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Schmidt v. The Washington Newspaper Publishing Company, LLC

Superior Court of Delaware

September 30, 2019

JOSEPH SCHMIDT, Plaintiff,
v.
THE WASHINGTON NEWSPAPER PUBLISHING COMPANY, LLC d/b/a WASHINGTON EXAMINER, a Delaware entity Defendant.

          Date Submitted: June 14, 2019

         Upon Defendant's Motion to Dismiss Granted.

          Bartholomew J. Dalton, Esquire, Dalton & Associates, PA, Wilmington, DE, Attorney for Plaintiff.

          Andrea L. Lewis, Searcey, Denney, Scarola, Barnhart & Shipley, PA, West Palm Beach, FL, Attorney for Plaintiff

          Joseph J. Bellew, Esquire, White and Williams LLP, Wilmington, DE, Attorney for Defendant.

          Todd R. Ehrenreich, Esquire, Lewis, Brisbois, Bisgaard & Smith, Miami, FL, Attorney for Defendant.

          David L. Luck, Esquire, Lewis, Brisbois, Bisgaard & Smith, Miami, FL, Attorney for Defendant.

          SCOTT, J.

         Before the Court is Defendant Washington Examiner's Motion to Dismiss, arguing expiration of the statute of limitations and forum non conveniens. For the following reasons, Defendant's Motion to Dismiss is GRANTED.

         Background

         On April 21, 2017, Defendant Washington Examiner ("Defendant") published an article about a Navy Seal who was charged with making child pornography ("Article"). The Article was picked up by other news sources and soon became national news. Accompanying the Article was a photo of Plaintiff, who was not the subject of the Article but who was also a Navy Seal.

         In response to the Article, Plaintiff filed a complaint against Defendant in Florida state court on April 4, 2018. On May 11, 2018, Defendant removed the case to the U.S. District Court for the Southern District of Florida. A federal magistrate judge dismissed the case for lack of personal jurisdiction on October 3, 2018. Plaintiff then filed a motion for reconsideration and sought to have the case transferred to Washington, D.C.; the federal judge denied this motion on December 6, 2018.

         On March 25, 2019, Plaintiff filed a Complaint with this Court. Plaintiff alleges defamation, defamation by implication, and intentional infliction of emotional distress against Defendant. On April 30, 2019, Defendant filed this Motion to Dismiss.

         Parties' Assertions

         In its Motion to Dismiss, Defendant argues that this Court should dismiss this case as time-barred. Defendant argues that, under Delaware's choice-of-law rules, California law applies to Plaintiffs claims because Plaintiff resided in California when the Article was published. Defendant further argues that the Delaware Borrowing Statute mandates using California's one-year statute of limitations instead of Delaware's two-year statute of limitations for defamation claims. Defendant also argues that Plaintiffs intentional infliction of emotional distress claim is dependent upon the defamation claim. Because the intentional infliction of emotional distress claim is tied to the defamation claim, under California law, the defamation claim's statute of limitations applies. Because Plaintiff filed this Complaint more than one-year after his claim accrued, Defendant urges the Court to dismiss the action as time-barred.

         In the alternative, Defendant argues that this Court should dismiss this case for forum non conveniens. Defendant points out that the Delaware action is later-filed and argues that the hybrid forum non conveniens test laid out by the Delaware Supreme Court in Gramercy Emerging Markets Fund v. Allied Irish Banks, P.L.C. applies in this case. The Defendant asks the Court to find that these factors weigh in Defendant's favor.

          In response, Plaintiff argues that his claim is not time-barred. Plaintiff argues that Delaware's Borrowing Statute does not apply because he was not forum shopping. Plaintiff also argues that Delaware has the "most significant relationship" to this action and that Delaware's two-year statute of limitations applies to Plaintiffs claims. Alternatively, Plaintiff argues that California's Savings Statute, which is identical to Delaware's Savings Statute, extends the applicable statute of limitations by one year.

         Plaintiff also argues that California's equitable tolling doctrine applies to this case, and that this doctrine tolled the statute of limitations during the Florida proceedings. Additionally, Plaintiff argues that Defendant waived its right to assert a statute of limitations defense because it did not raise this defense during the Florida proceedings. Finally, Plaintiff argues that the forum non conveniens factors weigh in his favor.

         Standard of Review

         This Court's standard of review on a motion to dismiss is well-settled. The Court must accept all well-pleaded facts as true and draw all reasonable inferences in favor of the nonmoving party.[1] The motion will be denied when the plaintiff can prove any facts entitling him to relief.[2]

         Discussion

         I. Statute of Limitations

         In its Motion to Dismiss, Defendant argues: 1) California law applies to Plaintiffs claims; 2) Delaware's Borrowing Statute mandates application of California's statute of limitations; and 3) California's one-year statute of limitations for defamation bars Plaintiffs claims.

         A. Choice-of-Law Analysis

         When conducting a choice of law analysis, this Court follows the "most significant relationship test from the Restatement (Second) of Conflict of Laws ("Restatement").[3] When determining which state's law applies to a tort involving multistate defamation, Restatement § 150 applies.[4] Under the pertinent parts of §150:

(1) The rights and liabilities that arise from defamatory matter in . . . [an] aggregate communication are determined by the local law of the state which, with respect to the particular issue, has the most significant relationship to the occurrence and the parties under the principles stated in [Restatement] § 6.
(2) When a natural person claims that he has been defamed by an aggregate communication, the state of most significant relationship will usually be the state where the person was domiciled at the time, if the matter complained of was published in that state.[5]

         Aggregate communications are communications published simultaneously in two or more states, such as Internet publications.[6] Thus, a defamation claim arising from an Internet publication is governed by the law of the state with the "most significant relationship" to the claim.[7] At issue here is an article published to the Defendant's website; accordingly, § 150 governs.

         When choosing the applicable law for a claim arising from an Internet publication, the state with the most significant relationship will usually be the state where the person is domiciled at the time of publication.[8] This is because "defamation produces a special kind of injury that has its principal effect among one's friends, acquaintances, neighbors and business associates in the place of one's residence."[9] It is undisputed that Plaintiff was a resident of and domiciled in California at the time the Article was published.[10] Therefore, the local law of California should apply unless another state has a "more significant relationship to the occurrence and the parties."[11]

         Restatement § 150(2) creates a presumption that the law of the state where a plaintiff resides applies unless there are "significantly sufficient considerations" under Restatement §§ 6 and 145 to overcome this presumption.[12] Restatement § 6(2) provides the following seven factors for the Court to evaluate during a choice of law analysis: (a) needs of interstate and international systems; (b) relevant policies of the forum; (c) relevant policies of other interested states and the relative interests of those states in the determination of the particular issue; (d) protection of justified expectations; e) basic policies underlying the particular field of law; (f) certainty, predictability, and uniformity of result; and (g) ease in the determination and application of the law to be applied.[13] Restatement § 145(2) instructs that when applying the § 6 factors, the Court should take into account the following contacts: (a) the place where the injury occurred; (b) the place where the conduct causing the injury occurred; (c) the domicile, residence, nationality, place of incorporation, and place of business of the parties; and (d) the place where the relationship, if any, between the parties is centered.[14]

         Based on the considerations in § 145, the relevant contacts are California, [15]Delaware, [16] Texas, [17] and the District of Columbia.[18] The parties' briefings focus only on California and Delaware. Accordingly, the Court will narrow its discussion to California and Delaware only.

         Plaintiff argues that Delaware law should apply because Defendant is incorporated in Delaware, Defendant's parent company is incorporated in Delaware, and Delaware has an interest in deterring tortious conduct and compensating victims.[19] Defendant argues that California law should apply because Plaintiffs injury occurred in California.[20] For the reasons that follow, the Court finds that California law should apply.

         The Delaware Supreme Court has previously applied Delaware law where the plaintiff was injured in a different state.[21] However, both of those cases were personal injury actions with plaintiffs who were Delaware residents.[22] In Travelers Indemnity Co. v. Lake, the Supreme Court found that Delaware "clearly" had the most significant relationship to the issues presented even though the accident occurred in Quebec.[23] In Lake, the plaintiff was a resident of Delaware, the defendant conducted significant business in Delaware, and the plaintiffs motorist coverage provision was a product of Delaware law that involved "issues of vital importance to all Delaware citizens."[24] In Stale Farm Mutual Automobile Insurance Co v. Patterson, the Supreme Court found that Delaware had the most significant interest in the issues presented even though the accident occurred in New Jersey.[25]In Patterson, the Supreme Court found it determinative that the plaintiff would suffer the consequences of the car accident in Delaware, where she resided.[26] The Court reasoned "Delaware has the most significant interest in applying its law where what is at stake is the right of the injured Delaware citizen to recover the full amount of his or her actual damages."[27] Unlike Lake and Patterson, Plaintiff is not a resident of Delaware; accordingly, Delaware does not have the same interest here in applying its law.[28]

         In Bell Helicopter Textron Inc. v. Arteaga, the Supreme Court applied Mexican law even though the defendant was incorporated in Delaware when a helicopter crashed in Mexico and killed everyone on board.[29] The Supreme Court found that Mexico had the most significant relationship to the "liability, damages, and remedies" at issue because the plaintiffs were Mexican citizens and the injury occurred in Mexico.[30] Similar to the instant case, in Arteaga, the relevant Restatement provisions mandated a rebuttable presumption that the place with the "most significant relationship" to the case would be the place of injury.[31] Also similar to the instant case, in Arteaga, the defendant was incorporated in Delaware but Delaware was neither the place where the conduct that caused the injury occurred nor the place of injury.[32]

         The instant case is more similar to Arteaga than to Lake and Patterson. Plaintiff is a California resident, the injury occurred in California, and the conduct causing the injury occurred in Washington D.C. The only connection between Plaintiffs claims and Delaware is the fact that Defendant is incorporated here. Additionally, Delaware was not Plaintiffs first choice of forum.[33] Therefore, the Court finds that California law applies to Plaintiffs claims.[34]

         B. Delaware's Borrowing Statute

         As a general rule, the law of the forum governs in matters relating to the statute of limitations.[35] However, Delaware's Borrowing Statute modifies this general rule:

Where a cause of action arises outside of this state, an action cannot be brought in a court of this State to enforce such cause of action after the expiration of whichever is shorter, the time limited by the law of this State, or the time limited by the law of the state or country where the cause of action arose, for bringing an action upon such cause of action.[36]

         Under the Borrowing Statute, Delaware courts will apply the Delaware statute of limitations if it is shorter than the limitations period of the state in which the cause of action arose.[37] Here, the Court must decide whether to apply California's or Delaware's statute of limitations.

         Delaware has a two-year statute of limitation for defamation claims.[38] Under, Delaware's Savings Statute, a plaintiff has "one year to file a second cause of action following a final judgment adverse to his position, if such judgment was not upon the merits of the cause of action."[39] If Delaware's statute of limitations were to apply here, then Plaintiff would have an additional year to file his defamation claim because he lost on procedural grounds in Florida. Thus, Plaintiff had a total of three years in which to file his cause of action under Delaware's statute of limitations.[40]

         In California, a cause of action for a defamatory statement accrues at the time of the first general publication or broadcast of a tortious statement.[41] California has a one-year statute of limitation for defamation claims.[42] California's one-year statute of limitations is shorter than Delaware's two-year statute of limitations. Thus, under Delaware's Borrowing Statute, California's statute of limitations applies.

         Under Delaware's Borrowing Statute, however, the Court must look to the Savings Statute of the state whose law the Court is borrowing.[43] "The theory is that the borrowed statute is accepted with all its accoutrements."[44] Thus, this Court must look to California's Savings Statute to see if Plaintiff s claim is time-barred. Under California's Savings Statute, if a plaintiffs action fails for a reason "other than on the merits, " then the plaintiff has one additional year in which to file the action.[45]Plaintiff lost on procedural grounds in Florida.[46] Therefore, California's Savings Statute applies to Plaintiffs action; Plaintiff has one additional year from the end of the proceedings in Florida in which to file his action. Because the Borrowing Statute mandates application of the statute of limitations with all of its "accoutrements", California's Savings Statute saves Plaintiffs claims.

         Plaintiffs claim is not time-barred.

         C. Equitable Tolling

         The Court declines to address Plaintiffs argument that California's "equitable tolling" doctrine applies to this case. Defendant calculated-and Plaintiff did not oppose-the relevant time periods in this litigation. If the time period is not tolled for the duration of the Florida proceedings, then Plaintiff filed this action 1-year-l 1-months-and-four-days after the accrual date.[47] If the time period is tolled for the duration of the Florida proceedings, then Plaintiff filed this action 421 days after the accrual date.[48] Under either calculation, Plaintiffs claim survives because he has filed the instant action within one year of the dismissal of the Florida action, in accordance with California's Savings Statute. Accordingly, there is no need for the Court to reach the issue of "equitable tolling."

         D. Waiver of Statute of Limitations Defense

         Plaintiff argues that Defendant waived its ability to argue that California's one-year statute of limitations expired because it did not raise this argument in the Florida proceedings.[49] As Defendant correctly points out, it could not make this argument in the Florida proceedings.[50] Plaintiff filed his action in Florida prior to the expiration of the California statute of limitations; thus, Defendant could not raise the timeliness issue in the Florida proceeding. As required by Delaware law, Defendant raised the timeliness issue in its first response to Plaintiffs Complaint.[51]Accordingly, Defendant has not waived its right to assert a timeliness argument.

         II. Forum Non Conveniens

         As this Court has previously discussed, forum non conveniens is a judicially created doctrine that allows the Court to exert some control over a non-resident plaintiffs access to our forum.[52] When determining whether a suit should be dismissed for forum non conveniens, Delaware courts apply different standards depending on the circumstances.[53] The Supreme Court outlined the three options in Gramercy Emerging Markets Fund v. Allied Irish Banks, F.L. C.:

When a case is first-filed, Delaware courts award dismissal only when the defendant has established overwhelming hardship, thus tilting the [Cyro-Maid] analysis in the plaintiffs favor. When a case is later-filed, and its predecessors remain pending, McWane's "strong preference for the litigation of a dispute in the forum in which the first action relating to such dispute is filed" applies and the analysis is tilted in favor of the defendant. But when a case is later-filed and its predecessors are no longer pending, the analysis is not tilted in favor of the plaintiff or the defendant. In that situation, Delaware trial judges exercise their discretion and award dismissal when the Cyro-Maid factors weigh in favor of that outcome.[54]

         This case is similar to the third (hybrid) option. Plaintiff first filed his case in Florida. Those proceedings ended on December 6, 2018. Plaintiff filed this action on March 25, 2019. Accordingly, this Court shall apply the Cyro-Maid factors without the heightened "overwhelming hardship" standard of proof.[55]

         The Cryo-Maid factors "form the core of Delaware's traditional forum non conveniens analysis."[56] The six factors are: (1) the relative ease of access to proof; (2) the availability of compulsory process for witnesses; (3) the possibility of viewing the premises; (4) all other practical problems that would make the trial of the case easy, expeditious and inexpensive; (5) whether or not the controversy is dependent upon the application of Delaware law which the courts of this State more properly should decide than those of another jurisdiction; and (6) the pendency or nonpendency of a similar action in another jurisdiction.[57] The Court will discuss each factor individually.

         A. Relative Ease of Access to Proof

         Defendant argues that many of the significant witnesses and much of the central evidence in the instant case are in California. Defendant argues that the subject of the Article relates to California and that Plaintiff sustained his injuries in California.[58] Plaintiff argues that documentary evidence can be made available electronically and that ...


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