IBE Trade Corp. v. Dubinsky

Background

IBE Trade Corp. and Alexander Rovt sued Alexander Dubinsky and Teleradiokompania “Studia 1+1,” asserting defamation, libel per se, and tortious interference with prospective economic advantage. The plaintiffs later voluntarily dismissed the complaint against Teleradiokompania “Studia 1+1.” They then moved for a default judgment against Dubinsky.

The plaintiffs alleged that Dubinsky, a Ukrainian politician and former television personality, posted statements on Facebook accusing “Rovt’s associates” of offering a five-million-dollar bribe and referring to allegations that Rovt transferred money to companies connected to a former Ukrainian prime minister. The alleged statements concerned a bidding process for a contract to supply materials to a Ukrainian state-owned port enterprise.

Personal Jurisdiction

A court may not enter a default judgment unless it has personal jurisdiction—the legal authority to exercise power over the defendant. The court applied New York’s long-arm statute and then considered whether jurisdiction would comply with constitutional due process.

The plaintiffs argued that Dubinsky was subject to jurisdiction under the provision covering business transactions in New York because he allegedly maintained an online shop accessible to New York customers and operated a YouTube channel accessible from New York that advertised American brands. The court rejected that argument because none of the plaintiffs’ claims arose from transactions through those websites.

The plaintiffs also relied on a provision concerning certain tortious acts committed outside New York that cause injury in New York. The court explained that this provision excludes defamation claims and could apply, at most, to the tortious-interference claim. The court rejected the argument that Dubinsky should have expected consequences in New York merely because IBE Trade Corp. and Rovt were located there. The complaint did not allege that Dubinsky knew they were in New York or otherwise show that he should have expected his statements to affect New York. The court also noted that the alleged statements referred to “Rovt’s associates” and earlier allegations, rather than directly accusing IBE Trade Corp. or Rovt of misconduct involving the Ukrainian port contract.

The court further stated that there was reason to doubt that exercising jurisdiction would satisfy due process, and that the plaintiffs had not presented arguments addressing due process. Because the court found no personal jurisdiction, it did not decide whether Dubinsky had been properly served.

Ruling

Judge Mary Kay Vyskocil denied the plaintiffs’ motion for a default judgment and dismissed the claims against Dubinsky for lack of personal jurisdiction. The order did not specify that the dismissal was with or without prejudice. Because Dubinsky was the sole remaining defendant, the court directed the Clerk of Court to close the case.

Disposition

- Motion for default judgment: Denied. - Claims against Alexander Dubinsky: Dismissed for lack of personal jurisdiction. - Case: Closed after the dismissal of the sole remaining defendant.