Charles Harder Loses Again: You Can't Just File Defamation Lawsuits In A Random State Because You Like Its Statute Of Limitations

from the sorry-charles dept

As you may know, Charles Harder is the lawyer behind the lawsuit Shiva Ayyadurai filed against us, so feel free to view everything we say here through that prism. Last week, of course, the judge in our case dismissed the case against us, noting that everything we said was clearly protected by the First Amendment. But that wasn't Harder's only loss of the week. Eriq Gardner points out that he also lost a case he filed against The Deal.

That case had been filed a couple months before our lawsuit, in federal court in New Hampshire. It was filed on behalf of Scottsdale Capital Advisors, a company based in Arizona, and one of its execs, the Nevada-based John Hurry, against the Delaware-registered and New York-based "The Deal" and one of its reporters, the California-based William Meagher. Now, you may wonder why this lawsuit was filed in New Hampshire, seeing as none of the states above include "New Hampshire." And, indeed, the court was wondering that too, because it dismissed the case over this bit of weird venue shopping:

Scottsdale has failed to establish that defendants have the minimum contacts with New Hampshire required for this court to exercise personal jurisdiction over them in this action consistent with the Fourteenth Amendment’s due process clause. Specifically, the plaintiffs have not demonstrated that their claims are related to the defendants’ forum-based activities or that the defendants purposefully contacted New Hampshire such that they could expect to answer for their actions here.

So, why file in New Hampshire? Here's a hint:

• Statute of limitations for defamation lawsuits in New York: One Year
• Statute of limitations for defamation lawsuits in Delaware: Two Years
• Statute of limitations for defamation lawsuits in California: One Year
• Statute of limitations for defamation lawsuits in Arizona: One Year
• Statute of limitations for defamation lawsuits in Nevada: Two Years
• Statute of limitations for defamation lawsuits in New Hampshire: Three Years

The articles at issue in the lawsuit were published on December 6, 2013, March 20, 2014 and April 16, 2014. The lawsuit was filed on November 18, 2016. In other words, the lawsuit was filed over two years after the publication of the articles, and thus any state with a one-year or two-year statute of limitations -- including all of the states connected to the various parties -- would not have worked. New Hampshire, however, has that lovely three year statute of limitations.

The ruling then details the rather extraordinary effort that Scottsdale's lawyers put into trying to argue that New Hampshire is the right place to hear a case when none of the parties is actually in New Hampshire. In short, the argument appears to be that Dartmouth, a college based in New Hampshire, has a subscription to The Deal, and therefore it's published in New Hampshire. And also, The Deal tried to get Dartmouth to renew its subscription, and thus it "conducted business" in New Hampshire. The court is... not impressed for a variety of reasons.

At the time it published Meagher’s articles, and in the time since, The Deal has had only one subscriber in New Hampshire -- Dartmouth College. According to The Deal’s records, no user accessed these three articles through the Dartmouth subscription. Nor did either of the two users of the Dartmouth subscription who had signed up to receive “The DealFlow Report” at the time the articles were published open the attachments containing links to the March 25 or April 22 articles; and no evidence suggests either opened the attachment containing a link to the December 10 article. Indeed, according to data collected through Google Analytics, not a single user who read these articles through The Deal’s online portal was located in New Hampshire.

Because no evidence suggests that anyone in New Hampshire -- Dartmouth-affiliated or otherwise -- viewed the three allegedly-defamatory articles, the plaintiffs focus on other contacts between The Deal and Dartmouth. For example, The Deal solicited Dartmouth’s subscription, and renewals thereof, through emails and telephone calls specifically directed at Dartmouth. Furthermore, during the time period between January 1, 2013 and June 2017, 81 individuals were registered to use The Deal’s online portal under Dartmouth’s subscription. Approximately 30 to 40 students each year were permitted to access The Deal’s online portal via IP authentication (that is, without entering a log-in name or password). The Deal registered a total of 7,232 “sessions” by Dartmouth users visiting its online portal during this time period. The Deal also communicated directly with between 32 and 48 individuals at Dartmouth by email during this time, including regular circulation of “The DealFlow Report” to the two Dartmouth-affiliated individuals who had signed up for it.

But, the court notes that's not nearly enough to make New Hampshire the proper venue:

First, the circulation of the allegedly-defamatory articles in New Hampshire is negligible.... (“The size of a distribution of offending material helps determine whether a defendant acted intentionally.”). Though some 7,000 members of the Dartmouth community theoretically had access to The Deal Pipeline, the plaintiffs do not dispute the defendants’ representation that only 30 users were signed up to use that subscription to access The Deal’s online portal at the time the articles were published, and that only two users actually received an email newsletter containing active links to the articles. Such “thin distribution may indicate a lack of purposeful contact,” and it appears to do so here....

Regardless of the number of individuals who could have accessed the offending articles through Dartmouth’s subscription to The Deal Pipeline, the evidence presented suggests that none did. Unlike in Keeton and Calder, where New Hampshire residents read the allegedly libelous statements, presumably, damaging the plaintiffs’ reputations, Scottsdale’s reputation in New Hampshire cannot be impacted by the statements allegedly published in New Hampshire if no one in New Hampshire saw the statements.

The court also notes that there's a strong appearance that the lawsuits were filed to create a burden on the reporter, Meagher:

The defendants’ burdens of appearing in New Hampshire and the inconvenience to the plaintiffs weigh somewhat against finding jurisdiction here. While that burden on The Deal, a corporate defendant located in New York, is not heavy, the burden on Meagher, an individual residing in California, may be. Ticketmaster-N.Y., 26 F.3d at 210 (“The burden associated with forcing a California resident to appear in a Massachusetts court is onerous in terms of distance . . . .”);....

“As the First Circuit has explained, however, the ‘burden of appearance’ factor is important primarily because ‘it provides a mechanism through which courts may guard against harassment.’” R&R Auction Co., LLC v. Johnson, 2016 DNH 40, 23 (Barbadoro, J.) (quoting Ticketmaster-N.Y., 26 F.3d at 211). This is not the first action that Scottsdale has brought against the defendants for defamation. In May 2016, Scottsdale sued the defendants in New York, where The Deal is located. It withdrew that action on the eve of the deadline for defendants’ motion to dismiss, forcing the defendants to incur the expense of drafting that motion unnecessarily, and then filed this action in New Hampshire. Scottsdale also sued FINRA in Arizona over its investigations of Scottsdale. The defendants here suggest that “the Plaintiffs’ primary strategic purpose” for bringing both the New York and New Hampshire actions “was to coerce Defendants into revealing the identity of Mr. Meagher’s confidential source in the hopes that this information would bolster their case against FINRA in Arizona.” Scottsdale does not deny -- nor even address -- this allegation in its objection and did not do so at oral argument. This factor, therefore, weighs heavily against the reasonableness of this court finding personal jurisdiction.

This ruling also comes the day after another Charles Harder lawsuit was filed in New York. Again, there, we noted that there were serious statute of limitations questions.

In a profile of Charles Harder published in the Hollywood Reporter last year, it was noted that Harder is well aware of the differences in state laws over defamation:

In his offices, Harder keeps charts mapping the differences in libel and privacy laws throughout the country. He also has become a pro on where to strategically file cases.

It appears that at least some courts are not impressed with the "strategy" behind where Harder files his cases.

Filed Under: charles harder, john hurry, jurisdiction shopping, new hampshire, statute of limitations, william meagher
Companies: scottsdale advisors, the deal