Judge Tosses Media Firm’s Libel Claim

ALEXANDRIA, Va. (CN) - A federal judge dismissed a digital media firm's case against an industry analyst it accused of spreading a defamatory story that was eventually picked up by Adage magazine.

KMLLC Media, formerly known as Knowlera Media is an online video content producer that says it has licensed high-quality video content and video widgets to more than 100 third-party companies on the Internet.

In a complaint filed in March in the Alexandria, Va. Federal Court, KMLLC Media claimed that Telemetry Ltd.. a UK-based "digital forensics" company, published "blatantly false and defamatory statements" that have caused it "devastating financial harm and losses."

"In Defendant's frantic rush to capture the media spotlight for their own marketing and advertising purposes, and to avoid being 'scooped' by their competition, and to create media hype intended to promote [their] services, Defendants jumped to an unfounded and flatly incorrect conclusion -- that Knowlera had intentionally engaged in a highly-sophisticated, multi-million dollar, internet advertising scheme to defraud its customers into buying worthless internet ads that were never viewed by, or even visible to, any only viewers," the complaint said.

It continued: "Defendants recklessly published their error-filled Report ... as a promotional device intended to scare advertisers into terminating their relationships with Knowlera and, instead, hire Defendants for consulting services -- without regard for the lives and reputations that would be unjustifiably damaged or destroyed as a result of Defendants' reckless pursuit of headlines and profits."

Telemetry allegedly provided this report to Adage, a trade publication, which subsequently published an article about it under the headline, "Ad-Fraud Operation Fools Detection Companies, Nets Millions."

KMLLC Media says the was read by "millions of readers worldwide" the information provided by Telemetry destroyed its reputation.

In response to the complaint, Telemetry filed two motions for dismissal, one on the grounds of a lack of personal jurisdiction, and the other, for failure to state a claim.

U.S. District Judge James Cacheris agreed with Telemetry on the jurisdictional questions, rendering the other motion for dismissal moot.

Cacheris noted that it was undisputed that Telemetry US is domiciled in New York, and that Telemetry UK is domiciled in London, England.

"Both locations are the place of incorporation and principal place of business for each corporation," he said, adding that KMLLC Media failed to advance any argument that proved Telemetry had sufficient "minimum contacts" with the state of Virginia to trigger the jurisdiction of the court.

"Ultimately, Plaintiff cannot point to evidence of actions by Defendants which were purposefully directed towards Virginia and gave rise to Plaintiff's claims," Cacheris wrote. "The evidence put forward by Plaintiff shows only activities which were either directed at other states and gave rise to their cause of action, or directed at Virginia but did not give rise to Plaintiff's cause of action.

"Defendants' contacts with Virginia are therefore not of the quality or quantity which would support the exercise of personal jurisdiction in this action," he said.

Cacheris continued: "Plaintiff [also] fails to prove by a preponderance of the evidence that Defendants had even the slightest thought of Virginia in mind when one of their employees in Chicago forwarded the AdAge article to a Julie Fleisher, Kraft's Senior Director of Data, Content, and Media, also based out of Chicago."

"For the foregoing reasons, the Court grants Defendants' motion to dismiss for lack of personal jurisdiction," the judge wrote. "An appropriate Order shall issue."

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