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Seventh Circuit Finds Personal Jurisdiction in Defamation and Tortious Interference Claim

 

As Illinois and Chicago business law attorneys, we were interested to see a recent Seventh U.S. Circuit Court of Appeals opinion in an antitrust and trade libel lawsuit filed here in the Northern District of Illinois. In Tamburo v. Dworkin, 2010 WL 1387299 (C.A.7 April 8, 2010), John Tamburo and his software business filed suit against multiple defendants in the United States, Canada and Australia. Tamburo sought to pursue federal and state antitrust claims, as well as state tort claims for defamation, tortious interference with his business and civil conspiracy. He also wanted a declaratory judgment that he did not violate any federal laws. The district court dismissed all of the claims, but the Seventh reinstated some of the tort claims, reinforcing the rules for personal jurisdiction over foreign defendants, but applied to Internet-related claims.

Tamburo and his business make dog-breeding software, including an online database full of dog pedigree information. To get data for this database, he used publicly available information found on the websites of four of the defendants, dog pedigree enthusiasts in Ohio, Colorado, Michigan and Canada. These defendants reacted critically, launching a campaign of email “blasts” and website postings accusing Tamburo of theft, hacking and selling stolen goods. They urged readers to boycott his products. The Australian defendant, a software company with a similar pedigree software company, received some of these messages and reposted them to a private mailing list of dog breeders who had bought its software. Tamburo sued all of them in Chicago federal court, where the defendants moved to dismiss for lack of personal jurisdiction. The trial court granted this motion as to all claims and Tamburo appealed.

The Seventh Circuit only partially agreed. Right away, it upheld the dismissal of the antitrust claims, which it said were “woefully inadequate” under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 2007), which heightened the requirements for stating a claim in a Sherman Act case. Under that decision, plaintiffs must plead believable antitrust injuries that show an anticompetitive effect, which the court said Tamburo failed to do. Tamburo’s federal pleadings are conclusory, the court wrote, failing to give any evidence of a specific antitrust injury or even what kind of violation he alleges. The state law claims have the same failings, the majority said, so both should be dismissed, but for failure to state a claim rather than lack of personal jurisdiction.

This removed the only federal claim in the case, which meant personal jurisdiction must be decided under Illinois’ long-arm statute. None of the defendants had enough contact with Illinois to create general personal jurisdiction, the majority said; in fact, the Canadian and Australian defendants had never been there. However, the court did find evidence of personal jurisdiction specific to this case. The court applied Calder v. Jones, 465 U.S. 783 (1984), in which the Supreme Court said actress Shirley Jones could assert personal jurisdiction in California over a Florida-based magazine and its writers, whom Jones accused of libel. That case gave a test to find personal jurisdiction: intentional and allegedly tortious conduct, expressly aimed at the foreign state, with the defendant’s knowledge that the plaintiff would be injured there.

The bulk of the Seventh’s analysis was aimed at the second prong — “expressly aimed.”
The court said personal jurisdiction was appropriate for the U.S. and Canadian defendants because they were accused of disseminating information about Tamburo widely through websites and emails. In fact, the majority wrote, some of the messages gave Tamburo’s address and urged readers to harass him and boycott his product. This is enough for personal jurisdiction under the “express aiming” test. This wasn’t true of the Australian defendant, however, because the owner of the company was alleged only to have sent the information to a private mailing list — not enough to show “express aiming” at Tamburo in Illinois.

Finally, the court examined whether jurisdiction over the individuals would “offend traditional notions of fair play and substantive justice.” It found that hearing the case in Illinois would not be unfair. The defendants have diverse citizenship, the court noted, and it would be unreasonable to ask Tamburo to sue them all separately. Illinois has a strong interest in providing a forum for residents like Tamburo to settle disputes, whereas other states have no substantial interest in the case. Thus, jurisdiction in Illinois is fair. For all of these reasons, the Seventh Circuit upheld the dismissal of the antitrust claims, upheld the dismissal of the claims against the Australian defendant and reversed the dismissal of the tort-law claims against the U.S. and Canadian defendants.


This case is interesting to our Chicago Internet product disparagement lawyers because it states specifically that the principles in Calder apply to cases involving contact over the Internet. In doing so, it clarifies that certain specific behaviors must apply, agreeing with previous rulings that merely putting up a website is not enough. This is an issue in many of the online trade libel or trademark disparagement cases handled by DiTommaso-Lubin. In addition to pursuing or defending defendants who allegedly made outright false claims online, Our Chicago business law attorneys handle cases in which someone is accused of falsifying online reviews, putting up websites defaming a product or service, associating logos and trademarks with negative images and other types of online defamation. All of these behaviors can lead to allegations of serious harm to the business — lost sales as well as the loss of a good reputation.

If you’re involved in a case of libel, slander or defamation of a business, product or service, you should call DiTommaso-Lubin right away to see how we can help. For a free consultation with our experienced Geneva, Wheaton and Evanston trade libel attorneys, please call us toll-free at 1-877-990-4990 or contact us through our website.