United States District Court, E.D. Pennsylvania
WOODS SERVICES, INC.
DISABILITY ADVOCATES, INC., d/b/a Disability Rights New York
MEMORANDUM RE: MOTION TO DISMISS
issue in this diversity case is whether this Court should
grant Defendant's motion to dismiss for lack of personal
jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), and for
failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6).
For the reasons described below, the motion is DENIED.
Relevant Factual and Procedural History
Woods Services, Inc. (“Woods”) alleges that
Defendant Disability Advocates, Inc. d/b/a Disability Rights
New York (DRNY”) issued a public report (the
“DRNY Report”) regarding purported abuse and
neglect of New York residents in the care of Woods, a
provider of residential, educational, and clinical services
to children and adults with developmental disabilities. (ECF
1, Compl. ¶ 1). The DRNY Report purports to make 34
recommendations for corrective actions at Woods, but Woods
alleges that DRNY knows or should have known that the vast
majority of the recommended policies and procedures are
already in place at Woods, while others are impossible, would
be contrary to regulatory requirements, or would degrade
resident safety. (Id. ¶ 2). Woods was not
permitted to review and respond to the DRNY Report.
(Id. ¶ 3). Instead, DRNY publicly released the
Report and broadly disseminated it through social media and
its website, thereby increasing the harm to Woods.
(Id.). Woods also alleges that DRNY encouraged
subsequent media coverage. (Id.). As a result, Woods
received numerous investigative visits from oversight
agencies, suspensions of new resident referrals, and
inquiries from family members and the public regarding its
practices. (Id.). Woods has also had to conduct its
own internal investigations. (Id.). The
investigations and inquiries have generally found no basis
for DRNY's allegations of abuse and neglect, but have
required significant investments in time and energy.
filed its Complaint in this Court on January 24, 2018. The
Complaint alleges four counts:
Count I: Defamation
Count II: Commercial Disparagement
Count III: Intentional Interference With Contractual
Count IV: Intentional Interference With Prospective
Complaint alleges that this Court has personal jurisdiction
over DRNY based on DRNY's systematic and continuous
contacts with Pennsylvania, including by way of its past and
ongoing investigations of Woods, legal representations of
Woods residents, and publishing of the DRNY Report to
Pennsylvania residents, including via The Philadelphia
principal place of business is in Langhorne, Pennsylvania,
while Defendant's is in Albany, New York, and the amount
in controversy exceeds $75, 000. (Id. ¶¶
February 15, 2018, Defendant filed the Motion to Dismiss that
this Court presently considers (ECF 8), to which Woods filed
a response on March 1, 2018 (ECF 9). Defendant then filed its
reply on March 8, 2018 (ECF 10), and Plaintiff was granted
leave to file a sur-reply brief on March 19, 2018. (ECF 12,
Order granting leave to file sur-reply; ECF 13, Sur-reply
brief).Following a recorded telephone call with
the parties, Defendant's counsel filed a letter informing
the Court that Defendant “does not require any
jurisdictional discovery.” (ECF 22). As part of that
letter submission, Defendant filed a supplemental
parties' submissions only relate to two questions: (1)
whether this Court has personal jurisdiction over the case;
and (2) whether Count I (Defamation) fails to state a claim
for which relief can be granted by this Court.
considering a motion to dismiss under Rule 12(b)(2), “a
court is required to accept the plaintiff's allegations
as true, and is to construe disputed facts in favor of the
plaintiff.” Toys R Us v. Step Two, S.A., 318
F.3d 446, 457 (3d Cir. 2003) (citing Pinker v. Roche
Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002). Once a
jurisdictional defense has been raised, “the plaintiff
must sustain its burden of proof in establishing
jurisdictional facts through sworn affidavits or other
competent evidence.” Time Share Vacation Club v.
Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir.
1984). When the district court does not hold an evidentiary
hearing, the plaintiff must establish only a prima facie case
of personal jurisdiction. Eurofins Pharma U.S. Holdings
v. BioAlliance Pharma SA, 623 F.3d 147, 155 (3d Cir.
2010) (citing Metcalfe v. Renaissance Marine, Inc.,
566 F.3d 324, 330 (3d Cir. 2009)).
federal district court may assert personal jurisdiction over
a non-resident to the extent of the law of the state in which
it sits according to Federal Rule of Civil Procedure 4(e).
Time Share Vacation Club, 735 F.2d at 63. The
long-arm statute for Pennsylvania provides that a court may
exercise personal jurisdiction over non-residents “to
the fullest extent allowed under the Constitution of the
United States and may be based on the most minimum contact
with this Commonwealth allowed under the Constitution of the
United States.” 42 Pa. C.S. § 5322(b). The Due
Process Clause of the Fourteenth Amendment requires
non-resident defendants to have “certain minimum
contacts with [the forum state] such that the maintenance of
the suit does not offend traditional notions of fair play and
substantial justice.” Marten v. Godwin, 499
F.3d 290, 296 (3d Cir. 2007) (quoting Int'l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945)) (alteration in
original). “Minimum contacts must have a basis in
‘some act by which the defendant purposefully avails
itself of the privilege of conducting activities within the
forum State, thus invoking the benefits and protections of
its laws.'” Remick v. Manfredy, 238 F.3d
248, 255 (3d Cir. 2001) (quoting Asahi Metal Indus. Co.,
Ltd. v. Superior Court of California, 480 U.S. 102, 109
are two types of personal jurisdiction a court may have over
a defendant: general jurisdiction and personal jurisdiction.
General jurisdiction requires a defendant to have maintained
systematic and continuous contacts with the forum state, and
specific jurisdiction requires the claim to arise out of
conduct purposely directed at the forum state.
Remick, 238 F.3d at 296. (citing Helicopteros
Nacionalesa de Colombia, 466 U.S. 408, 414-15 (1984)).
When neither party argues that general jurisdiction exists
over the defendant in the forum state, the court may examine
specific jurisdiction on its own. Remick, 238 F.3d
at 296. (citing Pennzoil Prods. Co. v. Colelli
& Assocs., Inc., 149 F.3d 197, 200-01 (3d Cir.
There are three steps to determining specific jurisdiction:
First, the defendant must have purposefully directed his
activities at the forum. Second, the plaintiff's claim
must arise out of or relate to at least one of those specific
activities. Third, courts may consider additional factors to
ensure that the assertion of ...