New York "Long Arm" Falls Short for Alleged Defamation

Movers can be a scurulous lot, at times pulling all kinds of tricks to extract more money from people, suddenly jacking up prices significantly above estimates that are artifically reduced as a come-on. (Though a great many movers are legit and I have a lot of sympathy for them, as I used to do it for a living.) And one has found, as a greater number of businesses will over the coming years, that consumers might have the last say.

And so, as has happened in so many other areas, people who have felt themselves to have been stung decided to do something about it - on the Internet. The site MovingScam.com offers advice to those about to hire movers, runs message boards, and warns against certain companies. One of them is Best Van Lines.

According to a story at Law.com (caveat, I write for a couple of magazines owned by the publishing company), MovingScam.com owner Timothy Walker posted that Best Van Lines was operating without legal authorization or mandated insurance. In September, the company sued in New York for $1.5 million in actual and punative damages. Walker got the case transfered to his home state of Iowa, presumably making it expensive and difficult for Best Van to take action. A New York court said that the state's long-arm statute, which allows New York courts to have jurisdiction when someone has transacted business there, even if the person resides in another state, doen't apply in this case. And now the Court of Appeals has agreed.

What makes this a business issue is that consumer critique and rating sites are springing up like weeds. Displease customers, and it's likely to come back to haunt you. Some companies try to use law suits as a way of silencing opposition - a classic example of a SLAPP (strategic lawsuit against public participation) suit. This has just become more difficult when the customer isn't in the same state. As 2nd Circuit Judge Robert D. Sack wrote in the decision:

"These courts have concluded that the posting of defamatory material on a Web site accessible in New York does not, without more, constitute 'transact[ing] business' in New York for purposes of New York's long-arm statute."

The best defense against bad mouthing from consumers is to do business well and honorably in the first place.