First Circuit Holds That Massachusetts-Based Court Lacked Personal Jurisdiction Over Foreign Website That Allegedly Defamed a Domestic Resident

In Lin v. TipRanks, Ltd., No. 20-1001 (1st Cir. Nov. 23, 2021), the First Circuit elides a difficult question of personal jurisdiction – whether federal constitutional due process “permits a defamation plaintiff to assert personal jurisdiction over an out-of-forum defendant that operates a for-profit website that trades on assertions about individuals’ reputations, absent the defendant knowing the location of the plaintiff” – holding instead that the plaintiff failed to allege sufficient facts to support bringing an action in Massachusetts.

Plaintiff Lin filed an action in Massachusetts state court, then removed to federal district court, alleging that an Israeli-based website, TipRanks, defamed her. TipRanks uses analytics “to rank financial analysts based on the performance of their investment recommendations. These rankings are made available for free on the TipRanks website.” The website also hosts a “premium service” that, for a fee, provides more analyst ratings and investment recommendations. “TipRanks is not registered to do business in Massachusetts, has no employees in Massachusetts, and does not maintain an office or own any personal or real property in Massachusetts. According to its chief executive officer, it also does not ‘derive substantial revenue from business in Massachusetts.’”

Under removal jurisdiction, the Massachusetts federal district court applied the Commonwealth’s long-arm statute, Mass. Gen. Laws ch. 223A, § 3 (“ § 3”), and federal due process to determine whether it had personal jurisdiction. While agreeing that the tort claim facially met the requirements of state law, it nevertheless failed the due process test. To comport with due process, “the plaintiff must establish that (1) the claim that she is bringing ‘directly arise[s] out of, or relate[s] to, the defendant’s forum-state activities’; (2) the defendant’s contacts with the forum state ‘represent a purposeful availment of the privilege of conducting activities in’ that state; and (3) the exercise of jurisdiction is reasonable.” The court held that “the ‘relatedness’ prong of the inquiry was satisfied here because Lin’s ‘claim arises out of TipRanks’s forum-state activity of disseminating the website and the website’s content in Massachusetts.’” Nevertheless, it held that the claim did not meet the other two prongs of the test.

The First Circuit affirms, but on the alternative ground that the plaintiff failed to allege facts that supported “relatedness” because “the record fails to show that anyone in Massachusetts saw the allegedly defamatory statement in question.”

The panel observes first that the state-law question under § 3 is “vigorously dispute[d],” but resolving that question was unnecessary to dispose of the case. “[R]ather than engage the complicated questions regarding how § 3(a) applies in this context without the aid of either fully adversarial briefing or a lower court decision, we proceed on the understanding that Lin is right that, given § 3(a), the long-arm statute poses no bar to the exercise of personal jurisdiction over TipRanks here . . .  [Yet] even assuming that TipRanks’s business activity in Massachusetts suffices to satisfy the requirements of § 3(a) of that state’s long-arm statue . . . our recent decision in Scottsdale Capital Advisors Corp. v. The Deal, LLC, 887 F.3d 17 (1st Cir. 2018), leads us to conclude that we must affirm the District Court’s ruling that the exercise of personal jurisdiction over TipRanks on these claims does not comport with due process . . . .”

Scottsdale, another defamation case, “was brought in New Hampshire by an Arizona corporation and one of its officers concerning allegedly defamatory articles that the defendant, ‘The Deal,’ had posted to a subscriber-only web portal and attached to email newsletters sent to subscribers . . . . With respect to the relatedness requirement, Scottsdale explained that, given the nature of the legal claim at issue there, the relatedness showing depended on whether the evidence sufficed to show a causal connection between the claimed injury – reputational harm – and the defendant’s forum-state activities . . . . That question was a substantial one in that case because the only forum-state activity identified was the defendant’s maintenance of a subscriber-only website in the forum state and its solicitation of one subscriber in the state.” In that case, the First Circuit “concluded that if no one using the forum-state college’s institutional subscription saw the articles, the plaintiffs could not establish cause in fact or legal cause because their ‘reputation would not differ had [the college] not subscribed to The Deal.’”

In the present case, the panel notes, the alleged injury to Lin was occupational, i.e., that potential employers might see Lin’s negative rating on the site, and that at least one or more of those potential employers might be based in Massachusetts. “Lin contends that, when all reasonable inferences are drawn in her favor — as they must be — the fact that she ‘was a highly educated and highly valued analyst who applied to, and interviewed with, numerous Boston and Cambridge based employers for over a year without being hired’ but then ‘was hired less than a month after TipRanks removed the inaccurate profile posted on its website’ is sufficient to establish that her potential employers viewed the allegedly defamatory TipRanks posting.”

But there was considerable doubt as to this inferential argument. TipRanks was targeted at individual investors, not employers in the financial field. And “there is nothing in the record that suggests that conducting an internet search for all applicants – or even all reasonably strong ones – in advance of calling applicants in for interviews is anything like a routine practice in the industries in which Lin was applying.” Indeed, most of the positions that plaintiff sought were outside the financial field altogether.

Indeed, “there are myriad reasons why an individual might not receive an interview. Moreover, Lin did receive some interviews while the problematic rating on [TipRanks website] was on display. Thus, the record suggests that if the ranking was the barrier to entry for her, it was far from an absolute one. That being so, we do not see what non-speculative basis there is for concluding that the ranking proved to be a barrier only for those employers – or a subset of them – to which she applied but that did not seek to interview her, at least when there is no basis for presuming that prospective employers generally would have done the search described before even inviting her to interview.”

Moreover, that she received an offer after her name came off the TipRanks ratings does not tip the probabilities in plaintiff’s favor. “We know little about that offer from the record. For example, we do not know what the position she was offered was and how it compared to positions she had applied for during the relevant time frame, or how many other jobs she applied to after the ranking depopulated for which she did not get offers . . . . And, even if we assume that she did continue applying for jobs through that period, the fact that she received a job offer within a month of the ranking depopulating from Google is not sufficient to infer that employers had previously been conducting Google searches prompting them to see and rely on the purportedly defamatory material. Thus, we do not see how the fact of her having been hired when she was is sufficient on its own — or even when considered with the other aspects of the record just reviewed — to permit the inference that Massachusetts employers were looking at the TipRanks profile.”

Thus, finding no facts sufficient to establish relatedness, the panel affirms dismissal and does not proceed to the other two prongs of the analysis.

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