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Art of Living Foundation v. Does 1-10

June 15, 2011

ART OF LIVING FOUNDATION,
PLAINTIFF,
v.
DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Lucy Koh United States District Court

ORDER GRANTING MOTION TO DISMISS AND DENYING MOTION TO STRIKE

(re: dkt. #26 and #27)

It has long been settled that an author's decision to remain anonymous is an aspect of freedom of speech protected by the First Amendment. The right to speak anonymously, however, 19 is not unlimited. This case centers on the contours of balancing the First Amendment rights of 20 online authors' decisions to speak anonymously and critically of an organization against the claims 21 of the organization that the speech is simply the false and malicious rants of disgruntled former 22 students and teachers.

Plaintiff Art of Living Foundation is a California non-profit corporation, and is the United States branch for the international Art of Living Foundation based in Bangalore, India. Plaintiff is 25 dedicated to teaching the wellness and spiritual lessons of Ravi Shankar, the founder of the Art of Living Foundation. Defendants Doe Skywalker and Doe Klim are former adherents of the Art of Living Foundation, but are now critical of both the Foundation and Shankar. Plaintiff alleges that Defendants have posted defamatory statements on blogs, published trade secrets, and infringed copyrighted materials. Defendants, appearing specially via counsel, have moved to dismiss for 2 lack of personal jurisdiction, and for failure to state a claim with respect to the defamation and 3 trade libel claims. Defendants have also filed a motion to strike the defamation, trade libel, and 4 trade secrets claims under California Code of Civil Procedure § 425.16 (California Anti-SLAPP 5

Statute). The Court held a hearing on Defendants' motions on May 26, 2011. For the reasons 6 explained below, Defendants' motion to dismiss for lack of personal jurisdiction is DENIED.

GRANTED with leave to amend. Defendants' motion to strike the defamation, trade libel, and 9 trade secrets claim is DENIED WITHOUT PREJUDICE. However, discovery on the trade secrets 10 claim may not proceed until Plaintiff identifies the trade secrets with reasonable particularity.

based in Bangalore, India, but with chapters in more than 140 countries. Compl. ¶¶ 1, 21. The Art 15 of Living Foundation was founded by "His Holiness Sri Sri Ravi Shankar" in 1981. Id. at ¶ 16. 16

Plaintiff here, also called Art of Living Foundation (Plaintiff or "AOLF-US"), is a California non-17 profit corporation based in Goleta, California and is the United States chapter of the international 18

Foundation. Id. at ¶¶ 2, 13. Plaintiff offers courses that employ breathing techniques, meditation, 19 and yoga, focusing on "Sudarshan Kriya," an ancient form of stress and health management via 20 rhythmic breathing. Id. at ¶ 3. 21

22 blogger names of "Skywalker" and "Klim." Plaintiff alleges that Defendants are "disgruntled 23 student-teacher and/or students of Plaintiff, AoL [Art of Living Foundation], and/or Ravi Shankar." 24

Living," located at artoflivingfree.blogspot.com. Id. at ¶ 53. In or around November 2010, 26

Defendants started the blog called "Beyond the Art of Living," located at aolfree.wordpress.com.

Id. at ¶ 54. 28

Defendants' motion to dismiss the defamation and trade libel claims for failure to state a claim is

I. BACKGROUND

A.The Parties

The Art of Living Foundation is an international educational and humanitarian organization Defendants are Does, but have specially appeared through counsel under their

Id. at ¶ 52. In or around November 2009, Defendants started the blog called "Leaving the Art of

Guide Phase One; the Continuation Manual; and the Yes! Teacher Notes. Id. at ¶ 39. However,

B. AOLF-US's Allegations and Claims

Plaintiff alleges that an essential component of its practice is the training of teachers. Id. at ¶ 34. These teaching methods are contained in several written manuals, including: the Training

Plaintiff alleges that the teaching methods for the "Sudarshan Kriya" have intentionally not been 6 memorialized in writing and are kept "strictly confidential." Plaintiff alleges that although the 7 ostensible purpose of Defendants' blogs is to provide a forum for former students/adherents of Art 8 of Living, Defendants really use the Blogs to defame Plaintiff, misappropriate Plaintiff's trade 9 secrets, and infringe on Plaintiff's copyright materials." Id. at ¶¶ 56-58.

first published the Breathe Water Sound Manual on June 1, 2003. Plaintiff has applied to the Defendants. Id.

Plaintiff submits that the Manuals and teaching processes have independent economic value (i.e.,

Plaintiff engages in diligent efforts to keep the information confidential. Id. at ¶¶ 94-96. Plaintiff 20 alleges that Defendants agreed to keep the trade secrets confidential, but then used the information 21 to instruct students without authorization. Id. at ¶ 98. Moreover, Plaintiff continues, Defendants 22 published the confidential Manuals on their blogs, and hyperlinked to another website that had a 23 written summary of Plaintiff's teaching processes for "Sudarshan Kriya." Id. at ¶¶ 99-100. 24

Sound Manual in June and July, 2010, but argues: (1) the documents are not actually trade secrets 26 because they are well-known in the yoga community and are not kept strictly confidential; and (2) 27 in any event, Skywalker's publication of the materials is protected by the First Amendment 28 because it arises from free speech on a "public issue." See Defs.' Mot. to Strike at 2, 12.

Specifically, Plaintiff's first claim is that Defendants committed copyright infringement by publishing the Breathe Water Sound Manual on the blogs.

Id. at ¶¶ 75-88. Plaintiff alleges that it Copyright Office for registration of the Manual, and has not licensed the Manual's use to Plaintiff's second claim is that its teaching Manuals and teaching processes for "Sudarshan Kriya" (the latter of which is intentionally not written down) are trade secrets. Id. at ¶¶ 89-107.

Plaintiff charges students for lessons based on the Manuals and teaching processes) and that Defendant Skywalker concedes publishing the alleged trade secret documents and the Breath Water of 20

Plaintiff's third claim is that Defendants use the blogs to intentionally disparage and defame

Plaintiff, the Art of Living Foundation, and Ravi Shankar. Id. at ¶ 62 (providing list of 18 alleged 3 examples of defamatory statements on the blogs). For example, one statement on one of the blogs 4 is: "The truth is more disgruntled people should come out to do something about all the illegal 5 activities that occur thru and in his organization, ranging from exploitation, to swindling, to 6 cheating, to physical abuse, to sexual harassment and fondling, etc." Id. Another statement is: 7

"Again answer is obvious, the master is a charlatan (is a person practising quackery or some 8 similar confidence trick in order to obtain money) in disguise." Id. And: "The 'dollar a day' 9 program was started in the US. The money never went to that cause."

disparaging statements have attacked Plaintiff's teaching methods and services, and have discouraged other potential students from registering for Plaintiff's courses. Id. at ¶¶ 116-121.

p. 19 ("Prayer for Relief").

Finally, Plaintiff's fourth claim that Defendants have committed trade libel because their

In its prayer for relief, Plaintiff seeks monetary damages and injunctive relief "restraining

Defendants from operating the Blogs and requiring that the Blogs be removed the Internet." Id. at

II. DISCUSSION

A.Motion to Dismiss for Lack of Personal Jurisdiction

Defendants move to dismiss for lack of personal jurisdiction pursuant to Federal Rule of

Civil Procedure 12(b)(2). Specifically, Defendants allege: (1) that Plaintiff has not alleged 20 personal jurisdiction over any of the Defendants in the Complaint; and (2) that neither Defendant 21

Skywalker nor Defendant Klim are citizens of the United States, let alone California. Plaintiff 22 responds that there are sufficient contacts between Defendants and California to make personal 23 jurisdiction reasonable, especially in light of the "harmful effects" felt by Plaintiff in California.

jurisdictional statute confers personal jurisdiction over defendants, and that the exercise of such 27 jurisdiction "accords with federal constitutional principles of due process." Federal Deposit Ins.

1.Legal Standard

In order to establish personal jurisdiction, a plaintiff must first show that the forum state's Corp. v. British-American Ins. Co., Ltd., 828 F.2d 1439, 1441 (9th Cir. 1987). California's "long- arm" statute extends jurisdiction to the maximum extent permitted by due process. See Cal. Civ. 2 Proc. § 410.10. Accordingly, the jurisdictional inquiries under state law and constitutional due 3 process principles can be conducted simultaneously. In the Ninth Circuit, a three-part test is 4 applied to determine whether specific jurisdiction may be exercised over a defendant consistent 5 with due process principles: (1) The nonresident defendant must do some act or consummate some 6 transaction with the forum or perform some act by which he purposefully avails himself of the 7 privilege of conducting activities in the forum, thereby invoking the benefits and protections of its 8 laws; (2) the claim must be one which arises out of or results from the defendant's forum-related 9 activities; and (3) exercise of jurisdiction must be reasonable. See Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1999). In the context of websites on the Internet, there has to be "'something more' [than a web-site] to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state." See Panavision International, L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998) (quoting Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997).

consider whether defendants purposefully availed their activities at the forum state or whether 18 defendants should have known that the "effects" of their actions would be felt in the forum state.

California over out-of-state defendants where defendants published defamatory article about

California resident and circulated article to only 13-18 subscribers in California); see also Nicosia v. De Rooy, 72 F. Supp. 2d 1093, 1097-99 (N.D. Cal. 1999) (finding personal jurisdiction in a 23 defamation action where defendant created a website with a defamatory article about a California 24 resident and circulated e-mails to California residents). 25

Here, Plaintiff's Complaint, along with additional documentary evidence, establishes a 26 prima facie case of personal jurisdiction over Defendants. See Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) ("the plaintiff need only make a prima 28 facie showing of jurisdiction to avoid the defendant's motion to dismiss"). Plaintiff is incorporated

2.Analysis

Under the Ninth Circuit's "effects test" for tort actions of defamation, a court should See Gordy v. Daily News, L.P., 95 F.3d 829, 835 (9th Cir. 1996)(finding personal jurisdiction in in California and is the Art of Living branch for the entire United States. In addition, certain 2 critical statements by Defendants on the Blogs are, in part, directed at Plaintiff's activities in the 3

United States and exhibit knowledge of Plaintiff's incorporation in California. See Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) (finding personal jurisdiction where out-of-5 state defendant's website postings injured plaintiff in California, where plaintiff had its principal 6 place of business). In addition, the Blogs are hosted in California using northern California-based 7 companies Google, Inc. (based in Mountain View, California) and Automattic, Inc. (based in 8

Redwood City, California). Defendants, in creating and using the Blogs, agreed to terms and 9 conditions with California choice of law and venue provisions.

multiple inquires from individuals throughout the United States about the critical and negative Moreover, Plaintiff represents that its office, located in Goleta, California, has received statements on the Blogs. See Nicosia, 72 F. Supp. 2d at 1099 (in determining personal jurisdiction, 13 a court looks to where the injury is felt); compare Church of Scientology v. Adams, 584 F.2d 893, 14 898-99 (9th Cir.1978) (pre-dating "effects" test, finding no personal jurisdiction over out-of-state 15 defendants where those defendants' statements did not concern or affect California residents). 16

Significantly, there appears to be no other alternative forum state for Plaintiff, a California non-17 profit corporation, to raise its claims because Defendants' United States contacts are centered in 18

California. See FDIC v. British-American Ins. Co., 828 F.2d 1439, 1442 (9th Cir. 1987) (an 19 important factor in determining reasonableness of asserting jurisdiction over a non-resident 20 defendant is the existence of an alternative forum). Finally, in addition to the allegedly defamatory 21 statements posted on the Blogs hosted by northern California companies, Plaintiff alleges that 22

Defendants have also published trade secrets and committed copyright infringement by publication 23 of Plaintiff's confidential teaching materials. These allegations, combined with the allegations 24 regarding defamation, establish the "something more" requirement necessary for assertion of 25 personal jurisdiction. See Cybersell, 130 F.3d at 418. the Federal Rules of Civil Procedure, for lack of personal jurisdiction.

Accordingly, the Court denies Defendants' motion to dismiss, pursuant to Rule 12(b)(2) of and trade libel claims for failure to state a claim.*fn1 The Court begins with analysis of the allegations 4 of defamation, which form the heart of the dispute between the parties. 5

B.Motion to Dismiss Defamation and Trade Libel Claims

Aside from the jurisdictional challenge, Defendants have moved to dismiss the defamation

Defamation

Defendants offer four challenges to Plaintiff's defamation claim: ...


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