Havanese Day! Statements on duped dog buyer’s blog not defamatory

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

HavaneseIn Roberts v. Mintz, defendant bought what he believed was a "healthy, nine-month old, purebred Havanese," but what he got was a two-year old dog that was not a purebred Havanese, and was suffering from various health problems. Defendant complained and plaintiffs offered to refund his money in exchange for the dog. Defendant refused. He wanted the refund, but he wanted to keep the dog because he had already incurred $800 in veterinary fees and because he had become fond of the dog, which he named Moose.

One month after buying Moose, defendant began posting about his experience with plaintiffs on his blog. As you probably guessed, the posts were not positive. Eventually, plaintiffs sued in connection with six specific statements defendant made on his blog, which, among other things, accused plaintiffs of being members of a "notorious ring of South Jersey dog grifters," alleged that plaintiffs had been convicted of animal cruelty, claimed that plaintiffs' lived in a "run down farmhouse with 6 children," and described plaintiffs as "despicable human beings" who ran a "fraudulent puppy mill." Defendants also posted that they had heard from others who were "unwittingly scammed" by plaintiffs. Individuals who claimed to be plaintiffs responded to some of the posts in the comments sections of the blog, calling defendant a "liar" and a "jerk," and claiming that he "suffered from 'rage syndrome,' a behavioral condition that afflicts canines."

In lieu of answering plaintiffs' complaint, defendant moved for summary judgment, seeking to have the complaint dismissed. He also served plaintiffs with a frivolous litigation letter. Plaintiffs cross moved for summary judgment and also sought an injunction preventing defendant from defaming them. The trial court granted defendant's motion. It held that plaintiffs were barred from suing in connection with several of the statements because the one-year statute of limitations had expired. In doing so, it rejected plaintiff's claim that the statute of limitations should have been tolled because defendant had committed a continuous tort. The trial court found that the remaining statements were "opinions, epithets, and hyperbole," and were therefore "not sufficiently factual to be actionable."

Defendant then moved for sanctions, and the trial court granted the motion. Although it did no award defendant all of the sanctions he sought, it did award him $25,000 — assessed against both plaintiffs and their counsel — because plaintiffs filed their complaint without sufficient evidentiary support and because several claims were barred by the statute of limitations. 

Both sides then appealed — plaintiffs seeking to reverse the trial court's decision dismissing their complaint, and defendant seeking to reverse the trial court's decision to award him less in sanctions than what he requested

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by: Peter J. Gallagher (@pjsgallagher)

If you are like me, you just can’t read enough decisions about diversity jurisdiction. OK, hopefully you are not like me in that regard, but you might still find a recent decision from the Third Circuit interesting. In it, the Third Circuit discussed what it means to be a “stateless person” for purposes of diversity jurisdiction — the so-called “statelessness doctrine” — and ultimately questioned the rationale behind the entire concept.

In Freidrich v. Davis, plaintiff and defendant, both American citizens, were passengers on a flight from Philadelphia to Germany. While plaintiff was standing in line for the bathroom, she claims that defendant fell on her and broke her arm.  Plaintiff sued in federal court, claiming diversity jurisdiction, and defendant moved to dismiss for lack of subject matter jurisdiction. Defendant argued that, although he was a citizen of Pennsylvania, he was domiciled in Germany, and therefore was “stateless” for purposes of diversity jurisdiction and thus could be sued under the diversity jurisdiction statute. The district court granted the motion and the Third Circuit affirmed.

Under the diversity jurisdiction statute, district courts have jurisdiction over matters between: citizens of different states; citizens of a state and citizens of a foreign state; citizens of different states in which citizens of a foreign state are additional parties; and a foreign state, as plaintiff, and citizens of a state or different states. But, as the Freidrich court observed, for purposes of diversity jurisdiction, courts have explained that citizenship is synonymous with domicile, and domicile is the: “true, fixed and permanent home and place of habitation. It is the place to which, whenever he is absent, he has the intention of returning.” Under this rationale, the Supreme Court has held that citizenship for diversity purposes requires that an individual be both a citizen of the United States and domiciled within a state. If the individual is a U.S. citizen but domiciled in a foreign state, that person is considered “stateless” and a federal court cannot obtain jurisdiction over the person under the diversity jurisdiction statute.

In Friedrich , the district court concluded that defendant was an American citizen domiciled in Germany, and was, therefore, “stateless.” Among other things, the district court relied on the fact that defendant has continuously resided in Germany since 1996, sold his home in Pennsylvania in 1999 and currently owns no property in the state, purchased a home in Germany, owns and operates a business that caters exclusively to German customers , holds a German driver’s license, pays taxes in Germany, and has held a German residency permit since 2003. The Third Circuit affirmed this decision, but found the conclusion “troubling because it closes the doors of the federal court to a citizen of a State who wishes to sue another citizen based on diversity.” The Third Circuit further observed that “this ‘stateless person’ doctrine is an unintended consequence flowing from Congress’ now possibly outdated assumption that U.S. citizens generally reside in the United States.” Accordingly, although the Third Circuit applied the “stateless person” doctrine as it now exists, it did so reluctantly and invited Congress to consider taking another look at whether it is still appropriate or applicable.

(Incidentally, I tried to think of a way to work a reference to two of my favorite movies into this post — Airplane (since the injury occurred on a plane) and Young Frankenstein (the part about how to pronounce Frederick Frankenstein's name) — but just could not figure out how to do it.)

Extra! Extra!

by: Peter J. Gallagher (@pjsgallagher)

The latest edition of  "Commercial Litigation Briefs" is out. The newsletter is published by my firm and contains short articles on topics and cases of interest to commercial litigators. This month there are two articles — one by me and one by my colleague, John DeSimone. My article discusses a recent decision from the Delaware Supreme Court that required Wal-Mart to produce attorney-client communications to shareholders as they investigated whether to bring a derivative lawsuit against the company. John's article reports on a recent New Jersey Appellate Division decision about debt buyers trying to collect on charged-off credit card accounts they purchased from other debt buyers, which also provides helpful guidance for litigators on the hearsay exception for business records.