"Optimists Sometimes Do Not Fare Well When They Gloss over Problematic Facts"

From Basulto v. Netflix, Inc., decided May 25 by Magistrate Judge John Goodman, but just posted on Westlaw:

In this defamation lawsuit against Defendant Netflix, Inc. and other Defendants, certain Defendants known as "the Foreign Defendants" filed a Motion to Dismiss for Lack of Jurisdiction….

As explained below, the Undersigned is recommending that the District Court grant the Foreign Defendants' Motion. However, before turning to the specific legal principles which will inform this recommendation, the Undersigned offers the following introductory remarks about a theme articulated in a business management book:

"Confront the Brutal Facts" and its companion concept, "The Stockdale Paradox," developed in business management consultant Jim Collins' book Good to Great, tout the following principle: a successful person must maintain unwavering faith that he will prevail in the end, regardless of the difficulties, while also having the discipline to simultaneously confront the most brutal facts of the current reality, whatever they might be.

Collins' perspective comes to mind in connection with the motion to dismiss the Undersigned will analyze here. Plaintiffs Jose Basulto and Brothers to the Rescue, Inc. seem to have unbridled confidence in their ability to prevail on the motion and to obtain personal jurisdiction over these Defendants. But, as this ruling will soon explain, Plaintiffs' enthusiastic optimism is not enough to overcome the harsh facts (including a lack of facts) undermining their legal position. In many instances, Plaintiffs either ignore the negative facts, describe them incompletely, omit troublesome aspects, fail to address omitted facts and/or exaggerate the significance of other facts.

For example, Plaintiffs proudly state, in support of their effort to obtain personal jurisdiction, that the Foreign Defendants used the services of a plane rental company based in Opa Locka. Yet they neglect to mention that the flight at issue originated in Italy and never entered Florida airspace, and that no payments for the service were made to a United States bank account. In another instance, Plaintiffs claim that a specific Defendant had knowledge that Plaintiffs reside in Florida, but the deposition testimony does not support the assertion. Similarly, Plaintiffs—as purported proof of publication—argue that Orange "participated in publishing the Film at the Venice and Toronto film festivals," (emphasis added) but the cited testimony states only that Orange was "present" at the film festivals when the Film was published.

These embellishments and incomplete factual recitations cannot win the day. For Plaintiffs, the brutal fact about the jurisdictional facts is that they have precious few facts in their favor on the due process portion of the analysis. None of the Foreign Defendants is domiciled in Florida, but Plaintiffs need to establish that they are covered by Florida's long-arm statute and that such coverage is constitutionally permissible and does not violate due process.

Certainly, their upbeat position may be admirable in the abstract, but attitude alone cannot cure the deficiencies in Plaintiffs' jurisdictional approach. Optimists sometimes do not fare well when they gloss over problematic facts. Indeed, Admiral Jim Stockdale, the highest-ranking United States military officer in the "Hanoi Hilton" prisoner-of-war camp during the height of the Vietnam War, explained to author Collins that the optimists were the one most likely to not make it out and survive because they ignored the horrific facts of their confinement and incorrectly and repeatedly said they would be released by a certain date, such as Christmas or Easter, but were devasted when their predictions turned out to be wrong.

Although Plaintiffs' argument is more complex than summarized in this sentence, the mere fact that the Foreign Defendants may have known that the purportedly defamatory Film in question might be broadcast in Florida is inadequate to compensate for the fact that they did not themselves broadcast the movie in Florida. Moreover, Plaintiffs' conclusory allegations that the Foreign Defendants somehow "conspired" to publish the Film in Florida is too conclusory and detail-free to propel Plaintiffs over the due process goal line of a personal jurisdiction battle.

You can also see the plaintiffs' objections to the Magistrate Judge's recommendation.