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Sunday, June 23, 2024 | Back issues
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CA Not Golden for Klayman Scuffle With Ex-Wife

SAN JOSE, Calif. (CN) - A federal judge in California dismissed conservative lawyer and self-appointed government watchdog Larry Klayman's fraud and racketeering action against his ex-wife and her lawyers - none of whom live or work the Golden State.

Klayman - founder of the politically conservative Judicial Watch and Freedom Watch groups - sued his ex-wife Stephanie Deluca and her lawyers from the firm Baker Hostetler, as well as eBay and PayPal, for fraud and racketeering stemming from the couple's divorce and child custody dispute in Ohio.

According to Klayman, he and Deluca agreed to use Virginia law when they divorced, in Ohio, in 2003. After Deluca remarried in 2007, she allegedly kept Klayman from seeing their children - prompting Klayman to withhold child support payments since Virginia law provides a complete defense for nonpayment when one is denied access to one's children.

An Ohio court, however, found Klayman in contempt of the couple's divorce agreement and also awarded Deluca $320,000 in attorneys' fees. When Klayman didn't pay, Baker Hostetler filed a motion to show cause and the Ohio court issued subpoenas which the firm and Deluca served on PayPal in an effort to get Klayman's financial records.

PayPal initially released the records, but demanded them back after Klayman protested. The conservative pundit then sued everyone involved in 2014, alleging fraud, invasion of privacy, trespass, conversion, unfair business practices and racketeering against Deluca and Baker Hostetler.

Deluca and her lawyers asked U.S. District Judge Edward Davila to dismiss the suit for lack of jurisdiction and failure to state a claim. Last week, Davila agreed that a federal court in California was no place for Klayman to litigate his differences with Deluca and Baker Hostetler.

"In his complaint, Plaintiff alleges that he is a resident of Florida. As to the defendants, plaintiff alleges that: Deluca and the Baker attorneys are residents of Ohio; and PayPal and eBay are corporations with its headquarters and principal place of business in California. There are no allegations, however, of all of the states of which the Baker firm's partners are citizens. Plaintiff has failed to meet his burden; therefore, there is no diversity jurisdiction. Given that plaintiff had an opportunity to rehabilitate this issue in his opposition brief, but failed to do so, this court presumes that allowing leave to amend would be futile," Davila wrote.

As to the court's personal jurisdiction over Klayman's RICO claims, Davila found that Deluca simply serving subpoenas issued by an Ohio court on PayPal - headquartered in California - did not make a California federal court the appropriate forum for the dispute.

"While Deluca may arguably have authorized an intentional act by serving a subpoena, through counsel, directed at a third party in California, there is no indication that Deluca expressly aimed her act towards California," Davila wrote. "Serving a subpoena alone would not have a devastating impact upon plaintiff in California since plaintiff neither lives nor works in California. Moreover, there is no indication that the subpoena would cause harm that was likely to be suffered in California. Plaintiff generally alleges that he was harmed as a result of the release of the financial records. While the financial records may have been released in California, the harm to plaintiff personally should have been suffered in the state where he resides or works, neither of which is California."

Similarly, Deluca and her attorneys lack sufficient contacts with California to entertain Klayman's RICO complaints here - even though Baker Hostetler has an office in the Golden State, Davila said.

"First, the court must have personal jurisdiction over at least one of the participants," the judge wrote. "There is no indication that this court can exercise personal jurisdiction over Deluca or the Baker attorneys since they all live in Ohio, and plaintiff has not made a case of specific personal jurisdiction over them. Second, even if this court can exercise personal jurisdiction over the Baker firm because of some presence in California, plaintiff has failed to allege that there is no other district court that will have personal jurisdiction over all of the RICO defendants. The complaint states that Deluca and the Baker attorneys are residents of Ohio, the Baker firm has an office in Ohio, and at least part of the alleged acts of the conspiracy occurred in Ohio. As such, an Ohio court would have jurisdiction over all of the RICO defendants."

And since the racketeering claims are dismissed, Klayman's complaint no longer has any federal claims left for the court to hear, Davila ruled.

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