Court Opinion

ID: 819777
Source: CourtListenerOpinion
Date Created: 2013-02-06 15:09:10.754841+00
Date Added: 2024-06-11T09:03:00.662612
License: Public Domain

Case: 12-14504   Date Filed: 02/05/2013   Page: 1 of 8

                                                        [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT

                       ____________________________

                               No. 12-14504
                           Non-Argument Calendar
                       ____________________________

                     D. C. Docket No. 1:11-cv-04044-JOF

LABMD, INC.,

                                                               Plaintiff-Appellant,

     versus

TIVERSA, INC.,
a Pennsylvania Corporation,
TRUSTEES OF DARTMOUTH COLLEGE,
M. ERIC JOHNSON,

                                                           Defendants-Appellees.

                       ____________________________

                  Appeal from the United States District Court
                     For the Northern District of Georgia
                      ____________________________

                               (February 5, 2013)

Before CARNES, BARKETT, and EDMONDSON, Circuit Judges.
                Case: 12-14504        Date Filed: 02/05/2013       Page: 2 of 8

PER CURIAM:

       LabMD, Inc., a Georgia corporation, appeals the dismissal of its diversity

lawsuit for lack of personal jurisdiction over Defendants Tiversa, Inc. (a

Pennsylvania corporation), Trustees of Dartmouth College (a New Hampshire

college), and M. Eric Johnson (a New Hampshire resident). No reversible error

has been shown; we affirm.

       LabMD’s complaint arose out of an article written by Johnson -- a

Dartmouth professor -- entitled “Data Hemorrhages in the Health-Care Sector.”

Johnson worked in collaboration with Tiversa, a company that monitors global

peer-to-peer network searches and provides peer-to-peer intelligence and security

services.1 In preparing the article, Johnson and Tiversa searched peer-to-peer

networks looking for computer files containing data that could be used potentially

to commit medical or financial identity theft. As part of their search, Johnson and

Tiversa found a 1,718-page document that contained patient social security

numbers, insurance information, and treatment codes (the “1,718 File”). LabMD

1
 Peer-to-peer networks allow users to place shared computer files in folders that are open for
other users to search via the internet.

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alleges that the 1,718 File was created and stored on a LabMD computer and was

the personal property of LabMD.

      Tiversa later called LabMD to notify LabMD that it had discovered the

1,718 File. That same day, Tiversa sent LabMD three emails following up on the

phone call and offering its intelligence and security services to LabMD. Over the

next two months, Tiversa sent six more emails soliciting business from LabMD.

      LabMD filed this lawsuit against Defendants in the Superior Court of Fulton

County, Georgia, asserting claims for trespass, conversion, and violations of the

Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and the Georgia Computer

Systems Protection Act, O.C.G.A. § 16-9-90. Defendants removed the case to the

District Court for the Northern District of Georgia. The district court later granted

Defendants’ motions to dismiss, concluding that it lacked personal jurisdiction

over Defendants under Georgia’s long-arm statute, O.C.G.A. § 9-10-91.

      We review de novo a district court’s dismissal of a complaint for lack of

personal jurisdiction. Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A.,

421 F.3d 1162, 1166 (11th Cir. 2005). “A plaintiff seeking the exercise of

personal jurisdiction over a nonresident defendant bears the initial burden of

alleging in the complaint sufficient facts to make out a prima facie case of

jurisdiction.” Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d

1249, 1257 (11th Cir. 2010).

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      To determine whether personal jurisdiction exists over a nonresident

defendant, we must decide whether the exercise of jurisdiction is appropriate under

the state’s long-arm statute.

      Georgia’s long-arm statute provides that Georgia courts may exercise

personal jurisdiction over a nonresident defendant if, among other things, the

nonresident “(2) [c]ommits a tortious act or omission within [Georgia]” or “(3)

[c]ommits a tortious injury in [Georgia] caused by an act or omission outside

[Georgia] if the tort-feasor regularly does or solicits business, or engages in any

other persistent course of conduct, or derives substantial revenue from goods used

or consumed or services rendered in [Georgia].” O.C.G.A. § 9-10-91(2), (3). We

interpret and apply Georgia’s long-arm statute “in the same way as would the

Georgia Supreme Court.” Diamond Crystal Brands, Inc., 593 F.3d at 1258.

      LabMD contends that Defendants are subject to personal jurisdiction under

subsection (2) of Georgia’s long-arm statute because Defendants used peer-to-peer

software to open a Transmission Control Protocol/Internet Protocol port on a

LabMD computer that was located physically in Georgia. Because Defendants

caused a port to open on the Georgia computer being searched, LabMD contends

that Defendants’ tortious act took place in Georgia even though Defendants were

outside Georgia when they searched for and downloaded the 1,718 File.

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      For purposes of personal jurisdiction under Georgia’s long-arm statute,

Georgia courts have ruled that -- when a defendant uses the telephone or email to

contact a Georgia resident -- defendant’s conduct occurs at the place where

defendant speaks into the telephone or types and sends his email. See Anderson v.

Deas, 279 Ga. App. 892, 893-94 (Ga. Ct. App. 2006) (no personal jurisdiction

existed over a defendant who made harassing telephone calls to a Georgia resident

from another state); Huggins v. Boyd, 304 Ga. App. 563, 565 (Ga. Ct. App. 2010)

(concluding -- based on Anderson -- that no personal jurisdiction existed over a

nonresident defendant who emailed Georgia residents).

      For the long-arm statute, we see no meaningful distinction between the

technology used to place telephone calls or send emails and the technology used in

peer-to-peer file sharing. In all cases, the technology causes the transmission of

information along telephone or electronic lines between an out-of-state defendant

and a Georgia resident. See Anderson, 279 Ga. App. at 893-94; Huggins, 304 Ga.

App. at 565. That peer-to-peer software causes a port to open on another computer

is not unique: telephone calls also require a connection to the receiving phone line

before the transmission of information can occur. The conduct giving rise to

Defendants’ alleged offense occurred where Johnson and Tiversa used computers

to access the 1,718 File. Because Johnson and Tiversa used computers outside of

Georgia, Defendants are not subject to personal jurisdiction under subsection (2).

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       LabMD also contends that Defendants are subject to personal jurisdiction

under subsection (3) of Georgia’s long-arm statute. LabMD argues that Tiversa

“regularly solicited business” in Georgia because, over the course of two months,

Tiversa made one phone call to LabMD once and sent nine emails offering

Tiversa’s services.2

       Georgia’s long-arm statute “requires that an out-of-state defendant must do

certain acts within the State of Georgia before he can be subjected to personal

jurisdiction.” Gust v. Flint, 257 Ga. 129, 130 (Ga. 1987). In determining whether

a nonresident defendant may be subject to personal jurisdiction under subsection

(3), Georgia courts consider many factors including -- but not limited to -- whether

a defendant (1) regularly does business or solicits business within Georgia;

(2) engages in a persistent course of conduct within Georgia; (3) derives

substantial revenue from services rendered within Georgia; (4) has employees

located within Georgia; or (5) is authorized to do business in Georgia. Id. at 129

(no personal jurisdiction existed over nonresident defendant who advertised in a

trade paper, negotiated a sale over the phone, and accepted a deposit check from a

Georgia resident); ETS Payphone v. TK Indus., 236 Ga. App. 713, 715-16 (Ga. Ct.

App. 1999) (no personal jurisdiction existed over nonresident defendant who
2
 LabMD also argues that, as co-conspirators, Johnson and Dartmouth are subject to personal
jurisdiction to the same extent as Tiversa. Because no personal jurisdiction exists over Tiversa,
LabMD cannot show that Johnson or Dartmouth are subject to personal jurisdiction under
subsection (3).

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visited Georgia once and negotiated a contract via telephone, mail, and fax). Other

factors weighing against a finding of personal jurisdiction are when a defendant’s

contact with Georgia is limited to a single business transaction and when that

transaction is conducted via telephone. See Gust, 257 Ga. at 129.

      Tiversa is not registered to do business in Georgia, has no employees or

customers in Georgia, derives no revenue from business activities in Georgia, owns

no Georgia property, and pays no Georgia taxes. Tiversa’s contact with Georgia

consisted of one phone call and nine emails to LabMD. Such contact is not enough

under Georgia law to subject Tiversa to personal jurisdiction in Georgia courts.

See Gust, 257 Ga. at 130; ETS Payphone, 236 Ga. App. at 715-16.

      LabMD also argues that personal jurisdiction exists over Tiversa because

Tiversa maintains a website that is accessible to Georgia residents. But Tiversa’s

website merely advertises Tiversa’s services, does not offer products or services

for purchase online, and does not target Georgia residents. Thus, Tiversa’s website

does not subject Tiversa to personal jurisdiction in Georgia’s courts. See Smith v.

Air Ambulance Network, 207 Ga. App. 75, 75 (Ga. Ct. App. 1993) (explaining that

the “mere placement of advertisements in Georgia would be insufficient to

authorize the exercise of personal jurisdiction” under Georgia’s long-arm statute).

And, although Tiversa’s business involves the global searching of computer

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networks, this circumstance alone is also not enough to establish personal

jurisdiction.

      LabMD failed to demonstrate personal jurisdiction under Georgia’s long-

arm statute. We need not decide anything else in this case.

      AFFIRMED.

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