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Unspam Technologies v. Chernuke, No. 11-2406

Date Decided: May 3, 2013

The Fourth Circuit affirmed the district court’s dismissal of a complaint against four banks located outside the United States for lack of personal jurisdiction.

Plaintiff John Doe, a Virginia resident, purchased prescription drugs online from a business called “Canadian Pharmacy” with his Visa debit card. After not receiving the drugs, Doe tried to contact Canadian Pharmacy with no success. After several unsuccessful attempts to get in tough with Canadian Pharmacy, plaintiff canceled the transaction at his bank and the bank issued the plaintiff a new debit card. Once he cancelled the order, Doe alleges that Canadian Pharmacy inundated him with spam email. A second plaintiff, engaged in the business to track and combat spam emails, joined the action. Plaintiffs collectively filed a complaint against two “pharmacists” that run Canadian Pharmacy and six foreign banks, alleging that all defendants participated in a global conspiracy to sell illegal prescription drugs and violated various state and federal computer crimes laws. Plaintiffs argue that by processing the pharmacists’ transaction on the Visa network, the banks are coconspirators in a global prescription-drug conspiracy. The district court dismissed all banks for lack of jurisdiction, finding that the plaintiffs failed to establish the requisite “minimum contacts” with Virginia to satisfy the Due Process Clause.

On appeal, the plaintiffs first argued that the district court erred in dismissing the claim for lack of personal jurisdiction because the banks were part of a “global conspiracy,” and thus the minimum contacts of the pharmacists, subjecting them to personal jurisdiction in Virginia, were sufficient to subject the banks to personal jurisdiction in Virginia. The Fourth Circuit disagreed. Plaintiffs acknowledged that they could not link Doe’s particular purchase to any one of the defendant banks nor could they link any of the banks with the spam email solicitations. The court found that the banks’ involvement was speculative, and did not constitute sufficient minimum contacts to satisfy the Due Process Clause for the court to exercise jurisdiction. The Fourth Circuit concluded that none of the banks directed business to Virginia or aimed commercial efforts at Virginia. Moreover, even if the banks had actually processed Doe’s prescription drug transaction through the international Visa network, that transaction was too remote to subject the bank to jurisdiction. Plaintiffs also argued that personal jurisdiction was appropriate under Federal Rule of Civil Procedure 4(k)(2), allowing a court to exercise jurisdiction in cases “arising under federal law when the defendant is not subject to personal jurisdiction in a state court but has contacts with the United States as a whole.” The Fourth Circuit again disagreed, emphasizing that the banks’ minimal and indeterminate role in the drug transaction was not enough to satisfy the Due Process Clause.

Full Opinion

– Wesley B. Lambert