I don’t have much to say about yesterday’s Fifth Circuit decision in Defense Distributed v. Grewal (written by Judge Edith Jones and joined by Judges Jennifer Elrod, with a concurrence by Stephen Higginson), another example of the lawyer’s true superpower: the power to make every question into a question about procedure. Here’s the core of the majority’s analysis:
Plaintiff Defense Distributed is a Texas company operated for the purpose of promoting popular access to firearms. To carry out this purpose, it produces and makes accessible information related to the 3D printing of firearms and publishes and distributes such information to the public….
Defense Distributed began distributing files related to the 3D printing of firearms in December 2012. It did so by publishing files to its defcad.org and defcad.com websites and letting visitors freely download them. It also distributed digital firearms information via mail and at a brick-and-mortar public library in Austin, Texas. Defense Distributed’s efforts were initially met with opposition from the United States Department of State. But, after a period of litigation, the parties reached a settlement agreement that granted Defense Distributed a license to publish its files.
Shortly thereafter, nine Attorneys General, including New Jersey Attorney General Grewal, filed suit on behalf of their respective states in the Western District of Washington to enjoin the State Department from authorizing the release of Defense Distributed’s files. They argued that the State Department’s license to Defense Distributed constituted an ultra vires about-face that violated the Administrative Procedure Act and jeopardized the states’ statutory and regulatory schemes for firearms. The Western District of Washington quickly issued a temporary restraining order, followed closely by a nationwide preliminary injunction.
Just before the Attorneys General sued in Washington, Defense Distributed and SAF brought the instant action in the Western District of Texas challenging select enforcement actions taken by the state Attorneys General. Of relevance to this appeal, plaintiffs alleged these actions by Grewal: (1) sending a cease-and-desist letter threatening legal action if Defense Distributed published its files; (2) sending letters to third-party internet service providers based in California urging them to terminate their contracts with Defense Distributed; (3) initiating a civil lawsuit against Defense Distributed in New Jersey; and (4) threatening Defense Distributed with criminal sanctions at a live press conference. Further, these actions, coupled with the injunctive orders issued in the Washington litigation, have caused Defense Distributed to cease publication of its materials. The plaintiffs asserted, inter alia, that these actions infringed the exercise of their First Amendment freedoms and constituted tortious interference with the State Department’s settlement agreement….
Grewal moved to dismiss for lack of personal jurisdiction…. [The question is whether federal courts in Texas have] specific jurisdiction [over Grewal, on the theory that he is a] defendant “doing business” in the state, including defendants who “commit[ ] a tort in whole or in part in th[e] state.”
“The constitutional requirement for specific jurisdiction is that the defendant has ‘minimum contacts’ with the forum state such that imposing a judgment would not ‘offend traditional notions of fair play and substantial justice.’ ” This court has framed the inquiry as a three-step analysis: “(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.”
The issue on appeal is whether Grewal has established sufficient minimum contacts with Texas… “[T]he totality of [Grewal’s] contacts with Texas involves a cease and desist order” sent to Defense Distributed. And Grewal’s purpose in issuing the cease-and-desist letter ostensibly was to enforce New Jersey public nuisance and negligence laws (more on this below). Further, Grewal, … was sued in his official capacity and did not derive commercial benefits from performing his governmental function….
[Grewal] does not cabin his request by commanding the plaintiffs to stop publishing materials to New Jersey residents; he instead demands that the plaintiffs cease publication of their materials generally. For example, in his cease-and-desist letter, Grewal states that the plaintiffs’ “widespread dissemination of printable-gun computer files is negligent because it encourages an illegal gun market, which will foreseeably lead to increased crime and violence in New Jersey.” He accordingly requests that Defense Distributed “halt publication of the printable-gun computer files” without specifying that Defense Distributed cease marketing its materials to New Jersey residents.
Grewal’s conduct beyond sending the cease-and-desist letter confirms his intent to crush Defense Distributed’s operations and not simply limit the dissemination of digital files in New Jersey. Grewal’s enforcement actions are selective. He has not targeted the many similarly-situated persons who publish Defense Distributed’s files on the internet. Instead, he has focused solely on Defense Distributed. Perhaps nowhere is this better illustrated than in Grewal’s efforts to enjoin the national distribution of Defense Distributed’s files by suing in Washington, far from his or the plaintiffs’ home state. Grewal has also threatened Defense Distributed’s founder, Cody Wilson, by name, promising to “come after” “anyone who is contemplating making a printable gun” and “the next ghost gun company.” Together, these actions confirm Grewal’s intent to force Defense Distributed to close shop.
Relatedly, the intended effects on the plaintiffs and, by extension, the intended effects on Texas residents who would benefit from the plaintiffs’ activities, are [thus substantial]…. Grewal seeks to bar Defense Distributed from publishing its materials anywhere, not just in New Jersey. Grewal’s actions, moreover, have all been taken in the name of law and order. He has projected himself across state lines and asserted a pseudo-national executive authority ….
[Plaintiffs] allege that Grewal’s letter had a chilling effect on the exercise of their First Amendment rights (among other constitutional and Texas law violations). That chilling effect, in turn, caused them to cease publication and reduced Texans’ access to the materials the plaintiffs seek to publish…. In this sense, Grewal created contacts with Texas and not just the plaintiffs.
Grewal’s contacts with Texas, moreover, are more than a “mere fortuity” …. Grewal intentionally mailed the cease-and-desist letter into Texas …. Further, that contact alone gave rise to distinct tort causes of action. Grewal knew that the cease-and-desist letter would “have a potentially devastating impact” on the plaintiffs—and, by extension, those who wished to benefit from the plaintiffs’ activities, including Texas residents. And he “knew that the brunt of [the] injury would be felt by [the plaintiffs] in [Texas].” Based on the foregoing analysis, … Grewal has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas’s courts.
{We do not intend to convey that sending a cease-and-desist letter into a forum always subjects the sender to jurisdiction in the forum state…. “There are strong policy reasons to encourage cease and desist letters. They are normally used to warn an alleged rights infringer that its conduct, if continued, will be challenged in a legal proceeding, and to facilitate resolution of a dispute without resort to litigation. If the price of sending a cease and desist letter is that the sender thereby subjects itself to jurisdiction in the forum of the alleged rights infringer, the rights holder will be strongly encouraged to file suit in its home forum without attempting first to resolve the dispute informally by means of a letter.” … Indeed, … sending a cease-and-desist letter may, under different circumstances, be insufficient to establish personal jurisdiction. Today’s holding is derivative of the specific language used in Grewal’s cease-and-desist letter coupled with other actions he took that, together, demonstrate his intent to gut Defense Distributed’s operations and restrict Texans’ access to Defense Distributed’s materials. That the plaintiffs’ injuries are directly attributable to the cease-and-desist letter itself also weighs heavily in our analysis.}
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