     06-2228-cv
     Ehrenfeld v. Mahfouz

 1                            UNITED STATES COURT OF APPEALS
 2
 3                                FOR THE SECOND CIRCUIT
 4
 5                                       -------------
 6
 7                                      August Term 2006
 8
 9
10   Argued: November 8, 2006                         Decided: March 3, 2008
11
12           (Question certified to New York Court of Appeals:
13           June 8, 2007.
14           Question answered by New York Court of Appeals:
15           December 20, 2007.)
16
17                                 Docket No. 06-2228-cv
18
19   --------------------------------------------------X
20
21   RACHEL EHRENFELD,
22
23                          Plaintiff-Appellant,
24
25                   - against -
26
27   KHALID SALIM BIN MAHFOUZ,
28
29                          Defendant-Appellee.
30
31   --------------------------------------------------X
32
33           Before:        FEINBERG, LEVAL, and CABRANES, Circuit Judges.
34
35           Plaintiff-appellant          Rachel     Ehrenfeld    appeals    from    a
36   judgment of the United States District Court for the Southern
37   District of New York (Richard C. Casey, J.) granting the motion
38   to dismiss of defendant-appellee Khalid Salim Bin Mahfouz on
39   the    basis      of   the   lack   of     personal   jurisdiction   under   N.Y.
40   C.P.L.R.        §§     302(a)(1)     and    302(a)(3),    denying    Ehrenfeld’s
     1
 1   request for jurisdictional discovery, and dismissing the case
 2   for lack of personal jurisdiction.              This Court affirmed the
 3   district court’s decision as to N.Y. C.P.L.R. § 302(a)(3) and
 4   jurisdictional discovery, and certified to the New York Court
 5   of   Appeals   the   question   whether     N.Y.   C.P.L.R.    §   302(a)(1)
 6   confers   personal    jurisdiction       over   defendant.    Ehrenfeld    v.
 7   Mahfouz, 489 F.3d 542 (2d Cir. 2007). The Court of Appeals
 8   having answered that question in the negative, the decision of
 9   the district court is now affirmed in its entirety.
10
11         DANIEL J. KORNSTEIN, MARK PLATT, CECELIA CHANG and MIKAELA
12         A. McDERMOTT, Kornstein Veisz Wexler & Pollard, LLP, New
13         York, NY, for Plaintiff-Appellant.
14
15         STEPHEN J. BROGAN and TIMOTHY J. FINN, Jones Day,
16         Washington, DC, and MICHAEL NUSSBAUM, Bonner, Kiernan,
17         Trebach & Crociata, Washington, DC, for Defendant-
18         Appellee.
19
20         KURT A. WIMMER , JASON P. CRISS , Covington & Burling LLP, New
21         York, NY, for Amici Curiae Amazon.com, American Society of
22         Newspaper Editors, Association of American Publishers,
23         Inc., Authors Guild, Inc., Electronic Frontier Foundation,
24         European Publishers Council, Forbes Inc., John Fairfax
25         Holdings,    Ltd.,     Media/Professional    Insurance,   Media
26         Institute, Newspaper Association of America, Online News
27         Association, Radio-Television News Directors Association,
28         Reporters Committee for Freedom of the Press, and World
29         Press   Freedom     Committee,    in   support  of   Plaintiff-
30         Appellant.
31
32
33
34
35
36   FEINBERG, Circuit Judge:

37         Plaintiff-appellant       Rachel     Ehrenfeld   appeals      from   a

38   judgment of the United States District Court for the Southern

                                        -2-
 1   District of New York (Richard C. Casey, J.) granting defendant-

 2   appellee      Khalid      Salim      Bin      Mahfouz’s       motion      to     dismiss

 3   plaintiff’s        action      against        him      for    lack       of     personal

 4   jurisdiction under N.Y. C.P.L.R. §§ 302(a)(1) and 302(a)(3) and

 5   denying plaintiff’s request for jurisdictional discovery.

 6          This   case     has    had     an     unusual     procedural       background.

 7   Ehrenfeld     is   the    author      of   Funding      Evil:    How     Terrorism     Is

 8   Financed—and How to Stop It, published in 2003, in which she

 9   alleged that Mahfouz financially supported terrorism. In 2004,

10   Mahfouz sued Ehrenfeld in London and obtained a default libel

11   judgment against her enjoining the further publication of the

12   statements     about      Mahfouz     in     England    and     Wales.    Thereafter,

13   Ehrenfeld sought a declaratory judgment under the Declaratory

14   Judgment Act, 28 U.S.C. § 2201, against Mahfouz in the District

15   Court for the Southern District of New York, that (1) Mahfouz

16   could not prevail on a libel claim against her under federal or

17   New   York    law;   and      (2)    the     English    judgment       would     not   be

18   enforceable in the United States, and New York in particular,

19   on    constitutional        and     public    policy     grounds.      The      district

20   court,   sitting     in      diversity       jurisdiction,       granted       defendant

21   Mahfouz’s motion to dismiss plaintiff’s declaratory judgment

22   action for lack of personal jurisdiction over him.



                                                -3-
 1         Subsequently, plaintiff appealed to this Court. In June

 2   2007, we affirmed the district court’s judgment as to N.Y.

 3   C.P.L.R.       §     302(a)(3)       and    the     denial       of   jurisdictional

 4   discovery. See Ehrenfeld v. Mahfouz, 489 F.3d 542, 545, 550-51

 5   (2d Cir. 2007). We also found that the portion of the district

 6   court’s    opinion         regarding      N.Y.    C.P.L.R.     §    302(a)(1)    raised

 7   important, unsettled questions of New York law and we certified

 8   the   following           question   to    the    New   York   Court     of    Appeals:

 9   whether        New        York’s     long-arm       statute        confers     personal

10   jurisdiction over a person (1) who sued a New York resident in

11   a non-U.S. jurisdiction; and (2) whose contacts with New York

12   stemmed entirely from the foreign lawsuit and whose success in

13   the foreign suit resulted in acts that must be performed by the

14   subject of the suit in New York. Id. at 545.

15         The New York Court of Appeals accepted certification and

16   in a thorough opinion, filed in December 2007, answered the

17   certified question in the negative. See Ehrenfeld v. Mahfouz, -

18   - N.E.2d --, 2007 WL 4438940, at *6 (N.Y. Dec. 20, 2007). The

19   Court    of    Appeals       acknowledged         the   potentially     “pernicious”

20   effect    of       what    plaintiff      Ehrenfeld     called      “libel    tourism,”

21   i.e., “the use of libel judgments procured in jurisdictions

22   with claimant-friendly libel laws — and little or no connection

23   to the author or purported libelous material — to chill free
                                                 -4-
 1   speech in the United States.” Id. at *3. However, the court

 2   emphasized     that   “[its]    task      is   to       interpret    the    New     York

 3   statute   as    written.”      Id.   at      *3     n.5.    The     court    rejected

 4   plaintiff’s     argument    that     defendant          Mahfouz     had    transacted

 5   business in New York by scheming to “chill her speech” there.

 6   Id. at *3. Writing for a unanimous court, Judge Ciparick found

 7   that   defendant’s     contacts      with         New    York   were      limited     to

 8   communications merely “intended to further his assertion of

 9   rights under the laws of England,” and thus, none of these

10   contacts “invoked the privileges or protections of [New York]

11   State’s laws.” Id. at *4.

12          The Court of Appeals also declined to assert jurisdiction

13   over defendant on the basis of his refusal to waive the right

14   to enforce the English judgment in New York. The court pointed

15   out that the future implications of potential enforcement of

16   that judgment would “not arise from [defendant’s] invocation of

17   the privileges” of New York laws, but “from an English remedy

18   and plaintiff’s unilateral activities in New York.” Id. at *5

19   (citing Ferrante Equip. Co. v. Lasker-Goldman Corp., 258 N.E.2d

20   202, 205 (N.Y. 1970)). In addition, the court stressed that New

21   York’s long-arm statute “does not confer jurisdiction in every

22   case where it is constitutionally permissible.” Id. at *6. The

23   court, therefore, concluded that on the facts of this case
                                            -5-
 1   personal jurisdiction cannot be obtained over defendant under

 2   N.Y. C.P.L.R. § 302(a)(1).

 3        Thereafter, we afforded the parties and the amici curiae

 4   an opportunity to comment in letter briefs on the decision of

 5   the New York Court of Appeals. In response, defendant simply

 6   requested    that    we   affirm      the    district         court’s     judgment        in

 7   accordance with the decision of the New York Court of Appeals.

 8   By contrast, plaintiff urged us to assert personal jurisdiction

 9   over defendant on the ground that the construction of N.Y.

10   C.P.L.R. § 302(a)(1) by the Court of Appeals violates the First

11   Amendment. According to plaintiff, this constitutional issue is

12   not resolved by the Court of Appeals’ answer to the certified

13   question     and     deserves        further       analysis         by    this      Court.

14   Alternatively, plaintiff invites us to postpone issuing a final

15   decision     until    the    end      of     the    current         New     York        state

16   legislative session, in deference to the state legislature’s

17   current     consideration       of     a    bill     that      would      provide        for

18   jurisdiction over Mahfouz.

19        For a number of reasons, plaintiff’s arguments are legally

20   unavailing.     First,      plaintiff        filed       her    complaint          in     the

21   district    court    in   December         2004    and   up    to    this    point       has

22   apparently not raised a federal constitutional challenge to a



                                                -6-
 1   reading     of    N.Y.    C.P.L.R.        §    302(a)(1)         that    would     deny

 2   jurisdiction over defendant.

 3        To   be     sure,    plaintiff       sought     a    declaration       from    the

 4   district court that enforcement of the English judgment in the

 5   United States would contravene the First Amendment. Ehrenfeld

 6   v. Mahfouz, No. 04 civ. 9641, 2006 WL 1096816, at *1 (S.D.N.Y.

 7   Apr. 26, 2006). She also argued before the district court and

 8   this Court that defendant Mahfouz’s contacts with New York were

 9   part of a scheme to abridge her free speech rights in New York.

10   Plaintiff      made     the    argument       that   the     freedom       of    speech

11   implications      of     the    case,     arising        under    both     the     First

12   Amendment        and     the     New      York       Constitution,          compelled

13   certification of the jurisdictional issue to the New York Court

14   of   Appeals.      We    heeded    that       suggestion         and     granted    her

15   certification request based on the public policy significance

16   of the matter. Ehrenfeld, 489 F.3d at 549 & n.4.

17        Plaintiff, however, has not made the argument that the

18   First Amendment would compel us to assert jurisdiction over

19   defendant in any case, regardless of the reading by the Court

20   of Appeals of the state long-arm statute. Plaintiff had the

21   opportunity to make the argument to Judge Casey in the district

22   court and in this Court. Her failure to mount an attack on

23   First Amendment grounds against denial of personal jurisdiction
                                             -7-
 1   over defendant Mahfouz at any prior stage of this prolonged

 2   litigation in the federal courts amounts to a waiver of the

 3   claim. See United States v. Braunig, 553 F.2d 777, 780 (2d Cir.

 4   1977) (“The law in this Circuit is clear that where a party has

 5   shifted his position on appeal and advances arguments available

 6   but not pressed below, and where that party has had ample

 7   opportunity to make the point in the trial court in a timely

 8   manner, waiver will bar raising the issue on appeal.” (internal

 9   citations omitted)).

10        Finally, we must decline plaintiff’s invitation to refrain

11   from disposing of the remaining issue in this appeal until the

12   New York state legislature has had an opportunity to act upon a

13   proposed amendment to New York’s long-arm statute that could

14   confer jurisdiction over defendant. Whether the bill will be

15   passed, and what the provisions of the new section of the long-

16   arm statute may be if the bill is passed, “are entirely in the

17   field of uncertain speculation.” Moore v. Comm’r of Internal

18   Revenue,   170   F.2d   191,   192   (4th   Cir.   1948).   To   delay   our

19   decision because plaintiff may benefit from a possible revision

20   of the New York jurisdictional statute would indeed “constitute

21   an abnegation of the judicial process.” FDIC v. Alker, 169 F.2d

22   336, 337 (3d Cir. 1948). If the new bill is signed into law,

23   plaintiff may file a new action in the district court or move
                                          -8-
 1   to reopen the judgment and amend the complaint, and the court

 2   will    have   the    chance    to   properly   address,   in   the     first

 3   instance, the question of personal jurisdiction over defendant.

 4                                    Conclusion

 5          Plaintiff asks us to disregard the decision of New York’s

 6   highest    court     on   a   controlling   jurisdictional      issue    that

 7   requires us to interpret and apply New York law. This we cannot

 8   do. “[T]he interpretation placed by the highest court of the

 9   state upon it statutes is conclusive here.” Smiley v. Kansas,

10   196 U.S. 447, 455 (1905).

11          Judgment AFFIRMED.

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