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Back in 2012, the Alexandria Circuit Court ruled in an Internet defamation case that discovery could be obtained from a nonresident third party by serving a subpoena on the company's registered agent in Virginia. That decision was reversed last week by the Virginia Supreme Court in an unambiguous ruling that is going to force a lot of Virginia attorneys to make greater use of the Uniform Interstate Depositions and Discovery Act.
I had been following this case--Yelp, Inc. v. Hadeed Carpet Cleaning, Inc.--over the past few years with great interest, not because of the subpoena-power issue, but because the case involved some fascinating First Amendment issues and promised to offer some guidance on the correct application of Virginia's "unmasking" statute, Section 8.01-407.1. For example, would an interactive computer service like Yelp have standing to object to complying with an enforceable subpoena by invoking the First Amendment rights of its users? Does a plaintiff need to produce evidence to meet 8.01-407.1's "showing" requirement or can it make the required showing merely by alleging a prima facie cause of action for defamation? In a case involving online negative reviews phrased as non-actionable statements of opinion but written anonymously by competitors hiding behind a pseudonym, how can a plaintiff demonstrate falsity (i.e., that the reviewer was not an actual customer) without an opportunity to use discovery to ascertain the poster's true identity? The justices showed keen interest in questions like these at oral argument, but ultimately decided to save addressing them for another day.
What we have instead is nevertheless a useful decision that provides concrete guidance for Virginia practitioners regarding the scope of Virginia's subpoena power. Prior to the court's April 16, 2015 decision, there had been some uncertainty about whether subpoenas could be issued to companies or individuals located outside of Virginia. Does it depend on whether the person receiving the subpoena would be subject to personal jurisdiction in Virginia? Does it depend on whether the company being served maintains a registered agent in Virginia? But now we have a decisive ruling: Virginia subpoenas that seek out-of-state discovery are not enforceable when issued to non-resident non-parties.
Read the rest of the article at the Virginia Business Litigation Lawyer Blog.
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