In Virginia Fraud Case, Defendant’s Website Held Insufficient Basis for Personal Jurisdiction

To file a lawsuit in Virginia’s state or federal courts against a non-resident of Virginia or an out-of-state corporation, it is necessary to establish “personal jurisdiction” over the defendant. A court has no power over parties to a lawsuit absent such jurisdiction. Personal jurisdiction will exist only if (1) Virginia’s “long-arm” statute authorizes it; and (2) the defendant has certain “minimum contacts” with Virginia “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice,” which is required by constitutional due process. In a recent case from the Eastern District of Virginia, Judge Trenga held that a passive website not purposefully targeted at Virginians was not sufficient to create a basis for personal jurisdiction and he dismissed the case.

The case, which contains counts for actual fraud, constructive fraud, negligence, and breach of fiduciary duty, was filed by Dr. Olimpia Rosario, a Virginia psychiatrist, against professional psychic Jeffrey Wands, who operates Psychic Eye Media in New York. Dr. Rosario became impressed with Mr. Wands several years ago when he correctly predicted that she would obtain a residency in a New York-based hospital. Ever since, Dr. Rosario has sought counseling and guidance from Mr. Wands on a wide range of issues, including spiritual issues and substance abuse problems, despite the fact he held no degree or license to practice any type of healing art, medicine, counseling, or social work in either Virginia or New York.

Eventually, Mr. Wands became concerned about certain of Dr. Rosario’s behavior and reported it to both the New York Police Department and the Virginia Board of Medicine. Dr. Rosario sued, claiming Mr. Wands caused her condition to worsen and denying abuse of prescription drugs. Mr. Wands, a resident of New York, moved to dismiss the case for lack of personal jurisdiction.

Dr. Rosario’s main argument in support of jurisdiction was that Mr. Wands maintained a website accessible to residents of Virginia (as well as everyone else in the world having an Internet connection) and touting a national following. The court disagreed that such a website was sufficient to establish a “presence” in Virginia sufficient to form a basis for personal jurisdiction. Citing a Fourth Circuit case, the court noted that “a person who simply places information on the Internet does not subject himself to jurisdiction in each State into which the electronic signal is transmitted.” There were no allegations that Mr. Wands’ website was interactive or that users could conduct transactions through the website. The court also noted the absence of any facts demonstrating that Mr. Wands was intentionally targeting citizens of Virginia. For these reasons, the court found general jurisdiction lacking.

Specific jurisdiction was also found to be absent. This more limited type of jurisdiction, the court noted, exists when a defendant “purposefully directed his activities at the residents of the forum” and the plaintiff’s causes of action “arise out of those activities” (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). In Virginia, courts must consider the following in determining whether specific jurisdiction should be asserted: “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs’ claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable” (citing Consulting Eng’rs Corp. v. Geometric, Ltd., 561 F.3d 273, 278 (4th Cir. 2009)). Dr. Rosario argued that Mr. Wands purposefully directed his activities at Virginia when, for seven years, he and Dr. Rosario participated in quarterly telephone discussions. The court found such minimal contact insufficient, especially since Mr. Wands never physically came to Virginia for any of those discussions.



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