7.21 Litigation: Preliminary Issues

LibraryThe Virginia Lawyer: A Deskbook for Practitioners (Virginia CLE) (2018 Ed.)

7.21 LITIGATION: PRELIMINARY ISSUES

7.2101 In General. With their unique blend of constitutional and common law principles, defamation claims generate a number of preliminary litigation issues.

7.2102 Arbitration. A number of courts have discussed the arbitrability of defamation claims arising in the employment context. Several courts have found that an employment contract arbitration clause covers defamation claims. 1115 One court found that even the arbitrability of the claim was subject to the arbitration clause. 1116

7.2103 Exhaustion of Remedies. Plaintiffs pursuing a defamation action against the government must exhaust their administrative reme-dies. 1117

7.2104 Standing. The issue of standing sometimes arises in the context of defamation directed at companies. Corporate owners generally cannot pursue an action for defamation of the corporation because the corporate

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entity is "itself the only person entitled to recover for injuries to its business, profits, or property 1118

In WJLA-TV v. Levin, 1119 the Virginia Supreme Court seemed to have muddied this concept somewhat, finding that a doctor could recover for
diminution in his earning capacity, thus essentially recovering indirectly for damages to his corporate practice. A Virginia circuit court, relying on WJLATV, found that both an auto dealership and its owner could sue for defamatory statements about the former. 1120

A 2015 Virginia Supreme Court case, however, held that a corporation's owner could not personally assert a cause of action for defamation of her corporation. 1121 The court explained that corporate owners generally cannot personally pursue an action for defamation of their corporation, because the corporate entity is "itself the only person entitled to recover for injuries to its business, profits or property." 1122

7.2105 Suing the Right Defendant. In some situations, plaintiffs must decide whom to sue for a defamatory statement. For instance, one court explained that a plaintiff complaining of a person's statements reported in a newspaper and on a television news report could sue the person who made the statement—without also suing the media who republished the statement. 1123

7.2106 Subject Matter Jurisdiction: Federal Courts.

A. Preemption. Courts must sometimes wrestle with arguments that state law defamation claims are preempted by federal law and, therefore, must be brought in federal court if they can be brought at all. The federal laws involved include:

The Fair Credit Reporting Act; 1124

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ERISA laws; 1125
Title VII; 1126
OSHA; 1127
The Communications Decency Act; 1128 and
Labor laws. 1129

B. Jurisdiction of State Claims in Federal Court. A federal court dismissing the federal portions of a lawsuit has the discretion to hear or remand any remaining state law defamation claims. Most federal courts decline to exercise jurisdiction in this situation. 1130 Some courts retain juris-diction. 1131

C. Diversity Jurisdiction. The standard principle guides federal courts' exercise of diversity jurisdiction in defamation cases. In one interesting case, the Fourth Circuit indicated that adding as a defendant a United States citizen domiciled abroad destroys diversity jurisdiction. 1132

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D. Forum Non Conveniens. The Eastern District of Virginia dismissed on forum non conveniens grounds an action brought by a United Kingdom resident against a defendant who spent most of his time in Iraq. 1133

7.2107 Subject Matter Jurisdiction: State Courts. 1134 State courts also debate their jurisdiction over certain claims. For instance, the Virginia Supreme Court has held that courts cannot exercise jurisdiction over defamation claims involving matters of church doctrine because the exercise of that jurisdiction would inevitably infringe on the federal and state constitutional protections covering religious freedom. 1135

More recently, the court exercised jurisdiction over a defamation claim against a church pastor. The court explained that the claim did not involve church governance. 1136

7.2108 Personal Jurisdiction. Under general applicable personal jurisdiction principles, defamation defendants may be sued where they can be found. 1137 The United States Supreme Court has held that First Amendment considerations do not affect the minimum contacts analysis that underlies the exercise of jurisdiction. 1138

7.2109 Long-Arm Jurisdiction: Traditional Rules.

A. In General. Given the ease with which communications cross state lines, it is not surprising that courts have had to wrestle with long-arm jurisdiction issues. Plaintiffs have generally relied on three long-arm jurisdiction theories to sue defendants in Virginia.

B. Section 8.01-328.1(A)(1). Some plaintiffs rely on section 8.01-328.1(A)(1) of the Virginia Code to justify suing a defendant who derives substantial revenue from Virginia and engages in a persistent course of conduct

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in Virginia. 1139 Other plaintiffs have failed in their efforts to assert personal jurisdiction on this basis. 1140

C. Section 8.01-328.1(A)(3). Some plaintiffs have sought the assertion of long-arm jurisdiction over defendants under section 8.01-328.1(A)(3), arguing that the communication sent into Virginia was a tortious act committed in Virginia. Some plaintiffs have succeeded in this asser-tion, 1141 whereas other plaintiffs have failed. 1142

D. Section 8.01-328.1(A)(4). Some plaintiffs have sought to assert long-arm jurisdiction under section 8.01-328.1(A)(4), arguing that the defendant's tortious act outside Virginia caused injury inside Virginia. This requires a closer connection between the defendant and Virginia than the other long-arm theory. Some plaintiffs have succeeded in this argument, 1143 whereas other plaintiffs have failed. 1144

E. Conspiracy. A plaintiff might also argue that an out-of-state defendant conspired with a defendant over whom the court has jurisdiction. In 2011, a Virginia circuit court found that the plaintiff could not satisfy the pertinent sections' standards for exercising personal jurisdiction over several out-of-state defendants but could exercise jurisdiction over them under this conspiracy theory. 1145

7.2110 Long-Arm Jurisdiction: Internet Defamation.

A. In General. As in so many other areas of the law, the rise of the Internet has complicated the long-arm jurisdiction analysis in defamation claims.

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With more traditional forms of communication, such as a letter, fax, or telephone call, it was much easier to envision and analyze a communication traveling from one state to another. However, the presence of a defamatory communication on the Internet creates a complex and confusing picture. The communication is not actually sent into Virginia, but someone in Virginia can read it or download it. Is this the electronic equivalent of someone in Virginia opening a letter mailed from another state?

Among all of the states, Virginia faces another complicating factor. Because several of the country's largest Internet service providers are based in Virginia, courts must assess whether defamation via the Internet somehow exists in Virginia because the servers housing the electronic data are in buildings on Virginia soil.

Courts wrestling with this issue must still fit their analysis into one of the long-arm jurisdiction statutes. In addition, underlying all of these state long-arm jurisdiction statute issues is the constitutional requirement of "minimum contacts" before any state can exercise jurisdiction over the citizen of another state.

B. Section 8.01-328.1(A)(3). As explained above, Virginia can exercise long-arm jurisdiction over defendants outside Virginia if they have committed a tortious act inside Virginia. Virginia courts' application of this long-arm statute to electronic defamation shows an interesting evolution.

In an early case involving computer communications, the Virginia Supreme Court held that a Virginia court could exercise jurisdiction over a New York defendant who had posted defamatory information on a computerized bulletin board on a computer in New York, although the court noted that the New...

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