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Salfinger v. Fairfax Media Limited

Court of Appeals of Wisconsin

January 20, 2016

RODERICK N. SALFINGER AND THRESHOLD AERONAUTICS, LLC, PLAINTIFFS-APPELLANTS,
v.
FAIRFAX MEDIA LIMITED, D/B/A SYDNEY MORNING HERALD, FAIRFAX MEDIA PUBLICATIONS PARTY LIMITED AND FAIRFAX DIGITAL AUSTRALIA AND NEW ZEALAND PARTY LIMITED, DEFENDANTS-RESPONDENTS, KEN HARDY, D/B/A MAFIA TODAY, MINZEYE LIMITED, ENOM, INC., STUART PIGOTT GLOBAL REISLING, GMBH, HOWELL BRENDAN AND JOHN/JANE DOES, DEFENDANTS

Argued December 15, 2015

Page 161

[Copyrighted Material Omitted]

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APPEAL from an order of the circuit court for Milwaukee County: RICHARD J. SANKOVITZ, Judge. Cir. Ct. No. 2013CV10081.

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Franklyn M. Gimbel and Kathryn A. Keppel of Gimbel, Reilly, Guerin & Brown, LLP, Milwaukee. There was oral argument by Franklyn M. Gimbel.

On behalf of the defendants-respondents, the cause was submitted on the brief of Robert J. Dreps and Dustin B. Brown of Godfrey & Kahn, S.C., Madison. There was oral argument by Dustin B. Brown.

Before Curley, P.J., Kessler and Brennan, JJ.

OPINION

Page 163

CURLEY, P.J.

[367 Wis.2d 318] [¶1] Roderick N. Salfinger and Threshold Aeronautics, LLC (we refer to Roderick Salfinger individually as " Mr. Salfinger" and to the co-appellants collectively as " Salfinger" ) appeal from a final order dismissing Fairfax Media Limited, d/b/a the Sydney Morning Herald, Fairfax Media Publications Party Limited, and Fairfax Digital Australia and New Zealand Party Limited (collectively, " the Fairfax parties" ) for lack of jurisdiction.[1] On appeal, Salfinger asserts that the trial court erred in finding that, although jurisdiction was authorized under Wis. Stat. § 801.05(4)(b) (2013-14),[2] exercising that jurisdiction would offend due process. We agree with the trial court and affirm.

BACKGROUND

[¶2] This lawsuit, which challenges Wisconsin jurisdiction over multiple Australian and New Zealand defendants, has its genesis in an article entitled " Lawyers, guns, money: the sting in Yellow Tail" published in the Sydney Morning Herald on October 30, 2010. That article, which circulated in print within Australia, was also made available worldwide on the internet [367 Wis.2d 319] via the Sydney Morning Herald 's website.[3] While it is not entirely clear how many individuals in Wisconsin have actually accessed or read that article since first appearing online, 826,746 users located in Wisconsin accessed the Sydney Morning Herald website between May 23, 2011, and June 16, 2014.[4]

[¶3] The Sydney Morning Herald article at issue in Salfinger's lawsuit primarily discussed the Australian family behind the popular Yellow Tail wine label; however, it also touched on the family's relationship with appellant Roderick Salfinger. Numerous individuals offered descriptions and opinions about Mr. Salfinger in the article that were less than flattering, and Salfinger's lawsuit hones in on one specific statement that Salfinger alleges is untrue and defamatory and has caused personal and professional harm: that Mr. Salfinger " faces prosecution in the [United States] after allegedly producing a revolver at his daughter's wedding." Mr. Salfinger denies that he engaged in such conduct and requested that the Sydney Morning Herald retract the statement, which it has, to date, refused to do.

[¶4] Mr. Salfinger, an Australian citizen, asserts that he has resided in Shorewood, Wisconsin, since August 2010.[5] He claims

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that the alleged harm [367 Wis.2d 320] suffered--both business and personal--stems from the Sydney Morning Herald publication and that the alleged injury occurred in Wisconsin because of his residence here. Among the alleged harms Mr. Salfinger claims to have suffered include: (1) loss of investments in co-appellant Threshold Aeronautics, LLC, by potential investors; (2) loss of business opportunities in the mining industry; (3) inability to establish or maintain meaningful interpersonal relationships; and (4) depression.

[¶5] At least some of Mr. Salfinger's alleged business harm relates to his membership interest in co-appellant Threshold Aeronautics, LLC (" Threshold" ), a domestic limited liability company registered in Wisconsin as of June 14, 2012--nearly two years after the Sydney Morning Herald article at issue was published. Generally speaking, the alleged harm to Threshold arises from Mr. Salfinger's status as one of its two members, as Salfinger alleges that Threshold has lost out on investments due to the unwillingness of investors and businesses to work with Threshold and Mr. Salfinger after reading about Mr. Salfinger in the Sydney Morning Herald article. The Sydney Morning Herald article makes no reference to Threshold.

[¶6] Respondent Fairfax Media Limited is a media holding company incorporated in New South Wales, Australia, with its principal offices located in Pyrmont, Australia.[6] Respondent Fairfax Media Publications [367 Wis.2d 321] Party Limited is a media publisher and is also incorporated in New South Wales, Australia, with its principal offices located in Pyrmont, Australia. In its answer, Fairfax Media Publications Party Limited affirmatively alleges that it publishes the Sydney Morning Herald. Respondent Fairfax Digital Australia and New Zealand Party Limited, too, is a media publisher incorporated in New South Wales, Australia, and its principal offices are also located in Pyrmont, Australia.

[¶7] Salfinger filed the summons and complaint on October 30, 2013, and the Fairfax parties were served on January 28, 2014.[7] The Fairfax parties filed an answer and affirmative defenses on March 18, 2014, raising lack of personal jurisdiction as an affirmative defense. The trial court stayed all discovery except discovery dealing with jurisdiction, and on July 29, 2014, the Fairfax parties filed a motion to dismiss for lack of personal jurisdiction.[8]

[¶8] The parties engaged in significant briefing on the Fairfax parties' motion to dismiss. The trial court had initially planned to issue its decision on the motion to dismiss at a hearing on October 22, 2014; however, on October 21, 2014, Salfinger moved to amend the complaint and

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to stay the pending motion to dismiss, arguing that he would concede claims against certain defendants and would also clarify the factual basis for the remaining jurisdiction claims if allowed to [367 Wis.2d 322] file the amended complaint. Salfinger further suggested that allowing him to submit an amended complaint would aid the trial court in deciding whether there was jurisdiction over the Fairfax parties.

[¶9] The trial court, despite recognizing that Salfinger's motion " arrive[d] at the last minute after a motion to dismiss [was] fully briefed," nevertheless allowed Salfinger to file a proposed amended complaint. However, it denied Salfinger's request to stay the motion to dismiss and informed the Fairfax parties that they were not required to file responsive pleadings until after the trial court issued its ruling on the motion to dismiss. The trial court allowed Salfinger to file a supplemental response to the motion to dismiss " asserting any ground in opposition to the motion that ha[d] not previously been asserted," and the Fairfax parties were also given an opportunity to respond to Salfinger's supplemental brief.

[¶10] The trial court thereafter issued its written decision and order on December 8, 2014, granting the Fairfax parties' motion to dismiss for lack of personal jurisdiction. In its written decision, the trial court explained that although it found that Wis. Stat. § 801.05(4)(b) applies and allows for jurisdiction, it nevertheless concluded that the Fairfax parties' " contacts with Wisconsin are simply too insubstantial to satisfy the dictates of the due process clause."

[¶11] On appeal, we do not address the underlying nature of Salfinger's lawsuit. Rather, this matter comes to us for resolution of a jurisdictional issue that presents the unique question of 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 [367 Wis.2d 323] for targeted advertising based upon the user's location and interests. Additional facts will be developed below.

ANALYSIS

[¶12] Personal jurisdiction under the long-arm statute falls into two categories: general personal jurisdiction and specific personal jurisdiction. Rasmussen v. General Motors Corp., 2011 WI 52, ¶ 15, 335 Wis.2d 1, 803 N.W.2d 623. If there is general personal jurisdiction over a nonresident defendant, the defendant may be sued in a Wisconsin court for claims entirely unrelated to the defendant's activities in Wisconsin. Id. Specific jurisdiction over a nonresident defendant is more limited in that " the claim for relief for which personal jurisdiction is sought must be substantially connected to or arise out of the defendant's contacts with Wisconsin." Id. Salfinger contends that there is specific jurisdiction over the Fairfax parties because his defamation claim arises from an article made available online at the Sydney Morning Herald website, which can be accessed in Wisconsin.[9]

[¶13] Whether there is personal jurisdiction under Wisconsin's long-arm statute requires us to apply a two-step analysis. See Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis.2d 396, 629 N.W.2d 662. First, we must determine whether the Fairfax parties are subject to jurisdiction under Wisconsin's long-arm [367 Wis.2d 324] statute, Wis. Stat. § 801.05(4). Kopke, 2001 WI 99, 245 Wis.2d 396, ¶ 8, 629 N.W.2d 662.

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While we benefit from the trial court's analysis, our review is de novo. See Rasmussen, 2011 WI 52, 335 Wis.2d 1, ¶ 14, 803 N.W.2d 623. The long-arm statute is to be construed liberally and in favor of jurisdiction, id., ¶ 17, and the party asserting jurisdiction carries a " 'minimal burden of establishing a prima facie threshold showing that constitutional and statutory requirements for the assumption of personal jurisdiction are satisfied[,]'" Kopke, 2001 WI 99, 245 Wis.2d 396, ¶ 8, 629 N.W.2d 662 (citation omitted; emphasis added). " [W]e may consider documentary evidence and weigh affidavits in reaching a determination as to whether this burden has been met," and factual doubts at this stage are resolved in favor of the plaintiff. Id.

[¶14] If we conclude that the statutory requirements of Wis. Stat. § 801.05(4) are satisfied, we must then " consider whether the exercise of jurisdiction comports with due process requirements." Kopke, 2001 WI 99, 245 Wis.2d 396, ¶ 8, 629 N.W.2d 662. " The Due Process Clause of the Fourteenth Amendment limits the exercise of jurisdiction by a state over a nonconsenting resident." Id., ¶ 22. " The limits of due process are ... established by ...


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