Author: Rich Orton
Recently, in Salfinger v. Fairfax Media, Ltd., the Wisconsin Court of Appeals considered “whether a Wisconsin Court may exercise jurisdiction over foreign defendants whose only real connection to the State of Wisconsin is in having published an article online that is ostensibly available to anyone in the world and that also provides for targeted advertising based upon the user’s location and interests.” ¶ 11.
Plaintiff Roderick Salfinger, an Australian claiming to be a resident of Shorewood, WI, brought a defamation claim against the Sydney Morning Herald for an article it ran about the family behind Yellow Tail wine, which noted his connection to them and contained other individuals’ descriptions and opinions about him which were “less than flattering.” ¶¶ 2-4. Of primary concern to the plaintiff was a statement that he “faces prosecution in the [United States] after allegedly producing a revolver at his daughter’s wedding.” ¶ 4.
The article was published in print within Australia and online via the newspaper’s website. ¶ 2. The parties from Australia and New Zealand with ties to the newspaper – “the Fairfax parties” – moved to dismiss for lack of personal jurisdiction. The trial court granted the motion, concluding that the newspaper’s contacts within Wisconsin were too insubstantial to satisfy the due process clause. ¶ 10.
On appeal, plaintiff argued that specific jurisdiction over Fairfax existed because his defamation claim arose from an article made available online which could be accessed in Wisconsin. ¶12. The court engaged in the two-step personal jurisdiction analysis, first considering whether Fairfax was subject to Wisconsin’s long-arm statute, Wis. Stat. § 801.05(4). ¶ 16. This prong was not in dispute – the statute authorized jurisdiction. Id.
The court then turned to the heart of the dispute, the second prong: whether the exercise of jurisdiction would comport with Constitutional due process requirements. ¶ 21.
The plaintiff suggested three ways in which Fairfax’s actions satisfied due process:
1. Fairfax received online advertising revenue from the Wisconsin users that accessed the newspaper’s website;
2. The Fairfax parties published The Wisconsin Agriculturalist, a magazine specifically targeted at Wisconsin residents and which had two full-time employees in Wisconsin; and
3. The Fairfax parties provide yearly online subscriptions to the newspaper to Wisconsin residents. ¶ 25.
The Court of Appeals quickly dispatched with the second and third arguments, finding that neither the subsidiary’s publication nor the newspaper subscriptions (individually or collectively) were sufficient to establish the requisite minimum contacts. ¶ 26.
The court then turned to the issue of whether publishing the article online and benefitting financially from targeted online advertising could satisfy due process. ¶ 31. The court explained that even though the Fairfax parties could have reasonably known that the online article could be accessed anywhere, that was insufficient to establish minimum contacts with Wisconsin. “To the contrary, merely placing an article online on an Australian newspaper’s website, particularly where the article does not even mention Wisconsin, fails to evince any connection with or conduct in Wisconsin.” ¶ 37.
As for the issue of whether the targeted Wisconsin advertising could satisfy due process, the court again found that there were not sufficient contacts. The court discussed at length how targeted online advertising works, ultimately agreeing with the trial court that the advertisements are not part of the Fairfax parties’ efforts to “drum up” business in Wisconsin. ¶ 49. Instead, they “merely greet Wisconsin residents who themselves take the initiative to visit the defendants’ websites.” Id.
The outcome in this case probably comes as no surprise to most people. However, with technology constantly changing and constantly influencing the way business is conducted and information is shared, how the courts “catch up” and apply the old jurisdictional analyses to new fact scenarios and innovative arguments involving new technologies is worth monitoring. Certainly the facts of this case could be analogized to countless other scenarios and parties, including product manufacturers, part suppliers, retailers, service providers, etc. While different facts could lead a court to a different conclusion in its due process analysis, this case may serve as a road map for parties in similar situations where personal jurisdiction is questionable.