Ehrenfeld v. Mahfouz

glish counsel wrote to plaintiff and sought to have her: (i) promise the “High Court in England” that she would refrain from repeating similar allegations, (ii) destroy or deliver to him all copies of Funding Evil, (iii) issue a letter of apology (to be published at plaintiffs expense), (iv) make a charitable donation and (v) pay his legal costs in exchange for defendant’s agreement to not bring a defamation action against her. When plaintiff did not accept this offer, defendant sued her, seeking damages and injunctive relief under the English Defamation Act of 1996, in the High Court of Justice, Queens Bench Division, in London.

Pursuant to an order of the English court, defendant served papers upon plaintiff at her New York City apartment on four occasions: October 22, 2004, December 30, 2004, March 3, 2005 and May 19, 2005. Plaintiff alleges that the process server who visited her on March 3 threatened her, stating: “You had better respond, Sheikh bin Mahfouz is a very important person, and you ought to take very good care of yourself.”^[1] In addition to serving litigation papers, defendant’s English lawyers contacted plaintiff at her home in New York via mail and e-mail. These communications—received on September 22, 2004, December 9, 2004, April 26, 2005, April 27, 2005, May 2, 2005 and May 9, 2005—all concerned the English action. By these letters and e-mails, defendant’s English counsel provided plaintiff with the claim in the English action, witness statements, documents supporting defendant’s alleged damages and court orders. For example, the December 9 letter advised plaintiff that pursuant to an injunction issued by the English court she was under a duty to prevent Funding Evil from “leak[ing] into the [English court’s] jursdiction,” “England and Wales,” and that if she failed to do so she could “be held in contempt of court.”

Plaintiff elected not to appear in the English action.^[2] 3She did so because of the cost of litigating in England, the procedural barriers facing a libel defendant under English law and her dis

agreement in principle with defendant’s alleged attempt to chill her speech in New York by suing in a claimant-friendly libel jurisdiction to which she lacked any tangible connection.^[3] On December 7, 2004, the English court entered a default judgment against plaintiff and Bonus Books, providing for an award of damages and enjoining the further publication of the allegedly defamatory statements in England and Wales. On May 3, 2005, the English court entered a second order declaring the allegedly defamatory statements false, setting damages owed to defendant and his sons at £10,000 each, requiring plaintiff and Bonus Books to publish an apology in accordance with section 9 (2) of England’s Defamation Act of 1996,^[4] mandating that the December 7 injunction “shall continue in full force and effect,” and awarding defendant his costs in prosecuting the English action. Defendant reported the contents of the May 3 order on his Web site (see Bin Mahfouz Information, http://www. binmahfouz,info/news_20050503.html [accessed Dec. 3, 2007]), which is accessible in New York.

Plaintiff filed suit against defendant in the United States District Court for the Southern District of New York. There, she sought a declaratory judgment that, under federal and New York law, defendant could not prevail on a libel claim against her based upon the statements at issue in the English action and that the December 7 default judgment is unenforceable in the United States and, particularly, in New York State. Defendant moved to dismiss, arguing that the court lacked subject matter and personal jurisdiction.

The district court held that it lacked personal jurisdiction under CPLR 302 (a) (1) because defendant’s communications to plaintiff in New York regarding the English action and his Web site posting, “however persistent, vexing or otherwise meant to coerce, do not appear to support any business objective” ( 2006 WL 1096816 , *4, 2006 US Dist LEXIS 23423 , *14). Further, the court concluded that plaintiffs reliance upon Yahoo! Inc. v La Ligue Contre Le Racisme Et L’Antisemitisme ( 433 F3d 1199 [9th Cir 2006, en banc]), which affirmed a finding of personal

jurisdiction based upon facts similar to those here, was misplaced. This was so, said the district court, because the Ninth Circuit was interpreting California’s long-arm statute, which unlike CPLR 302 (a) (1), is “coextensive with Federal Due Process” standards for exercising personal jurisdiction ( 2006 WL 1096816 , *5, 2006 US Dist LEXIS 23423 , *19).

On appeal, the Second Circuit asked defendant whether he would commit to not seek enforcement of the English court’s orders in the United States. In a letter to the court, defendant “decline[d] to . . . waive . . . whatever rights he may have to seek enforcement of the damage award in a U.S. court.” On June 8, 2007, the Second Circuit certified to us the above-quoted question. We now answer that question in the negative, concluding that CPLR 302 (a) (1) does not confer in personam jurisdiction over defendant.

At the outset, it is important to emphasize that we are called upon to decide a narrow issue. The Second Circuit has not asked us to opine upon the propriety of English libel law or its differences from its United States and, particularly, New York State counterparts. And we decline to do so. Plaintiff and her amici argue that this case is about “libel tourism,” a phenomenon that they variously describe as the use of libel judgments procured in jurisdictions with claimant-friendly libel laws—and little or no connection to the author or purported libelous material—to chill free speech in the United States. However pernicious the effect of this practice may be, our duty here is to determine whether defendant’s New York contacts establish a proper basis for jurisdiction under CPLR 302 (a) (l).^[5] It is to that inquiry to which we now turn.

Here, none of defendant’s relevant New York contacts have invoked the privileges or protections of our State’s laws.^[6] Quite to the contrary, his communications in this state were intended to further his assertion of rights under the laws of England. As defendant points out—and plaintiff does not dispute—his prefiling demand letter and his service of documents were required under English procedural rules governing the prosecution of defamation actions. And in none of his letters to plaintiff did defendant seek to consummate a New York transaction or to invoke our State’s laws (compare e.g. Fischbarg, 9 NY3d at 382-383 [CPLR 302 (a) (1) jurisdiction proper because “defendants established a substantial ongoing professional commitment . . . governed by the laws of our state”]).

Accordingly, contrary to plaintiffs assertions, our decisions in Parke-Bernet Galleries v Franklyn ( 26 NY2d 13 , 18 [1970] [defendant transacted business in New York by participating in and purchasing paintings from New York auctioneer via telephone]) and Sayeh R. ( 91 NY2d at 319 [long-arm jurisdiction proper because “(r)espondent has repeatedly invoked the aid and protection of our courts (and) . . . enlisted the aid of local police” to enforce a Florida court order]) do not support her position (see also e.g. Deutsche Bank, 7 NY3d at 72 [long-arm jurisdiction proper because “sophisticated institutional trader knowingly enter(ed) our state ... to negotiate and conclude a substantial transaction”]).

Moreover, plaintiffs reliance upon the Second Circuit’s decision in PDK Labs, Inc. v Friedlander ( 103 F3d 1105 [2d Cir 1997]) is misplaced. There, the defendant, a promoter of weight-loss products, engaged a New York attorney to contact a New York corporation regarding an alleged infringement of his patents (see id. at 1107 ). In the course of his communications with the corporation, the attorney not only threatened to sue under Georgia law, he also “ solicited] PDK’s investment in [the defendant’s] weight loss product” (id. at 1109). It was this “persistent campaign ... to secure PDK’s investment” that, the court held, “constitute[d] business transacted in New York under CPLR § 302 (a) (1)” (id.). By contrast in Beacon Enters., Inc. v Menzies ( 715 F2d 757 [2d Cir 1983]), the Second Circuit held that the defendant’s mailing of a “cease and desist” letter to the plaintiff in New York was not a sufficient predicate for long-arm jurisdiction (see id. at 766 ). The court reasoned that, “[i]t is difficult to characterize [a] letter alleging infringement in an unspecified locale and threatening litigation in an unspecified forum as an activity invoking the ‘benefits and protections’ of New York law” (id.). Confronted, as we are, with a demand letter sent by English solicitors requesting—among other things—“[a]n undertaking to the High Court in England” not to repeat plaintiffs alleged defamatory statements as well as defendant’s service of documents and other mailings related to the English action, we, too, conclude that the defendant has not purposefully availed himself of the laws of New York.^[7]

Plaintiff urges us, however, to hold that defendant’s refusal to waive whatever rights he may have to enforce the English judgment in New York, constitutes a purposeful availment of this state’s laws. Indeed, according to her, the “future New York contact” of potential enforcement is “crucial” to finding jurisdiction over defendant. This is so, she says, because that judgment could only be enforced here, where she resides and works, and where all her assets are located. In addition, plaintiff claims that the ongoing threat of enforcement in New York has led her to decline publishing certain articles and to attempt to conform her writing to the standards of English libel law. Plaintiff also asserts that the alleged chill caused by the English judgment

terms of those orders, Yahoo! was required to alter its servers, located in California, under threat of a substantial monetary penalty. Yahoo! then sued the French groups in federal court in California, seeking a declaratory judgment that the French orders were not enforceable or recognizable in the United States based, in part, upon their interference with Yahoo!’s First Amendment rights. Affirming the federal district court, a majority of the en banc panel ruled that exercising in personam jurisdiction over the French groups was proper.^[8]

The critical distinction between Yahoo! and the present case, however, is that the California long-arm statute applicable, there is “coextensive with federal due process requirements” and thus “the jurisdictional analyses under state law and federal due process are the same” ( 433 F3d at 1205 ; compare CPLR 302 [a] [1], with Cal Civ Proc Code § 410.10 [“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States”]). By contrast, we have repeatedly recognized that New York’s long-arm statute “does not confer jurisdiction in every case where it is constitutionally permissible” (Kreutter, 71 NY2d at 471 ; accord Talbot v Johnson Newspaper Corp., 71 NY2d 827 , 828 [1988]). “Thus, a situation can occur in which the necessary contacts to satisfy due process are present, but in personam jurisdiction will not be obtained in this State because the statute does not authorize it” (Banco Ambrosiano v Artoc Bank & Trust, 62 NY2d 65 , 71 [1984]). The Ninth Circuit’s analysis in Yahoo! confirms that this is just such a situation.

Utilizing the “effects test” announced by the United States Supreme Court in Calder v Jones ( 465 US 783 [1984]) the Ninth Circuit majority held that by virtue of obtaining the French orders, the civil rights groups had “(1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state” (Yahoo!, 433 F3d at 1206 ). Because CPLR 302 (a) (3) expressly provides for jurisdiction in cases where—in contrast to transacting business in New York—a defendant “commits a

tortious act without the state causing injury to person or property within the state,” use of such an effects test here “would be an unwarranted extension of [section 302 (a) (1)] and a usurpation of a function more properly belonging to the Legislature” (Ferrante, 26 NY2d at 285-286 [rejecting attempt to “superimpose” the language of CPLR 302 (a) (3) onto section 302 (a) (1) based upon New York effect of breach of contract]). Our Legislature, unlike California’s, has seen fit to confer jurisdiction in a limited subset of cases concerning nondomiciliaries. And, as we have in the past, we continue to adhere to that express mandate here.^[9]

Accordingly, the certified question should be answered in the negative.^[10]

Chief Judge Kaye and Judges Graffeo, Read, Pigott and Jones concur; Judge Smith taking no part.

Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.27 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.27), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the negative.