United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
D. Schroeder United States District Judge.
James Lostutter, proceeding pro se, claims that Defendants,
all residents of different States, defamed him, principally
through their use of the unauthorized eponymous website
www.DericLostutter.org. In this court, the parties have
engaged in a nearly non-stop campaign of motions and filings,
of which the following require resolution: Defendants'
motion to dismiss and motion for gatekeeper order (Doc. 13);
Lostutter's motion for preliminary injunction or
temporary restraining order (Doc. 16); Defendants' motion
to strike several of Lostutter's “notices of
filing” (Doc. 26); Lostutter's motion to strike
Defendants' motion to dismiss (Doc. 29); Lostutter's
motion for extension of time to serve Defendant Alexandria
Goddard (Doc. 32); Lostutter's motion for contempt or in
the alternative for the issuance of a warrant for arrest
(Doc. 35); Defendant Michelle McKee's motion for
attorneys' fees (Doc. 48); and Defendants'
counsel's motion to withdraw (Doc. 50).
has recently voluntarily dismissed the action against
Defendant McKee (Doc. 45), so the motions are moot as to her.
For the reasons that follow, the court finds that Defendant
Thomas Olsen has not been properly served with process, and
the action will be dismissed without prejudice as to him. As
to the remaining action against Defendant Goddard, the court
grants her motion to dismiss for failure to state a claim as
to all of Lostutter's claims except those for libel per
se and libel per quod. The remainder of the parties'
motions will be denied.
allegations of the complaint are difficult to follow and
presume knowledge of events it does not fully describe. As
best as can be ascertained and viewed in the light most
favorable to Lostutter, the complaint alleges the following:
styles himself as a women's rights advocate who, through
his cyber-technology skills, exposes wrongdoing. Among his
actions was the use of his computer skills to unearth
technical information related to the prosecution of two high
school football players accused of raping a 16-year-old in
Steubenville, Ohio, and school administrators who covered it
up. His activities were featured in the media, most notably
in Rolling Stone Magazine and on CNN. (Doc. 1 ¶ 10.) As
a consequence of his covert computer actions, he was charged
with felony crimes and was ultimately convicted and sentenced
to federal prison, where he presently resides. When not in
prison, Lostutter resides in Forsyth County, North Carolina.
(Id. ¶ 4.)
claims that Defendants, who reside in various States, have
engaged in a scheme to defame him. Defendant Olsen is a
resident of Escambia County, Florida, and a member of the
internet “hacking activist group,
‘Anonymous.'” (Id. ¶ 5.)
Defendant Goddard is a resident of Franklin County, Ohio, and
is an online blogger and the founder of Xander Business
Group. (Id. ¶ 6.) McKee, whom Lostutter
recently dismissed from the action, is a resident of Pierce
County, Washington. (Id. ¶ 7.)
alleged defamation campaign traces its start to April 2015,
when Olsen created a website entitled DericLostutter.org in
an effort to post negative information about Lostutter and to
confuse the public over Lostutter's actual website,
DericLostutter.com. According to Lostutter, Olsen has
resisted his request and efforts to remove the site.
Defendants have used DericLostutter.org to upload
“pornographic content” relating to Lostutter for
the purpose of harassing, degrading, and embarrassing him.
(Id. ¶ 14.)
9, 2016, Defendants “hatched a plot to falsely label
the Plaintiff threatening, including false threats of rape
and violence . . . using what appears to be Facebook Message
generators to imitate Plaintiff[‘s] Facebook
page, typing ridiculous threats, encouraging the readers of
the blog to send the fabrications to Plaintiff's local
police department and the F.B.I. in an attempt to have
Plaintiff arrested and damage the Plaintiff's good
name.” (Id. ¶ 15.) An article about
Lostutter was linked to the webpage as
(Id.) Defendants also “targeted”
Lostutter's Kernersville, North Carolina business, known
as TechAssist, resulting in a “catastrophic loss of
clientele and forcing Plaintiff to close the doors.”
(Id. ¶ 16.) (It appears that Lostutter's
business was a brick-and-mortar store located in
Kernersville, North Carolina. (Doc. 1 ¶ 16.)) Defendants
posted false accusations that Lostutter kept clients'
electronic devices he was servicing. (Id. ¶
17.) Lostutter claims a “projected” loss of
“$80, 000 in revenue for the fiscal year of
2016.” (Id. ¶ 18.)
December 15, 2015, Defendants engaged in a campaign to label
Lostutter a “rapist.” (Id. ¶ 21.)
They posted an article on the DericLostutter.org website
which allegedly details a false account of Lostutter sexually
assaulting a former girlfriend. (Id. ¶ 21.)
Defendants accused Lostutter of seeking to profit from the
stillborn death of his daughter in January 2016, Lostutter
sought and obtained ex parte protection orders from a North
Carolina State court against Defendants Olsen and McKee.
(Id. ¶¶ 22-24.) Thereafter, McKee
allegedly provided false information about Lostutter
(including allegations of
“grifting”) to the local district attorney in Forsyth
County, North Carolina, in connection with Lostutter's
proceedings against her. (Id. ¶¶ 30-31.)
offering supporting factual explanation, the complaint
alleges that Defendants have charged that “Plaintiff is
a scam artist” and is “ripping people off and
embezzling donations.” (Id. ¶ 35.)
Defendants Goddard and McKee have also allegedly
“repeatedly faxed/emailed/mailed multiple authorities
and solicited help of other people to maliciously prosecute
the Plaintiff.” (Id. ¶¶ 42, 43.)
Defendant Olsen has allegedly threatened violence against
Lostutter, and all three Defendants have “repeatedly
retaliated against Plaintiff.” (Id. ¶
45.) Defendant Goddard has “sexually harassed”
Lostutter on Twitter. (Id. ¶ 46.)
brings six claims in his complaint: negligence per se - cyber
stalking-harassment (count 1); negligence per se - cyber
stalking - false statement (count 2); cyber stalking - false
statement - threatening language (count 3); false designation
of origin in violation of North Carolina law, citing
“U.S.C. § 1125” (count 4); libel per se
(count 5); and libel per quod (count 6). Lostutter seeks $1
million in damages, which includes “future damages,
” payment of “reputation management
services” to restore his reputation, the removal of all
disparaging content from the internet involving him, and
various injunctive relief. In addition, Lostutter has moved
for a temporary restraining order and/or preliminary
injunction. (Doc. 16.)
move to dismiss on several grounds, but since Lostutter has
dismissed Defendant McKee, the allegations as to only
Defendants Olsen and Goddard remain. These Defendants argue
that dismissal is warranted for lack of subject matter
jurisdiction as to the amount in controversy; lack of
personal jurisdiction (both general and specific) over them;
improper service; and failure to state a claim upon which
relief can be granted. They also seek entry of a
“gatekeeper” order to prevent further lawsuits by
Lostutter. (Doc. 13.) Lostutter has filed a response but
addresses only the personal jurisdiction and service of
process issues, and he opposes the entry of a gatekeeping
order. (Docs. 18, 19.)
Subject Matter Jurisdiction
argue that Lostutter has not met the amount-in-controversy
requirement for diversity jurisdiction and thus that this
court lacks subject matter jurisdiction over the action.
(Doc. 14 at 10-11.) Because subject matter jurisdiction
serves as a limitation on the court's power, the court
addresses that argument first. ESAB Grp., Inc. v.
Arrowood Indem. Co., No. 4:09-CV-1701-JMC-TER, 2011 WL
13176143, at *3 (D.S.C. Feb. 23, 2011) (“Because ESAB
challenges this Court's subject-matter jurisdiction, the
Court must address that issue prior to reaching ZIP's
personal jurisdiction and forum non conveniens
arguments.”); see also Steel Co. v. Citizens for a
Better Env't, 523 U.S. 83, 89 (1998) (“The
requirement that jurisdiction be established as a threshold
matter ‘spring[s] from the nature and limits of the
judicial power of the United States' and is
‘inflexible and without exception.'” (citing
Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S.
379, 382 (1884))).
party seeking to invoke the court's jurisdiction bears
the burden of establishing the court's subject matter
jurisdiction. McNutt v. Gen. Motors Acceptance
Corp., 298 U.S. 178, 189 (1936). For diversity
jurisdiction, the amount in controversy must exceed $75, 000.
28 U.S.C. § 1332(a). Courts apply the “legal
certainty” test in determining whether the amount in
controversy requirement is met. St. Paul Mercury Indem.
Co. v. Red Cab Co., 303 U.S. 283, 289 (1938).
“[T]he court should look to the face of the complaint
itself to determine whether it is a legal certainty that
plaintiff's claims do not reach the required
amount.” Shanaghan v. Cahill, 58 F.3d 106, 112
(4th Cir. 1995). “Unless the claim for an amount over
the jurisdictional prerequisite is made in bad faith, or
unless it is plain from the complaint that an amount less
than the jurisdictional amount is all that is at issue, the
district court has jurisdiction over the case.”
Id.; Lunsford v. Cemex, Inc., 733 F.Supp.2d
652, 657 (M.D. N.C. 2010) (“The amount claimed in the
complaint controls when assessing the amount in controversy,
unless it appears to a legal certainty on the face of the
complaint that the claim is for less than the jurisdictional
amount.”). “[T]he legal impossibility of recovery
must be so certain as virtually to negative the
plaintiff's good faith in asserting the claim. If the
right of recovery is uncertain, the doubt should be resolved,
for jurisdictional purposes, in favor of the subjective good
faith of the plaintiff.” McDonald v. Patton,
240 F.2d 424, 426 (4th Cir. 1957). In determining whether the
threshold amount is met, a plaintiff may aggregate separate
claims for damages as long as they are not actually one claim
with separate legal theories of recovery. Shanaghan v.
Cahill, 58 F.3d 106, 109 (4th Cir. 1995).
Lostutter's verified complaint alleges $1, 000, 000 in
damages, based in part on a “projected [loss of] $80,
000 in revenue [to Opsec CyberSecurity Solutions, LLC d/b/a
TechAssist] for the fiscal year 2016, ” as well as damage
to his reputation from false claims of rape and sexual
assault. (Doc. 1 ¶ 18.) Although Defendants do not argue
the complaint alleges the business is a North Carolina
limited liability company. (Doc. 1 ¶ 4.) Under North
Carolina law, a limited liability company is a separate
entity from its owners. N.C. Gen. Stat. § 57D-2-01(a).
The complaint further alleges it is Lostutter's business.
(Doc. 1 ¶ 16 (“his DBA”); Id.
¶ 17 (“Plaintiff's business”).) Thus, it
is unclear how much of the business's revenue is
attributable to Lostutter as his loss, as opposed to that of
his business (which is not named as a plaintiff).
event, Defendants offer no authority to suggest that
Lostutter's reputational loss is insufficient to a legal
certainty. Between the reputational loss alleged and whatever
loss Lostutter derives from his business, he has facially
alleged an adequate jurisdictional amount which Defendants
have not demonstrated fails to reach the threshold to a legal
certainty. Should Defendants determine otherwise, they may
renew their argument. Grupo Dataflux v. Atlas Glob. Grp.,
L.P., 541 U.S. 567, 574 (2004) (noting that the
court's subject matter jurisdiction at the time of the
filing of the complaint is always subject to later attack).
motion to dismiss for lack of subject matter jurisdiction is
therefore denied at this time.
Service of Process
Olsen and Goddard maintain they have not been properly served
with process and move to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(5). Lostutter contends he has submitted
evidence of proper service as to both.
of process is governed by Federal Rule of Civil Procedure
4(e)(1), which provides in part that an individual can be
served by “following state law for serving a summons in
an action brought in courts of general jurisdiction in the
state where the district court is located or where service is
made.” North Carolina Rule of Civil Procedure
4(j)(1)(d) in turn provides in relevant part that a natural
person can be served “[b]y depositing with a designated
delivery service authorized pursuant to 26 U.S.C. §
7502(f)(2) a copy of the summons and complaint, addressed to
the party to be served, delivering to the addressee, and
obtaining a delivery receipt.” The burden of proving
service under Rule 4 rests with the plaintiff.
O'Meara v. Waters, 464 F.Supp.2d 474, 476 (D.
Md. 2006). While mere technicalities ordinarily should not
stand in the way of finding proper service and courts will
liberally construe the rules when actual notice occurs,
“the rules ‘are there to be followed, and plain
requirements may not be ignored.'” Garvey v.
Seterus, Inc., No. 5:16CV00209-RLV, 2017 WL 2722307, at
*5 (W.D. N.C. June 23, 2017) (citations omitted).
Olsen, Lostutter has filed an affidavit of service claiming
to have served him through United Parcel Service
(“UPS”), with signature confirmation. Olsen
argues that Lostutter's affidavit fails to list the
address where the summons and complaint were delivered or
where, when, or by whom they were received. (Doc. 14 at 13.)
Attached to Lostutter's affidavit is a receipt from UPS,
which clearly shows a delivery address of 348 West Herman
Street in Pensacola, Florida, as well as a delivery time and
date. (Doc. 18 at 7-8.) While the shipment receipt purports
to require “signature confirmation, ” and the UPS
“Proof of Delivery” receipt shows that signature
was “required, ” the receipt shows only that
delivery was “Left At: Reception” at 10:04 a.m.
(Doc. 6 at 5.) This fails to comply with North Carolina's
Rule 4, which requires that the summons and complaint be
“deliver[ed] to the addressee.” N.C. R. Civ. P.
4(j)(1)(d). Moreover, there is no evidence that anyone at
reception signed for the delivery and, if so, who they were
and whether they were authorized to accept service on behalf
of Olsen. Cf. Baker v. Joseph, 938 F.Supp.2d 1265,
1268-69 (S.D. Fla. 2013) (service of process held
insufficient under New York law where plaintiffs affixed
process on defendant's residence door and later claimed,
without proof, to have attempted service on adult male at
defendant's residence); Williams v. Hetzel, No.
12- CV-23300-UU, 2012 WL 2577042, at *1 (W.D. N.C. July 3,
2012) (finding defendant named in individual capacity not
properly served where process was sent via certified mail to
defendant's office, but was not signed for by defendant).
also appears to be defective under Florida law. Florida
permits service “by delivering a copy of [the summons]
to the person to be served with a copy of the complaint,
petition, or initial pleading or paper or by leaving the
copies at his or her usual place of abode with any person
residing therein who is 15 years of age or older and
informing the person of their contents." Fla. Stat.
§ 48.031(1)(a); Thomas v. Derryberry, No.
8:16-CV-3482-T-33AEP, 2017 WL 2448177, at *2-3 (M.D. Fla.
June 6, 2017) (quashing service). There is no evidence this
was done, and leaving a copy with the receptionist is
insufficient. Schupak v. Sutton Hill Assocs., 710
So.2d 707, 708-09 (Fla. App. 1998) (holding that service on
doorman at residence fails to comply with Fla Stat. §
48.031(1)). Finally, there is no evidence that Lostutter
complied with any of the provisions of Federal Rule of Civil
Procedure 4(e)(2), which provides alternate means of service
by way of personal service, leaving a copy with a someone at
the defendant's personal abode, or delivering a copy to
an authorized agent for service of process.
contrary to Lostutter's argument that Olsen was properly
served at his home (Doc. 18 at 3), there is no evidence that
Olsen in fact was properly served with process. For these
reasons, service of process is insufficient as to Defendant
Olsen. Because this defect is capable of being cured, the
motion to dismiss as to him will be granted without
Defendant Goddard, Lostutter does not dispute that she was
not served properly within the initial 90 days of issuance of
the summons on September 2, 2016. (See Doc. 18 at 2-3.)
However, on November 29, 2016, Lostutter timely moved for an
extension of time to serve her under Rule 4(m) (Doc. 32) and
contends he in fact personally served her by sheriff on
December 9, 2016, at her home in Dublin, Ohio (Doc. 39).
Goddard does not dispute this later service.
service by sheriff is permitted under North Carolina law,
N.C. R. Civ. P. 4(a) (who may serve), as well as under
federal law, Fed.R.Civ.P. 4(j)(1)(a)(personal service) &
4(e)(2) (permitting personal service). Moreover, although no
party has addressed the point, Ohio law appears to permit
service on an individual by sheriff as well. Ohio R. Civ. P.
4.1 (B) & (C); Rhodes v. Valley Greyhound Lines,
98 Ohio App. 187, 190, 128 N.E.2d 824, 827 (1954) (upholding
personal service by sheriff).
Lostutter filed an affidavit from a deputy sheriff in
Franklin County, Ohio, stating that he received the summons
and complaint on November 15, 2016, and personally served the
documents on Goddard at her residence on December 9, 2016, at
12:08 p.m. (Doc. 39.) Thus, service appears to be proper, and
the only issue is whether service is effective when a
plaintiff timely seeks an extension of time to serve under
Rule 4(m) and serves a defendant within that additional time
but before the court acts on the motion for extension.
4(m) provides that if a plaintiff does not serve a defendant
within 90 days after the complaint is filed, the court
on motion or on its own after notice to the plaintiff - must
dismiss the action without prejudice against that defendant
or order that service be made within a specified time. But if
the plaintiff shows good cause for the failure, the court
must extend the time for service for an appropriate period.
Rule 4(m) does not define “good cause,
” it is generally regarded to mean
“reasonable and diligent efforts . . . to effect
service prior to the” deadline. Chen v. Mayor &
City Council of Baltimore, 292 F.R.D. 288, 293 (D. Md.
2013) (citation omitted). In an unpublished case,
Fourth Circuit has recently articulated several factors to
consider in assessing whether good cause has been shown.
See Scott v. Md. State Dep't of Labor, 673 F.
App'x 299, 305-06 (4th Cir. 2016) (listing the factors of
whether delay was outside plaintiff's control, the
defendant was evasive, the plaintiff acted diligently or made
reasonable efforts, the plaintiff is pro se, the defendant
will be prejudiced, the plaintiff asked for an extension of
time under Rule 6(b)(1)(A)), petition for cert. filed, ___
U.S.L.W. ___ (June 23, 2017) (No. 16-1546). Courts have
specifically found that failure to obtain service due to a
defendant's evasion constitutes good cause. Ruiz
Varela v. Sanchez Velez, 814 F.2d 821, 823 (1st Cir.
1987) (citing cases).
Lostutter, who is proceeding pro se, timely moved for an
extension (although not citing Rule 6(b)(1)(A)) and stated
that while he tried to serve Goddard, she evaded his service
attempts on three occasions and has a history of doing so in
other litigation. (Doc. 32 at 1-2.) Lostutter has included
evidence of his initial September 6, 2016 attempt to serve
Goddard. (Doc. 6 at 8.) There is also evidence that Goddard
was aware of Lostutter's action against her and thus had
incentive to evade service. (Doc. 32 at 2 (noting that before
service Goddard had posted the complaint on her website
prinniefied.com and retained counsel).) Her knowledge of the
action also suggests she was not prejudiced by any delay.
various factors weigh in favor of finding good cause.
Yongo v. Nationwide Affinity Ins. Co. of Am., No.
5:07-CV-94-D, 2008 WL 516744, at *9 (E.D. N.C. Feb. 25,
2008) (finding good cause in light of plaintiff's
diligent, repeated efforts to serve defendants, application
for new summons less than a month after expiration of service
deadline, and pro se status); Selman v. Am. Sports
Underwriters, Inc., 697 F.Supp. 225, 235 (W.D. Va. 1988)
(denying motion to dismiss for insufficient service of
process; good cause found where defendants received actual
notice of action, plaintiff had been diligent and given
reasonable effort by making multiple attempts at service, and
had a good faith belief that service was accomplished).
the court will grant the motion for extension of time (Doc.
32) and deny the motion to dismiss for insufficient ...