Global companies want to know if and when they can end up in a US court. One common question relates to websites: if anyone in the US can access my website, does that mean that I can be sued anywhere in the United States? In a recent appellate decision relating to Texas, the U.S. Court of Appeals for the Fifth Circuit answered that question: No. Just because a Texan can access a company’s website does not mean that a Texas court has jurisdiction to hear a case relating to the content of that website.
The Fifth Circuit decision – Johnson v. TheHuffingtonpost.com, Inc.[1] – concerned a Huffington Post article that described a Texan named Charles Johnson as a “noted Holocaust denier and white nationalist”. Mr. Johnson did not like this. He sued the Huffington Post in a Texas court, alleging libel. The Fifth Circuit court held that personal jurisdiction does not exist over an out-of-state website for an allegedly libelous article on its website when the article did not target the forum state in any way. In addition, the court determined that a website’s universal accessibility and marketing of advertisements and merchandise to all visitors are not sufficient forum contacts to establish jurisdiction with respect to an unrelated libel claim. The court’s decision is important for website operators because it provides guidance on how they can limit or avoid exposure to courts in states where they do not reside. Website operators may also draw reassurance that certain basic website features, such as accessibility and advertising, do not automatically establish personal jurisdiction.
Background
On January 17, 2019, the Huffington Post (“HuffPost”) published an article about a meeting between two congressmen and Charles Johnson in Washington, D.C. The article identified Johnson as a “noted Holocaust denier and white nationalist” and included some of his prior comments. Johnson sued HuffPost for libel in the Southern District of Texas, asserting that he is a Texas citizen and that the libel had occurred in Texas. As HuffPost is a citizen of Delaware and New York and has no Texas employees, offices, or other physical ties to the state, Johnson filed an amended complaint alleging that personal jurisdiction was based on HuffPost’s virtual ties to Texas. These links include HuffPost being accessible in Texas; selling merchandise and ad-free experiences to all users, including Texans; contracting with Texan advertisers; and gathering data about users’ locations to enable targeted advertising.
The district court granted HuffPost’s motion to dismiss for want of personal jurisdiction. The court found that Texas “was neither the subject matter of the Article nor the supplier of sources for the Article.”[2] Furthermore, HuffPost did not direct the article at Texans more than residents of other states.
Fifth Circuit Decision
A divided Fifth Circuit panel (Judges Smith and King in the majority, Judge Haynes dissenting) affirmed the district court’s dismissal for lack of personal jurisdiction and denial of jurisdictional discovery.
The court analyzed jurisdiction using the two-step framework set forth in its prior online libel case, Revell v. Lidov, 317 F.3d 467 (5th Cir. 2002). Under the first step, a court examines the website’s interactivity — if the website is passive (meaning that it simply posts information), the court lacks jurisdiction. However, if the website is interactive in that it both sends and receives information from users, the court then applies its standard jurisdiction tests to ascertain whether the “defendant’s purposeful targeting of the forum state” causes the “virtual contacts that give rise to the plaintiff’s suit.”[3] A defendant purposely targets a forum state, according to Calder v. Jones, 465 U.S. 783 (1984), when the state is “the focal point both of the [alleged libel] and of the harm suffered.”[4] Applying Revell and Calder, the Fifth Circuit found that, while HuffPost is an interactive website, it did not target Texas with its article. Besides the fact that the article reported on a meeting that occurred outside of Texas, the court noted that it did not mention Texas or use Texas sources.
The court then explained that, even if Revell did not control, overarching personal jurisdiction principles, such as fairness to defendants and protection of interstate federalism, support dismissal for lack of jurisdiction. The court determined that none of HuffPost’s four alleged virtual ties to Texas provided the website fair notice to anticipate being haled into a Texas court to defend a libel claim there. The alleged libel did not arise from or relate to HuffPost merchandise, advertisements, or its advertisers’ citizenship. With respect to HuffPost’s visibility in Texas, the court emphasized that visits to HuffPost’s website “reflect the ‘unilateral activity’ of persons in Texas typing ‘huffpost.com’ into their web browsers and pressing “‘Enter.’”[5] Jurisdiction, however, requires the defendant to create the contacts with the forum state.[6] The court concluded that exercising jurisdiction on the basis of website visibility would not conform to defendants’ reasonable expectations.
Turning to the protection of interstate federalism, the court warned that exercising jurisdiction in this case would muddle the boundaries of specific and general jurisdiction. The court reasoned that, if HuffPost’s alleged virtual ties to Texas can trigger specific jurisdiction over an unrelated libel claim, then specific jurisdiction would reach most claims against websites. This would vitiate the power of states where websites are “at home” to hear such disputes.
Subsequent to the opinion, Johnson filed a Petition for Rehearing En Banc. HuffPost filed its Opposition on February 4.
The Impact
Website operators can draw lessons from the Fifth Circuit’s decision to reduce their litigation exposure in states where they do not reside. To avoid any inference of purposefully targeting a state, website operators should take care when using website visitors’ location data. While targeted advertising based on location may carry minimal risk based on the Fifth Circuit’s ruling (as all visitors regardless of location receive their own tailored advertisements), choosing to send or make accessible website content only to visitors from a certain state could be interpreted by a court as directing activity at that state. Soliciting website visitors from a particular state (for example, a website offering a discounted subscription only for visitors with a Florida IP address) presents a similar hazard.
The Fifth Circuit’s emphasis on a showing of relatedness between virtual contacts and the allegedly offending material or conduct also deserves attention from website operators. The court declared that, even if HuffPost’s marketing of advertisements and selling of merchandise had constituted targeting of Texas, “neither relates to Johnson’s claim, so neither supports specific jurisdiction.”[7] Thus, website operators should be mindful of the potential legal ramifications of new merchandise or advertisements that reference specific content on their websites. A court may determine, for instance, that advertisements focused on an allegedly libelous story could give rise to personal jurisdiction if they were directed at the forum state.
Finally, website operators can take comfort that certain inherent features of many websites—their universal accessibility and display of advertisements—do not, without more, trigger personal jurisdiction under the Fifth Circuit’s analysis. Courts have drawn a distinction between sending thousands of libelous magazines into a state,[8] which gives rise to personal jurisdiction, and hosting a website that anyone, regardless of location, can elect to visit.
Freshfields and US Jurisdiction
The Freshfields US litigators frequently advise clients about whether client activities might subject a company to the jurisdiction of US courts. For more on this topic, visit our prior posts:
- Sixth Circuit confirms that filing a notice of appearance by itself does not waive personal jurisdiction
- Limiting the 'Effects' Test For Personal Jurisdiction: 'Walden'
- Personal Jurisdiction and Financial Transfers: Exploring Reach of U.S. Law
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[1] 21 F.4th 314 (5th Cir. 2021).
[2] Johnson v. Verizon CMP Holdings, LLC, No. 4:20-CV-0179, 2020 WL 8116186, at *1 (S.D. Tex. Dec. 18, 2020).
[3] Johnson, 21 F.4th at 318 (citing Revell, 317 F.3d at 472–76).
Calder, 465 U.S. at 789.
[4]
[5] Johnson, 21 F.4th at 321 (cleaned up).
[6] See Walden v. Fiore, 571 U.S. 277, 286 (2014).
