-Caveat Lector- from: http://www.narconews.com/narconewsmotion1.html Click Here: <A HREF="http://www.narconews.com/narconewsmotion1.html";>Narco News Files Motion to Dismiss Banamex Laws�</A> ----- April 24, 2001 IN THE SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK BANCO NACIONAL de M�XICO, S.A. Plaintiff, v. Index No. 00603429 MARIO RENATO MEN�NDEZ RODRIGUEZ, AL GIORDANO, and THE NARCO NEWS BULLETIN, Defendants. ____________________________________________ DEFENDANT NARCO NEWS BULLETIN'S MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS THE COMPLAINT I. INTRODUCTION The complaint brought by Banco Nacional de M�xico, S.A. ("Banamex") must be dismissed as to The Narco News Bulletin ("Narco News Bulletin"). The Narco News Bulletin is not a legal entity capable of being sued. It is simply a name that was given to identify a particular Internet website, www.narconews.com. A person, or other legal entity responsible for the actions which occur under the umbrella of a particular name can be sued, but not, as pleaded by the plaintiff, the name itself. The fact that the complaint against Narco News Bulletin must be dismissed should not be allowed to cloud the larger threat to Internet news reporting raised by this case. A Mexican bank (Banamex) is suing a website which emanates from Mexico (Narco News Bulletin) over articles concerning events which occurred in Mexico. If Narco News Bulletin were required to defend itself in New York under these circumstances, the concept of personal jurisdiction (as well as choice of law rules and forum non conveniens) will have been stretched well beyond its natural and previously recognized boundaries. Such a ruling would leave every Internet website potentially subject to suit in any of the 50 states or in any foreign country. The Internet, as a forum for robust debate and exchange of information, would be unalterably changed. II. FACTS The facts supporting this memorandum are set forth in the affidavit of Al Giordano with regard to Narco News Bulletin submitted in support of this motion, the affidavit of Al Giordano submitted in support of his motion to dismiss, the affidavit of Karen Thatcher and the affidavits submitted by Mario Menendez in support of his motion to dismiss. Those affidavits are incorporated herein. The specific facts relevant to the legal issues are discussed in the context of the argument below. III. ARGUMENT A. Narco News Bulletin is simply a name given to an Internet website. It is not a legal entity capable of being sued. Banamex has named Narco News Bulletin as a defendant in Count I of its complaint, alleging libel, and Count III of its complaint, alleging interference with prospective economic advantage. However, Narco News Bulletin is not a legal entity capable of being sued. It is only a name--the name that the defendant Al Giordano gave to a web site, www.narconews.com--that he established on April 7, 2000 (see affidavit of Al Giordano, pars. 1-5). 1 1 New York statutes allow service to be made on (a) an individual, CPLR �308; (b) an infant, CPLR �309; (c) a corporation or governmental subdivision, CPLR �311; (d) a limited liability company, CPLR � 311-a; (e) a court, board or commission, CPLR �312; (f) a partnership, CPLR �310; (g) a limited partnership, CPLR �310-a; (h) the state, CPLR �307 and (i) an unincorporated association, CPLR �1025. (The complaint properly does not allege that Narco News Bulletin is any one of those entities.) However, nowhere in the statutes is there a provision for suing a name. Narco News Bulletin, as the name of a website, is no different than the name of a television show, such as "Frontline," the name of a magazine, such as Nation, or the brand name of a product, such as Ford. None of these "names" (or any other name) can be sued. Only the legal entities responsible for the named television show or magazine or product, e.g., the Public Broadcasting System, The Nation Company, L.P. and the Ford Motor Company, can be sued. 2 2 Banamex's confusion as to the nature of Narco News Bulletin is obvious from its complaint, which alleges that: (a) "Mr. Giordano was an agent of the Narco News Bulletin" (complaint at par. 4) and (b) "through its agent Giordano, the Narco News Bulletin is vicariously liable for all false and defamatory statements made by Giordano in the Narco News Bulletin and is directly liable for the false and defamatory statements it publishes" (complaint at par. 6). Only legal entities can have agents. A person cannot be the agent of a name, which has no legal identity. The New York statutes governing civil procedure do not specifically address the issue of how a defense based on the lack of the capacity of a defendant, such as Narco News Bulletin, to be sued is to be raised. However, CPLR �3211(a)(3) does state that the capacity of a plaintiff to sue can be raised in a motion to dismiss. Therefore, Narco News Bulletin has assumed that a defense based on its lack of capacity to be sued can likewise be properly raised in a motion to dismiss. This is consistent with the Federal Rules of Civil Procedure. The capacity of a party to sue or be sued is discussed in Rule 9(a), which states that "the party desiring to raise the issue shall do so by specific negative averment, which shall include such supporting particulars that are within the pleader's knowledge." Although the method by which to raise a Rule 9(a) defense is not specifically set forth in the Rules, the proper method is by a motion to dismiss for failure to state a claim. Wright and Miller, Federal Practice and Procedure, �1294. Therefore, Counts I and III must be dismissed as to Narco News Bulletin. 4 4 For the remainder of this memorandum it is assumed hypothetically that Narco News Bulletin is an entity with the capacity to be sued. B. Even if Narco News Bulletin were a legal entity capable of being sued, New York does not have personal jurisdiction over an Internet website which emanates from Mexico and is accessible to computer users in New York. A finding of personal jurisdiction in New York would mean worldwide jurisdiction over every Internet website--all websites would be amenable to lawsuit in any of the 50 states or in foreign countries. 1. New York's long-arm statute limits defamation actions. The complaint in this case alleges slander and libel. The New York long-arm statute regulating personal jurisdiction over out-of-state defendants significantly limits personal jurisdiction in such defamation actions. CPLR �302(a) provides: As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent: 1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act . . . (emphasis added). The legislative exclusion of defamation from the provisions of �302(a)(2) and �302(a)(3) was an intentional policy decision: the legislature "did not wish New York to force newspapers published in other states to defend themselves in states where they had no substantial interests." 5 The statute was intended "to avoid unnecessary inhibitions on freedom of speech or the press." 6 These two freedoms were deemed "entitled to special protections lest procedural burdens shackle them." 7 5 J. Weinstein, H. Korn and A. Miller, New York Civil Practice, �302.15 at 3-142.26. 6 Ibid 7 Ibid The limiting language in �302(a)(2) and �302(a)(3) means that in New York, personal jurisdiction in a defamation cause of action cannot be based on the defamatory act itself, even if that defamatory act caused injury within New York. Rather, personal jurisdiction for acts of defamation can only be established by proof under CPLR �302(a)(1) that a defendant has "transact[ed] any business within the state or contract[ed] anywhere to supply goods or services in the state." 8 In this case, Narco News Bulletin has done neither, and therefore personal jurisdiction does not lie against it in New York. 8 The limited scope of the New York long-arm statute stands in contrast to most other jurisdictions, where long-arm statutes establish personal jurisdiction over a defendant if the defendant has either: (a) committed the defamatory act in that jurisdiction or (b) committed the defamatory act outside the jurisdiction, but caused injury within the jurisdiction. 2. Banamex has failed to show that CPLR �302(a)(1) confers jurisdiction over Narco News Bulletin. New York law holds that the plaintiff has the burden of setting forth the statutory basis upon which it is asserting jurisdiction in its complaint. See Sipa Press, Inc. v. Star-Telegram Operating, Ltd., 181 Misc. 2d 550, 583, 694 N.Y.S. 2d 850 (Sup. Ct. N.Y. Co. 1999). In this case, Banamex has failed to set forth any jurisdictional basis for a claim against Narco News Bulletin--perhaps because it recognizes the impossibility of that task. Despite Banamex's failure to allege any jurisdictional basis for its action, Narco News Bulletin has chosen to address the issue of personal jurisdiction over Narco News Bulletin directly below. 9 9 Banamex is obligated to plead facts that establish the basis for the exercise of personal jurisdiction over Narco News Bulletin. Roldan v. Dexter Folder Co., 178 A.D.2d 589, 577 N.Y.S.2d 483 (2d Dept. 1991). 3. New York has no personal jurisdiction over a website emanating from a foreign country simply because the website is always available for viewing in New York. Narco News Bulletin is the name of a non-commercial, non-interactive website, what is known as a passive informational website. It offers nothing for sale. It directs persons who log on to no commercial enterprise. It offers no interaction such as a "chat room" in which people can "talk" to each other (see affidavit of Al Giordano, pars. 22-28). Narco News Bulletin assumes that Banamex nonetheless will argue that the website itself is subject to personal jurisdiction in New York because it is available 24 hours per day, seven days per week, to any New York citizen who chooses to "log" onto it. 10 In order to prevail on this theory, Banamex will have to convince this court that it has personal jurisdiction over a passive, informational website which: (a) emanated from Mexico, (b) was produced in Mexico 11 , (c) had no offices, agents, employees or subscribers in New York, (d) raised no funds in New York, (e) made available the allegedly defamatory articles about activities which a Mexican bank conducted in Mexico, and (f) uses a server in Maryland. 10 This argument has been rejected by every court that has considered it. See argument below. 11 The person responsible for the website, Al Giordano, was not in New York between April 7, 2000, the date on which he established the website, and August 9, 2000, the date on which this lawsuit was filed (see affidavit of Al Giordano regarding Narco News Bulletin, par. 7). Such a ruling would be unprecedented and its implications truly staggering. It would mean that New York would have personal jurisdiction in a defamation action over any website anywhere in the world. This is not what the legislature intended when it limited defamation jurisdiction under �302(a), nor is it in accordance with the case law in the Internet area. 12 12 "'The Internet is not a physical or tangible entity, but rather a giant network which interconnects innumerable smaller groups of linked computer networks. It is thus a network of networks' (American Civil Liberties Union v. Reno, 929 F.Supp. 824, 830 [E.D. Pa. 1996] probable juris. noted ___ U.S. ___, 117 S.Ct. 554, 136 L.Ed.2d 436). As of 1996, it was estimated that more than 9.4 million computers were so linked, with 40 million people accessing the system, and it was anticipated that there would be 200 million Internet users by 1999 (id. at 831). Internet 'communications can occur almost instantaneously, and can be directed either to specific individuals, to a broader group of people interested in a particular subject, or to the world as a whole' (id.). 'Individuals can also access the Internet through commercial and non-commercial Internet service providers that typically offer modem telephone access to a computer or computer network linked to the Internet' (id. at 833)." People by Vacco v. Lipsitz, 663 N.Y.S.2d 468, 472-73 (Sup. 1997). In examining the issue of Internet jurisdiction in People by Vacco v. Lipsitz, supra, the court phrased the first jurisdictional question in such cases as follows: "whether the litigation target has established a physical presence or a sufficiently close equivalent in the jurisdiction." The court then went on to clearly state that the existence of a non-commercial, passive website in a foreign jurisdiction does not create jurisdiction in New York: As recognized by Magistrate Peck in Hearst Corp. v. Goldberger, n.o.r., 1997 WL 97097, *1 (S.D.N.Y. 1997), "a finding of personal jurisdiction in New York based on an Internet web site would mean that there would be nationwide (indeed worldwide) personal jurisdiction over anyone and everyone who establishes an Internet web site. Such nationwide jurisdiction is not consistent with traditional personal jurisdiction case law nor acceptable to the Court as a matter of policy" (see also, in accord, Bensusan Restaurant Corp. v. King, 937 F.Supp. 295 [S.D.N.Y. 1996, Stein, J.]). Id. at 473. Hearst and Bensusan both stand for the proposition that publication of an informational, non-commercial website outside New York does not confer personal jurisdiction in New York over the publisher of the website. Jurisdiction was not appropriate in Bensusan because the defendant, B.B. King: has done nothing to purposefully avail himself of the benefits of New York. King, like numerous others, simply created a Web site and permitted anyone who could find it access to it. Creating a site, like placing a product into the stream of commerce, may be felt nationwide or even worldwide--but, without more, it is not an act purposefully directed towards the forum state. There are no allegations that King actively sought to encourage New Yorkers to access his site, or that he conducted any business--let alone a continuous and systematic part of its business--in New York. Bensusan, supra, 937 F.Supp. at 301. "[T]he mere creation of a web site, without more, does not constitute sufficient contacts to provide this Court with personal jurisdiction." Hearst, supra, at 51. 13 13 See also McDonough v. Fallon McElligott, Inc., 1996 U.S. Dist. LEXIS 15139, No. 95-4037, slip op. (S.D. Cal. Aug. 6, 1996). "Because the Web enables easy world-wide access, allowing computer interaction via the web to supply sufficient contacts to establish jurisdiction would eviscerate the personal jurisdiction requirement as it currently exists; the Court is not willing to take this step." The issue of Internet personal jurisdiction was analyzed recently in Citigroup, Inc. v. City Holding Co., 97 F.Supp.2d 549 (S.D.N.Y. 2000). There, the court began by noting that in situations where the defendant's activity occurred mainly or entirely over the Internet, it "raises the question of . . . where such transactions should be viewed as having occurred" (emphasis added). The court then suggested that the "virtual" nature of the Internet requires standards of personal jurisdiction to evolve: It has long been observed that technological advances affecting the nature of commerce require the doctrine of personal jurisdiction to adapt and evolve along with those advances. See Hanson v. Denckla, 357 U.S. 235, 250-52, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) ("As technological progress has increased the flow of commerce between the States, the need for jurisdi <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER =========CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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