A panel of Ninth Circuit justices upheld a lower court ruling that a post office box does not establish sufficient contacts within a state to support the exercise of specific jurisdiction.
Palm Springs attorney Mitchell Sussman appealed Central District of California Judge James V. Selna’s decision dismissing a complaint against Mexican timeshare company Playa Grande for lack of personal jurisdiction.
“It just confirms what a lot of smaller businesses and out of country businesses do, which is try to provide a convenience to their users by having a post office box,” observed Los Angeles attorney Nicole Kuklok-Waldman. “Having a post office box or an email address for correspondence is not an express gain. That's just running a business.”
Plaintiff Sussman, who specializes in resolving timeshare disputes, sued and served Playa Grande in California for libel through a post office box after Playa Grande wrote to timeshare members in Washington state, who were Sussman’s clients, explaining that their membership had not been canceled as Sussman had allegedly misled them to believe, according to media reports.
“The letter concerned a dispute over a timeshare in Mexico and addressed potential harm that could be suffered by Washington residents,” wrote Circuit Judges Ronald M. Gould, Kenneth Kiyul Lee, and Lawrence VanDyke.
“It was not circulated in California or read by anyone residing in California. The only link between Playa Grande’s letter and California is that it discussed the allegedly wrongful actions of Sussman—an attorney licensed to practice in California—and suggested that the timeshare members may want to seek disciplinary action against Sussman.”
Playa Grande had allegedly defamed Sussman to his clients by stating in the letter that he runs a “scam operation” and that they should report him to the State Bar of California.
“The plaintiff thought that was defamatory but under California law, not Washington,” Kuklok-Waldman told the Southern California Record. “So, he wanted California jurisdiction and the courts thought that was just very tenuous. Literally, the timeshare company has a post office box in California and his clients were Washington state residents. They weren't California residents.”
The Metropolitan News-Enterprise reported that Sussman brought the lawsuit in Riverside Superior Court but Playa Grande removed it to federal court.
"Even if the court did take this all at face value, the people the attorney was talking to were from Washington state and what did they have to do with California," Kuklok-Waldman said. "The outcome could have been different if the defamation claim was based in California. So, if the plaintiff was after California purchasers of the Mexico timeshare property, that would have made more sense."