No Personal Jurisdiction Over Nonresident Whose Primary Contact With Forum State Was Hacking Email Accounts Possibly Located There

The World in U.S. Courts: Winter 2018 - Personal Jurisdiction/Forum Non Conveniens | December.21.2017

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Republic of Kazakhstan v. Ketebaev, US District Court for the Northern District of California, December 21, 2017

The Republic of Kazakhstan alleged that two defendants, Muratbek Ketebaev and Ilya Khrapunov, hacked Kazakh government Gmail accounts (hosted by Google) and published the contents online on a website they created. Kazakhstan alleged violations of the Computer Fraud and Abuse Act, as well as the Stored Communications Act. Khrapunov moved to dismiss the complaint, arguing that he was not subject to the personal jurisdiction of the Court.

The Court in California agreed. It noted that personal jurisdiction under California’s long-arm statute is as extensive as allowed by the Due Process Clause of the US Constitution, and so the only legal question was whether Khrapunov had sufficient “minimum contacts” with California so that he could reasonably anticipate being required to appear in California in connection with the dispute.

The Court began by considering whether it had “general personal jurisdiction” over Khrapunov, observing that test requires an individual defendant to be domiciled in the forum State or to maintain “continuous and systematic” contacts with the State so extensive that he be “at home” there. The Court concluded the allegation Khrapunov had owned a home in California was not sufficient to show he was domiciled in California, especially given Kazakhstan’s concession that Khrapunov resided in Switzerland. Additionally, plaintiff did not allege “continuous and systematic” contacts between Khrapunov and California of any kind. Therefore, the Court concluded it did not have general personal jurisdiction over Khrapunov.

Next, the Court determined it lacked specific personal jurisdiction over Khrapunov. Citing Ninth Circuit precedent, the Court examined three factors to determine whether Khrapunov’s contacts were a sufficient basis for specific personal jurisdiction: i) whether he purposefully directed his actions toward the forum; ii) whether the claim arises out of his actions in the forum; and iii) whether exercising jurisdiction would be reasonable. The Court also noted that the relevant focus was Khrapunov’s own contacts with the forum state, not his contacts with people who themselves have a connection to the State.

On the first factor, the Court noted that the claims in the case sounded in tort, and therefore the plaintiffs had the burden of establishing that Khrapunov committed an intentional act “expressly aimed” at California which caused harm Khrapunov knew was likely to occur there. Khrapunov conceded his actions had been intentional, so the Court focused on the latter two elements of this test. It concluded that Khrapunov had not expressly aimed his conduct at California by hacking plaintiff’s Gmail accounts, even though some of them may currently be hosted in California. The Court noted the absence of an allegation that the accounts in question had actually been hosted in California when Khrapunov hacked them, or that Khrapunov knew or expected the accounts to be in California. The Court also held that the harm alleged by Kazakhstan was not sufficiently foreseeable, which would also be a link connecting conduct to the forum. While Kazakhstan attempted to rely on harm to California-based Google to satisfy the foreseeability element, the Court rejected this argument because Google was not a party to the litigation. It further reasoned that Kazakhstan’s position, if accepted, would massively expand the scope of personal jurisdiction, effectively giving the Court jurisdiction over “any case arising from any wrongful conduct on Gmail, Google, Facebook, Twitter, or YouTube.” Kazakhstan thus failed to satisfy the first prong of the personal jurisdiction test.

The Court next noted that even if Kazakhstan had shown Khrapunov purposefully directed his actions toward California, specific personal jurisdiction would still be inappropriate because it would be unreasonable: Khrapunov’s interjection into California was slight, traveling from Switzerland to litigate would pose a significant burden, Switzerland had a sovereign interest in adjudicating a dispute involving a Swiss resident, and California’s interest in the case was minimal. The Court also concluded that Kazakhstan could not argue that litigating in California would efficiently and effectively resolve the case, as it had originally filed the case in New York, only later to voluntarily dismiss it. The earlier New York case further undercut Kazakhstan’s argument that its interest in convenient and effective relief pointed to a California forum. The Court thus held that it lacked specific personal jurisdiction over Khrapunov.

The Court also rejected two collateral grounds of specific personal jurisdiction raised by Kazakhstan. First, while jurisdiction theoretically could be based on consent to terms of service of the website software used to publish the hacked information online, no evidence was produced that Khrapunov had agreed to them. Kazakhstan also argued that Khrapunov was subject to personal jurisdiction under Federal Rule of Civil Procedure 4(k)(2), relying on his contacts with the US as a whole. The Court rejected this argument because in order for Rule 4(k)(2) to apply the defendant must not be subject to jurisdiction in any state court of general jurisdiction, which appeared not to be the case in light of the prior suit against him in New York.

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