter remains responsible
for demonstrating personal jurisdiction by a preponderance of the
evidence.
D.
Failure to State a Claim
Defendants move to dismiss the complaint on the ground that
it fails to state a claim on which relief can be granted, pursuant
to Rule 12(b)(6).
Lostutter does not defend against this ground
29
for dismissal.
He therefore has waived any right to contest
Defendants’ contention in this regard.
See Landress v. Tier One
Solar LLC, No. 1:15CV354, 2017 WL 1066648, at *2 n.7 (M.D.N.C.
Mar. 21, 2017) (noting that where a party fails to develop an issue
in its brief, courts have deemed the issue waived (citing Belk,
Inc. v. Meyer Corp., U.S., 679 F.3d 146, 152 n.4 (4th Cir. 2012))).
However, because even an unopposed motion to dismiss must be
supported by the record, the court must satisfy itself that the
complaint is barred.
See Stevenson v. City of Seat Pleasant, 743
F.3d 411, 416 n.3 (4th Cir. 2014) (explaining that “[e]ven though
[the plaintiffs] did not challenge the motions to dismiss, . . .
the district court nevertheless has an obligation to review the
motions to ensure that dismissal is proper”); accord Gardendance,
Inc. v. Woodstock Copperworks, Ltd., 230 F.R.D. 438, 449 (M.D.N.C.
2005) (“As with summary judgment motions, a court does not grant
a motion for dismissal merely because it is uncontested.
Rather,
a district court should review a motion to dismiss on its merits
to determine whether the pleadings are sufficient.”).
The purpose of a Rule 12(b)(6) motion is to “test[] the
sufficiency
of
a
complaint”
and
not
to
“resolve
contests
surrounding the facts, the merits of a claim, or the applicability
of defenses.”
Republican Party of N.C. v. Martin, 980 F.2d 943,
952 (4th Cir. 1992).
“To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state
30
a claim to relief that is plausible on its face.’”
Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
The court “must accept as
true all of the factual allegations contained in the complaint,”
Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (citations
omitted), and all reasonable inferences must be drawn in the
plaintiff’s favor, Ibarra v. United States, 120 F.3d 472, 474 (4th
Cir. 1997).
This means a plaintiff must “plead[] factual content
that allows the court to draw the reasonable inference that the
defendant is liable” and must demonstrate “more than a sheer
possibility that a defendant has acted unlawfully.”
U.S. at 678 (citing Twombly, 550 U.S. at 556).
Iqbal, 556
This “does not
mean that the court can ignore a clear failure in the pleadings to
allege any facts [that] set forth a claim,” however.
Estate of
Williams-Moore v. All. One Receivables Mgmt., Inc., 335 F. Supp.
2d 636, 646 (M.D.N.C. 2004) (citing McNair v. Lend Lease Trucks,
Inc., 95 F.3d 325, 327 (4th Cir. 1996)).
are not accepted as true, and
Mere legal conclusions
“[t]hreadbare recitals
of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.”
Counts
I,
II,
negligence per se.
and
III
Iqbal, 556 U.S. at 678.
of
Lostutter’s
complaint
allege
To succeed on such a claim under North Carolina
law, a plaintiff must show that the defendant violated a “public
safety statute.”
Stein v. Asheville City Bd. Of Educ., 360 N.C.
31
321, 326, 626 S.E.2d 263, 266 (2006) (citing Byers v. Standard
Concrete Prods. Co., 268 N.C. 518, 521, 151 S.E.2d 38, 40 (1966)).
To be a “public safety statute,” a statute must “impose[] upon a
person a specific duty for the protection of others.”
Lutz Indus.
v. Dixie Home Stores, 242 N.C. 332, 341, 88 S.E.2d 333, 339 (1955).
To recover on a negligence per se theory, a plaintiff must show
that she “belongs to ‘the class [of persons] intended to be
protected by [the] statute,’” Stein, 360 N.C. at 326, 626 S.E.2d
at 266 (quoting Baldwin v. GTE S., Inc., 335 N.C. 544, 546, 439
S.E.2d 108, 109 (1994)), and that “the statutory violation is ‘a
proximate cause of [the plaintiff’s] injury,’” id. (quoting Hart
v. Ivey, 332 N.C. 299, 303, 420 S.E.2d 174, 177 (1992)) (alteration
in original).
Here,
Lostutter
invokes
North
Carolina’s
cyberstalking
statute, N.C. Gen. Stat. § 14-196.3(b)(1)-(3), as the basis for
all three negligence per se claims.
(Doc. 1 ¶¶ 47-67.)
The North
Carolina Court of Appeals has held squarely that that statute
provides no basis for a negligence per se claim.
Crowell v. Davis,
226 N.C. App. 431, 741 S.E.2d 511, 2013 WL 1315853, at *6 (Apr. 2,
2013) (table) (“In his pleadings, Plaintiff attempted to allege
various negligence per se claims, with each such claim predicated
upon alleged violations of North Carolina’s cyberstalking statute
or its extortion statute.
Although Plaintiff describes these
claims as sounding in negligence, he actually alleges in his
32
complaint
that
Defendants
(citations omitted)).
engaged
in
intentional
conduct.”
Crowell is identical to this case in all
relevant respects – in fact, it appears that Lostutter reproduced
Crowell’s pleadings verbatim.
Compare id. (“Plaintiff explicitly
alleges that Defendants willfully failed to comply with various
statutory obligations and that they acted in this manner ‘in order
to
harass,
annoy
and
abuse’
Plaintiff.”),
with
Doc.
1
¶ 50
(“Defendants willfully made these statements in order to harass,
annoy and abuse the Plaintiff.”), id. ¶ 57 (same), and id. ¶ 64
(same).
As in Crowell, Lostutter “has alleged that Defendants
acted in an intentional manner and that they intended the specific
consequences which resulted from their actions.”
at
*6.
He
therefore
“has
failed
to
2013 WL 1315853,
adequately
allege
any
negligence-based claims,” id., and the motion to dismiss Counts I,
II, and III will be granted.
Lostutter’s fourth claim alleges that Defendants violated the
federal Lanham Act because their “use of Plaintiff’s name in
commerce for the purpose of collecting funds is likely to cause
confusion and deception as to the source and or association of
Defendants’ cause and service.” (Doc. 1 ¶¶ 68-72 (citing 15 U.S.C.
§ 1125).)
Relevant here, the Lanham Act creates a civil cause of
action against a person who misuses some unregistered trademarks
and trade names.
The Lanham Act does not, however, protect an
individual’s name unless it has acquired a “secondary meaning,”
33
which
is
to
say
that
the
consuming
public
“understand[s] that the mark, when used in context, refers, not to
what
the
descriptive
word
ordinarily
describes,
but
particular business that the mark is meant to identify.”
to
the
Perini
Corp. v. Perini Const., Inc., 915 F.2d 121, 125 (4th Cir. 1990).
Lostutter does not plead facts that would raise an inference that
his name has a secondary meaning.
He does not allege that it has
a commercial purpose or that “a substantial number of present or
prospective customers understand the designation when used in
connection with a business to refer to a particular person or
business enterprise,” which he would have to prove at trial.
Id.
The motion to dismiss Count IV will therefore be granted.
Defendants also move to dismiss Lostutter’s other two claims
alleging libel per se and libel per quod on 12(b)(6) grounds.
The
sole basis for Defendants’ motion is that Lostutter is a “public
figure” for the purposes of a defamation claim.
17.)
(Doc. 14 at 16-
A public figure must show “actual malice” to recover on a
defamation claim, they argue, and Lostutter has not alleged that
Defendants “knew their statements were false or acted in reckless
disregard for the truth or falsity of their statements.”
(Doc. 14
at 17.)
The only argument Defendants offer in favor of the proposition
that Lostutter is a public figure is that he “states he is ‘well
known’ and has been featured in multiple publications including
34
CNN and Rolling Stone.”
(Doc. 14 at 17.)
Defendants do not,
however, identify which type of public figure they take Lostutter
to be.
See Gaunt v. Pittaway, 139 N.C. App. 778, 785, 534 S.E.2d
660, 664–65 (2000) (stating that there are three types of “public
figures” for the purpose of a defamation claim: involuntary public
figures, all-purpose public figures, and limited purpose public
figures (citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 345
(1974))).
Nor do they cite any legal authority for their argument
that Lostutter is a public figure.
While the complaint indicates that Lostutter has had some
media exposure for his activities, the court cannot determine on
this record that he is a public figure.
Defendants have provided
insufficient analysis for the court to determine the issue as a
matter of law, and “[t]he Court need not undertake that exercise
itself.”
Finnegan v. Berryhill, No. 1:16CV1012, 2017 WL 2224332,
at *7 (M.D.N.C. May 19, 2017) (citing inter alia Belk, Inc., 679
F.3d at 152 n.4); see also United States v. Zannino, 895 F.2d 1,
17 (1st Cir. 1990) (“[A] litigant has an obligation to spell out
its arguments squarely and distinctly, or else forever hold its
peace.” (citation and internal quotation marks omitted)).
The
motion to dismiss Lostutter’s libel claims will therefore be
denied.
E.
Motion for Sanctions
Defendant McKee moves the court for an award of attorney’s
35
fees, contending that her dismissal from the action demonstrates
that Lostutter lacked evidentiary and legal support for the claims
made against her.
(Doc. 48.)
Though the September 2, 2016
complaint advanced a variety of State law claims alleging that the
Defendants engaged in a scheme to harass and “cyberstalk” Lostutter
through
the
use
of
the
DericLostutter.org
website,
Lostutter
voluntarily dismissed McKee on April 4, 2017, explaining that he
concluded her involvement was “minimal at best.”
(Id. ¶ 6.)
In
defending the lawsuit until her dismissal, McKee had retained
counsel and incurred legal expenses.
She now seeks attorney’s
fees pursuant to Federal Rule of Civil Procedure 11 and N.C. Gen.
Stat. § 6-21.5.
never
conceded
(Doc. 48 ¶ 8.)
that
McKee
Lostutter responds that he has
lacked
involvement
in
the
alleged
wrongful conduct, McKee agreed to absorb her counsel fees as part
of the agreement to dismiss her, and he agrees Gibson should
withdraw.
(Doc. 51.)
Although
McKee
has
been
dismissed,
the
jurisdiction to consider motions for sanctions.
court
retains
Courtney v. IKEA
Holding US, Inc., No. 1:16CV1215, 2017 WL 2455100, at *4 (M.D.N.C.
June
6,
2017)
(considering
defendants’
motion
for
costs
and
attorneys’ fees under Rule 11 after granting motion to dismiss);
Bryson v. Sullivan, 330 N.C. 644, 412 S.E.2d 327 (1992) (finding
that dismissal, whether with or without prejudice, does not deprive
court
of
jurisdiction
to
determine
36
the
appropriateness
of
attorney’s fees pursuant to N.C. Rule Civ. P. 11 and N.C. Gen.
Stat. § 6-21.5).
On either legal basis, the burden rests with
McKee, as the moving party. United States v. Henry, No. 2:07CV342,
2017 WL 1065820, at *1 (E.D. Va. Mar. 20, 2017) (“The party moving
for Rule 11 sanctions has the burden of proving a violation of
Rule 11; once that burden is met, it shifts to the responding party
to prove that his or her conduct was reasonable.”); In re Cranor,
786 S.E.2d 379, 390 (N.C. App. 2016) (party moving for sanctions
pursuant to N.C. Gen. Stat. § 6-21.5 carries the burden of proof
to support the motion).
The initial problem with McKee’s motion, however, is that it
lacks a supporting brief.
Local Rule 7.3 requires that, except
for a select group of motions not applicable here, every motion
shall be accompanied by a brief of supporting authorities.
The
rule further warns that “[a] motion unaccompanied by a required
brief may, in the discretion of the Court, be summarily denied.”
L.R. 7.3(k).
Dismissal is more apt to occur where, as here, the
motion provides no legal argument. For this reason, McKee’s motion
fails.
Even on the merits, however, the motion would be denied. Both
Rule 11 and N.C. Gen. Stat. § 6-21.5 vest the court with discretion
to sanction a party.
Rule 11 requires a plaintiff to “conduct a
reasonable investigation of the factual and legal basis for [her]
claim before filing.” Brubaker v. City of Richmond, 943 F.2d 1363,
37
1373
(4th
Cir.
1991).
To
be
reasonable,
a
plaintiff’s
investigation must have yielded “some [factual] information” and
“some basis in law” to support the claims.
Id.
“[U]nartful
pleading, such as through a vague and conclusory complaint, is
irrelevant to the factual and legal inquiry required under Rule
11.”
Id. (citing Simpson v. Welch, 900 F.2d 33, 36 (4th Cir.
1990)).
“[C]reative
claims,
coupled
even
with
ambiguous
or
inconsequential facts, may merit dismissal, but not punishment.”
Id. (citing Davis v. Carl, 906 F.2d 533, 536 (11th Cir. 1990))
(alteration in original); see generally Dillard v. Thomasville
Auto Sales, LLC, 221 F. Supp. 3d 677, 683–84 (M.D.N.C. 2016).
Similarly, under N.C. Gen. Stat. § 6-21.5, the court is
authorized to award a prevailing party a reasonable attorney’s fee
“if the court finds that there was a complete absence of a
justiciable issue of either law or fact raised by the losing party
in any pleading.”
The plaintiff must have reasonably been aware
of this deficiency when the complaint was filed or must have
persisted in litigating the case after a point where he should
reasonably have become aware that the pleading he filed no longer
contained a justiciable issue.
Sunamerica Fin. Corp. v. Bonham,
328 N.C. 254, 258, 400 S.E.2d 435, 438 (1991); see also Bryson v.
Sullivan, 330 N.C. 644, 664, 412 S.E.2d 327, 338 (1992) (dismissed
parties
are
“prevailing
parties”
regardless
dismissals were with or without prejudice).
38
of
whether
their
Lostutter’s
voluntary
dismissal
of
McKee
establish the absence of a justiciable issue.
granted for a variety of reasons.
alone
does
not
Dismissals are
Lostutter’s concession that
McKee’s involvement in the alleged wrongs was “minimal at best”
does not equate to frivolousness.
According to Lostutter, he
concluded that McKee was exploited by Olsen and Goddard, because
she was “under [the] direction and influence from her co-defendants
and other third parties, was taken advantage of, and ‘gaslighted’
regarding the Plaintiff.”
(Doc. 45 at 2.)
Lostutter maintains
that McKee’s co-Defendants took advantage of her, leading her to
misplace her trust in the information they provided about him.
(Id.)
He does not expressly retract any claim that she engaged in
the conduct alleged.
Moreover, the complaint alleges that McKee assisted her coDefendants in harassing Lostutter through a “smear campaign.”
(Doc. 1 ¶ 16.)
Lostutter accused McKee of assisting her co-
Defendants in the harassment, not only by means of the website,
but also through Twitter, and by writing a letter to North Carolina
law enforcement officials accusing Lostutter of violating several
laws.
(Id. ¶¶ 25-31, 43, 45.)
The complaint also details Olsen’s
admission that McKee was involved in cyberstalking.
(Id. ¶ 12.)
As to the legal support for his claims, the court has found
that Lostutter’s “cyber-stalking” claims cannot survive dismissal,
as they rely on criminal statutes that have no apparent private
39
right of action.
But the absence of a private right of action,
while supporting dismissal, does not inescapably render a claim
frivolous.
Cf. Williams v. Spencer, 883 F. Supp. 2d 165, 181-82
(D.D.C. 2012) (finding that the fact that the No Fear Act did not
provide a private right of action did not render a civil claim
based on it so frivolous as to deprive the court of subject matter
jurisdiction).
Moreover, the same conduct is alleged to support
Lostutter’s defamation claims, as to which the court has denied
Defendant’s motion to dismiss.
Even weak claims – including those
that would be dismissed for failure to state a claim - are not
rendered so lacking in legal support as to be frivolous under Rule
11 or N.C. Gen. Stat. § 6-21.5.
Ultimately, the burden is on McKee to establish a right to
sanctions.
McKee’s
While McKee’s conduct may have been “minimal at best,”
unsupported
motion
has
not
demonstrated
that
she
is
entitled to attorney’s fees as a sanction under either Rule 11 or
N.C. Gen. Stat. § 6-21.5.
Her motion for sanctions will therefore
be denied.7
F.
Motion to Withdraw
Next, R. Daniel Gibson moves to withdraw as attorney of record
for all Defendants.
conflict
existed
(Doc. 50.)
among
the
According to Gibson, while no
Defendants
7
at
the
outset
of
his
This denial is without prejudice to any Defendant filing any later
motion for sanctions based on conduct not set forth in this motion.
40
representation of them, Olsen has since sued McKee in an unrelated
matter, which has created “an unwaivable conflict” that requires
his withdrawal. (Id. at 2.) Gibson represents that all Defendants
consent to the motion (id.), and no Defendant has filed any
opposition.
3.)
Lostutter does not oppose the motion.
(Doc. 51 at
Because Lostutter has dismissed McKee and the court has
dismissed the action as against Olsen, the motion is moot as to
them
and
will
be
considered
as
to
Goddard
as
the
remaining
Defendant.
Here, again, the motion lacks a supporting brief, in violation
of the court’s local rules.
L.R. 7.3(a).
Despite the motion’s
claim, it is not apparent that Olsen’s separate lawsuit creates an
actual conflict of interest.
The motion itself represents that
the other litigation does not relate to the same transaction or
occurrence as this matter.
(Doc. 50 at 2.)
North Carolina Rule
of Profession Conduct 1.7 provides that an actual concurrent
conflict exists where “the representation of one client will be
directly adverse to another client” or “the representation of one
of
more
clients
may
be
materially
limited
by
the
lawyer’s
responsibilities to another client, a former client, or a third
person, or by a personal interest of the lawyer.”
None of those
conditions is alleged here.
Another problem is that the motion to withdraw does not
indicate any substitution of counsel.
41
While no Defendant has
indicated opposition to the motion, the court’s Local Rule 83.1(e)
requires that a motion to withdraw without substitution of new
counsel be served on the clients and include the clients’ mailing
address in the certificate of service.
Counsel must make this
showing in order to have his motion considered.
The court is therefore compelled to deny the
motion to
withdraw without prejudice unless and until counsel complies with
the requirements of Local Rules 7.3(a) and 83.1(e).
G.
Request for Gatekeeper Order
Claiming that the present action is frivolous and harassing,
Defendants ask the court to invoke its powers under the All Writs
Act, 28 U.S.C. § 1651, to enter a “gatekeeper” order preventing
Lostutter from filing any further actions.
(Doc. 13.)
Defendants
argue that Lostutter has filed eight other actions in North
Carolina State court, including one substantially similar to the
present case.
They also note that Lostutter dismissed the similar
State court action, after Defendants filed a motion to dismiss for
lack of personal jurisdiction, only to refile it as the present
action.
Finally, Defendants point to Lostutter’s untimely motion
for summary judgment (Doc. 30), which he has since withdrawn (Doc.
44).
Lostutter responds that he withdrew the similar State court
action in order to revise his complaint, and he details the nature
of the other various State court proceedings, many of which were
criminal misdemeanor cases.
(Doc. 19.)
42
Under the All Writs Act, district courts may restrict access
to parties who repeatedly file frivolous litigation.
In re
Burnley, 988 F.2d 1, 3-4 (4th Cir. 1992); Abdul-Akbar v. Watson,
901 F.2d 329, 332 (3d Cir. 1990); In re Martin-Trigona, 737 F.2d
1254, 1261 (2d Cir. 1984) (“Federal courts have both the inherent
power
and
the
constitutional
obligation
to
protect
their
jurisdiction from conduct which impairs their ability to carry out
Article III functions.”).
Pro se litigants, like Lostutter, enjoy
no exception to these rules.
See Mallon v. Padova, 806 F. Supp.
1189 (E.D. Pa. 1992); Armstrong v. Koury Corp., 16 F. Supp. 2d
616, 620 (M.D.N.C. 1998), aff’d per curiam, 168 F.3d 481, 1999 WL
11298 (4th Cir. Jan. 13, 1999) (unpublished table decision).
Such a remedy is a drastic one that is to be
sparingly.
employed
Cromer v. Kraft Foods N. Am., Inc., 390 F.3d 812, 817
(4th Cir. 2004). Before a court can enter a pre-filing injunction,
it must analyze all relevant circumstances, including: “(1) the
party’s history of litigation, in particular whether he has filed
vexatious, harassing, or duplicative lawsuits; (2) whether the
party had a good faith basis for pursuing the litigation, or simply
intended to harass; (3) the extent of the burden on the courts and
other parties resulting from the party’s filings; and (4) the
adequacy of alternative sanctions.”
Id. at 818.
If such analysis
reveals that an injunction is justified, it must be narrowly
tailored to fit the specific circumstances at issue.
43
Id.
Here, Defendants have failed to demonstrate that they have
met this high bar.
Lostutter has a history of filing several
actions, but they do not all involve these same Defendants.
Only
the complaint from one of the actions – the State court action
that is similar to, and the precursor of, the present case – has
been made a part of the record.
The fact that it was dismissed
voluntarily is not sufficient to demonstrate that it was filed, or
refiled now, vexatiously.
None of the cases appears to have been
dismissed on grounds of res judicata or collateral estoppel.
Moreover, Lostutter does allege that Defendants publicly accused
him falsely of sexual assault and other wrongdoing.
Whether his
claims muster up is unclear on this record, but for now the court
has
denied
Defendants’
motion
to
dismiss
the
libel
claims.
Defendants have therefore not demonstrated on this record that
Lostutter’s previous filings render the present action vexatious
and
harassing
and
thus
meet
the
high
bar
for
a
pre-filing
injunction, and the motion for a pre-filing injunction will be
denied without prejudice.
H.
Motion to Strike
Lostutter has filed several batches of documents in the
record, but with no notation that they are intended to apply to
any pending motion.
(See Docs. 20, 22, 23, and 24.)
Defendants
have moved to strike these filings pursuant to Federal Rule of
44
Civil Procedure 12(f). (Doc. 26.) Lostutter has filed a response.
(Doc. 28.)
Federal Rule of Civil Procedure 12(f) authorizes the court to
“strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”
Such motions act
to prevent the litigation of “unnecessary issues.”
Simaan, Inc.
v. BP Prods. N. Am., Inc., 395 F. Supp. 2d 271, 278 (M.D.N.C.
2005).
A party moving to strike a defense under Rule 12(f) must
make a showing of prejudice.
Id.
“[T]o survive a motion to
strike, a defendant must offer more than a bare-bones conclusory
allegation which simply names a legal theory but does not indicate
how the theory is connected to the case at hand.”
Villa v. Ally
Fin., Inc., No. 1:13CV953, 2014 WL 800450, at *2 (M.D.N.C. Feb.
28, 2014) (internal quotations and citations omitted).
Whether to
grant or deny a motion to strike is discretionary with the district
court.
Renaissance Greeting Cards, Inc. v. Dollar Tree Stores,
Inc., 227 Fed. App’x 239, 246 (4th Cir. 2007); Ferrellgas, L.P. v.
Best Choice Prod. a/k/a Sky Billiards, Inc., No. 1:16CV259, 2016
WL 4539220, at *2 (M.D.N.C. Aug. 30, 2016).
There is no basis for filing documents in the record for
general purposes; rather, a party may file them in connection with
a pending motion, where appropriate, and only according to the
rules of the court.
While Lostutter is proceeding pro se, he must
abide by the applicable Federal Rules of Civil Procedure and the
45
court’s Local Rules available publicly on the court’s website,
www.ncmd.uscourts.gov.
Because Rule 12(f) applies to pleadings
(which these documents are not), and because the rules permit the
court to consider all filings of a pro se litigant in assessing
whether he has stated a claim, the court will not strike the
filings at this stage. The court will only consider those portions
of the filings referenced in this memorandum opinion for the
limited purposes noted.
filings.
denied,
Otherwise, the court will disregard the
With this explanation, the motion to strike (Doc. 26) is
but
Lostutter
is
warned
against
making
unauthorized
filings in the docket.
I.
Motion for Contempt
Lostutter moves for an order finding Olsen in contempt of
court or alternatively for arrest for an alleged violation of 18
U.S.C. § 1512.
(Doc. 35.)
Insofar as § 1512 is a criminal statute
and the claim against Olsen has been dismissed, the motion is
frivolous and will be denied.
Lostutter is warned that even as a
pro se litigant, he is bound by Federal Rule of Civil Procedure 11
and will be subject to sanctions for frivolous motions.
The court
can consider such sanctions on motion of any party or on its own
in the absence of such a motion.
J.
Motion for Preliminary Injunction
Lostutter has filed a motion for a temporary restraining order
and preliminary injunction.
(Doc. 16.)
46
The motion is predicated
on alleged violations of the North Carolina cyber-stalking law,
N.C. Gen. Stat. § 14-196.3(b)(1)-(3) and the Lanham Act, 15 U.S.C.
§ 1125.
The motion would only be applicable to the only remaining
Defendant, Goddard.
To succeed on this motion, Lostutter would
have to demonstrate a likelihood of success on the merits.
But
his motion relies on claims that have been dismissed, so the motion
must be denied.
U.S.
7,
20
See Winter v. Nat. Res. Def. Council, Inc., 555
(2008)
(setting
forth
standards
for
preliminary
injunctive relief).
III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED as follows:
1.
Defendants’ motion to dismiss for lack of subject matter
jurisdiction (Doc. 13) is DENIED.
2.
Defendant
Olsen’s
motion
to
dismiss
based
on
insufficient service of process (Doc. 13) is GRANTED, and the
action against him is DISMISSED WITHOUT PREJUDICE.
3.
Lostutter’s
motion
for
extension
of
time
to
serve
Defendant Goddard (Doc. 32) is GRANTED, Lostutter’s motion to
strike (Doc. 29) is DENIED AS MOOT, and Goddard’s motion to dismiss
based on insufficient service of process (Doc. 13) is DENIED.
4.
Defendant Goddard’s motion to dismiss based on lack of
personal jurisdiction (Doc. 13) is DENIED at this time; Lostutter
47
remains responsible for demonstrating personal jurisdiction by a
preponderance of the evidence.
5.
Defendants’ motion to dismiss for failure to state a
claim on which relief can be granted, as it applies to the
remaining Defendant Goddard, is GRANTED as to Counts I through IV
and DENIED as to Counts V and VI for libel per se and libel per
quod.
Counts I, II, III and IV are DISMISSED WITH PREJUDICE.
6.
Defendant McKee’s motion for sanctions in the form of
attorney’s fees (Doc. 48) is DENIED.
7.
Defendants’
counsel’s motion to withdraw as counsel
(Doc. 50) is MOOT as to Defendants McKee and Olsen, who are
dismissed, and is DENIED WITHOUT PREJUDICE as to Defendant Goddard,
pending counsel’s compliance with Local Rules 7.3(a) and 83.1(e).
8.
Defendants’ motion for a “gatekeeper” order (Doc. 13) is
DENIED WITHOUT PREJUDICE.
9.
Defendants’ motion to strike (Doc. 26) is DENIED.
10.
Lostutter’s motion for contempt or arrest (Doc. 35) is
DENIED as frivolous.
11.
Any other motion or request for relief not specifically
addressed herein is DENIED.
Lostutter is cautioned that, while he is proceeding pro se,
he must comply with the Federal Rules of Civil Procedure and the
court’s Local Rules.
48
/s/
Thomas D. Schroeder
United States District Judge
August 24, 2017
49
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