Sig Sauer Libel Suit Bumped from N.H. to Connecticut

A good illustration of how many courts deal with personal jurisdiction in libel cases.

From this morning's decision in Sig Sauer v. Bagnell by Judge Landya McCafferty (D.N.H.):

Sig Sauer's claims relate to a computer-generated animation that Bagnell uploaded to [his] law firm's website and to YouTube. {Bagnell and his law firm are Connecticut residents. Bagnell's practice includes representing plaintiffs in lawsuits against Sig Sauer alleging that Sig Sauer's negligent design and manufacture of the [Sig Sauer] P320 [pistol] allows it to be fired without a trigger pull.} … Sig Sauer alleges that the animation … incorrectly depicts some of the P320's internal geometry. Sig Sauer also claims that the animation makes assertions about the mechanics of the P320 that are physically impossible.

Sig Sauer has moved for a preliminary injunction requiring Bagnell to remove the animation from YouTube, the law firm's website, and "from any other location over which they have control." The preliminary injunction would also restrain Bagnell from publishing the animation elsewhere in the future. Bagnell objected to the motion for preliminary injunction, contending, among other arguments, that the court cannot exercise personal jurisdiction over him and the law firm.

The court agreed that New Hampshire, and therefore the federal court in New Hampshire, lacked jurisdiction over Bagnell:

In the context of defamation claims, the court applies the "effects" test derived from Calder v. Jones (1984), to determine whether a defendant's contacts are sufficient to make the exercise of jurisdiction fair, just, and reasonable. Under the effects test, the court considers the nature of the allegedly defamatory material and its publication, asking whether the forum state was the focal point of the defamatory material and the plaintiff's alleged injuries.

Although the effects test looks at how the alleged defamation harmed the plaintiff in the forum state, purposeful availment still "focuses on the defendant's intentionality." The Supreme Court has "consistently rejected attempts to satisfy the defendant-focused 'minimum contacts' inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State." The place where the injury occurred and where the plaintiff resides "is jurisdictionally relevant only insofar as it shows that the defendant has formed a contact with the forum State."

For example, in Calder, the plaintiff's residency and employment in the forum state were jurisdictionally relevant because the defendants gathered information for a defamatory story from sources in the forum state, the defendants aimed the defamatory story at the forum state, and the defendants published the story in a tabloid with wide circulation in the forum state "knowing that the injury would be felt in the forum." Specifically, the plaintiff in Calder was a well-known entertainer and California resident who brought an action for libel against the author and editor of a National Enquirer story…. Critically, … "[t]he allegedly libelous story concerned the California activities of a California resident. It impugned the professionalism of an entertainer whose television career was centered in California." Given those facts plus the defendants' other contacts with California (the author's calls to sources in California and the wide publication of National Enquirer in California) the Supreme Court found that "California is the focal point both of the story and of the harm suffered."

Accordingly, the Court held that jurisdiction was proper in California based on how the defendants' conduct in Florida affected the plaintiff in California. That is, if a defendant intentionally aims defamatory material at the forum state and knows or should know that the effects of the defamatory material are likely to have a "devastating impact" on the plaintiff in the forum state, then the defendant's knowledge about the defamatory material's effects in the forum state becomes "a purposeful contact or substantial connection whereby the intentional tortfeasor could reasonably expect to be haled into the forum State's courts to defend his actions."

Calder, however, must be read in light of Walden v. Fiore, a more recent Supreme Court decision that further clarifies the Supreme Court's reasoning in Calder. In Walden, the defendant, a police officer in Georgia, wrongfully seized a large sum of money from the plaintiffs while they were travelling from Georgia to their residence in Nevada. The defendant knew that the plaintiffs lived in Nevada, and the plaintiffs felt the harm resulting from the seizure—the loss and delayed return of their money—in Nevada….

[Yet d]espite Nevada being the plaintiffs' place of residence and the place where they were likely to feel the most harm resulting from the defendant's tortious conduct, the Supreme Court held that the Nevada court could not exercise personal jurisdiction over the defendant. The Court emphasized that contacts between the plaintiff and the forum state alone do not suffice to show purposeful contacts between the defendant and the forum state. Id. ("Calder made clear that mere injury to a forum resident is not a sufficient connection to the forum."). "Put simply, however significant the plaintiff's contacts with the forum may be, those contacts cannot be 'decisive in determining whether the defendant's due process rights are vindicated.'"

The Court acknowledged that, in Calder, it held that "the reputation-based 'effects' of the alleged libel connected the defendants to California, not just to the plaintiff." But personal jurisdiction did not exist in Calder merely because the plaintiff happened to live in California. Rather, the defendants' actions—reaching out to sources in California and writing an article for publication in California "that was read by a large number of California citizens" in combination "with the various facts that gave the article a California focus, sufficed to authorize the California court's exercise of jurisdiction." In contrast, in Walden, the defendant's actions and the effects of his actions were not "tethered to Nevada in any meaningful way"—at least not beyond the fortuitous circumstance that the plaintiffs happened to live there….

Turning to the facts before the court, … [m]erely making the animation generally available over the internet, such that it was accessible to New Hampshire residents, is not sufficient to show that the animation was aimed at New Hampshire. Further, there is no evidence that Bagnell targeted or directed the website, the YouTube page, or the animation to New Hampshire residents specifically. Although the animation concerns claimed defects of the P320, which was designed and is manufactured in New Hampshire, the animation does not identify where the P320 is designed and manufactured. There is no evidence that New Hampshire was mentioned on the YouTube page where the animation was uploaded or on the law firm's website.

The only mention of New Hampshire in the animation occurs for a few seconds just before the animation ends, when the animation briefly displays a press release that—according to the release— was issued by Sig Sauer to rebut "social media rumors questioning the safety of the P320 pistol …." The beginning line of that press release states the location of the release as Newington, New Hampshire. The display of a press release that happens to reference New Hampshire in passing is insufficient to show that Bagnell aimed the animation at New Hampshire and intended the injurious effects of the animation to be felt primarily in New Hampshire….

Thus, the fact that Sig Sauer's headquarters, design, and manufacturing are in New Hampshire "is entirely fortuitous in the context of the conduct on which plaintiff bases its claims."

Sig Sauer argues that this case is similar to de Laire v. Voris and Hugel v. McNell, [two District of New Hampshire cases] which applied the effects test and found the purposeful availment prong met when individuals suffered reputational harm in New Hampshire. In de Laire, the court applied the effects test and exercised jurisdiction over an out-of-state defendant who published on the internet an allegedly defamatory article concerning the professional activities of a pastor of a New Hampshire parish. When preparing the article, its author travelled to and spoke with sources in New Hampshire. Given these facts, the court found that the article's author knew that New Hampshire was the location where the defendant would feel the effects of the defamatory material the most.

And in Hugel, the plaintiff "had an established reputation as a businessman and public servant" in New Hampshire and the defamatory material attacked the plaintiff's honesty, which resulted in a particular and specific impact on the plaintiff in New Hampshire. Like de Laire, the likelihood that the impact would be felt principally in New Hampshire was obvious and known to the defendants.

In contrast to de Laire and Hugel, as well as Calder, in this case there are insufficient facts that would have put Bagnell on notice that the animation would have a focused impact on Sig Sauer in New Hampshire. Sig Sauer highlights the extent of its operations in New Hampshire and compares itself to the individuals involved in Calder, de Laire, and Hugel. But Sig Sauer's New Hampshire operations do not necessarily make it like an individual who suffers reputational harm in a forum state as a result of defamation. In other words, the plaintiffs in Calder, de Laire, and Hugel each suffered focused reputational injuries in their respective forum states: the entertainer in California (Calder), the pastor of a New Hampshire parish (de Laire), and the New Hampshire businessperson (Hugel). By contrast, in this case there is no evidence that Sig Sauer's business—selling firearms—is so focused in New Hampshire that the reputational harm suffered by it creates a meaningful contact between Bagnell and New Hampshire.

The court therefore transferred the case to the District of Connecticut, where Bagnell resides.