Ohio Court Can Assert Personal Jurisdiction over Nonresident Defendant in Internet Defamation Case

Where Defendant Indicated Intent to Impact Ohio Company’s Reputation

Kauffman Racing Equip., L.L.C. v. Roberts, Slip Opinion No. 2010-Ohio-2551.
Knox App. No. 07-CA-14, 2008-Ohio-1922. Judgment of the court of appeals affirmed.
Pfeifer, Lundberg Stratton, O'Connor, and Cupp, JJ., concur.
O'Donnell and Lanzinger, JJ., dissent.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-2551.pdf

(June 10, 2010) The Supreme Court of Ohio ruled today that an Ohio trial court could properly exercise personal jurisdiction over a nonresident defendant in a defamation case in which an Ohio-based plaintiff alleged that the defendant posted disparaging statements on the public forum areas of several Internet sites with the intention of damaging the plaintiff’s business and personal reputation. The Court’s 4-2 majority decision, which affirmed a ruling of the 5th District Court of Appeals, was authored by Justice Paul E. Pfeifer.

In 2006 Kauffman Racing Equipment (KRE) of Knox County, which specializes in the manufacture and sale of race car parts, sold an auto engine block to a Virginia resident, Scott Roberts, who has never been to Ohio. Eight months later, Roberts called KRE to complain that the engine block was defective. KRE owner Steve Kaufman had Roberts ship the block back to Ohio, where his examination revealed that the block had been modified by Roberts, a fact that Roberts subsequently admitted. KRE declined to buy back the engine block because of the modifications made by Roberts, and shipped the block back to him.

During a two-month period following KRE’s refusal to replace the engine block, Roberts posted a number of comments that were highly critical of KRE products and business practices and of Steve Kauffman personally on the public-forum pages of several Internet sites dedicated to automobile racing equipment and related subjects. These included postings on the websites PerformanceYears.com and PontiacStreetPerformance.com, and in an item description on the internet auction website, eBay Motors. In some of those comments, Roberts indicated that it was his intention to get even for his economic loss on the engine block transaction by negatively impacting KRE’s reputation via his postings on Web sites frequented by car racing enthusiasts.

After receiving inquiries from at least five Ohio residents triggered by Roberts’ Web postings, KRE filed suit against Roberts in the Knox County Court of Common Pleas, alleging that Roberts had injured the company’s reputation and business by posting false and malicious statements on the Internet and seeking damages for defamation and intentional interference with contracts and business relationships. Roberts filed a motion to dismiss KRE’s claims against him on the basis that an Ohio trial court could not exercise personal jurisdiction over him because he was a Virginia resident with no legal presence in Ohio. The trial court granted Roberts’ motion to dismiss based on lack of personal jurisdiction.

KRE appealed. On review, the 5th District Court of Appeals reversed and remanded the case to the trial court for further proceedings. The court of appeals found that Ohio’s “long arm” statute, R.C. 2307.382, and Civil Rule 4.3(A) conferred jurisdiction on the trial court to hear KRE’s complaint, and held that the court’s exercise of personal jurisdiction over Roberts did not deprive him of his right to due process of law under the Fourteenth Amendment to the U.S. Constitution. Roberts sought and was granted Supreme Court review of the 5th District’s decision.

In today’s majority opinion affirming the judgment of the court of appeals, Justice Pfeifer wrote that KRE had established both of the necessary elements that: 1) Ohio’s long-arm jurisdiction statute and supporting civil rule confer jurisdiction over Roberts on the trial court; and 2) exercising that jurisdiction to require Roberts to answer for his alleged tortious conduct in an Ohio court does not violate his constitutional right to due process.

“Roberts contends that Ohio’s long-arm statute does not confer personal jurisdiction because he did not direct the alleged tortious statements to Ohio or publish them here,” wrote Justice Pfeifer. “Despite the fact that Roberts’s publication of his comments did not emanate from Ohio, those comments were received in Ohio. ... Roberts posted his allegedly defamatory statements on the Internet, ostensibly for the entire world to see. How much of the world saw the comments is unknown; but we do know that at least five Ohioans saw Roberts’s statements. The comments were thus published in Ohio. Because Roberts’s allegedly defamatory statements were published in Ohio, his alleged tort was committed in Ohio, and he falls within the grasp of R.C. 2307.382(A)(3) and Civ.R. 4.3(A)(3).

In finding the necessary nexus between Roberts’ Internet postings and Ohio to defeat his due process objections, Justice Pfeifer wrote: “Roberts argues that mere foreseeability by a nonresident defendant of the effects in the forum state is insufficient to justify the exercise of personal jurisdiction. Roberts’s reliance of this conclusion is inapposite because the effects of his conduct went well beyond foreseeability: Roberts intended the effects of his conduct to be felt in Ohio. His statements were communicated with the very purpose of having their consequences felt by KRE in Ohio. The contention that his statements were not made with the purpose of injuring some person in Ohio is unavailing. The postings themselves indicate his purpose of injuring Kauffman. For example, on his October 18, 2006, posting, Roberts stated: “[w]hat I loose [sic] in dollars I will make up in entertainment at their expence [sic].” On October 19, 2006, he wrote: “[a]gain, this is not to get a resolution. I have a much bigger and dastardly plan than that and this is a good place to start.” Many of the postings name Kauffman directly and specifically mention Ohio.”

“Here, Roberts not only knew that Ohio resident KRE could be the victim, he intended it be the victim. The allegedly defamatory communications concerned KRE’s activities in Ohio. We are not dealing with the situation in which jurisdiction is premised on a single, isolated transaction. The posts detailed the transactions between Roberts and KRE. Moreover, the purchase of the engine block and subsequent transfers from Virginia to Ohio and back again served as the foundation from which this dispute arose. Roberts’s allegedly defamatory posts were predicated on his course of dealing with an Ohio resident corporation. At least five Ohio residents other than Kauffman read these postings. Lastly, although KRE does business nationwide, its business reputation is centered in Ohio, because Ohio is the location of its sole base of operations. Roberts knew, and in fact intended, that the brunt of the harm caused be felt by KRE in Ohio. Thus, the focal point of the damage was Ohio, and Roberts’s actions therefore fulfill the requirement of causing a consequence in Ohio.”

Justice Pfeifer’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp.

Justice Terrence O’Donnell entered a dissenting opinion, joined by Justice Judith Ann Lanzinger, stating that in his view the actions taken by Roberts in this case did not establish the “minimum contacts” with Ohio necessary to meet due process requirements set by prior U.S. Supreme Court decisions on the issue of personal jurisdiction, including the high court’s 1980 ruling in World-Wide Volkswagen Corp. v. Woodson. Under those precedents, Justice O’Donnell observed, a defendant’s actions must have created a “substantial connection” with the forum state to such a degree that he “‘should reasonably anticipate being haled into court there.’ ... When the defendant does not have an ongoing relationship with the forum state, a defendant must deliberately engage in significant activities within that state and ‘purposefully direct[]’ his activities at residents of the forum to satisfy this standard.”

In this case, he wrote, “Roberts posted his comments on three general auto-racing websites and an auction site, none of which have any specific connection to Ohio or are more likely to be viewed by a resident of Ohio than by a resident of any other state. ... By merely posting to general websites, Roberts neither deliberately engaged in significant activities within Ohio nor purposefully directed his activities at an Ohio resident sufficient to establish minimum contacts and satisfy due process – regardless of his intent. ... Notwithstanding this traditional jurisdictional principle, the majority has ostensibly provided an avenue for any affected Ohioan to sue the originator of any negative Internet post in an Ohio court when the product has been purchased in Ohio and the negative post is read by an Ohio resident. But this standard falls far short of due process.”

Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in this case.

Contacts
Brett Jaffe, 614.443.7654, for Racing Equipment, LLC.

William J. Kepko, 740.392.2900, for Scott Roberts.

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