Yelp, Inc. v. Hadeed Carpet Cleaning ( 2015 )

PRESENT: Lemons, C.J., Goodwyn, Millette, Mims, McClanahan,
and Powell, JJ., and Koontz, S.J.
YELP, INC.
OPINION BY
v. Record No. 140242 JUSTICE ELIZABETH A. McCLANAHAN
April 16, 2015
HADEED CARPET CLEANING, INC.
FROM THE COURT OF APPEALS OF VIRGINIA
Yelp, Inc. ("Yelp"), appeals from the judgment of the
Court of Appeals affirming the order of the Circuit Court of
the City of Alexandria holding Yelp in civil contempt for
failing to comply with a non-party subpoena duces tecum served
upon it by Hadeed Carpet Cleaning, Inc. ("Hadeed"). The
subpoena duces tecum directed Yelp, a Delaware corporation with
its principal place of business in California, to produce
documents located in California in connection with a defamation
action filed by Hadeed against John Doe defendants. Because we
conclude the circuit court was not empowered to enforce the
subpoena duces tecum against Yelp, we will vacate the judgment
of the Court of Appeals and the contempt order of the circuit
court.
I. BACKGROUND
Yelp operates a social networking website that allows
registered users to rate and describe their experiences with
local businesses. Since Yelp does not require users to provide
their actual names, users may post reviews under pseudonyms.
Hadeed, a Virginia corporation doing business in Virginia,
filed a defamation action in the circuit court against three
John Doe defendants alleging they falsely represented
themselves as Hadeed customers and posted negative reviews
regarding Hadeed's carpet cleaning services on Yelp.
Hadeed issued a subpoena duces tecum to Yelp, seeking
documents revealing the identity and other information about
the authors of the reviews. The information provided by users
of Yelp upon their registration and the Internet Protocol
addresses used by registered users who post reviews are stored
by Yelp on administrative databases accessible only by
specified Yelp employees located in San Francisco.1 Yelp has no
offices in Virginia.
Although Yelp's headquarters are located in California,
Yelp is registered to do business in Virginia and has
designated a registered agent for service of process in
Virginia. Hadeed served the subpoena duces tecum on Yelp's
registered agent in Virginia. Yelp objected to an initial
subpoena duces tecum for, among other reasons, Hadeed's failure
1
Specifically, Yelp's "user operations team" is tasked
with the duty of compiling the data that comprises information
that would identify its users. These employees, and "[n]o
other employees" use "specialized access to this data" to
compile information that would identify Yelp users in response
to supboenas for such identifying data.
2
to comply with the requirements of Code § 8.01-407.1. Hadeed
then issued a second subpoena duces tecum that complied with
the procedural requirements of Code § 8.01-407.1. That section
sets forth the procedure that must be followed for any subpoena
seeking information identifying a tortfeasor "[i]n civil
proceedings where it is alleged that an anonymous individual
has engaged in Internet communications that are tortious."
Code § 8.01-407.1(A).2
After Yelp filed written objections to the subpoena duces
tecum, Hadeed moved to overrule the objections and enforce the
2
Code § 8.01-407.1 was enacted following a study and
report on the discovery of electronic data pursuant to a Joint
Resolution of the General Assembly. The Resolution recognized
that "Virginia is the center of the Internet, with numerous
multi-state and multi-national Internet businesses located in
the Commonwealth" and that motions regarding the discovery of
electronic data "arise out of cases pending in other states but
are being heard in the Commonwealth solely because the Internet
service providers. . . , which may be the custodians of such
electronic data, are located in the Commonwealth." S.J. Res.
334, Va. Gen. Assem. (Reg. Sess. 2001). In response to the
directions embodied in the Resolution, the Office of the
Executive Secretary of the Supreme Court of Virginia issued a
report on the disclosure of electronic information "maintained
by electronic communications service providers in Virginia,
particularly the legal procedure for [the] subpoena of such
information and the application of that procedure in cases
where litigation pending outside the Commonwealth of Virginia
results in an application to the Virginia courts for orders
compelling disclosure of information." Executive Secretary of
the Supreme Court of Virginia, Report to the Governor and
General Assembly of Virginia: Discovery of Electronic Data,
Senate Doc. No. 9, at 1 (2002), available at
http://leg2.state.va.us/dls/h&sdocs.nsf/By+Year/SD92002/$file/
SD9_2002.pdf (last visited April 10, 2015).
3
subpoena duces tecum. The circuit court issued an order
enforcing the subpoena duces tecum and subsequently holding
Yelp in civil contempt when it refused to comply.3 The Court of
Appeals affirmed the circuit court's decision. Yelp, Inc. v.
Hadeed Carpet Cleaning, Inc., 62 Va. App. 678, 752 S.E.2d 554
(2014).
With specific regard to the exercise of subpoena power
over Yelp, the circuit court and Court of Appeals ruled that
service of the subpoena on Yelp's registered agent in Virginia
provided the circuit court with jurisdiction to enforce the
subpoena duces tecum.4 Id. at 709-10, 752 S.E.2d at 569.
II. ANALYSIS
Yelp contends that the Court of Appeals erred in holding
that "a Virginia trial court may assert subpoena jurisdiction
over a non-party California company, to produce documents
3
Following the circuit court's order enforcing the
subpoena duces tecum, Yelp informed Hadeed that in order to
appeal the order and protect its users' rights, it would not
comply with the Order. Hadeed then moved to have Yelp held in
contempt. 62 Va. App. at 687-88, 752 S.E.2d 558.
4
Both the circuit court and Court of Appeals relied upon
Code § 13.1-766(A), which states that "[t]he registered agent
of a foreign corporation authorized to transact business in
this Commonwealth shall be an agent of such corporation upon
whom any process, notice, order or demand required or permitted
by law to be served upon the corporation may be served," and
Code § 8.01-301(1), which provides for service of process "on
the registered agent of a foreign corporation which is
authorized to do business in the Commonwealth."
4
located in California, just because the company has a
registered agent in Virginia."5
In determining whether the circuit court was empowered to
enforce the subpoena duces tecum against Yelp, we first observe
that while the General Assembly has expressly provided for the
exercise of personal jurisdiction over nonresident defendants
under certain circumstances, it has not expressly provided for
the exercise of subpoena power over nonresident non-parties.
In particular, the General Assembly has provided for the
exercise of personal jurisdiction over nonresident defendants,
including foreign corporations, through enactment of the long-
arm statute, Code § 8.01-328.1, and has provided a range of
options for the manner in which nonresident defendants may be
served when "exercise of personal jurisdiction is authorized by
this chapter." Code § 8.01-329(A).6 When personal jurisdiction
is based upon the long-arm statute, "only a cause of action
arising from acts enumerated in this section may be asserted
5
Yelp asserts additional assignments of error in
connection with its contention that enforcement of the subpoena
was inconsistent with the First Amendment to the Constitution.
In light of our holding that the circuit court lacked the
authority to enforce the subpoena duces tecum, we need not
reach these assignments of error.
6
The General Assembly has also recognized that "[a] court
of this State may exercise jurisdiction on any other basis
authorized by law." Code § 8.01-330.
5
against [the defendant]." Code § 8.01-328.1(C).7 In contrast
to the express provisions authorizing the exercise of personal
jurisdiction over nonresident defendants and the manner of
service of process on such nonresident defendants, the General
Assembly has not expressly authorized the exercise of subpoena
power over non-parties who do not reside in Virginia.8
Similarly, our Rules do not recognize the existence of
subpoena power over nonresident non-parties. Rule 4:9A sets
forth the procedure for issuing a subpoena duces tecum to a
non-party. The subpoena duces tecum may be issued by the clerk
7
The long-arm statute further provides that "nothing
contained in this chapter shall limit, restrict or otherwise
affect the jurisdiction of any court of this Commonwealth over
foreign corporations which are subject to service of process
pursuant to the provisions of any other statute." Code § 8.01-
328.1(C). In this regard, Code § 8.01-301 sets forth the most
common modes of service upon a foreign corporation depending on
whether the foreign corporation is authorized to transact
business in Virginia and the basis for exercising jurisdiction
over such corporation.
8
The dissent contends that Code § 8.01-301 confers upon
the circuit courts a general subpoena power extending beyond
Virginia because the statute lists how process may be served on
a foreign corporation. However, there is a fundamental
difference between the issuance of an enforceable subpoena and
the manner by which a subpoena may be served. See Bellis v.
Commonwealth, 241 Va. 257, 261-62, 402 S.E.2d 211, 214 (1991).
Service by one of the modes prescribed by law does not make the
subpoena served enforceable. Service of process "cannot cure
defects in the 'process' itself." Lifestar Response of Md.,
Inc. v. Vegosen, 267 Va. 720, 725, 594 S.E.2d 589, 591 (2004).
Thus, the General Assembly's authorization of a method of
service does not make all process served by such a method
lawful.
6
pursuant to Rule 4:9A(a)(1) or by an attorney pursuant to Rule
4:9A(a)(2). Rule 4:9A does not address the issuance of a
subpoena duces tecum to persons who reside or have a principal
place of business outside of Virginia. Likewise, Rule 4:9A
does not address the issuance of a subpoena duces tecum for
documents located outside of Virginia. Rule 4:9A also does not
address service on the non-party of the subpoena duces tecum or
service upon a nonresident or foreign corporation.9
The General Assembly's authorization of the exercise of
personal jurisdiction over nonresident defendants does not
confer upon Virginia courts subpoena power over nonresident
non-parties. It is axiomatic that "[t]he underlying concepts
of personal jurisdiction and subpoena power are entirely
different." In re National Contract Poultry Growers' Ass'n,
9
The Rule does provide that copies of the subpoena duces
tecum must be served pursuant to Rule 1:12 upon counsel of
record and parties having no counsel. Rule 4:9A(a)(1) and (2).
In addition, Rule 4:1(f) provides, in pertinent part, "that any
notice or document required or permitted to be served under
this Part Four shall be served as provided in Rule 1:12." Rule
1:12 governs service of process after the initial process of
"[a]ll pleadings, motions and other papers not required to be
served otherwise and requests for subpoenas duces tecum" and
provides for service "by delivering, dispatching by commercial
delivery service, transmitting by facsimile, delivering by
electronic mail when Rule 1:17 so provides or when consented to
in writing signed by the person to be served, or by mailing, a
copy to each counsel of record on or before the day of filing."
(Emphasis added.)
7
771 So. 2d 466, 469 (Ala. 2000). "Personal jurisdiction is
based on conduct that subjects the nonresident to the power of
the [state] courts to adjudicate its rights and obligations in
a legal dispute." Id. "By contrast, the subpoena power of [a
state] court over an individual or a corporation that is not a
party to a lawsuit is based on the power and authority of
the court to compel the attendance of a person at a deposition,
or the production of documents by a person or entity." Id.;
Phillips Petroleum Co. v. OKC Ltd. Partnership, 634 So. 2d 1186,
1187 (La. 1994) ("The concepts, and/or underlying purposes, of
personal jurisdiction and subpoena power are simply
different.").
Therefore, the power to compel a nonresident non-party to
produce documents in Virginia or appear and give testimony in
Virginia is not based on consideration of whether the
nonresident non-party would be subject to the personal
jurisdiction of a Virginia court if named as a defendant in a
hypothetical lawsuit.10 See, e.g., In re National Contract
Poultry Growers' Ass'n, 771 So. 2d at 469 ("The fact that NCPGA
may have sufficient contacts with the State of Alabama to
10
While the exercise of subpoena power over nonresident
non-parties may certainly raise Due Process considerations, the
issue before us on appeal is whether the circuit court had
authority to exercise subpoena power in the first instance.
8
subject it to the jurisdiction of the Alabama courts under the
Alabama long-arm personal-jurisdiction provisions is irrelevant
to the question [of whether it is required to respond to a
subpoena in a lawsuit in which it is not a party]."); Colorado
Mills, LLC v. SunOpta Grains & Foods Inc., 269 P.3d 731, 734
(Colo. 2012) (There is no "authority applying our long-arm
statute, or the long-arm statute of any other state for that
matter, to enforce a civil subpoena against an out-of-state
nonparty."); Ulloa v. CMI, Inc., 133 So. 3d 914, 920 (Fla. 2013)
("The long-arm statute does not extend the subpoena power of a
Florida court to command the in-state attendance of a non-
resident, non-party person or entity, or compel that person or
entity to produce documents."); Phillips Petroleum Co., 634
So. 2d at 1188 ("Whereas the long-arm statute extends
Louisiana's personal jurisdiction over persons or legal
entities beyond Louisiana's borders, there is no similar
authority for extending the subpoena power of a Louisiana court
beyond state lines to command in-state attendance of
nonresident nonparty witnesses."); Syngenta Crop Prot., Inc. v.
Monsanto Co., 908 So. 2d 121 (Miss. 2005) ("[A] Mississippi
court cannot subpoena a nonresident nonparty to appear and/or
produce in Mississippi documents which are located outside the
State of Mississippi, even if that nonresident nonparty is
subject in another context to the personal jurisdiction of the
9
court."); Craft v. Chopra, 907 P.2d 1109, 1111 (Okla. Ct. App.
1995) (rejecting the assertion that "discovery of documents
from non-resident non-parties by subpoena issued in the State
of Oklahoma" is permitted "so long as the non-resident has
sufficient due process 'minimum contacts' with the State of
Oklahoma").11
Thus, enforcement of a subpoena seeking out-of-state
discovery is generally governed by the courts and the law of
the state in which the witness resides or where the documents
are located. See, e.g., In re National Contract Poultry
Growers' Ass'n, 771 So. 2d at 469 (where documents located in
foreign jurisdiction are sought from non-party foreign
corporation, subpoena must issue from foreign jurisdiction and
be served in accordance with law of foreign jurisdiction);
Colorado Mills, LLC, 269 P.3d at 734 ("enforcing civil
subpoenas against out-of-state nonparties is left to the state
11
This principle holds true even in states where the
designation by a foreign corporation of a registered agent for
service of process is deemed to confer personal jurisdiction
upon the state court. See, e.g., Ulloa v. CMI, Inc., 133 So. 3d
at 920 ("[d]esignating an agent for service of process subjects
a foreign corporation to the jurisdiction of the Florida court
to adjudicate its rights and obligations in a legal dispute,"
but it does not confer subpoena power beyond state lines);
Phillips Petroleum Co., 634 So. 2d at 1188 (although "[a]
principal consequence of designating an agent for service of
process is to subject the foreign corporation to jurisdiction
in a Louisiana court," it does not subject the corporation to
the subpoena power of the court).
10
in which the discovery is sought"). In recognition of the
territorial limits of subpoena power, most states have adopted
some form of the Uniform Interstate Depositions and Discovery
Act ("UIDDA"), which sets forth procedures for litigants to
pursue out-of-state discovery.12
The Virginia General Assembly enacted the UIDDA, Code §§
8.01-412.8 et seq., in 2009. The Act provides reciprocal
mechanisms by which discovery of persons and documents in
Virginia may be obtained in connection with actions pending in
a foreign jurisdiction through presentment of a subpoena issued
by the foreign jurisdiction.13 "In applying and construing this
uniform act, consideration shall be given to the need to
promote uniformity of the law with respect to its subject
matter among states that enact it." Code § 8.01-412.14. Thus,
12
See Uniform Law Commission, Uniform Interstate
Depositions and Discovery Act, Legislative Enactment Map,
http://www.uniformlaws.org/Act.aspx?title=Interstate
Depositions and Discovery Act (last visited March 9, 2015).
13
Pursuant to Code § 8.01-412.10, a party seeking to
conduct discovery in Virginia in aid of a lawsuit pending in
another jurisdiction "shall submit to the clerk of court in the
circuit in which discovery is sought to be conducted in the
Commonwealth (i) a foreign subpoena and (ii) a written
statement that the law of the foreign jurisdiction grants
reciprocal privileges to citizens of the Commonwealth for
taking discovery in the jurisdiction that issued the foreign
subpoena."
11
[t]he privilege extended to persons in other
states for discovery under this article shall
only apply if the jurisdiction where the action
is pending has extended a similar privilege to
persons in the Commonwealth, by that
jurisdiction's enactment of the Uniform
Interstate Depositions and Discovery Act, a
predecessor uniform act, or another comparable
law or rule of court providing substantially
similar mechanisms for use by out-of-state
parties.
Id.
The UIDDA, as enacted in Virginia, is the successor to the
Uniform Foreign Depositions Act ("UFDA"), "rooted in principles
of comity and provides a mechanism for discovery of evidence in
aid of actions pending in foreign jurisdictions." America
Online, Inc. v. Anonymous Pub. Traded Co., 261 Va. 350, 360,
542 S.E.2d 377, 382 (2001) (applying UFDA). Comity "is a
matter of favor or courtesy, based on justice and good will. It
is permitted from mutual interest and convenience, from a sense
of the inconvenience which would otherwise result, and from
moral necessity to do justice in order that justice may be done
in return." Id. at 361, 542 S.E.2d at 383; see also America
Online, Inc. v. Nam Tai Elec., Inc., 264 Va. 583, 591, 571
S.E.2d 128, 132 (2002) (applying UFDA).
In determining the scope of subpoena power over
nonresident non-parties, it is important to consider the policy
underlying the General Assembly's enactment of the UIDDA. The
UIDDA provides a reciprocal and fair process that assists out-
12
of-state litigants seeking discovery from non-parties and seeks
to "promote uniformity of the law with respect to its subject
matter among the states that enact it." Code § 8.01-412.14.
The UIDDA affords protection to Virginia citizens subject to a
subpoena from another state by providing for enforcement of the
subpoena in Virginia. In turn, the UIDDA contemplates that
Virginia courts will respect the territorial limitations of
their own subpoena power. Such respect furthers the
preservation of comity and uniformity among the states, which
ultimately benefits Virginia citizens.14
The language of the statute also manifests the intent of
the General Assembly to respect the territorial limitations of
out-of-state discovery. Under the UIDDA, the place where
"discovery is sought to be conducted" determines which circuit
court issues and enforces a subpoena. See Code §§ 8.01-412.10
and -412.13. The location of discovery also determines which
jurisdiction's law governs a non-party's discovery obligations.
See § 8.01-412.12. This language indicates the General
14
Consistent with this policy, Rule 4:5(a1)(iii), which
governs depositions taken in another state, requires
enforcement matters to be pursued "by process issued and served
in accordance with the law of the jurisdiction where the
deposition is taken."
13
Assembly has not created two mechanisms for obtaining discovery
from a non-party residing outside of Virginia.15
In sum, we conclude that the circuit court was not
empowered to enforce the non-party subpoena duces tecum
directing Yelp to produce documents located in California in
connection with Hadeed's underlying defamation action against
the John Doe defendants in the Virginia circuit court. The
information sought by Hadeed is stored by Yelp in the usual
course of its business on administrative databases within the
custody or control of only specified Yelp employees located in
San Francisco, and thus, beyond the reach of the circuit
court.16 Our holding is consistent with the traditional limits
15
If the UIDDA provided additional authority for Virginia
courts to exercise subpoena power over nonresidents, this could
subject non-parties to greater discovery than litigants. A
Virginia subpoena that was quashed or limited could be "re-
litigated" under another jurisdiction's law by resorting to the
UIDDA. See, e.g. Cal. Civ. Pro. Code 2029.600(a).
16
The dissent argues that Yelp has not proved that user
operations team members are the only Yelp employees with access
to the database, or that all other employees with access, if
any, are only in San Francisco. This argument misses the
point. Regardless of the number of employees who have access
to the data comprising information that would identify Yelp
users, such data is maintained in the regular course of Yelp's
business by employees in California. For this reason, we
cannot accept the dissent's position that the concept of out-
of-state discovery is outdated in this "digital era" in which
data is more easily accessed and disseminated in electronic
form. Even data that is maintained in a tangible form can be,
and has long been, subject to reproduction and dissemination.
Yet, corporate data, in any form, is necessarily created and
14
on subpoena power of state courts and the public policy
established by the General Assembly through enactment of the
UIDDA.17 Although the General Assembly has expressly authorized
Virginia courts to exercise personal jurisdiction over
nonresident parties, it has not expressly authorized Virginia
courts to compel nonresident non-parties to produce documents
located outside of Virginia. Because the underlying concepts
of personal jurisdiction and subpoena power are not the same,
the question of whether Yelp would be subject to personal
jurisdiction by Virginia courts as a party defendant is
irrelevant.18 Therefore, subpoena power was not conferred upon
maintained in the regular course of a corporation's business by
designated corporate employees who are located at a place that
is either within Virginia or out-of-state.
17
Thus, our holding does not mean that a Virginia court
could not compel in-state discovery from a non-party foreign
corporation that maintains an office in Virginia. This case
presents the issue of a Virginia court's power to compel out-
of-state discovery from a non-party foreign corporation.
18
The dissent proposes to subject nonresidents to the
jurisdiction of Virginia courts even though they have not been
sued in our courts by extending subpoena power to the limits of
personal jurisdiction using the minimum contacts analysis.
However, the minimum contacts analysis is premised upon the
existence of actual litigation against a nonresident defendant.
"Where a forum seeks to assert specific jurisdiction over an
out-of-state defendant who has not consented to suit there,
this fair warning requirement is satisfied if the defendant has
purposefully directed his activities at residents of the forum,
and the litigation results from alleged injuries that arise out
of or relate to those activities." Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 472 (1985)(emphasis added) (internal
quotation marks and citations omitted).
15
the circuit court by Yelp's act in registering to conduct
business in Virginia or designating a registered agent for
service of process in the Commonwealth.
III. CONCLUSION
For the foregoing reasons, we will vacate the judgment of
the Court of Appeals, vacate the contempt order of the circuit
court, and remand for further proceedings consistent with this
opinion.19
Reversed and remanded.
JUSTICE MIMS, with whom JUSTICE MILLETTE joins, concurring in
part and dissenting in part.
The majority opinion holds that the General Assembly has
not provided for the exercise of “subpoena power” over non-
The dissent also assumes an "out-of-state bank" with a
"pervasive presence" in Virginia would be subject to general
personal jurisdiction in our courts. However, general personal
jurisdiction over a foreign corporation exists only if it is at
"home" in the forum state. Daimler AG v. Bauman, 134 S. Ct.
746, 760-62 (2014). A corporation is not "at home" in "every
state in which [it] 'engages in a substantial, continuous, and
systematic course of business.'" Id. at 760-61. It would be an
"exceptional case" that "a corporation's operations in a forum
other than its formal place of incorporation or principal place
of business [are] so substantial and of such a nature as to
render the corporation at home in that State." Id. at 761
n.19.
19
We will not quash the subpoena duces tecum since Hadeed
may choose to seek enforcement of the subpoena duces tecum
through the versions of the UIDDA enacted in California, Cal.
Civ. Proc. Code §§ 2029.100 et seq. See also, Delaware, Del.
Code Ann. Tit. 10, § 4311.
16
resident non-parties. Because the relevant statutory text is
clear, I disagree.
The General Assembly has said that a subpoena duces tecum
is “process.” Code § 1-237 (defining “process” to include a
subpoena); Code § 8.01-2(8) (defining “subpoena” to include a
subpoena duces tecum for the purposes of Title 8.01). It has
said that “[u]pon commencement of an action, process shall be
served in the manner set forth in” Chapter 8 of Title 8.01.
Code § 8.01-287. Chapter 8 of Title 8.01 includes Code § 8.01-
301. In Code § 8.01-301(1), the General Assembly provides that
a foreign corporation may be served with process through its
Virginia registered agent. Nothing in the Code restricts
service of process if the foreign corporation is a non-party or
redefines process to exclude subpoenas or subpoenas duces tecum
if the foreign corporation is a non-party. Finally, the
General Assembly has said that Virginia courts may use their
contempt power to punish any person who disobeys lawful
process. Code § 18.2-456(5).
Thus, the General Assembly has provided for the exercise
of subpoena power over a non-resident non-party, where that
non-resident non-party is a foreign corporation with a Virginia
resident agent (as Yelp is in this case). The majority opinion
17
overlooks the clear statutory language.1 As far as the General
Assembly is concerned, if a foreign corporation can be lawfully
served with process in Virginia, Virginia courts can compel it
to respond to discovery here. However, for reasons I discuss
below, state statutes are not the last word on this subject.
Rather, the Due Process Clause of the Fourteenth Amendment
narrows the broad authority the General Assembly has given
Virginia courts.
But before undertaking the constitutional analysis, some
important observations are in order. First, in its statement
of facts, the majority opinion says that Yelp stores IP
addresses in administrative databases accessible only by
specified Yelp employees located in San Francisco. No evidence
supports this statement. Rather, through an affidavit by its
Associate Director of User Operations, Yelp says only that the
1
In footnote 8, the majority opinion correctly observes
that valid service cannot make unlawful process lawful.
However, the majority opinion does not explain why the process
at issue in this case is unlawful. Cf. Lifestar Response of
Md., Inc. v. Vegosen, 267 Va. 720, 724, 594 S.E.2d 589, 591
(2004) (holding that the amended motion for judgment validly
served on the defendant was not lawful process because it did
not include the notice required by Rule 3:3(c)).
Hadeed’s subpoena duces tecum is authorized by Code §
8.01-407.1. Nothing in that statute, or any other, says that
it does not apply to non-resident non-parties. Accordingly, it
appears that under the majority opinion, the “lawfulness” of
process appears to turn not on whether its form and substance
is authorized by law but on the status of the entity upon whom
it is served.
18
user operations team has access to the database, and the user
operations team is in San Francisco. This does not establish
that user operations team members are the only Yelp employees
with access to the database, or that all other employees with
access, if any, are only in San Francisco.2
This misstatement of the evidence is compounded by
footnote 17, in which the majority opinion states that the
Court’s holding does not mean that Virginia courts cannot
compel production in Virginia by a non-party foreign
corporation that (unlike Yelp) has an office in Virginia. The
implication of this footnote is that if the record at issue is
located in Virginia, Virginia courts can compel the non-party
foreign corporation to produce it here. Yet the majority
opinion’s conclusion makes that impossible. If the General
Assembly has not provided for the exercise of subpoena power
over a non-resident non-party (as the majority opinion says),
how can Virginia courts acquire this authority based solely on
2
In footnote 1, the majority opinion correctly notes that,
according to the affidavit, user operations team members have
specialized access to the database and only they respond to
subpoenas seeking that information. However, this statement
does not support the majority opinion’s extrapolation that only
those employees have access to the database.
Despite the majority opinion’s characterization in
footnote 16, the issue is not whether Yelp proved that only
employees in California have access to the database. Rather,
the issue is that the majority opinion states as a fact that
only employees in California do, when that proposition is not
supported by the record.
19
the location of the record being sought? The majority opinion,
which is based solely upon an interpretation of what the
General Assembly has authorized, cites no statute for this
proposition.
Further, to base the courts’ power to compel production on
the geographic location of a record is simply incompatible with
the digital era. The majority opinion appears to presume that
records are still printed on paper as documents and stored in
filing cabinets in a file room, where they can be seen and
touched. This practice is waning in modern interstate commerce
and soon only nostalgic vestiges will remain, the lingering
artifacts of an earlier age. Now, records are more commonly
intangible and incorporeal, stored electronically in binary
form. Where are such records located? Only on the device
where the information is created? On any device where a copy
can be found? On any device that can access it remotely?
Under the majority opinion, the answers to these questions will
determine whether the General Assembly has authorized Virginia
courts to exercise subpoena power. And the questions cannot be
answered in the abstract. Circuit courts throughout the
Commonwealth will be forced to grapple with them often.
To illustrate the practical difficulty the majority
opinion needlessly creates, one can consider a hypothetical
case where an employer sues a former employee to recover funds
20
he embezzled by falsely endorsing a customer’s check and
depositing it in his personal account. The check is both drawn
on and deposited into accounts at a national bank incorporated
in Delaware with its principal place of business in North
Carolina. The bank has a registered agent, hundreds of
branches, and thousands of employees in Virginia. The employer
serves a subpoena duces tecum on the bank’s Virginia registered
agent, seeking production of the check. The bank routinely
scans all paid and deposited checks, stores the images
electronically on a server located at its principal office in
North Carolina, and destroys the physical check.
According to the majority opinion, whether the General
Assembly has authorized Virginia courts to compel this out-of-
state bank, a non-party foreign corporation but with pervasive
presence in and contacts with Virginia, to produce its
electronic record depends on where the record is located. That
cannot be the case, but it is the effect of the majority
opinion’s analysis.3, 4
3
Incidentally, if an attorney wants to issue a subpoena to
such a foreign corporation, how can he or she do so without
first knowing where the record is located? Issuing such a
subpoena without sufficient knowledge that it is located in
Virginia would be sanctionable under Code § 8.01-271.1.
4
Contrary to the majority opinion’s assertion in footnote
18, this dissent does not assume that Virginia would have
personal jurisdiction over the hypothetical bank. Rather,
whether a Virginia court can compel the bank to produce the
record depends on whether the bank has constitutionally
21
Second, the majority opinion states that the General
Assembly has not authorized courts to exercise subpoena power
over a non-resident non-party in the long-arm statute, Code §
8.01-328.1. However, the long-arm statute is irrelevant. It
neither confers nor constrains the power at issue here. As
noted above, the authority is provided by Code §§ 1-237, 8.01-
2(8), 8.01-287, 8.01-301, and 18.2-456(5).
To the contrary, the long-arm statute expressly provides
that “nothing contained in this chapter shall limit, restrict
or otherwise affect the jurisdiction of any court of this
Commonwealth over foreign corporations which are subject to
service of process pursuant to the provisions of any other
statute.” Code § 8.01-328.1(C). Foreign corporations with
Virginia registered agents are subject to service of process
under Code § 8.01-301(1). The long-arm statute therefore does
not deny Virginia courts jurisdiction over them, whether they
are parties or not. This is consistent with our previous
holdings that by enacting the long-arm statute, the General
Assembly intended to confer as much jurisdiction upon Virginia
courts as constitutional due process allows. E.g., Peninsula
Cruise, Inc. v. New River Yacht Sales, Inc., 257 Va. 315, 319,
sufficient contacts with Virginia, not whether the record is
located here.
22
512 S.E.2d 560, 562 (1999); John G. Kolbe, Inc. v. Chromodern
Chair Co., 211 Va. 736, 740, 180 S.E.2d 664, 667 (1971).
Third, the majority opinion refers to the legislature’s
enactment of the Uniform Interstate Depositions and Discovery
Act, Code §§ 8.01-412.8 to -412.15, as further support for its
conclusion that the General Assembly has not authorized
Virginia courts to exercise subpoena power over non-resident
non-parties. However, that Act only provides Virginia courts
with additional authority.5 Nothing in it subtracts from the
statutory authority the General Assembly has already provided
Virginia courts in Code §§ 1-237, 8.01-2(8), 8.01-287, 8.01-
301, and 18.2-456(5). Consequently, Virginia courts had
authority to compel production by a non-party foreign
corporation prior to the Act’s enactment, and that authority
remains.
Fourth, the majority opinion cites several decisions by
appellate courts in other states finding that trial courts in
those states could not enforce a subpoena against a non-
resident non-party. However, those decisions are not relevant
in this case because they are interpretations holding that the
applicable state law did not provide those states’ courts with
5
Specifically, the Act supplies Virginia courts the
statutory authority to compel a Virginia resident to produce
information relevant to litigation pending in another state’s
courts. The Act has no effect on Virginia courts’ authority
over non-residents.
23
the broad authority the General Assembly has provided Virginia
courts in Code §§ 1-237, 8.01-2(8), 8.01-287, 8.01-301, and
18.2-456(5).
The majority opinion relies principally on In re National
Contract Poultry Growers’ Ass’n, 771 So. 2d 466 (Ala. 2000).
That Alabama case involved a non-party corporation incorporated
in Arkansas. Its principal place of business was in Louisiana
and it did not have an Alabama registered agent. A party
obtained a subpoena against the corporation and served it by
certified mail at its Louisiana office. The corporation did
not respond to the subpoena and the trial court thereafter
found it in contempt. Id. at 466-67. On appeal, the Supreme
Court of Alabama reversed. Id. at 470. It determined that an
Alabama statute and the Alabama Rules of Civil Procedure
permitted a subpoena to be “served at any place within the
state.” 771 So. 2d at 468-69 (quoting Ala. R. Civ. P.
45(b)(2)). Because the subpoena was served by certified mail
in Louisiana, the subpoena was not served on the corporation
within the state as Alabama law required. Id. at 469-70.
Similarly, Craft v. Chopra, 907 P.2d 1109 (Okla. Civ. App.
1995), involved a plaintiff suing a doctor in Oklahoma,
alleging that he sexually abused her while she was under
anesthesia. She obtained a subpoena against a Texas hospital
for letters of recommendation pertaining to the doctor’s
24
privileges there. There is no indication of whether the
hospital had a registered agent in Oklahoma. Rather, the
subpoena was served on it by certified mail in Texas. When the
hospital resisted the subpoena, the trial court refused to
enforce it and awarded the hospital damages. Id. at 1110-11.
On appeal, the Oklahoma Court of Civil Appeals affirmed. It
determined that under the Oklahoma statute, subpoenas could be
served only within the state. Id. (construing former Okla.
Stat. tit. 12, § 2004.1(A)(1)(c)).
These cases are irrelevant here because Yelp was served in
Virginia according to Virginia law. Code § 8.01-301(1).
Another case cited in the majority opinion, Syngenta Crop
Prot., Inc. v. Monsanto Co., 908 So. 2d 121 (Miss. 2005),
involved three non-party corporations. All three were
incorporated in Delaware. One had its principal place of
business in North Carolina, another in Minnesota, and the last
in Indiana. All had Mississippi registered agents. Id. at
124. The Supreme Court of Mississippi ruled that a state
statute permitted service of process on foreign corporations by
registered or certified mail but that a rule of court required
subpoenas to be served personally. Id. at 127-28 (construing
Miss. Code Ann. § 79-4-15.10 and Miss. R. Civ. P. 45(c)(1)).
Reconciling these conflicting provisions of Mississippi law,
the court determined that subpoenas were not process and
25
therefore could not be served on a foreign corporation through
its registered agent. Id.
This case is not relevant here because a subpoena is
process under Virginia law and can be served on a foreign
corporation through its Virginia registered agent. Code §§ 1-
237 and 8.01-301(1).
Other cases cited in the majority opinion are also
irrelevant. Ulloa v. CMI, Inc., 133 So. 3d 914 (Fla. 2013)
involved criminal defendants charged with driving under the
influence who sought technical data from the corporation that
manufactured breathalyzer equipment. The corporation was
incorporated in Kentucky. There is no indication of where it
had its principal place of business, but it had a Florida
registered agent. Id. at 915. The Supreme Court of Florida
determined that the applicable Florida statute provided that
subpoenas in criminal cases ran only within the state. Id. at
920-21 (construing Fla. Stat. § 914.001(1)).
Similarly, Phillips Petroleum Co. v. OKC Ltd. P’ship, 634
So. 2d 1186 (La. 1994), involved a non-party corporation
incorporated in Texas. Its principal place of business was in
Texas, but it had a Louisiana registered agent. Id. at 1187.
The Supreme Court of Louisiana determined that the applicable
Louisiana statute simply did not “provide for the subpoena of a
26
nonresident witness.” Id. at 1188 n.3 (construing La. Code
Civ. Proc. Ann. art. 1352).
These cases are not relevant here because Virginia law
does provide for the subpoena of a non-resident non-party, if
that non-party is a foreign corporation with a Virginia
registered agent that can be served with process.
Each of these opinions also includes language (recited in
the majority opinion in this case) rejecting the claims made by
the parties seeking discovery that the subpoenas should be
enforced because the courts could exercise personal
jurisdiction over the foreign corporations. I agree with the
majority opinion and these out-of-state cases that having
personal jurisdiction over a non-resident non-party is not
enough to allow a court to enforce a subpoena; there must also
be statutory authority enabling a court to exercise that
jurisdiction by enforcing a subpoena. Where I part with the
majority opinion is its conclusion that the General Assembly
has not provided that authority here, under Virginia law.
These flaws in the majority opinion are significant and
problematic. Nevertheless, it reaches the correct conclusion
that the circuit court cannot enforce Hadeed’s subpoena duces
tecum in this case. However, the reasons are constitutional
rather than statutory. Specifically, a state court’s coercive
judicial power is limited by the Due Process Clause of the
27
Fourteenth Amendment. J. McIntyre Mach., Ltd. v. Nicastro, 564
U.S., ___, ___, 131 S. Ct. 2780, 2786-87 (2011). This extends
to enforcement of subpoenas and subpoenas duces tecum. Eli
Lilly & Co. v. Gottstein, 617 F.3d 186, 192 & n.4 (2d Cir.
2010) (collecting cases); see also United States Catholic
Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72,
76 (1988) (“[T]he subpoena power of a court cannot be more
extensive than its jurisdiction.”).
Hadeed argues that Virginia courts may constitutionally
exercise personal jurisdiction over Yelp because it has a
Virginia registered agent and therefore has consented to being
subject to jurisdiction here. There is historical authority
supporting the proposition that a foreign corporation consents
to be sued in a state when it appoints an agent for the receipt
of process there. E.g., Railroad Co. v. Harris, 79 U.S. 65, 81
(1871); Pennoyer v. Neff, 95 U.S. 714, 735 (1878); Ex parte
Schollenberger, 96 U.S. 369 (1878); Pennsylvania Fire Ins. Co.
v. Gold Issue Mining & Milling Co., 243 U.S. 93, 95-96 (1917).
However, to the extent that these cases are applicable to
a non-party foreign corporation at all, I believe they have
been supplanted by the contacts-based theory of personal
jurisdiction articulated in International Shoe Co. v.
Washington, 326 U.S. 310 (1945). Shaffer v. Heitner, 433 U.S.
186, 212 (1977) (“[A]ll assertions of state-court jurisdiction
28
must be evaluated according to the standards set forth in
International Shoe and its progeny.”) Contacts-based
jurisdiction comes in two forms, general and specific. Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.15 (1985). The
party claiming that a court may exercise jurisdiction bears the
burden of showing a prima facie case for that claim. ESAB
Group, Inc. v. Zurich Ins. PLC, 685 F.3d 376, 391 (4th Cir.
2012).
To be subject to general jurisdiction, a foreign
corporation must have “‘continuous corporate operations within
a state . . . so substantial and of such a nature as to justify
suit on causes of action arising from dealings entirely
distinct from’” the activities it purposefully directs there.
Daimler AG v. Bauman, 571 U.S. ___, ___, 134 S. Ct. 746, 761
(2014) (quoting International Shoe, 326 U.S. at 318)
(alteration and emphasis omitted). A corporation has such
operations in the states where it is incorporated and where it
has its principal place of business. Id. at 760. A
corporation may also be subject to general jurisdiction in
other states, provided that the corporation’s operations there
are “‘so continuous and systematic as to render [it]
essentially at home’” there. Id. at 761 & n.19 (quoting
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. ___,
29
___, 131 S. Ct. 2846, 2851 (2011) (internal quotation marks
omitted)).
Yelp is incorporated in Delaware. Its principal place of
business is in California. Hadeed has neither alleged nor
shown that Yelp has any corporate operations within the
Commonwealth, much less operations that are sufficiently
“continuous and systematic,” for the purposes of the Goodyear
Dunlop test. Accordingly, I cannot conclude on this record
that Virginia courts may exercise general jurisdiction over
Yelp.
Specific jurisdiction assesses whether a foreign
corporation has sufficient contacts with a state for its courts
to constitutionally exercise jurisdiction over the corporation
based on its activity there. Burger King, 471 U.S. at 472.
Further, the foreign corporation’s activities must be
“purposefully directed” at that state. Id. Activity is
purposefully directed at a state if it is “such that [the
corporation] should reasonably anticipate being haled into
court there.” Id. at 474. “[R]andom, fortuitous, or
attenuated” activity or “the unilateral activity of another
party or a third person” is insufficient. Id. at 475 (internal
quotation marks and citations omitted).
The limited record in this case does not establish that
Yelp has sufficient contacts with the Commonwealth or that it
30
has purposefully directed activities here such that Virginia
courts may exercise specific jurisdiction over it. Neither the
complaint nor the materials Hadeed submitted in support of the
subpoena duces tecum alleges any such contacts or purposeful
direction; rather, each merely states that Yelp operates a
website with approximately 54 million unique visitors per year.
Hadeed has not shown whether Yelp has paid subscribers or
how many of them reside in Virginia. It has not shown how many
Virginians view or contribute to Yelp’s website, or that merely
viewing or contributing to the website would amount to more
than “the unilateral activity of . . . a third person,” which
is insufficient to confer specific jurisdiction. Burger King,
471 U.S. at 475. It has not shown whether Yelp solicits
advertising from Virginia businesses or that it has any
contracts with Virginia residents. Accordingly, the record
does not include evidence from which I can conclude that Yelp
has sufficient contacts with or has purposefully directed
activity into Virginia so that courts here may constitutionally
exercise specific jurisdiction over it.6
6
Hadeed also argues that under Code § 8.01-277.1, Yelp
waived any objection to jurisdiction because it failed to make
a special appearance. Hadeed contends that Yelp’s written
objections to the subpoena duces tecum are not a motion to
quash, so they did not preserve a jurisdictional argument under
Code § 8.01-277(A). I disagree.
Yelp has done none of the things listed as examples of
“conduct related to adjudicating the merits of the case” in
31
For these reasons, I must respectfully dissent from the
majority opinion’s determination that the circuit court lacked
statutory authority to enforce the subpoena duces tecum against
Yelp. However, I conclude that the evidence was insufficient
to establish that the court could exercise personal
jurisdiction over Yelp within the limits of Fourteenth
Amendment due process. I therefore concur in the judgment
vacating both the judgment of the Court of Appeals and the
contempt order of the circuit court.
Code § 8.01-277.1(A). The merits of this case involve whether
the defendants defamed Hadeed and conspired against it in
violation of Code § 18.2-500, as alleged in the complaint.
Yelp’s participation in the proceedings is not related to the
adjudication of those claims. All Yelp has done is resist the
enforcement of Hadeed’s subpoena duces tecum in the manner
expressly provided by Code § 8.01-407.1(A)(4), which includes
the filing of written objections. Unlike conducting discovery,
resisting discovery is not one of the means by which
jurisdictional objections may be waived under Code § 8.01-
277.1.
32