Software Development and Investment v. Wall [1]

In August 2005, Software Development and Investment of Nevada ("Software Development"), a Nevada corporation in the business of "internet advertising and internet placement optimization" under the name Traffic-Power.com, sued Aaron Wall and an unknown number of anonymous users of Wall's blog for libel and misappropriation of trade secrets. At the time of the suit, Wall was a Pennsylvania resident and a blogger who wrote about search engine optimization on his blog, "SEO Book.com."

According to Software Development's complaint in Nevada state court, a number of unknown persons disseminated information about its marketing strategy and solicitation procedures over the internet. These unknown persons allegedly posted this proprietary information on Wall's blog and other "publicly available areas of the internet."

The complaint also alleged that Wall and his anonymous co-defendants published false and defamatory statements about it and its business over the internet. The complaint did not specify any statements, but an opinion from the federal district court during the litigation identified the following statements that Software Development contended were defamatory:

• a statement that Software Development is among a group of people that Wall considered "fraudsters and hucksters";
• a statement that Software Development's website had been "banned by the search engines";
• a statement that Software Development used "idiotic high pressure salesmen" to sell its "shit services";
• a statement that Software Development's services "suck";
• a statement that people who buy Software Development's services get "screwed"; and
• a statement that Wall would "need to shower at least 6 times a day" if he worked for "a company as dirty" as Software Development.

Wall also allegedly linked to other sites that made disparaging comments about Software Development. Software Dev. & Inv. v. Wall [2], No. 2:05-cv-01109, slip op., at 2 (D. Nev. Feb. 13, 2006).

In September 2005, Wall removed the lawsuit to federal court. He later moved to dismiss, and the federal court dismissed the action in February 2006, holding that it had no personal jurisdiction over Wall. Software Dev. & Inv. v. Wall [2], No. 2:05-cv-01109, slip op. (D. Nev. Feb. 13, 2006).

In its order, the court concluded, among other things, that Wall's blog was "passive" despite the ability of reader's to post comments. Id. at 3. The determination of a website's "passive" or "active" character is important in the legal analysis because the more "active" a site is with respect to a state's citizens, the more justification there is for that state to assert personal jurisdiction over it. The court also concluded that there was no evidence that Wall had "expressly aimed the offensive communications at the Sate of Nevada, knowing that the communications would cause harm to Plaintiff in Nevada." Id. at 7. The court never reached the CDA 230 issue.

In its order dismissing the case, the court gave Software Development permission to file an amended complaint, but Software Development did not do so, and the case was dismissed for want of prosecution in June 2007.