Court Opinion

ID: 6337916
Source: CourtListenerOpinion
Date Created: 2022-05-05 00:00:25.01726+00
Date Added: 2024-06-11T09:25:09.122256
License: Public Domain

United States Court of Appeals
             for the Fifth Circuit                                    United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                         April 27, 2022
                               No. 21-20022
                                                                        Lyle W. Cayce
                                                                             Clerk
Charles Johnson,

                                                        Plaintiff—Appellant,

                                   versus

TheHuffingtonpost.com, Incorporated,

                                                        Defendant—Appellee.

               Appeal from the United States District Court
                   for the Southern District of Texas
                            No. 4:20-CV-179

          ON PETITION FOR REHEARING EN BANC

Before King, Smith, and Haynes, Circuit Judges.
Per Curiam:
      Treating the petition for rehearing en banc as a petition for panel
rehearing (5th Cir. R. 35 I.O.P.), the petition for panel rehearing is
DENIED. The petition for rehearing en banc is DENIED because, at the
request of one of its members, the court was polled, and a majority did not
vote in favor of rehearing (Fed. R. App. P. 35 and 5th Cir. R. 35).
      In the en banc poll, 7 judges voted in favor of rehearing (Judges Elrod,
Haynes, Costa, Willett, Engelhardt, Oldham, and Wilson), and 10 voted
                               No. 21-20022

against rehearing (Chief Judge Richman and Judges Jones, Smith, Stewart,
Dennis, Southwick, Graves, Higginson, Ho, and Duncan).

                                    2
                                 No. 21-20022

Jennifer Walker Elrod, Circuit Judge, joined by Haynes,
Engelhardt, and Wilson, Circuit Judges, dissenting from the denial of
en banc rehearing:
       Does the Constitution immunize online news-media outlets from libel
lawsuits in states in which they circulate their content online? The panel
opinion in this case held that it does. I am not so sure. The Supreme Court
has held that a print publication “aimed at a nationwide audience” is not
immune from defamation actions in any state where it has “regular
circulation.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 773–74, 781
(1984). Are online publications to be treated differently? We should have
reheard this case en banc to reassess this question of exceptional importance.
       We should also have reheard this case in light of the circuit split that
the panel opinion begat. None of our sister circuits have “restricted
application of Keeton to print publications” like the panel majority opinion
does in this case. Johnson v. TheHuffingtonPost.com, Inc., 21 F.4th 314, 330
(5th Cir. 2021) (Haynes, J., dissenting). In fact, decisions of the Seventh and
Ninth Circuits have relied heavily on Keeton to uphold personal jurisdiction
over companies whose Internet-driven business models evince intent to avail
themselves of the privilege of doing business in the states in which they were
sued. See uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 427–30 (7th Cir.
2010); Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1229–31 (9th
Cir. 2011). The Fourth Circuit recently held similarly. See UMG Recordings,
Inc. v. Kurbanov, 963 F.3d 344, 352–55 (4th Cir. 2020), cert. denied, 141 S. Ct.
1057 (2021). The panel opinion in this case broke with these decisions,
cabining Keeton to the almost-bygone world of print-only media.
                                       I.
       In January of 2019, the Huffington Post published a headline on its
website that labeled plaintiff–appellant Charles (“Chuck”) Johnson a

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                                 No. 21-20022

“Holocaust-Denying White Nationalist.” Johnson sued HuffPost for libel.
Characterizing the piece as a fake-news “hit job” by a “notoriously left-
leaning” news outlet, Johnson adamantly repudiated the positions that
HuffPost had publicly attributed to him and sought damages in excess of $1
million.
       Johnson, a Texan, filed his complaint with the United States District
Court for the Southern District of Texas. To establish the court’s power to
hear the case, Johnson alleged several interrelated contacts tying HuffPost—
a Delaware corporation headquartered in New York—to Texas: HuffPost’s
online publication and its allegedly libelous article are freely available in
Texas, where Johnson resides and where the article allegedly caused him
reputational injury. The national media outlet “derives substantial revenue”
in the course of “servicing the Texas market through [its] [w]ebsite.” It
“tracks the location and activities of Texas residents on [its] [w]ebsite
thereby enabling targeted advertising to Texas residents that generate
substantial revenue.” And it has contracted “with advertisers in Texas to
advertise on its [w]ebsite” and run ads on its site that are “geared to the
Texas market.”
       HuffPost moved to dismiss for lack of personal jurisdiction, and the
district court granted the motion. Our court’s panel majority opinion
affirmed, holding that none of these alleged contacts sufficed to empower a
Texas federal court to hear this libel case against HuffPost. Johnson, 21 F.4th
at 325. The opinion reasons that Keeton cannot be “woodenly appl[ied] . . .
to [I]nternet publications” because “websites are different” than print
publications. Id. Johnson sought rehearing of his case en banc, which,
regrettably, today we deny.

                                      4
                                 No. 21-20022

                                      II.
       “The analysis applicable to a case involving jurisdiction based on the
Internet should not be different at its most basic level from any other personal
jurisdiction case.” Admar Int’l, Inc. v. Eastrock, L.L.C., 18 F.4th 783, 786
(5th Cir. 2021) (quoting Pervasive Software, Inc. v. Lexware GmbH & Co. KG,
688 F.3d 214, 226–27 (5th Cir. 2012)). The panel majority opinion gives lip-
service to this key principle, but it swiftly dismisses Johnson’s reliance on
Keeton simply because “websites are different.” Johnson, 21 F.4th at 325
(emphasis added); id. at 330–31 (Haynes, J., dissenting). The panel opinion
thus bifurcates the law of specific jurisdiction over defamation actions: we
now have one rule for print publications and a new special rule for web
publications. This approach plainly conflicts with our professed application
of the same law to the Internet as to the material world.
                                      A.
       This case turns on purposeful availment. The central question is this:
what proves a publication’s purposeful availment through cyberspace? In
Johnson’s view, HuffPost’s online circulation of its content (including the
disputed article), considered in light of its ad-driven business model, shows
that the company intended to avail itself of the Texas market. The panel
majority opinion says that Johnson must show something more: namely, that
HuffPost specifically “aimed the alleged libel at Texas.” Id. at 320–21
(majority opinion). As Judge Haynes meticulously explained in her panel
dissent, we apply the Supreme Court’s instructions in Keeton when a
defamation defendant is a publication. See id. at 327–30 (Haynes, J.,
dissenting); Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 425 (5th Cir.
2005); cf. Calder v. Jones, 465 U.S. 783, 789–90 (1984) (Keeton’s companion
case furnishing the “aiming” test for author–editor defendants).

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                                       No. 21-20022

        In Keeton v. Hustler, the Supreme Court instructed us how to apply
the purposeful availment requirement to defamation lawsuits against
publications. Keeton held that a New Hampshire federal court had personal
jurisdiction over Hustler, an Ohio-domiciled magazine with its principal
place of business in California, to hear a libel lawsuit brought by a New
Yorker.1 465 U.S. at 781. Hustler’s only contact with New Hampshire was
its circulation of 10,000–15,000 magazines (containing the alleged libel) in
that state. Id. at 772. But that was sufficient for specific jurisdiction over Ms.
Keeton’s libel suit. It mattered not a whit that the alleged libel had nothing to
do with New Hampshire besides the mere fact of its circulation there. Id.
And why? Because circulation itself showed that Hustler “continuously and
deliberately exploited the New Hampshire market” such that “it must
reasonably anticipate being haled into court there in a libel action based on
the contents of its magazine.” Id. at 781 (citing World-Wide Volkswagen Corp.
v. Woodson, 444 U.S. 286, 297–98 (1980)). The bottom line is this: for a
publishing company to purposefully avail itself of a state’s marketplace,
Keeton says its publication simply needs to be in “regular circulation” there.
Id. at 773–74.
        The Internet only presents a new twist for the old test: how do we
know that a defendant publishing company continuously and deliberately
exploited the forum state’s market when its publication only 'circulates’ by
virtue of the Internet’s universal accessibility? The panel majority opinion
in this case holds that HuffPost’s online circulation cannot constitute
purposeful availment because Texans act unilaterally in visiting

        1
          The Court noted that the New York plaintiff was flagrantly forum shopping: she
had no particular connection with New Hampshire; she simply wanted to take advantage
of that state’s generous statute of limitations for libel. 465 U.S. at 772 n.1, 778–79. Here,
by contrast, Johnson is a resident of the forum state, sensibly suing where he says he was
injured.

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                                  No. 21-20022

huffpost.com. Johnson, 21 F.4th at 320–21. And as for HuffPost’s
geolocation tracking, Texan advertisers, and ads targeting Texans?
“[I]rrelevant,” says the panel majority opinion; “Johnson’s libel claim arises
from the story declaring him a white-nationalist Holocaust denier”—not
HuffPost’s sale of ads, the citizenship of its advertising counterparties, or the
ads themselves. Johnson, 21 F.4th at 320–21.
       That is all true. Third parties’ unilateral activities do not create forum
contacts for an unwitting defendant, see Hanson v. Denckla, 357 U.S. 235,
253–54 (1958), and a defendant’s own forum contacts that are unrelated to
the lawsuit itself are insufficient to support specific jurisdiction, see Ford
Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1026 (2021). The
problem, though, is that the panel majority opinion’s blinkered analysis did
not put the puzzle pieces together. It did not consider HuffPost’s online
circulation in light of its ad-driven business model. As a result, it failed to
tackle the harder and more consequential issue in this case. To wit: does
HuffPost’s ad-driven business model prove that HuffPost intended that its
(ostensibly passive) online circulation would reach the Texas market?
       The logic behind Keeton suggests that it very well might. HuffPost
exploits the Texas market just as Hustler exploited the New Hampshire
market. 465 U.S. at 781. The only difference is how they do so. Whereas
Hustler sold magazines, HuffPost sells ads. By making its content freely
available online, HuffPost lures visitors from far and wide. This creates value
for advertisers, which HuffPost enhances by tracking visitors’ geolocation
data and enabling geotargeted ads. Hustler’s circulation in New Hampshire
was obviously no accident: it mailed print magazines there regularly.
Likewise, the argument goes, HuffPost’s Texan audience online was no
accident: HuffPost put its content online with the expectation that it would
attract viewers from the nation’s second most populous state, whose views

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                                        No. 21-20022

would drive sales of targeted ads and thus boost HuffPost’s revenue.2 See
Johnson, 21 F.4th at 331 (Haynes, J., dissenting) (“It is not an accident that
Texans can access HuffPost, and the approach HuffPost takes towards Texas
is the modern equivalent of Keeton sending magazines to New
Hampshire.”); cf. Woodson, 444 U.S. at 297–98 (authorizing personal
jurisdiction when a corporation “delivers its products into the stream of
commerce with the expectation that they will be purchased by consumers in
the forum State”); South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 2092
(2018) (“'[W]hile nexus rules are clearly necessary,’ the Court 'should focus
on rules that are appropriate to the twenty-first century, not the
nineteenth.’”) (citing Walter Hellerstein, Deconstructing the Debate over State
Taxation of Electronic Commerce, 13 Harv. J.L. & Tech. 549, 553 (2000)).3 If
that is so, HuffPost’s online circulation 'in’ Texas provides the basis, under
Keeton, for specific jurisdiction in Texas federal court.
                                               B.
        If Johnson were to succeed on this theory of purposeful availment, the
rest of the specific-jurisdiction analysis would easily fall into place. Start with
relatedness, the second prong of the analysis. HuffPost’s online circulation
in Texas is itself the relevant contact—not HuffPost’s geolocation tracking,
targeted ads, or contracts with Texan advertisers. And it is plain as day that

        2
           HuffPost could put its content online without subjecting itself to jurisdiction in all
fifty states if it wanted to. For instance, the publishing company could put its content
behind a paywall and refuse to offer subscriptions to would-be visitors from certain
undesired states. Or, it could simply refrain from showing ads to visitors from such states.
        3
          See also Wayfair, 138 S. Ct. at 2099 (rejecting the antiquated “physical presence
rule” in the dormant Commerce Clause context and holding that online retailers “avail[ed]
[themselves] of the substantial privilege of carrying on business” in a state based in part on
“both the economic and virtual contacts respondents have with the State” and on the fact
that “respondents are large, national companies that undoubtedly maintain an extensive
virtual presence” in the state (citations omitted)).

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                                      No. 21-20022

Johnson’s libel claim arose out of HuffPost’s circulation: Johnson’s
reputation was injured because HuffPost published allegedly false statements
about him online.4 Cf. Keeton, 465 U.S. at 772, 781. Indeed, as a Texas
resident, Johnson was largely injured in Texas, where HuffPost purposefully
circulated its allegedly libelous story and damaged his reputation most
significantly: his own community. Clearly, online circulation gave rise to (or,
at a bare minimum, “related to”) Johnson’s libel claim, just as Hustler’s
print circulation in New Hampshire gave rise to (or “related to”) Ms.
Keeton’s libel claim. See Ford Motor, 141 S. Ct. at 1024–28 (reminding us
that defendant’s contacts need only “relate to” the plaintiff’s claim).
        Now consider the final prong of the analysis, fairness to the defendant.
The panel majority opinion compares news–media giants like HuffPost to
“[g]rannies with cooking blogs [who] do not, and should not, expect lawsuits
from Maui to Maine.” Johnson, 21 F.4th at 320. It is hard to take this
comparison seriously. HuffPost is no tech-savvy octogenarian sharing apple-
pie recipes online. Id. at 331 (Haynes, J., dissenting). The publishing
company does not casually post its content just to share its interest in current
events with fellow enthusiasts wherever they may happen to reside. On the
purposeful availment theory described above, HuffPost is a robust
commercial enterprise, covetous of Texan clicks to help drive ad sales and
thus boost its bottom line. And having taken advantage of Texas’s market, it
is only fair that HuffPost accept the burden of jurisdiction in Texas courts.
Put simply, if HuffPost gets the quid, it cannot escape the quo. See Curtis
Publ’g Co. v. Golino, 383 F.2d 586, 593 (5th Cir. 1967) (“Having accepted the
benefits of the market place, [a publishing company] cannot complain that

        4
        Libel is written defamation, and defamation requires publication of a false
statement. See Bedford v. Spassoff, 520 S.W.3d 901, 904, 906 n.2 (Tex. 2017).

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                                       No. 21-20022

one of the fruits of the harvest [is] a lawsuit [for libel].” (quoting Curtis Publ’g
Co. v. Birdsong, 360 F.2d 344, 353 (5th Cir. 1966) (Rives, J., concurring))).5
                                            III.
        The panel opinion in this case takes us out on a limb. It parts ways
with every sister circuit to have addressed the matter. For this reason too,
we should have reheard this case.
        For starters, no other circuit has limited Keeton’s application solely to
print-media defendants. See, e.g., Ayla, LLC v. Alya Skin Pty. Ltd., 11 F.4th
972, 977, 981 (9th Cir. 2021) (applying Keeton to the volume of skincare
product sales); Plixer Int’l, Inc. v. Scrutinizer GmbH, 905 F.3d 1, 10–11 (1st
Cir. 2018) (applying Keeton to uphold personal jurisdiction over a foreign
company that “used its website to obtain U.S. customer contracts”); see also
Old Republic Ins. Co. v. Cont’l Motors, Inc., 877 F.3d 895, 900, 906, 914–15
(10th Cir. 2017) (observing that “[s]ome circuit courts have applied the
Keeton analysis in cases where the out-of-state defendant’s only contacts with
the forum state occurred over the internet . . . .” (emphasis added)). The
panel opinion’s constrictive reading of Keeton is thus at odds with our sister
circuits’ application of that case.
        But that is not all. The Fourth, Seventh, and Ninth Circuits have each
specifically concluded that online companies whose business models depend
upon attracting a wide audience for ad-driven revenue purposefully avail
themselves of the privilege of doing business virtually in states where their
sites are widely accessed. The panel majority opinion splits with these three

        5
          See also Choice Healthcare v. Kaiser Found. Health Plan of Colo., 615 F.3d 364, 374
(5th Cir. 2010) (“Deriving revenue from such commercial activity is the quid pro quo for
requiring the defendant to suffer a suit in the foreign forum.”).

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                                      No. 21-20022

sister circuits in concluding that HuffPost did not purposefully avail itself of
the privilege of doing business in Texas.
        Consider the Seventh Circuit’s analysis in uBID v. GoDaddy. 623
F.3d at 427–30. In that case, the court discerned purposeful availment from
an out-of-state domain-registration site’s “way of doing business” online. Id.
Arizona-based GoDaddy had conducted a nationwide ad campaign, targeting
no state in particular, but it was sued in Illinois. Relying on Keeton, the court
held that GoDaddy had “deliberately and continuously exploited the Illinois
market.” Id. at 427–29 & n.1, 433. “[I]t is easy to infer,” the court observed,
that GoDaddy “intended to reach as large an audience as possible, including
the 13 million potential customers in the nation’s fifth most populous state.”
Id. at 428. It did not matter that Illinois residents “unilaterally initiated”
transactions with GoDaddy online; GoDaddy obviously wanted their
business and used the Internet to get it. Id. at 428–29. Since a “typical
business” operating on the same scale in terms of Illinois revenue and
customers—but without the Internet—“would unquestionably be subject to
personal jurisdiction,” the Seventh Circuit concluded that GoDaddy’s
“unusual [Internet-based] business model [should not] complicate an
otherwise straightforward case for sufficient minimum contacts” under
Keeton. Id. at 429 (emphasis added).
        The Ninth Circuit too has clearly held that a website whose
“economic value turns, in significant measure, on its appeal to [forum
residents]” may be subject to personal jurisdiction in the forum state.
Mavrix, 647 F.3d at 1227–31.6 In Mavrix, an Ohio-based online publication

        6
          See also AMA Multimedia, LLC v. Wanat, 970 F.3d 1201, 1211 (9th Cir. 2020)
(reaffirming the core teaching of Mavrix, as relevant here, that when “[ad] targeting itself
indicate[s] that [a defendant website] knew about the [forum’s] user base which it then
exploit[s] 'for commercial gain by selling space on its website for advertisements,’” the

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                                      No. 21-20022

was sued in California. Applying Keeton, the court noted that the defendant
website, like Hustler, “sought and attracted [a] nationwide audience[]” and
“cultivated [its] nationwide audience[] for commercial gain.” Id. at 1230.
The court reasoned that the breadth of the defendant online publication’s
audience was “integral” to its ad-based “business model.” Id. It was no
accident that Californians visited Mavrix’s website: Mavrix, like Hustler,
wanted viewers “in any state”—including a populous state like California.
Id. It was a “predictable consequence” of the website’s “business model[].”
Id. Thus, following Keeton, the Ninth Circuit held that when “a website with
national viewership and scope appeals to, and profits from, an audience in a
particular state, the site’s operators can be said to have 'expressly aimed’ at
that state.” Id. at 1231. Hence, specific jurisdiction in California was proper.
        Most recently, in the international context, the Fourth Circuit held
that a foreign website operator purposefully availed himself of the privilege
of conducting business in Virginia. See Kurbanov, 963 F.3d at 352–55. Noting
that “[i]t is hardly unusual for websites to be free to use in today’s Internet
because many corporations 'make money selling advertising space,’” the
court concluded that forum-residents’ “acts of accessing the Websites”
supported specific jurisdiction because the website operator “made a
calculated business choice not to directly charge visitors in order to lure them
to his Websites.” Id. at 353 (emphasis added) (quoting Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 926–27 (2005)). Because the
website operator “ultimately profits from visitors by selling directed
advertising space and data collected to third-party brokers, [he] thus
purposefully avail[s] himself of the privilege of conducting business within
Virginia.” Id.

website can be said to have purposefully availed itself of the forum (quoting Mavrix, 647
F.3d at 1230)), cert. denied, 142 S. Ct. 76 (2021).

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                                  No. 21-20022

                                       IV.
       The panel majority opinion expresses concern at the jurisdiction-
expanding implications of applying Keeton to cyberspace. Johnson, 21 F.4th
at 321, 324, 326. To be sure, the Internet has revolutionized countless
industries—news-media chief among them—and it has all but dissolved
states’ borders in matters of commerce. The Internet allows corporations to
continuously and deliberately exploit more states’ markets more easily. No
doubt, that may mean that corporations taking advantage of the Internet’s
vast reach may be haled into more states’ courts. As Judge Haynes reminded
us in her excellent dissent, it is not for us to worry whether this is good or bad
as a policy matter. Id. at 331–32 (Haynes, J., dissenting). That is properly
left to the states and their long-arm statutes. Our sole concern is what the
Constitution—as interpreted by the Supreme Court—requires.
       In refusing to apply Keeton and failing to apply the appropriate
purposeful availment test correctly, the panel majority opinion gave short
shrift to the Supreme Court’s guidance and broke with our sister circuits.
For these reasons, I respectfully dissent from our denial of Johnson’s petition
for rehearing en banc.

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