Rebecca L. Tsai | Bloomberg Law Wilkerson v. RSL Funding, L.L.C., No. 01-10-01001-CV, 2011 BL 208123 (Tex. App. Aug. 11, 2011) Addressing an issue of first impression in the state, the Court of Appeals of Texas held that the "sliding scale" standard for assessing personal jurisdiction did not apply to a nonresident user of an interactive website.
Reviews on Yahoo! and Yelp Give Rise to Defamation SuitAfter Trisha Wilkerson won the California state lottery, she assigned a portion of her future payments to RSL Funding, L.L.C., a financial services company, in exchange for a one-time payment. Jerry Wilkerson, Trisha's father, was unhappy with the transaction and posted comments about RSL on a website that displayed information about RSL's Houston headquarters. His review stated in part that "RSL has lied repeatedly to us and misled us and have caused numerous delays in this project that still has yet to be funded." He followed up with a comment that "RSL is still playing games as they think they have us over a barrel. So dishonest and disrespectful, will not even return a phone call." While Wilkerson claimed that he found the website through a search engine and thought that it was owned by RSL, the website was actually maintained by Yahoo!. Wilkerson posted similar comments on a website about RSL maintained by Yelp. RSL sued Wilkerson in Texas state court for defamation, libel, and business disparagement. Wilkerson filed a special appearance, contesting the trial court's jurisdiction over him. The trial court overruled the special appearance, and Wilkerson appealed.
Court of Appeals Rejects Sliding Scale AnalysisAssessing whether the trial court properly overruled the special appearance, the Court of Appeals declined to apply the "sliding scale" analysis that many other courts employ in considering whether to exercise jurisdiction over a nonresident defendant based on Internet contacts. Rejecting the sliding scale's reliance on the relative interactivity of the relevant websites, the Court reasoned that the "interactive features of Yahoo! and Yelp are the creations of the owners and operators of those websites" and thus the "interactive nature [of the websites] cannot be fully imputed to an individual user such as Wilkerson" for purposes of determining personal jurisdiction. The Court further commented that although the websites at issue here "may themselves be considered interactive," Wilkerson's use of those sites constituted a "passive" use and thus was not amenable to a sliding scale analysis. Instead, the Court applied the purposeful availment standard and held that Wilkerson's reviews were not directed specifically towards Texas and therefore did not give rise to personal jurisdiction. Accordingly, it reversed the trial court's order denying Wilkerson's special appearance.
DissentJudge Evelyn V. Keyes authored a dissent in which she criticized the majority for "derail[ing] an important case of first impression in a developing area of law in which internet website owners, search engine operators, and users are all in need of . . . legal guidance." In her view, the websites at issue were "clearly interactive," and thus the majority should have looked at the "degree of the interaction between the parties." Specifically, Judge Keyes opined that Wilkerson's reviews concerned a Houston business, were posted on local websites, and targeted users of those local websites. As such, she would have affirmed the trial court's exercise of personal jurisdiction over Wilkerson.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)