In Salfinger v. Fairfax Media Ltd., No. 2015AP150 (Wis. Ct. App. Jan. 20, 2016) (recommended for publication), the Wisconsin Court of Appeals recently faced questions about personal jurisdiction over a foreign newspaper publisher. The case is particularly interesting because it takes precedents from the Industrial Age about the interaction necessary for a court to exercise personal jurisdiction over a defendant and seeks to apply them in the context of the Internet Age.

On October 31, 2010, the Australian newspaper Sydney Morning Herald published an article entitled “Lawyers, guns, money: the sting in Yellow Tail.” The article mentioned Roderick Salfinger, an Australian citizen currently residing in Shorewood, Wisconsin. It described Salfinger in “less than flattering” terms and asserted that Salfinger “faces prosecution in the [United States] after allegedly producing a revolver at his daughter’s wedding.” Salfinger, slip op. ¶3.

The article circulated in the print edition of the Sydney Morning Herald and was also posted on the newspaper’s website. Although it is “not entirely clear how many individuals in Wisconsin have actually accessed or read that article since first appearing online,” nearly one million users located in Wisconsin visited the Herald website between 2011 and 2014. Id. ¶2. The website presented those users with targeted advertisements for Wisconsin businesses.

Both Salfinger and his business, Threshold Aeronautics, LLC, filed a defamation lawsuit in Wisconsin state court. The lawsuit named the Australian companies that publish the Sydney Morning Herald as defendants. The allegations included both business and personal injuries resulting from the article. After the trial court dismissed the case for lack of personal jurisdiction, Salfinger appealed.

The Court of Appeals considered “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 for targeted advertising based upon the user’s location and interests.” Id. ¶11.

Personal jurisdiction requires a two-step analysis. First, the court must determine whether the defendant is subject to jurisdiction under Wisconsin’s long-arm statute (Wis. Stat. § 801.05(4)). Second, the court must “consider whether the exercise of jurisdiction comports with due process requirements” under the state and federal constitutions. Salfinger, slip op. ¶ 14 (quoting Kopke v. A. Hardtrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis. 2d 396, 629 N.W.2d 662). Here, because the parties agreed that the long-arm statute authorized jurisdiction, the court focused primarily on the due-process inquiry.

For an exercise of personal jurisdiction to comport with due process, a defendant must have “purposefully established minimum contacts in the forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). “Minimum contacts requires that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” Kopke, 2001 WI 99, ¶ 24 (internal quotations omitted). This requires “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Id. (internal quotations omitted). The Salfinger court also noted that a recent U.S. Supreme Court decision “reiterated” that “the inquiry of whether a state may exercise specific jurisdiction over a nonresident defendant focuses on the relationship between the defendant, the forum State, and the litigation.” Slip op. ¶ 24 (citing Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014)). These cases, the court noted, have “consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.” Id. (quoting Walden, 134 S. Ct. at 1122).

Salfinger advanced three separate theories to argue that the publishers had established sufficient minimum contacts. First, Salfinger argued that publication of The Wisconsin Agriculturalist magazine by a subsidiary of the Herald’s publishers established sufficient minimum contacts. The court quickly disposed of this argument, stating that Salfinger cited no legal authority “to support the position that sufficient minimum contacts can be established through a [non-party] subsidiary.” Id. ¶ 29. Second, Salfinger argued that sufficient minimum contacts exist because the Herald provides online subscriptions to Wisconsin residents. However, because none of the online subscriptions began until nearly two years after the allegedly defamatory article was published, the court rejected this theory. Third, Salfinger argued that the publishers “established minimum contacts by placing an article into worldwide circulation by publishing it on its website and then profiting financially from Wisconsin advertisements that appear to Wisconsin users accessing the website.” Id. ¶ 31. The court considered this Salfinger’s “strongest minimum contacts argument.” Id.

The court discussed at length the applicability of multiple U.S. Supreme Court personal jurisdiction cases involving publications, including Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), and Calder v. Jones, 465 U.S. 783 (1984). Under these and similar cases, courts look to a defendant’s purposeful actions targeted at a jurisdiction and discern whether, as a result of those actions, the defendant could have reasonably foreseen being haled into court there.

The court recognized that by “placing content on the Sydney Morning Herald website, [the publishers] could have reasonably understood that content placed on the website would ostensibly be accessible anywhere in the world with an internet connection.” Salfinger, slip op. ¶ 37. This, however, must be balanced against the fact that the Sydney Morning Herald is primarily an Australian newspaper with an Australian-targeted audience. Indeed, “there is no sincere argument that the Sydney Morning Herald’s target audience includes Wisconsin,” and “the article at issue neither mentions Wisconsin nor even suggests that there is any connection between Salfinger and Wisconsin at all.” Id. ¶ 38.

With that in mind, the court opined that “while it may have been theoretically foreseeable to the [publishers] that someone in Wisconsin might access the Sydney Morning Herald website because individuals in Wisconsin have access to the internet, we do not believe that the [publishers’] publication of an article on the Sydney Morning Herald website, without more, evidences either conduct or a connection with the State of Wisconsin such that they should have reasonably anticipated being haled into a Wisconsin court.” Id. ¶ 39. In reaching this conclusion, the court distinguished the publishers’ activities from those of Hustler Magazine in the Keeton case. Whereas Keeton concerned a “national publication targeting a nationwide audience” and “regular circulation of magazines in the forum State,” this case involved a much more attenuated connection between the defendant and the forum. Id. ¶ 35 (quoting Keeton, 465 U.S. at 773–74).

Notably, this reasoning aligns with Seventh Circuit case law on personal jurisdiction arising from Internet publication. That court has held that a nonresident “defendant’s intentional tort creates the requisite minimum contacts with a state only when the defendant expressly aims its actions at the state with the knowledge that they would cause harm to the plaintiff there.” Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 446 (7th Cir. 2010) (citing Tamburo v. Dworkin, 601 F.3d 693, 703 (7th Cir. 2010)). In the Internet context, the Seventh Circuit has held that a defendant’s ownership and operation of website will not “create constitutionally sufficient contacts with [the forum State] in the absence of express aiming.” Id. That means a defendant is not subject to personal jurisdiction solely because it “operates a website, even a ‘highly interactive’ website, that is accessible from . . . the forum state,” because due process requires that a defendant “in some way target[ed] the forum state’s market.” be2 LLC v. Ivanov, 642 F.3d 555, 558–59 (7th Cir. 2011) (emphasis in original).

Salfinger argued that “targeted advertisements that appear alongside the articles on the Sydney Morning Herald’s website” went beyond merely operating a website accessible to Internet users in Wisconsin and thereby satisfied the due-process inquiry. The Court of Appeals was unconvinced. It found that the Herald’s website, like many others, utilizes an advertising system that identifies a user’s geographical location and then displays corresponding targeted advertisements, including those “placed by Wisconsin businesses and directed towards Wisconsin consumers.” Salfinger, slip op. ¶ 43. Relying on the affidavit of a technology expert, the court discussed the significant role that third parties like Google, as well as the Internet users themselves, play in determining what advertisements are displayed. “The record does not establish that [the publishers] proactively take any affirmative or purposeful step in directly targeting Wisconsin internet users or in independently placing Wisconsin-based advertisements on the Sydney Morning Herald website.” Id. ¶ 50. Rather, the advertisements “merely greet Wisconsin residents who themselves take the initiative to visit” the Herald website. Id. ¶ 49 (citing trial court). The court concluded that the targeted advertisements did not show that the publishers had sufficient minimum contacts with the State of Wisconsin to allow personal jurisdiction.

The Court of Appeals upheld the trial court and dismissed Salfinger’s suit for lack of personal jurisdiction. In doing so, it showed sensitivity to the Seventh Circuit’s admonition that “[c]ourts should be careful in resolving questions about personal jurisdiction involving online contacts to ensure that a defendant is not haled into court simply because the defendant owns or operates a website that is accessible in the forum state, even if that site is ‘interactive.’” be2 LLC, 642 F.3d at 558 (quoting Illinois v. Hemi Group, LLC, 622 F.3d 754, 760 (7th Cir. 2010)).

To date, Salfinger has neither moved for reconsideration nor petitioned the Wisconsin Supreme Court for review.

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