If you badmouth an out-of-state company on the Internet, are you subject to personal jurisdiction in the state where the company resides?
In Fertel v. Davidson, a federal court in Maryland was given this interesting question with an interesting set of facts. A 52-year-old artist, who was in a troubled marriage in California, purchased a “Marriage Fitness Tele-Boot Camp” program for a Maryland company called MarriageMax. The opinion suggests that this program costs $400. It comes with a “if you are not satisfied for any reason, you can get your money back” type guarantee.
But the return policy had some fine print. It required return on if the program was in “resalable condition,” it is returned within thirty days of the order, and the consumer has had her “private 1-on-1 session with the owner of the company.”
Herein lies the problem. The owner was not available to meet with the owner because his scheduling did not allow it; they wanted to return the program. The customer service representative she called would not extend the time limit. So she wrote to TrustPilot and Ripoffreport.com and published a few screeds about the company, citing her allegations about how the company’s refund policy was impossible to meet.
MarriageMax’s owner sues to claim that the negative reviews defamed him personally. Noting that the review named Baltimore, Maryland as the site of the company, he sought personal jurisdiction in federal court in Maryland.
Let’s put this in context for a second. The MarriageMax owner wins this case no matter what. We have a poor woman in California who has to hire a lawyer and fight jurisdiction in Maryland. On her best day, she probably gets out of this by spending $5,000. So if his goal was to get back at her, mission accomplished. That’s the harsh reality of it. Of course, he loses too because it just generates more publicity and interest in the problems this woman had with his company. So it is sort of like leaving your high beams on out of spite. It might put you at risk of violent death in a car crash, but boy it felt good to get back at that dude that left his high beams on too long.
Legal Issue: Is There Personal Jurisdiction in Maryland?
There is a three-part test to determine personal jurisdiction in Maryland:
- did the defendant purposefully avail himself of the privilege of conducting activities in our state;
- do the claims arise out of activities directed in Maryland; and
- whether the exercise of personal jurisdiction would be constitutionally reasonable (which means do what you want)
So what do we do with this poor woman who got mad and wrote some bad reviews? The court decided that writing a bad review about a Maryland company in California is not enough to lead to personal jurisdiction in Maryland. Judge Catherine Blake reasoned that there is nothing in on-line reviews to suggest that they were tailored for a Maryland audience. These online review sites have a national scope and the consumer bought the product because it is marketed for people everywhere. Ultimately, the court concludes, the only Maryland nexus is that the owner of MarriageMax and the company itself live there and that the defendant noted this in her post.
Obviously, I’m passive-aggressively rooting for the defendant with my multiple “poor woman” comments. But what if it had been something with true malice intended to harm the reputation of a company? That is a tough question. Either way, the law is written, someone is getting a bad shake. It is not fair for MarriageMax to have to track to California to sue this woman, and it’s not fair for her to have to avail herself to Maryland. It is a tough situation all the way around. I’m a personal injury lawyer who would never take a case like this so I don’t have to worry about it. But we face these issues all the time because trucking companies sometimes cause harm to Maryland residents in adjoining states and they want to sue here in Maryland. The trucking company runs a lot of routes through Maryland. Is that enough? (Answer: it really depends.)
conduct fails prongs