SCOTTSDALE CAPITAL ADVISORS CORP.; JOHN HURRY, Plaintiffs, Appellants,
THE DEAL, LLC; WILLIAM MEAGHER, Defendants, Appellees.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW
HAMPSHIRE [Hon. Joseph Laplante, Chief U.S. District Judge]
Esper, with whom Douglas E. Mirell, Jordan D. Susman, Harder
Mirell & Abrams, LLP, Christopher D. Hawkins, and Devine,
Millimet & Branch, P.A., were on brief, for appellants.
Elizabeth A. McNamara, with whom John M. Browning and Davis
Wright Tremaine LLP were on brief, for appellees.
Lynch, Circuit Judge, Souter, Associate Justice,
and Kayatta, Circuit Judge.
KAYATTA, CIRCUIT JUDGE.
The Deal, LLC posted to a subscriber-only website and
attached to email newsletters three articles written by
defendant William Meagher that allegedly defamed plaintiffs
Scottsdale Capital Advisors Corporation and John Hurry.
Plaintiffs eventually filed suit in New Hampshire. None of
the four parties has anything to do with New Hampshire except
that one of The Deal's institutional subscribers,
Dartmouth College, is located there. After discovery
indicated that plaintiffs would have no reasonable basis upon
which to establish that anyone in New Hampshire ever saw any
of the three articles as a result of the Dartmouth
subscription, the district court dismissed the complaint for
lack of personal jurisdiction. For the following reasons, we
Deal is a Delaware limited liability company with its
principal place of business in New York. It reports primarily
on financial matters relevant to small cap and microcap
securities markets. It has approximately 700 subscribers.
While this number may seem small in absolute terms, virtually
all of these subscribers are large institutions, many of
which apparently pay substantial amounts for a subscription.
Individuals affiliated with the subscribing institution gain
the ability to access The Deal's web portal, on which The
Deal posts its articles. These individuals can also sign up
to receive email newsletters from The Deal containing PDF
copies of The Deal's articles.
2013 and early 2014 The Deal posted on its subscriber-only
web portal three articles written by Meagher concerning
plaintiffs. The Deal also sent each article as a PDF
attachment by email to newsletter subscribers. The articles
stated -- falsely, allege plaintiffs -- that plaintiffs were
under investigation by law enforcement and securities
Scottsdale is an Arizona corporation with its principal place
of business in Arizona. Plaintiff Hurry is an executive
officer of Scottsdale and a citizen of Nevada. Neither
plaintiff had any particular connection to New Hampshire
before they decided to file this suit in New Hampshire state
court, from which defendants removed it to federal court. The
parties devote some effort to debating plaintiffs'
motives for choosing to file this case in New Hampshire, but
we find no need to get to issues of motive in order to decide
moved to dismiss the claims under Federal Rule of Civil
Procedure 12(b)(2) for lack of personal jurisdiction.
Plaintiffs requested that should the district court be
inclined to grant the motion, it first allow for
jurisdictional discovery. In May 2017, the district court did
as plaintiffs asked, issuing an order permitting
jurisdictional discovery. The order limited the forms of
discovery to interrogatories and requests for production.
Plaintiffs never suggested that they needed any other forms
jurisdictional discovery revealed that for at least five
years (including the years at issue here) The Deal
successfully recruited and retained Dartmouth's business
by sending targeted communications to school officials
explaining why Dartmouth should pay the substantial costs of
becoming a subscriber. The Deal also telephoned Dartmouth
directly in the course of actively soliciting Dartmouth's
renewal of its subscription. The Dartmouth subscription
granted to Dartmouth's 7, 000 students and faculty
members the ability to sign up for access to the web portal
on which one could read The Deal's articles. Dartmouth
bore the cost of the subscription and did not charge its
users for access. The Deal affirmatively contacted thirty to
forty individuals on campus to elicit interest in The Deal.
Thirty members of the Dartmouth community signed up for
access to the web portal, and two members also signed up to
receive the emailed newsletter during the relevant period.
The Deal had no other New Hampshire subscribers or contacts.
Meagher has never set foot in the state, nor did he have any
other relevant contact to which plaintiffs point.
additional information produced in jurisdictional discovery
trained on whether anyone actually looked at any of the three
articles at issue here. Analytic tools, the accuracy of which
the parties do not dispute,  revealed that no one at Dartmouth
(or elsewhere in New Hampshire) accessed the allegedly
defamatory articles available on The Deal's web portal.
The parties also learned that the second and third articles
sent in PDF format were never opened, but because The Deal
was not set up to collect the necessary data when the first
article was sent in 2013, discovery did not reveal whether
either recipient opened the PDF file containing the first
also showed that twenty-one individuals in New Hampshire
viewed one of the articles on a free, unrestricted website
operated by The Deal's parent corporation. Plaintiffs did
not sue the parent company, and they make no effort to ground
jurisdiction on those viewings of the parent's website,
so neither shall we. See United States v. Zannino,
895 F.2d 1, 17 (1st ...