Mirza v. Dolce Vida Medical Spa, LLC

Background

Dr. Muhammad Mirza and Allied Medical and Diagnostic Services, LLC sued Dolce Vida Medical Spa, LLC and Scott Callahan. The plaintiffs asserted claims for false advertising under the federal Lanham Act, unfair competition, unfair and deceptive trade practices under New York General Business Law § 349, trade libel, defamation, and misappropriation of likeness. The claims arose from a June 4, 2019 email that included a photograph of Dr. Mirza and asked Dolce Vida clients who had experienced problems with Dr. Mirza’s services to contact Callahan. The plaintiffs alleged that the email was false, defamatory, and sent to hundreds or thousands of recipients, including some people in New York.

The defendants moved to dismiss for lack of personal jurisdiction and improper venue, or alternatively to transfer the case to the District of Connecticut. Personal jurisdiction is a court’s authority over a defendant. The parties conducted discovery concerning the defendants’ contacts with New York before the motion was decided.

The parties’ jurisdiction arguments

The plaintiffs argued that New York had general personal jurisdiction under New York Civil Practice Law and Rules § 301 because the defendants allegedly had an office in Manhattan, employees residing in New York, a contract with a New York physician, and regular solicitation of New York customers through email and social media. They also argued that New York had specific personal jurisdiction under §§ 302(a)(1) and 302(a)(3) because the alleged conduct affected New York and the plaintiffs’ principal place of business was there.

The defendants argued that they operated in Connecticut and had not specifically targeted New York in connection with the allegedly defamatory email. Callahan stated that he lived in Connecticut, worked at Dolce Vida’s Connecticut locations, and sent the email from Connecticut. He also stated that neither defendant had treated patients in New York, earned revenue from New York, maintained New York offices or property, or had New York officers or employees. He acknowledged that a small percentage of Dolce Vida clients had provided New York addresses when seen at Connecticut locations.

General personal jurisdiction

The court held that New York could not exercise general personal jurisdiction over either defendant. Under New York law, general jurisdiction requires a nonresident defendant to engage in a continuous and systematic course of business sufficient to show a presence in New York. For a company, the usual places for general jurisdiction are its state of incorporation and principal place of business; for an individual, the usual basis is domicile or another recognized basis such as consent.

The complaint identified Dolce Vida as a Connecticut limited liability company with its principal place of business in Connecticut and Callahan as domiciled in Connecticut. The plaintiffs relied on an advertisement that referred to a planned New York location, online advertising and social media references to New York, New York-resident patients, Yelp reviews by New York residents, Callahan’s New York license, and alleged relationships with New York physicians. The court found these facts insufficient. It credited the undisputed record that Dolce Vida never opened the proposed New York office, treated patients in New York, maintained New York property or bank accounts, or had New York officers or employees. The court therefore concluded that neither defendant was essentially “at home” in New York.

Specific personal jurisdiction

The court also held that the plaintiffs had not established specific personal jurisdiction. Under New York Civil Practice Law and Rules § 302(a)(1), a claim must arise from the defendant’s purposeful business activity in New York. The court found that sending advertising materials to New York and having some New York-resident patients did not, without more, show that the defendants transacted business in New York. The record did not show that the defendants treated patients or maintained an office there.

The court further held that the claims did not arise from any qualifying New York business transaction. The claims arose solely from the allegedly defamatory email, which was sent by Callahan from Connecticut. The court explained that, in a defamation-related case, merely transmitting allegedly defamatory material into New York is not enough under § 302(a)(1) without additional New York business activity or a sufficiently permanent and continuous New York presence.

The plaintiffs also invoked § 302(a)(3), which concerns certain tortious acts outside New York that cause injury in New York. The court explained that this provision excludes causes of action for defamation. Looking to the substance of the claims rather than their labels, the court found that all of the plaintiffs’ claims were based on the same allegedly defamatory statements. The plaintiffs therefore could not avoid the statutory defamation exception by labeling the claims as false advertising, unfair competition, trade libel, or misappropriation of likeness.

Disposition

The court granted the defendants’ motion to dismiss for lack of personal jurisdiction. The Clerk of Court was directed to terminate the motion and close the case. The order does not state that the dismissal was with or without prejudice.