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Notes Jurisdiction & the Internet Dont be a FOOL; The Law is Not DIY
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By the Muddy Waters of Internet Jurisdiction - April 10, 2007

As you may have heard, the Internet is an information revolution. It is a global market place of ideas that creates the opportunity for anyone anywhere to publish to everyone everywhere. [ ACLU v Reno ] It also creates the opportunity for anyone to be sued by everyone everywhere. Oh goody!

There are great stories of a reporter in New York City, writing an article which was hosted on a web server in New Jersey, getting hauled into court in Australia. [ Dow Jones v Gutnick ] Stories like this are enough to cause one to fear the slings and arrows of outrageous Internet fortune, and head for the safe refuge of the couch where the only risk is whether your TIVO captured all four showings of the Simpsons today.

It hardly seems fair. If I, in Texas , want to inform the world of the benefits of mixing Mentos and diet coke, why should I be subject to suit in Ohio , a state in which I have never dared set foot. Mine is just a passive website; if someone in Ohio should read it, follow my example, and cause diet coke to explode all over the basement, should I have to face lawsuit in a state I can't even find on a map?

Fortunately, recently there has been a plethora of Internet jurisdiction cases that provide perfect clarity on this troubling question; and by perfect clarity I of course mean that the waters are as murky as the mighty Mississippi that blocks the path between Ohio and Texas.

Our story starts in 1954, which would be 15 B.I. (Before Internet) for you young'uns, and an international shoe. Now if I am in Ohio, and you are in Ohio, it's a pretty easy case that an Ohio court has jurisdiction over the both of us. But what if I am in Texas, and you, in Ohio, want to sue me on the grounds of my lousy hockey playing. In 1954, the Supreme Court stated that a court can have jurisdiction over me, an out-of-state defendant, if I have certain "minimum contacts" with the forum state "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington , 326 US 310, 316 (1945). Then a few years later we learn that this jurisdiction can be specific or general . Specific is where the jurisdiction over me, the defendant, relates specifically to my lousy hockey playing (specifically to the cause of action). General jurisdiction is where I have had "continuous and systematic" ties with the forum state, Ohio, such as say going to school for the last four years at Oberlin - a fact not directly related to my lousy hockey playing (or maybe it is!?!).

If you know this much, you can get an A in first year law school civil procedure; I got a C.

So what about the Internet which is present everywhere all-the-time? If I write a blog in Texas, hosted on a server in New York City, about hockey that is read in Ohio, do I have to face the man in Ohio?

The answer is something called the " Calder Test ." Only some courts call it the "Effects Test." And other courts call it the "Sliding Scale Test." You see, we are already off to a bad start. Our story is about Hockey so we will call it the Icing Test .

In the Icing Test , the courts have set out a sliding scale for the effect that a website might have in a forum, as set forth by the Supreme Court in Calder v. Jones . At one end of the scale are those passive websites that have no interactivity that just present information.. Has anyone ever seen one of these?? Even my website, Cybertelecom , which is about the most amateur site in the world, has an email link , a Google Search Button , Google Ads, an RSS feed , and displays a secret message to visitors from Canada. There are court cases which conclude that the mere presence of an email link makes a website "interactive." So one end of the scale is "passive websites," but then according to court cases, these websites only exist in mythology. Muddy water.

At the other end of the Sliding-Scale-Effects-Icing test are websites which engage in commercial transactions over the Internet. In these cases, the courts state, "jurisdiction is almost always proper." Cybersell, Inc. v. Cybersell Inc , 130 F3d 414, 415 (9th Cir 1997). "Almost"? If these cases are "almost always" proper, do we ever get to a point where it is "always always" proper? Is there an end to this scale that gives a definitive answer? Or do we just have more muddy water?

Well maybe it would help if we look at the facts of some of the recent cases (then again, maybe not).

In Columbia Pictures Industries, Inc., v Fysh , Case No 5:06-CV-37, Sec. III.A (WDMi Feb. 16, 2007), Columbia Pictures tried in Michigan to sue Fysh, who was apparently in England where he ran a website that distributed copyrighted material. Fysh's website reportedly had indexed hash files of movies and television programs that visitors could download, and visitors could upload their own hash files. And visitors could login! The web server of the site was located in Michigan. So it was clear in the Michigan court's mind that "Defendant's website was interactive to such a degree that it is clear he specifically intended interaction with Michigan residents."

As you read over these cases, think to yourself about Web2.0. These court cases traditionally deal with judges that are struggling with the notion of website owners subject to jurisdiction everywhere - and that being bad. Judges have attempted to draw this magical line in the sand called "interactive websites." These are judges who have dealt primarily with Web1.0 where some amateurish websites simply presented information, and other interactive sites sell any book in all of creation. But what about Web2.0, where interactivity of all participants is the norm? What about my hockey blog post in Texas that permits comments, RSS feeds, trackbacks, digs, and has embedded videos. However much the judges wanted to stick fingers in the dyke and hold back universal jurisdiction at "passive websites," the whole thing comes tumbling down with the interactivity of Web2.0. Under the rules of Web1.0, the blogger, attempting to simply present passive information, could be subject to jurisdiction everywhere all the time.

Anyway, on to the next beacon of clarity: Optimal Beverages Co., Inc., v United Brands Co., Inc. , Civil Action No H-06-1386 , Sec. IV (SDTex Feb. 27, 2007). This case involved conflicting diesel. Plaintiff Optimal Beverages out of Houston had an energy drink "Deezel" that it sells nationwide and for which it has a trademark. In the other corner, Defendant United Brands out of California has an energy drink "Diesel" that it also sells nationwide - where nationwide apparently does not include Texas. As seems to be the way in these situations, plaintiff sued defendant.

The Texas court took note that the Defendant has no presence in Texas, and that there was no evidence that Defendant sold its drink in Texas, or that there was any confusion between brands in Texas. The court did note that Defendant's website was one of those interactive websites where one can come, review defendant's products, and place orders for defendant's drinks. Pursuant to the Sliding-Scale-Effects-Icing test, this seems like one of those interactive websites that could be sufficient to get sued everywhere all the time, almost .

This is a case of general jurisdiction, not specific jurisdiction. If it were specific, defendant's presence in Texas would have to be directly related to the cause of action. But defendant's only presence in Texas is the website - no one has bought drinks in Texas and apparently no one in Texas is confused (at least with regard to the Diesel drink). So jurisdiction must be general. And defendant has no presence in Texas, hasn't sold drinks in Texas, and Texas is not confused. The court reviews the Sliding-Scale-Effects-Icing test and some precedent, but comes back to the fact that no one in Texas has bought drinks, and concludes that it has no general long arm jurisdiction over defendant.

This case seems to elucidate the word "almost." Here we learn that "almost" seems to mean that the existence of the interactive website is irrelevant where the court can look at real word evidence of "minimum contacts." Interactive or not, this case turned on whether anyone anywhere in the real world of Texas had bought one Diesel Drink.

Well, what if the defendant had one sale in the forum state? This next case reportedly involves an MP3 -FM Transmitter thingy for which Plaintiff claimed a patent. Netalog, Inc. v Tekkeon, Inc. , No 1:05CV00980 (MD NC Feb. 15, 2007). Defendant allegedly (if I forget to use the word "allegedly," just assume everything is "allegedly" and I have no idea if it is true - and don't wanna get sued) had an interactive website and sold an infringing device in the forum of North Carolina. This is a specific jurisdiction case where an infringing product has been sold and delivered in the forum, and therefore the alleged patent infringement occurred in North Carolina . Based on that one sale from the interactive website, this court concluded that the defendant purposefully directed activities at the forum.

What's the difference between defendant Tekkeon and defendant United Brands? One sale. Is this the factor that helps elucidate "almost" - indicating when interactive websites may be subject to jurisdiction and when they might not? Well, what if the defendant had 17 sales in the forum state? Would that make things clearer?

In this last case - actually decided in 2002 but cited frequently in the collection of recent cases - Plaintiff Oliver "Buck" Revell believed that he had been defamed by Hart Lidov on an online bulletin board operated by Columbia University School of Journalism. Defendant Lidov apparently wrote a lengthy article concerning the bombing of Pan Am Flight 103 which exploded over Scotland. The troubling part of the article was an accusation of conspiracy and cover-up against Plaintiff and one-time Associate Deputy Direct of the FBI Revell. Once again, according to the way these things go, plaintiff sued defendant. Once again, the forum was Texas.

Plaintiff argued that defendant Columbia University ran a highly interactive website where the public can subscribe to the Columbia Journalism Review (17 Texans had subscribed to the journal - but this has nothing to do with this cause of action), purchase advertising (which has nothing to do with this cause of action), or submit an application for admission (which again has nothing to do with this cause of action). Where the interactive website has nothing to do with the cause of action, this falls under "general jurisdiction." For "general jurisdiction" contacts to be sufficient, they must constitute "continuous contacts" with the forum of the court. Once again citing the rule and looking at a bunch of precedent, the court comes to the gut conclusion that this is just not purposeful continuous contacts and does not qualify for long arm jurisdiction.

Okay, but part of the website was the bulletin board where the offending article was published. What about specific jurisdiction based on the harm caused by that article? First, we have to take off the table the subscribing to the journal, the ordering advertisements, and the submission of applications. They have nothing to do with the cause of action and therefore cannot substantiate a finding of specific jurisdiction. This leaves a "passive" bulletin board website where articles are posted. It is interactive, that's true, because people can post articles. But the court notes that the article written by the defendant contains no reference to Texas, does not refer to Texas activities of Revell, does not rely upon Texas sources, and it's not directed at readers in Texas. The Court specifically references the Calder test, concludes that this activity was not aimed at Texas, and therefore the court lacks jurisdiction.

Boy there are so many things you could say about these cases, and the handful of others I did not even get to. See Sayeedi v. Walser , 2007 NY Slip Op 27081 (Civil Court of the City of New York, Richmond County Feb. 27, 2007) (one sale on eBay didn't constitute minimum contacts to support jurisdiction). An online presence can subject a defendant to litigation anywhere - even if defendant prevails on a motion to dismiss for lack of jurisdiction - the defendant still had to deal with the litigation. Texas (a technology state) seems resistant to over-extending long arm jurisdiction to out of state websites; other states seem to have less of a problem with it. Where the jurisdictional analysis involves a mix of real world and virtual world facts, courts seem to emphasize the meat-space facts. And finally, a jurisdictional analysis which barely gave clarity with Web1.0 gives nothing but muddy water for Web2.0.

Jurisdiction 101

  • Basic Question:  Do I have jurisdiction over you?
  • Jurisdiction ~ Authority
  • Two Sub questions: 
  • (1) I and
  • (2) You
    • jurisdiction: n. The authority of a court to hear and decide a case. To make a legally valid decision in a case, a court must have both "subject matter jurisdiction" (power to hear the type of case in question, which is granted by the state legislatures and Congress) and "personal jurisdiction" (power to make a decision affecting the parties involved in the lawsuit, which a court gets as a result of the parties' actions).  Nolo.com
  • “I” (ie Court, Agency):  Subject Matter Jurisdiction
  • FCC Jurisdiction over all wireline and radio communications.  47 U.S.C. § 151
  • Jurisdiction of a Landlord Tenant Court is real property issues - not, for example, a divorce issue
  • Internet Example: International Ad Hoc Committee (ie ISOC DNS attempt that led to the Dept of Commerce White Paper) “Subject Matter Jurisdiction must be waived by domain name registrant.”
    •
  • “You”:  Jurisdiction Over the Person or Thing
  • Person:  In Personam Jurisdiction
  • Thing: In Rem Jurisdiction
  • Examples:
  • Cybersquatting Domain Name Dispute The Domain Name itself becomes the defendant where actual owner cannot be found or reached
  • US v. $10,000 in cash found on the dock in NYC
  • US jurisprudence that property shall not remain idle

    • Long Arm Jurisdiction

  • Defendant in State A.  Impact is in State B. Does State Court B have Jurisdiction over Defendant A?
  • Standard: 
  • Minimum Contacts with forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.  Intl Shoe. See also Burger King Corp. v. Rudzewicz, 471 US 462, 472 (1985)
  • Crummey v. Morgan, et al, 2007 CW 0087, slip at 6 (LA 1st Cir. Aug. 8 2007)
  • The due process test which was first enunciated in Intl Shoe Co v State of Washington 326 U S 310 320 66 S Ct 154 160 90 LEd 95 1945 requires that to subject a nonresident defendant to a personal judgment the defendant must have certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice The test has evolved to include a minimum contacts prong which is satisfied by a single act or actions by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state thus invoking the benefits and protections of its laws Ruckstuhl v Owens Corning Fiberglas Corp 98 1126 p 6 La 4 13 99 731 So 2d 881 885 86 celio denied 528 U S 1019 120 S Ct 526 145 L Ed 2d 407 1999 citing Burger King Corp v Rudzewicz 471 U S 462 475 105 S Ct 2174 2183 85 LEd 2d 528 1985 The nonresident s purposeful availment must be such that the defendant should reasonably anticipate being haled into court in the forum state Ruckstuhl 98 1126 at p 6731 So 2d at 885 citing World Wide Volkswagen Corp v Woodson 444 U S 286 297 100 S Ct 559 62 L Ed 2d 490 1980 Such contacts may be effectuated by mail and electronic communications as well as physical presence Spomer v Aggressor Int l Inc 00 1646 p 5 La App 1st Cir 9 28 01 807 So 2d 267 272 writ denied 01 2886 La 125 02 807 So 2d 250.
  • The purposeful availment requirement for the exercise of specific jurisdiction over nonresident defendants ensures that they will not be haled into a jurisdiction solely as a result of a random fortuitious or attenuated contact or by the unilateral activity of another paliy or a third person Burger King Corp v Rudzewicz 471 U S at 475 105 S Ct at 2183 To determine whether minimum contacts exist a court must engage in a factual determination of the relationship among the forum the defendant and the litigation A L Energy Inc v Pegasus Group 00 3255 p 6 La 6 29 01 791 So 2d 1266 1271 72 celio denied 534 U S 1022 122 S Ct 550 151 L Ed 2d 426 2001 citing Shaffer v Heitner 433 U S 186 204 97 S Ct 2569 2580 53 L Ed 2d 683 1977 7 Heitner 433 U S 186 204 97 S Ct 2569 2580 53 L Ed 2d 683 1977)).
  • A court may exercise personal jurisdiction over a defendant where the defendant has "minimum contacts" with the forum "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 US 310, 316 (1945). These minimum contacts can give rise to either general or specific jurisdiction. LSI Industries Inc v. Hubbell Linghting Inc, 232 F3d 1369, 1375 (Fed Cir 2000). General jurisdiction exists where a defendant maintains "continuous and systemic" ties with the forum state, even if those ties are unrelated to the cause of action. Id. (citing Helicopteros Nacionales de Columbia SA v Hall , 466 US 408, 414-16 (1984)). Specific jurisdiction exists where the claim "arise out of" or "relate to" the contacts with the forum, even if those contacts are "isolated or sporadic." Id. -- Mullally v Jones, 2:05-cv-00154-BES-GWF Sec. II (DNV Feb. 28, 2007)
  • Federal Court Jurisdiction
  • Federal courts will look to the long arm jurisdiction rules of the state court in the state where they are located.
  • "In most cases, service is only effective if the defendant 'could be subject to the jurisdiction of a court of general jurisdiction in the state in which the district court is located." Fed R Civ P. 4(k)(1)(A)." - Optimal Beverages Co., Inc., v United Brands Co., Inc.,, Civil Action No H-06-1386 , Sec. III (SDTex Feb. 27, 2007)
  • In determining whether personal jurisdiction exists over a defendant, a federal court must apply the law of the forum state, subject to the limits of the Due Process Clause of the fourteenth Amendment. Compuserv, Inc. v. Patterson, 89 F3d 1257, 1262 (6th Cir 1996) (citations omitted). "The defendant must be amenable to suit under the forum state's long-arm statute and due process requirements of the Constitution must be met." Id. -- Columbia Pictures Industries, Inc. v. Fysh, Case No 5:06-CV-37, Sec. III.A (WDMi Feb. 16, 2007)
  • State courts in turn frequently state that they have jurisdiction to the extent permissible under federal due process
  • Hubb System, LLC., v. microDATA GIS, Inc., No. C07-2677 BZ, Slip at 4 (NDCA Aug. 1, 2007) ("California’s long arm statute, Cal. Code Civ. P. § 410.10, allows the exercise of federal jurisdiction on any basis provided under the federal constitution.")
  • "To determine whether a Texas state court could exercise personal jurisdiction over a non-resident defendant, a court need only look to the 'due process' limitations of the Fourteenth Amendment to the federal Constitution., SEE, eg, Revell v LidovPDF, 317 F3d 467, 469-70 (5th Cir. 2002). Texas' long-arm state reaches to the full extent constitutionally permissible." - Optimal Beverages Co., Inc., v United Brands Co., Inc.,, Civil Action No H-06-1386 , Sec. III (SDTex Feb. 27, 2007)
  • Under Michigan's long-arm statute, Mich. Comp. Law. § 600.705, this question becomes one as Michigan's long-arm statute "extends to the limits imposed by federal constitutional requirements." Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog, 954 F2d 1174, 1176 (6th Cir 1992). -- Columbia Pictures Industries, Inc. v. Fysh, Case No 5:06-CV-37, Sec. III.A (WDMi Feb. 16, 2007)
  • See also
  • “Venue” (which forum is the right forum)
  • “Service” (does defendant have notice of case)
  • “Choice of Law” (Court A may have jurisdiction over defendant but may have to apply Court B’s law)
  • “Enforcement” (is judgment enforceable)
  • “Full Faith and Credit”

    • Internet Long Arm Jurisdiction

  • General versus Specific Jurisdiction
  • Personal jurisdiction may be either "general" or "specific." General jurisdiction arises when a defendant maintains 'continuous and systematic' contacts with the forum state even when the cause of action has no relation to those contacts. See LST Indus v. Hubbell Lighting, Inc, 232 F3d 1369, 1375 (Fed Cir 2000). In contract, specific jurisdiction exists based on isolated or sporadic contact with the forum state if the claim "arises out of" that contact. See Id; see also Akeva LLC v Mizuno Corp., 199 FSupp 2d 336, 339 (MD NC 2002) ("Specific jurisdiction can arise out of even a single contact with the forum state if the claim ';arises out of' that contact.") -- Netalog, Inc. v Tekkeon, Inc., No 1:05CV00980, Sec. II (MD NC Feb. 15, 2007)
  • Calder Effects Test
  • The Due Process Clause of the Fourteenth Amendment to the United States Constitution permits personal jurisdiction over a defendant in any State with which the defendant has "certain minimum contacts . . . such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.' Milliken v. Meyer, 311 U.S. 457, 463 ." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). In judging minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U.S. 186, 204 (1977). See also Rush v. Savchuk, 444 U.S. 320, 332 (1980). The plaintiff's lack of "contacts" will not defeat otherwise proper jurisdiction, see Keeton v. Hustler Magazine, Inc., ante, at 779-781, but they may be so manifold as to permit jurisdiction when it would not exist in their absence. Here, the plaintiff is the focus of the activities of the defendants out of which the suit arises. See McGee v. International Life Ins. Co., 355 U.S. 220 (1957)....The allegedly libelous story concerned the California activities of a California resident. It impugned the professionalism of an entertainer whose television career was centered in California. 9 The article was drawn from California sources, [465 U.S. 783, 789]   and the brunt of the harm, in terms both of respondent's emotional distress and the injury to her professional reputation, was suffered in California. In sum, California is the focal point both of the story and of the harm suffered. Jurisdiction over petitioners is therefore proper in California based on the "effects" of their Florida conduct in California. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 -298 (1980); Restatement (Second) of Conflict of Laws 37 (1971). -- Caldar v. Jones, 465 U.S. 783 (1984) Findlaw
  • The Calder effects test satisfies the "purposeful availment" prong if: 1) the defendant committed an intentional act 2) which was expressly aimed at the forum state and 3) caused harm "the brunt of which the defendant knows is likely to be suffered in the forum state." Bancroft, 223 F.3d at 1087. -- Hubb System, LLC., v. microDATA GIS, Inc., No. C07-2677 BZ, Slip at 4 (NDCA Aug. 1, 2007)
  • In the Internet context, maintenance of a website or Internet advertisement alone is not enough to subject a party to personal jurisdiction in the forum; rather, there must be "something more" to "indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state." Panavision Int'l, 141 F3d at 1321 (quoting Cybersell Inc v Cybersell, Inc., 130 F3d 414, 418 (9th Cir 1997)). Personal jurisdiction may be based on the effects of international actions expressly aimed at the forum state and causing harm, the brunt of which is suffered - and which the defendant knows is likely to be suffered - in the forum state. Id. at 1321 (citing Core-Vent, 11 F3d at 1486.) The Ninth Circuit has spoken clearly to this issue, holding that, even where a defendant never enters the plaintiff's home state but merely posts material accessible on the Internet giving rise to the Lanham Act claim, a district court in the plaintiff's home state has personal jurisdiction over the defendant because infringement would create an injury which would be felt mainly in that state. Id. at 1322. -- Bedavailability.com v A Bed Available, LLC, Case NJo 06cv2401-LAB (LSP), Sec I (SDCa Feb. 13, 2007).
  • In response, Ford relies solely upon this court's application of the Calder "effects test" in Ford Motor Co. v. Great Domains, Inc., 141 F. Supp. 2d 763 (E.D. Mich. 2001) (relying on Calder v. Jones, 465 U.S. 783 (1984)). In Calder, the Supreme Court held that a defendant who commits intentional acts expressly aimed at the forum state, knowing that the brunt of the injury will be felt within that state, must reasonably anticipate being haled into court there. In Great Domains, this court concluded that registering a trademark as a domain name with bad faith intent to profit from the value of the mark could satisfy the "effects" test if the registration was (1) intentional; (2) expressly aimed at the trademark holder; and (3) had its main impact in the forum state. - Ford Motor Company v. 2600 Enterprises, Case No. 01-CV-71685-DT (ED Mi Dec. 20, 2001)
  • Spectrum Test :: General Jurisdiction
  • In Mink, the Court of Appeals applied a "spectrum" test to decide if a non-resident defendant's Internet acclivity would establish general jurisdiction:

    At the one end of the spectrum, there are situations where a defendant clearly does business over the Internet by entering into contracts wit residents of other states which involve the knowing and repeated transmission of computer files over the Internet. In that situation, personal jurisdiction is proper. At the other end of the spectrum, there are situations where a defendant merely establishes a passive website that does nothing more than advertise on the Internet. With passive websites, personal jurisdiction is not appropriate. In the middle of the spectrum, there are situations where a defendant has a website that allows a user to exchange information with a host computer. In the middle ground, the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the website.

    190 F3d at 336 (internal quotation marks and citations omitted); see also Zippo Mfg, Co. v. Sippo Dot Com, Inc., 952 FSupp 1119 (WDPa 1997) (establishing the spectrum test). In Mink, the court held that the defendant's website was passive even though the site contained an email link as an order form which the customer could print, complete, and return through traditional mail. 190 F3d at 337. Because the site fell on the passive end of the spectrum, personal jurisdiction was not established. Id. - Optimal Beverages Co., Inc., v United Brands Co., Inc., Civil Action No H-06-1386 , Sec. IV.B (SDTex Feb. 27, 2007)

  • The Ninth Circuit applies a "sliding scale" approach to jurisdiction arising from a defendant's website. See Cybersell, Inc. v. Cybersell Inc, 130 F3d 414, 415 (9th Cir 1997). Under the sliding scale approach, "the likelihood of personal jurisdiction [that] can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet." Cybersell, 130 F3d at 415 (citation omitted). Thus, at one end of this sliding scale, the defendant conducts business transactions over the Internet with residents of the forum and jurisdiction is almost always proper in this situation. Id. At the other end of the scale are "passive" websites, through which the defendant simply posts information to those who access the site, such as advertisements and informational pieces about the website host. Id. In the middle of the sliding scale are so-called "interactive" websites that allow the user to exchange information with the defendant's host site. Id. In these cases, the court must examine "the level of interactivity and commercial nature of the exchange of information that occurs on the website" to determine if the defendant has purposeful availed itself of the forum. Id. -- Mullally v Jones, 2:05-cv-00154-BES-GWF Sec. II (DNV Feb. 28, 2007).
  • General :: Interactive Spectrum
  • The Sixth Circuit has employed a three-part test to determine whether personal jurisdiction is appropriate: (1) the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state; (2) the cause of action must arise from the defendant's activities there; and (3) the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. S Mach. Co. v. Mohasco Indus., Inc., 401 F2d 374, 381 (6th Cir 1968). "The operation of an Internet website can constitute the purposeful availment of the privilege of acting in a forum state under the first Mohasco factor 'fif the website is interactive to a degree that reveals specifically intended interaction with the residents of the state.'" Bird v Parsons, 289 F3d 865, 874 (6th Cir 2002) (quoting Neogen Corp v Neo Gen Screening, Inc., 282 F3d 883, 890 (6th Cir 2002)). ¶ In the present case, Defendant operated and profited from a website that was 'interactive.' Defendant's website required users to download indexed hash files which corresponded to copyrighted movies or television programs. (Am. Compl. ¶¶ 23-26) Defendant's website also allowed users to post their own hashes on his website and allowed users to acquire login names to accomplish this. (Id. ¶¶ 23-25) Moreover, the server which hosted Defendant's website, and which he leased, is physically located in this District and Michigan residents did download copyrighted movies or television programs. Therefore, where the Defendant's website was interactive to such a degree that it is clear he specifically intended interaction with Michigan residents, the Court holds it has limited personal jurisdiction over Defendant." -- Columbia Pictures Industries, Inc., v Fysh, Case No 5:06-CV-37, Sec. III.A (WDMi Feb. 16, 2007)
  • According to Plaintiff, the maintenance of "highly interactive" websites may provide a basis for general jurisdiction. However, the interactive nature of Defendants' websites does not automatically lead to the conclusion that general personal jurisdiction is proper. Plaintiff must also show that the interactivity resulted in substantial and systematic contacts with the forum state. See, eg, Revell v LidovPDF, 317 F3d 467, 471-72 (5th Cir 2002) (finding no general jurisdiction over nonresident defendant, despite fact that defendant's website allowed users to subscribe to a journalism review, purchase advertising, and submit electronic admissions applications, because the cited contacts with the forum were not substantial); see also Home Gambling Network, Inc v Betinternet.com, PLC, 2006 WL 1795554 at *4 (DNev June 26, 2006) (question of general jurisdiction was "not even close" in case involving nonresident defendant maintaining interactive website that allowed a bet to [be] placed online from Nevada, because defendant had "non of the continuous and systematic contacts with Nevada that show a substantial pattern of business relations conferring general jurisdiction").

    • Given that individuals can access an Internet website from any forum, an exercise of general jurisdiction based solely on an interactive website would subject many companies and individuals to suit in essentially any court, which is untenable. There must be evidence to show that the website was systematically and continuously aimed at the forum such that an exercise of jurisdiction would comport with "traditional notions of fair play and substantial justice." Absent such evidence, this Court does not have general personal jurisdiction of the basis of Defendants' interactive websites. See Cybersell Inc., 130 F3d at 419-20 (maintaining a website accessible to anyone over the Internet is not enough to establish jurisdiction). Accordingly, the Court finds that Boss Media's and RealTime's contacts with the District of Nevada are insufficient to support an exercise of general personal jurisdiction over these defendants -- Mullally v Jones, 2:05-cv-00154-BES-GWF Sec. II.C. (DNV Feb. 28, 2007).

  • General :: Middle Spectrum - limited contact with state
  • Happy Chef, Inc. v. Dauben, (D NJ 2008) (links to a third party website does not make defendant's website "interactive")
  • In this case, there is no evidence that United "purposefully availed itself of the benefits and protections" of texas. See id. According to uncontradicted portions of its president's affidavit, United "has never sold any product within the state of Texas, nor has United brands imported product into the state of Texas," and United has no "employees, sales agents or offices in Texas." [Sec. IV] . . . . . However, the website for US Energy is more interactive. Apparently, users can order US Energy directly through the website. See Reply, Exhs D3, E3; cf Mink, 190 F3d at 337 (noting that the defendant's "website does not allow consumers to order or purchase products and services online"). But mere interactivity, even when coupled with evidence of actual transactions with forum state residents, is not enough to establish general jurisdiction. Revell v LidovPDF, 317 at 469-71. ¶ In Revell, a defamation case, the Court of Appeals held that a federal district court in Texas could not exercise general jurisdiction over Columbia University even though Columbia maintained a website whereby customers could "subscribe to the Columbia Journalism Review, purchase advertising on the website or in the journal, and submit electronic applications for admission." 317 F3d at 470. Though there was evidence that at least 17 Texas customers had subscribed to the Review through the website, the court found insufficient contacts for general jurisdiction: "Irrespective of the sliding scale, the question of general jurisdiction is not difficult here. Though the maintenance of a website is, in a sense, a continuous presence everywhere in the world, the cited contacts of Columbia with Texas are not in any way substantial." Id at 471 (footnotes and internal quotations marks omitted). The court approvingly cited a Sixth Circuit case in which 4000 Internet orders by forum-state residents were held to be insufficient for general jurisdiction. Id. (discussing Bird v PArsons, 289 F3d 865 (6th Cir. 2002). ¶ Even though United offers US Energy for sale through its website, there is no evidence that anyone in Texas has purchased the product. Even if Optimal provided some evidence, Revell indicates that sporadic Internet sales to forum-state customers are not enough to create general jurisdiction. [Sec. IV.B.] - Optimal Beverages Co., Inc., v United Brands Co., Inc., Civil Action No H-06-1386 , Sec. IV (SDTex Feb. 27, 2007)
  • Bedavailability.com v A Bed Available, LLC, Case NJo 06cv2401-LAB (LSP), Sec I (SDCa Feb. 13, 2007) (where defendant website allegedly infringes trademark of plaintiff, where defendant solicits and does business with parties in plaintiff's forum, where defendant's website's advertisements are aimed at residents of plaintiff's forum, court reasonably has personal jurisdiction over defendant)
  • Specific Jurisdiction
  • Under Ninth Circuit law, specific jurisdiction lies if: 1) the defendant has performed acts or consummated transactions within the forum, purposefully availed themselves of the privileges of the forum, or purposefully directed activities toward the forum; 2) the claim arises out of the defendant's forumrelated activities; and 3) jurisdiction is reasonable. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006); Bancroft & Masters v. August Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir 2000). -- Hubb System, LLC., v. microDATA GIS, Inc., No. C07-2677 BZ, Slip at 4 (NDCA Aug. 1, 2007)
  • The Federal Circuit established a three-part test for specific jurisdiction: "[1] whether the defendant purposefully directed its activities at residents of the forum, [2] whether the claim arises out of or relates to the defendant's activities with the forum, and [3] whether assertion of personal jurisdiction is reasonable and fair." Genetic Implant, 124 F3d at 1458 (citing Akro Corp v. Luker, 45 F3d 1541, 1545-46 (Fed Cir 1995)); Inamed Corp, 249 F3d at 1360. The plaintiff has the burden of proof to establish the first two prongs. If the plaintiff satisfies his burden of proof on the first two prongs, it becomes the defendant's burden to present a "compelling case" that the exercise of jurisdiction would be unreasonable. See Inamed Corp, 249 F3d at 1360. -- Netalog, Inc. v Tekkeon, Inc., No 1:05CV00980, Sec. II (MD NC Feb. 15, 2007)
  • Panavision Intl LP v Toeppen, 141 F3d 1316 (9th Cir 1998). In that case, Panavision, a California corporation, filed suit against Toeppen, an Illinois resident, for dilution of its trademarks. Toeppen developed the practice of acquiring domain names , and in so doing, acquired a domain name in Panavision's trademark, "Panavision." Toeppen offered to "settle" the matter if Panavision paid him $13,000. After Panavision refused, Toeppen registered PAnavision's other trademark, "Panaflex," as a domain name. Panavision later filed suit against Toeppen in California for dilution of its trademarks. The district court held that Toeppen was subject to suit in California under the "effects doctrine." In affirming the district court, the Ninth Circuit reasoned:

    Toeppen engaged in a scheme to register Panavision's trademarks as his domain names for the purpose of extorting money from Panavision. His conduct, as he knew it likely would, had the effect of injuring Panavision in California where Panavision has its principal place of business and were the movie and television industry is centered. Under the "effects test," the purposeful availament requirement necessary for specific jurisdiction is met.

    Id at 1322, The court then found that the second requirement for specific jurisdiction was also met, as "Panavision's claims arise out of Toeppen's California-related activities." Id. -- Rodentpro.com LLC v Biggers & Callaham LLC, No 3:06-cv-81-RLY-WGH (SDIn Feb. 12, 2007)

  • Specific : Low Spectrum - Pasive Sites Quality Design and Constr Inc v Tuff Coat Mfg Inc 05 1712 La App 1st Cir 712 06 939 So 2d 429
  • Discussed in Crummey v. Morgan, et al, 2007 CW 0087, slip at 8 (LA 1st Cir. Aug. 8 2007)
  • In Tuff Coat a Louisiana general contractor brought an action against a Colorado supplier alleging that damages occurred when coating purchased from the supplier using information gained from the supplier s Internet site leached into a water park s water purification system.
  • In reaching its conclusion that the Louisiana court lacked personal jurisdiction over the Colorado supplier the Tuff Coat court looked to Zippo Mfg Co v Zippo Dot Com Inc 952 F Supp 1119 1124 W D Pa 1997 as a measure of an Internet site s connection to a forum state which had explained:
  • [Our review of the available cases reveals that the likelihood that personal jurisdiction can be constitutionally exercised is directly propOliionate to the nature and quality of commercial activity that an entity conducts over the Internet This sliding scale is consistent with well developed personal jurisdiction principles At one end of the spectrum are situations where a defendant clearly does business over the Internet If the defendant enters into a contract with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet personal jurisdiction is proper Eg CompuServe Inc v Patterson 89 F 3d 1257 6th Cir 1996 At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction Eg Bensusan Restaurant COpo v King 937 F Supp 295 S D N Y 1996 The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer In these cases the exercise of jurisdiction is determined by examining the level of interactivity and cOlmnercial nature of the exchange of information that occurs on the Web site Eg Maritz Inc v Cybergold Inc 947 F Supp 1328 E D Mo 1996 Emphasis added).
  • Applying the sliding scale the Tuff Coat court concluded that the supplier s website was passive because it was informational only Noting that Internet users could not purchase products from the supplier s website and that web users could not download repeated or regular information from the website the Tuff Coat court pointed out that the extent of interactivity between the Tuff Coat website and a web user was limited to an invitation to actual customers to make a one time contact initiated by the customers which would allow them to have their names placed on a web page list if they so desired The orders were then shipped by the supplier FOB free on board 2 which had the effect of transferring ownership of the products to customers when it left the loading dock As such it was not grounds for the exercise of personal jurisdiction over the supplier The Tuff Coat comi also concluded that four other sales by the supplier to Louisiana entities were fOliuitous emphasizing that the prior shipments into Louisiana had been made FOB and refused to find jurisdiction on that basis.
  • Best Van Lines v. Walker, 2007 WL 1815511 (2d Cir. June 26, 2007) (finding New York lacked jurisdiction over Iowa resident who operated Iowa website that allegedly defamed New York moving company; mere fact that website could be accessed in New Your was insufficient to establish jurisdiction and there is no showing the defendant directed his comments at New York).
  • Specific : Middle Spectrum - Limited Contact with State
  • Hubb System, LLC., v. microDATA GIS, Inc., No. C07-2677 BZ (NDCA Aug. 1, 2007) (finding jurisdiction over defendant where defendant was accused of registering a confusingly similar domainname to plaintiffs trademark, the harmful effects of defendant's alleged trademark infringement were potentially felt in plaintiff's residence California, defendant entered California, solicited business at California trade shows, and advertised in California - even though defendant's website was allegedly passive).
  • In Revell, the court indicated that Minek's sliding scale is more appropriate perhaps when the theory is specific jurisdiction, not general jurisdiction. Id. at 471. As stated previously, under the Mink scale, the Diesel website is passive and should not serve as a basis for exercising personal jurisdiction. Optimal attempts to characterize the Diesel site as "specifically and actively solicit[ing] Texas customers," (Resp. ¶ 9), because the site contains a copy of a Dallas Morning News article about Diesel. (Resp Exh C) Optimal does not argue that United caused the article to appear in the Dallas Morning News; it only argues that the article's inclusion in the Diesel website "specifically and actively solicits Texas customers." Id. ¶ The source of the Dallas Morning News article was Business Wire, a national wire service. The article itself contains no reference to Texas, and the dateline explicitly states that the article was filed in San Diego. Compare Revell v LidovPDF, 317 F3d at 476 (emphasizing the geographic focus of the alleged defamatory article). The Fifth Circuit has repeatedly held that advertising in nationwide publications alone is insufficient to establish personal jurisdiction. See Growden v Ed Bowlin & Assoc., 733 F2d 1149, 1151-52 (5th Cir 1984) ("The foregoing evidence of Bowlin's advertising in these two national trade publications which circulated in Louisiana is insufficient, without more, to constitute a 'purposeful availment' of the facilities in Louisiana."); Loumar v Smith, 698 F2d 759, 763-64 (5th Cir 1983); Charia v Cigarette Racing Tream, Inc., 583 F2d 184, 187 (5th Cir 1978) ("[M]erely advertising in magazines of national circulation that are read in the forum state is not significant contact for jurisdictional purposes."); Benjamin v W Boat Bldg Corp., 472 F3d 723, 731 (5th Cir 1973) (same). When the website is passive on the Mink scale, the mere fact that it contains a copy of a nationwide article as published in a Texas newspaper does not establish minimum contacts with Texas. ¶ The same is true for Unite's nationwide marketing of Diesel through the Beverages & More and Bevnet websites. If Optimal could show that a substantial percentage of the allegedly infringing products were being sold in Texas, and that United was aware of this fact, then that would establish minimum contact and personal jurisdiction. See Luv n' Care, Ltd. v. Insta-Mix, Unc, 438 F3d 465, 470 (5th Cir 2006), cert denied, 126 S Ct 2968 (2006) ("[M]ere foreseeability or awareness is a constitutionally sufficient basis for personal jurisdiction if the defendant's product made its way into the forum state while still in the stream of commerce." (internal quotation marks and footnote omitted). However, in this case, there is no evidence that nay of United's products had reached Texas "while still in the stream of commerce" as of the date of service. Id. - Optimal Beverages Co., Inc., v United Brands Co., Inc., Civil Action No H-06-1386 , Sec. IV.C (SDTex Feb. 27, 2007)
  • EBay Cases Yes Jurisdiction
  • Crummey v. Morgan, et al, 2007 CW 0087, slip at 12 (LA App 1st Cir. Aug. 8 2007)
  • Analyzing the facts before us applying the standards articulated in Tuff Coat particularly Zippo s sliding scale we deny the writ application The defendants entered into a contract to sell a vehicle alleged to be defective to a Louisiana resident utilizing the website eBay which greatly expanded their market They accepted the original down payment securing the sale with a credit card sent from Louisiana through the Internet Defendants also provided Crummey with a telephone number which allowed him to engage in additional conversations with the sellers while he was in Louisiana This was not an information only situation Defendants used a variety of means of electronic communication to advertise puff negotiate and accept payment for its product directed to a Louisiana consumer Thus sufficient minimum contacts effectuated by electronic cOlmnunications have been established to maintain personal jurisdiction See Hunter v Meyers 96 1075 p 5 La App 1st Cir 3 27 97 691 So 2d 318 323 To hold to the contrary would have a chilling effect on e commerce in that buyers wary of being haled into the home comis of out of state sellers will refrain from purchasing goods on eBay and other similar internet websites should the merchandise they considered purchasing be defective or otherwise not conform to the advertised online representations.
  • But See Dissent Slip at 22
  • The plaintiff s uses of a telephone and computer in Louisiana to contact and subsequently make a down payment to the defendants constitute unilateral activity by the plaintiff and as such are not contacts with Louisiana by the defendants Furthennore the few contacts that the defendants did have with Louisiana by virtue of this and any other sale on eBay were the exact type of random fortuitous or attenuated contacts that Burger King intended to exclude from jurisdictional reach Placing an item for sale on eBay is a random method of initiating a sale and it is fortuitous in determining the location and whereabouts of the ultimate buyer Moreover there is no evidence that the defendants made a conscious choice to conduct this sale or other sales with a resident or residents of Louisiana marketed their vehicles to potential customers in Louisiana specifically welcomed bids from residents of Louisiana or engaged in any other act which would indicate that the defendants were purposefully availing themselves the privilege of conducting business in Louisiana or taking advantage of Louisiana law Rather like any other sale on eBay the defendants in this case were prepared to sell the RV to whomever the highest bidder happened to be regardless of the state in which they happened to reside
  • Lastly while the majority is concerned that a contrary holding would have a chilling effect on e commerce buyers wary of being haled into the home courts of out of state sellers perhaps greater significance lies in how the majority s holding will affect e commerce itself on eBay or other internet auction websites The logical inference from the majority s holding is that any person or entity placing an item for sale on eBay bought by any person in any foreign forum is subject to the personal jurisdiction of that foreign forum The mere existence of such a rule in e commerce would clearly inhibit such transactions more so than any chilling effect on buyers wary of being haled into the home courts of out of state sellers
  • While the plaintiff in this case will certainly be inconvenienced by having to go to Texas to assert his claim against the defendants the plaintiff bought the RV without inspection knowing that it was in Texas The plaintiff specifically chose to go to Texas to retrieve the RV and the sale of the RV was finalized in Texas To summon the defendants from Texas into a Louisiana court on this matter and to asseli personal jurisdiction over them when they lack sufficient minimum contacts with this state offends due process.
  • Tindall v One 1973 Ford Mustang 2006 WL 1329168 (E D Mich 2006) (a Michigan court concluded it had personal jurisdiction over California residents who had sold a resident a car via eBay because they had transacted business in Michigan)
  • But See Crummey v. Morgan, et al, 2007 CW 0087, slip at 17 (LA App 1st Cir. Aug. 8 2007) (dissent) "the Tindall case's reasoning which analogized the situation to a phone call or written conespondence to the forum is flawed A phone call or written correspondence to the forum must by its very nature be specifically targeted to a resident of the forum whereas placing an item for sale on eBay which may be accessed by any person with a computer and Internet service lacks such specific focus)"
  • Dedvukaj v Maloney 447 F Supp 2d 813 (E D Mich 2006)
  • Discussed in Crummey v. Morgan, et al, 2007 CW 0087, slip at 10 (LA App 1st Cir. Aug. 8 2007)
  • There a Michigan federal court held that it had personal jurisdiction over a New York eBay seller accused of breach of contract fraud and misrepresentation The court noted that the defendant s auction listing stated he would ship paintings anywhere in the United States The listing also provided customers with a toll free telephone number and an e mail address to allow them to contact the New York eBay seller Because the defendant did not limit buyers from Michigan from participating in his auction and displayed a willingness to communicate with buyers from any state the Dedvukaj court concluded that the defendant had purposefully availed himself of the benefits of conducting business in Michigan The number of e mails and phone calls between the pmiies the intentional and misleading nature of the communications between the parties and the defendant s acceptance of payment from Michigan were other factors that influenced the court s finding of a purposeful availment by the New York eBay seller The court stated:
  • Internet forums such as eBay expand the seller s market literally to the world and sellers know that and avail themselves of the benefits of this greatly expanded marketplace It should in the context of these commercial relationships be no great surprise to sellers and certainly no unfair burden to them if when a commercial transaction formed over and through the Internet does not meet a buyer s expectations they might be called upon to respond in a legal forum in the buyer s home state Sellers cannot expect to avail themselves of the benefits of the Internet created world market that they purposefully exploit and profit from without accepting the concomitant legal responsibilities that such an expanded market may bring with it.
  • Dedvukaj 447 F Supp 2d at 820.
  • But See Dissent Slip at 16: "The court noted that the d efendants use of eBay was regular and systemic they had an eBay store offering multiple categories of merchandise including art antiques clothing jewelry and coamnpduwteersre listed as a Power Seller display ed favorable marketing statistics and require ed a warehouse for their goods Defendants offer ed a toll free number and appear ed to have several employees The court utilizing the Zippo analysis concluded that such factors present a situation where Defendants experience and extensive use of the eBay website warranted a finding that the defendants had purposefully availed themselves the privilege of conducting business in Michigan and thus had had sufficient minimum contacts with Michigan to establish personal jurisdiction."
  • Montalvo v First Interstate Finance Corp 2005 WL 380727 (Me Super 2005) a Maine court concluded it had personal jurisdiction over Florida residents who had sold a resident a 2000 Ford Ranger truck via eBay because Maine has a strong interest in protecting consumers from fraudulent sales practices)
  • But See Crummey v. Morgan, et al, 2007 CW 0087, slip at 17 (LA App 1st Cir. Aug. 8 2007) (dissent) "The plaintiff paid the purchase price the tax title and registration fees and to have the truck shipped to him in Maine The court found that the defendant directed a series of purposeful transactions with the plaintiff over the course of several months advertising and answering inquiries about the truck concluding the sale completing the paperwork shipping the vehicle and responding to the plaintiff s complaint such that the exercise of personal jurisdiction was proper"
  • EBay Cases No Jurisdiction
  • Marschke v Wratislaw , No. 24218 (SD Sup Ct Dec. 5, 2007)
  • Plaintiff in South Dakota engaged in a quest to obtain the car-of-his-youth, a Fiat 850 Spider (must have been a good youth!). In April 2005, he found one for sale on that galactic garage sale, eBay , listed by Defendant Wratislaw's Montana Muscle and Classics. In the ad, Defendant listed his phone number and linked to his website .

    Plaintiff, however, did not purchase the car through eBay. Instead, he decided to leave South Dakota, go to Illinois, and call defendant from there. An agreement was made for the transaction, defendant sent a purchase agreement to Plaintiff, Plaintiff signed the agreement while in South Dakota, and Plaintiff arranged for the down deposit to be wired from a bank in Wisconsin to defendant. Plaintiff paid the balance of the car and then "executed the agreement at the office of Montana Muscle" in Montana. The car was shipped by Plaintiff. After receiving the car in South Dakota, plaintiff "decided that it was not in the condition that he expected."

    Plaintiff decided to sue Defendant and decided that South Dakota would be an okay forum in which to sue Defendant.

    Plaintiff based his argument that the court has jurisdiction over defendant in part on defendant's Internet presence. But then, plaintiff did not actually use the Internet to make the deal; Plaintiff just learned about the availability of the car from the Net - just like one might pick up any advertising magazine that lists cars for sale. And the court had already dealt with Deals on Wheels concluding that such print advertising by itself is insufficient for jurisdiction.

    Plaintiff responds, well what about all this other stuff: the negotiations, the mailing of the agreement, and the paying of the money.

    The court was not persuaded, concluding in the alternative that this appeared to be a "one shot deal." The court noted that there were no other contacts of defendant with South Dakota on the record. Indeed, it was Plaintiff that initiated the negotiations (from Illinois). The only contact initiated by defendant with South Dakota was mailing the purchase agreement to Plaintiff there. The Court concludes that this "one shot deal" does not constitute sufficient contact for South Dakota to extend its long arm around Defendant.

  • Sayeedi v. Walser, 2007 NY Slip Op 27081 Sec. B.b. (Civil Court of the City of New York, Richmond County Feb. 27, 2007)
  • Although several non-New York courts have had the occasion to consider the issue, the majority of these courts have held that the usual online auction process does not rise to the level of purposeful conduct required to assert specific jurisdiction. (See United Cutlery Corp. v. NFZ, Inc. , 2003 U.S. Dist. LEXIS 21664, 2003 WL 22851946, [D. Md. 2003]; Machulsky v. Hall , 210 F. Supp. 2d 531, 544-45 [D.N.J. 2002]; Winfield Collection, Ltd. v. McCauley , 105 F. Supp. 2d 746, 749 [E.D. Mich. 2000]; Boschetto v. Hansing , 2006 U.S. Dist. LEXIS 50807, 2006 WL 1980383 [N.D.Cal.]). . . The courts finding no jurisdiction often have focused on the logistics germane to an on-line auction where the "choice of [the] highest bidder is beyond the control of the seller," (Winfield Collection, 105 F. Supp. 2d, 746), and similarly that the only intent manifested by the eBay seller is to "sell to the highest bidder, regardless of identity or location" (United Cutlery , 2003 U.S. Dist. LEXIS 21664, 2003 WL 22851946 at *4). These courts have reasoned where the eBay seller has no authority over the audience to which the listing of their good(s) are disseminated, (Id), such sales are merely "random" and "attenuated" contacts and do not raise to the level of "purposeful availment" required to meet due process.

    • The few courts that have found personal jurisdiction over purely on-line auction sales have focused primarily on the sophistication of the seller. (See, e.g., Dedvukaj v. Maloney, 447 F. Supp. 2d 813 [D. Mich. 2006]). Traditionally, courts have applied the "sliding scale" test in internet jurisdiction cases, which seeks to distinguish interactive from passive websites (see Zippo Mfg. Co. v. Zippo Dot Com, Inc. 952 F. Supp. 1119 [W.D.Pa.,1997]). Under the Zippo sliding scale test, "proper exercise of personal jurisdiction in a claim involving Internet contact is directly proportional to the commercial interactivity of the website over which the contact is made" (Action Tapes, 2005 U.S. Dist. LEXIS 29312, 2005 WL 3199706 at *2, [internal citations omitted]). However, this mode of analysis makes little sense in the eBay context since eBay, and not the user, controls the interactivity and marketing efforts of the website. As noted in Action Tapes, the sellers and buyers who connect through eBay "cannot be said themselves to control eBay's degree of commercial interactivity any more than a buyer and seller at Sotheby's can be said to be responsible for the premises or to control the auctioneer" (Id). Accordingly, the "sliding scale" standard is not applicable in the current case. Courts such as Dedvukaj appear to be applying a modified Zippo analysis, aimed not at determining the interactivity or passivity of the eBay internet site itself, but instead seeking to distinguish between the purposeful activity and the impressions created by the activity and representations of the individual eBay user from the standard content, templates, and general structure provided to all eBay users.

     Regardless of whether such a sliding scale analysis is employed or not, the crucial question remains whether the quality of the New York contact was of such a nature that the defendant can be said to have purposefully invoked the benefits and protections of New York law (Hutton v. Piepgras 451 F. Supp. 205 [1978, SD NY].) In the case at bar the contacts of the Defendant, as presented by Plaintiff, fail to meet the Hutton requirements. It has not been shown to this Court's satisfaction that the Defendant purposefully invoked the benefits and protections of New York law. No evidence was provided by Plaintiff as to Defendant's overall eBay statistics, experience, or of any marketing directed at potential customers, designed for instance, to welcome bids from New Yorkers or any other acts that indicate Defendant may be purposely availing himself specifically to the business of New Yorkers or any desire to take advantage of New York law. The Defendant was prepared to sell his Chevrolet engine to whoever the highest bidder happened to be regardless of the state in which they happened to reside. Given this unique sale style, even though a contract may be formed, the location of delivery is not likely in the seller's realm of contemplation. In the typical on-line auction sale the ultimate destination of any item is completely determined by the potential buyers through the bidding process. Accordingly, to summon the Defendant into a New York court on this matter would contravene the traditional notions of "fair play" and "substantial justice" that have become the touchstone of personal jurisdiction.

  • Boschetto v Hansing 2006 WL 1980383 (ND Cal 2006) ("plaintiff a resident of California purchased a defective 1964 Ford Galaxie on eBay from defendant a resident of Wisconsin The plaintiff not the defendant made arrangements for the pick up of the vehicle in Wisconsin purchased the car knowing it was in Wisconsin and purchased the car without an inspection by himself or a third pmiy Thereafter when suit was brought in Califomia the district court determined that e xercising personal jurisdiction would be improper because defendant s actions were not purposefully directed at the forum state")
  • Karstetter v Voss 184 S W 3d 396 Tx Ct App 2006 ("a Kmlsas resident obtained a default judgment against a Texas resident then sought to enforce judgment in Texas The court found Kansas had no personal jurisdiction over the eBay seller who rejected the buyer s offer to preempt the auction and instead let the bidding process conclude The court noted the interaction between the parties was minimal the email correspondence between the parties relating to the purchase was initiated by the plaintiff mld there was no evidence that the party traveled to Kansas or engaged in other transactions with the appellmlt or other Kansas residents Thus the court concluded that the defendant s contacts with Kmlsas were random isolated and fortuitous and did not rise to alevel that the defendant should have reasonably foreseen that he would be haled into aKansas court")
  • Buckland v Hobbs 176 N C App 766 627 S E 2d 350 2006 WL 695665 (N C App 2006) ("the plaintiff a North Carolina resident filed a complaint alleging that he purchased atractor from the defendant a resident of Tennessee on eBay The court noted that the placement of ml intemet advertisement and one prior sale to a resident ofNorth Carolina did not constitute sufficient minimum contacts with North Carolina to comply with the due process requirements of the due process clause to exercise personal jurisdiction The defendant s only contacts were the solicitation for bids on eBay which were not targeted at any particular state e mails exchanged between the parties and the wire transfer of money to the defendant. Furthermore the defendant never lived in NOlih Carolina never had an office or place of business in North Carolina never worked in North Carolina never shipped any goods to North Carolina and when the plaintiff purchased the tractor the plaintiff went to Tennessee to take delivery ofthe tractor")
  • Action Tapes Inc v Ebert 2006 WL 305769 (N D Tex 2006)
  • Action Tapes Inc v Weaver 2005 WL 3199706 (ND Tex 2005) ("district court found no personal jurisdiction over an eBay seller where the traditional auction process wasnot altered or circUlnvented in any manner")
  • Muir v Assad 2005 WL 3367697 (Ga Super 2005) ("plaintifffiled suit when an automobile purchased via eBay from Washington arrived in worse condition than advertised The court found the defendant had insufficient contacts with Georgia to satisfy the minimum contact requirement because the defendant had never been to the state of Georgia and had made no particular effort to reach out to any resident ofGeorgia in advertising the car for sale Furthennore the sale transaction took place in Washington through the buyer s agent who received delivery of the car in Washington Thus the comi concluded it lacked personal jurisdiction over the defendant")
  • Irving v Wagner Zone Inc 68 Va Cir 127 2005 WL 2242814 (Va Cir Ct 2005) ("In Irving another dispute arising out of aused car sale on eBay the seller required local pickup in Illinois The plaintiffarranged for pickup in Illinois and delivery ofthe car to Virginia and thereafter sought rescission of sale in Virginia The court concluded the transaction did not occur in Virginia and therefore Virginia had no personal jurisdiction")
  • Scordato v Dyess 2005 WL 3635104 Pa D CAth 360 (Penn 2005) ("plaintiff purchased a 1981 Mercedes Benz from eBay from a Nevada defendant who made misrepresentations about the vehicle s mileage and condition The car was in defendant s possession in Nevada at the time of sale the plaintiff mailed his payment for the automobile to the defendant in Nevada and the plaintiff made arrangements to have the vehicle shipped from Nevada to Pennsylvania The defendant never initiated contact with Pennsylvania in order to sell vehicle and the defendant never entered Pennsylvania to contract for or complete the sale of the vehicle The only contact the defendant had with Pennsylvania was to send the title and other paperwork for the vehicle to plaintiff after plaintiff initiated contact with defendant to purchase vehicle The court described such contact as attenuated and random and therefore court concluded that defendants use of eBay to advertise his vehicle for sale did notjustify assertion ofjurisdiction over defendant")
  • United Cutlery Corp v NFZ Inc 2003 WL 22851946 (D Md 2003) ("district court concluded that it had no jurisdiction over an eBay seller whose manifested intent was merely to sell to the highest bidder")
  • Jones v Munroe N Y 2 Misc 3d 24 (2003) ("In Jones the defendant a Florida resident sold the plaintiff a New York resident an automobile through eBay The automobile was retrieved by the plaintiff from the defendant s state of residence in Florida The lower court ruled that such contact was insufficient to confer personal jurisdiction and dismissed the suit The reviewing court upheld the dismissal ofthe suit for lack ofpersonal jurisdiction underNew York s long arm statute")
  • Machulusky v Hall 210 F Supp 2d 531 D N J (2002)
  • MetCalf v Lawson 148 N H 35 802 A 2d 1221 (N H 2002) ("cOUli concluded it had no personal jurisdiction over eBay seller from New Jersey because the seller did not purposefully avail herself the privilege ofdoing business in New Hmnpshire")
  • Winfield Collection Ltd v McCauley 105 F Supp 2d 746 (E D Mich 2000) ("t he only contact that the defendant a seller of homemade crafts on eBay was proven to have had with the State of Michigan were fortuitous and de minimus the results of two auction sales over which Defendant had little if any control and thus it would offend traditional notions of fair play and substantial justice to hale her into a Michigan court for suit when she has not purposefully availed herself ofthe benefits of Michigan law")
  • First Prong: Purposefully Directed Activities at Forum
  • The First prong of the Federal Circuit test requires that Tekkeon have purposefully directed its activities at resident of North Carolina. In this case, Tekkeon operated an interactive website from which it offered allegedly infringing products for sale to residents of North Carolina. In addition, through its website Tekkeon sold at least one of the allegedly infringing myTune products to a North Carolina resident. Tekkeon specifically admits that it directly sold one of the allegedly infringing products into North Carolina to a North Carolina resident before the Complaint in this action was filed. Given this, the Court concludes that Netalog has established that Tekkeon 'purposefully directed' its activities at North Carolina residents. Cf Osteotech, Inc., v GenSci Regeneration Sciences, Inc, 6 FSupp2d 349, 354 (D nNJ 1998) (holding that a single sale of an infringing product directly to a customer in the forum state is sufficient to establish jurisdiction because "[t]he law is clear that, where a defendant infringer is shown to have sold the allegedly infringing product in the forum state, the forum may exercise personal jurisdiction over the defendant"); Maxwell Chase Techs, LLC v KMB Produce, Inc, 79 FSupp2d 1364, 1372 (ND GA 1999) (applying this rule to find jurisdiction based on a single sale of an allegedly infringing product into the forum state); see also Walter Kidde, 304 FSupp2d at 771-72 (finding that defendant who offered allegedly infringing products for sale on its website and sold allegedly infringing products through distributors in North Carolina had 'purposefully directed' its activities at North Carolina residents). -- Netalog, Inc. v Tekkeon, Inc., No 1:05CV00980, Sec. II (MD NC Feb. 15, 2007)
  • Shipping of Goods
  • The New York Court of Appeals has held, on more than one occasion that the "mere shipment" of goods into New York does not qualify as a sole basis for personal jurisdiction. In order for jurisdiction to attach, any such shipment had to be part of a larger transaction in which the defendant engaged in some relevant acts within the state. This principle has endured even after the "contract anywhere to supply goods, or services in New York" language was incorporated into CCA § 404. (See McGowan v. Smith , (52 N.Y.2d 268, 419 N.E.2d 321, 437 N.Y.S.2d 643 [1981]). In McGowan the court ruled that long-arm authority does not extend to a non-domiciliary who merely shipped goods into the state without ever crossing its borders; and further required some purposeful activities within state in order to justify bringing a non-domiciliary defendant before New York state courts. ( See also, Paradise Products Corp. v. Allmark Equipment Co. , 138 A.D.2d 470, 526 N.Y.S.2d 119 [2d Dep't 1988], where plaintiff's New York suit for breach of contract lacked jurisdiction because the defendant's mere "knowledge that a product may be destined for a particular forum" was deemed insufficient contact with the State.) -- Sayeedi v. Walser, 2007 NY Slip Op 27081 Sec. B.b. (Civil Court of the City of New York, Richmond County Feb. 27, 2007)
  • Second Prong: Cause of Action arises out of activity
  • Rodentpro.com LLC v Biggers & Callaham LLC, No 3:06-cv-81-RLY-WGH (SDIn Feb. 12, 2007) (in a trademark violation action, court found that it lacked specific jurisdiction of defendant where defendant's only contact with forum state were a phone call, an email, and an advertisement, and were the phone call -- and the email were not related to the trademark violation cause of action, and the allegation that defendant used trademark in an advertisement in a national trade journal, without more, "does not amount to purposeful contact with Indiana that satisfies the Due Process Clause.")
  • The second prong of the Federal Circuit's personal jurisdiction test requires that the cause of action arise out of or directly relates to the Defendant's activities in the forum state. In the present case, Tekkeon offered for sale and actually did sell an allegedly infringing product to a resident of North Carolina. this patent infringement action alleges infringement by that product, and therefore the Court concludes that Netalog has shown that this action arises out of the Defendant's contact with the forum state. Cf. Beverly Hills Fan Co v Royal Sovereign Corp, 21 F3d 1558, 1665 (Fed Cir 1994); Walter Kidde, 304 FSupp2d at 772; see also HollyAnne Corp v TFT, Inc, 199 F3d 1304, 1308 n 4 (Fed Cir 1999) (noting that the fact that infringement may also have occurred in other states is irrelevant to this inquiry because "[t]he proper test for 'giving rise' to a cause of action is not whether the activity in the forum state was the exclusive ground of the plaintiff's complaint against the defendant. Rather, the test is whether the activity in the forum state is a basis for the cause of action."). -- Netalog, Inc. v Tekkeon, Inc., No 1:05CV00980, Sec. II (MD NC Feb. 15, 2007)
  • Third Prong: The assertion of personal jurisdiction would not be 'reasonable and fair'
  • Finally, because Plaintiff can establish the first two prongs of the Federal Circuit's specific jurisdiction test, the burden shifts to Defendant under the third prong to show that the assertion of personal jurisdiction would not be 'reasonable and fair.' . . . . . In this case, Tekkeon enjoyed the benefits of conducting business in North Carolina because it used its website to solicit sales in North Carolina and ultimately sold at least one allegedly infringing product to a North Carolina resident. In addition, the Court notes that Tekkeon also maintained an ongoing relationship with Netalog, which is based in North Carolina, and Tekkeon sold multiple other products to Netalog in North Carolina over at least a six month period. In addition, Tekkeon also sold its products to other retailers with locations in North Carolina. Tekkeon thus took advantage of potential North Carolina business opportunities in various ways. In addition, the court notes that North Carolina has a strong interest in protecting its resident patentees from patent infringement, as well as an interest in protecting against infringing products entering the state. Netalog also has a strong interest in obtaining relief here in its home forum. Although there may be some burden on Tekkeon, Tekkeon assumed that risk by conducting business in North Carolina, and on balance the burden on Tekkeon is not sufficiently compelling to outweigh Netalog's and North Carolina's interests. Therefore, Tekkoen has not established that the exercise of jurisdiction in North Carolina is unreasonable or unfair. -- Netalog, Inc. v Tekkeon, Inc., No 1:05CV00980, Sec. II (MD NC Feb. 15, 2007) (citations omitted).
  • Individual Long Arm Cases
  • Dow Jones v. Gutnick [2002] HCA 56 para 15 (10 December 2002) (High Court Australia)
  • Facts:
  • Unholy Gains, Barons Online Oct 30 2000 referenced Joseph Gutnick as a money launderer.
  • Gutnick lives in Victoria Australia.
  • Dow Jones publishes content online through restricted for-fee subscription service
  • Victoria resident paid for service - Victoria billing address
  • Defendant therefore knew residence of subscriber
  • Plaintiff sued only in Victoria for damage in Victoria
  • Jurisdiction Analysis: Where Published?
  • Defamation Cause of Action - AU
  • The damage (not the insult) is the cause of action in AU
  • Damage is done where read
  • Defamation occurs where publication is made available “in comprehensible form.” (multi publication events)
  • “In the case of material on the World Wide Web, it is not available in comprehensible form until downloaded on to the computer of a person who has used a web browser to pull the material from the web server. It is where that person downloads the material that the damage to reputation may be done.”
  • Dow Jones argued place of publication was NY Server (single publication event)
  • Conclusion:  Article was published in Victoria where downloaded
  • Intention of defendant to aim at forum not relevant
  • This case deals only with damage done in Victoria.
  • Young v. New Haven Advocate No. 01-2340 (4th Cir. Dec. 13, 2002)
  • Facts:
  • Conn. faced with prison overcrowding.  Contracted with Virginia to house Conn. prisoners.
  • Plaintiff is warden at Virginia prison.
  • New Haven Advocate ran articles concerning controversy discussing law suit by prisoners, letters from prisoners describing conditions, and confederate civil war memorabilia in wardens office
  • Article author referred to Virginia prison as a “cut rate gulag”
  • Plaintiff warden sued defendants for defamation arguing the articles imply that he “is a racist who advocates racism.”
  • Newspaper published in New Haven with circulation in New Haven
  • No subscribers are in Virginia
  • Articles written in Connecticut
  • Defendants have no contacts with Virginia
  • Analysis:
  • Plaintiff argued publication was world wide by merit of Internet and effect of statements was in Virginia where Plaintiff resided
  • Rule:  Jurisdiction, in Internet context, may be based only on an out-of-state persons Internet activity directed at the forum state and causing injury that gives rise to claim in that state.
  • Analysis
  • Content of the paper is local
  • No Virginia advertisements
  • Advocate website provides local weather and traffic, links to local interests
  • Focus of article was Connecticut prison policy and Connecticut prisoners
  • Conclusion:  Virginia Court lacks jurisdiction
  • Paper could not reasonably anticipate being haled into VA Court
  • Note: No discussion of location of servers
  • Is this outcome inconsistent with the AU case??
  • Palovich v. Superior Court of Santa Clara, Ct.App 6 H021961 (S.Ct. CA Nov 25, 2002)
  • Facts:
  • CSS is an encryption program for DVDs
  • DeCSS is a hacker program used to break that encryption.  It was created by Norwegian teenager Jon Johansen for the alleged purpose of playing DVDs on his Linux machine (in other words, a non infringing use) (just declared Not Guilty!)
  • Pavlovich in Texas posted DeCSS to Internet
  • He had no CA contacts
  • Led LiVid Video Project, effort to make DVD accessible via Linux, and thus posted DeCSS
  • DVD Copy Control Assn a DE Corp sued in CA
  • US S.Ct. (Justice Oconnor) emergency stayed decision but quickly withdrew stay
  • Rule:
  • Specific jurisdiction over non resident where
  • Purposefully avail himself of forum benefits
  • Controversy arises out of defendants contact with forum
  • fair play and substantial justice
  • Calder S.Ct.: Foreseeable impact in forum can give rise to jurisdiction - but defendant must expressly aim at forum
  • Analysis: No Jurisdiction
  • Pavlovich’s sole contact with CA is web posting
  • No evidence targeted CA or that any CA resident visited website
  • Passive content - not business, not interactive
  • Pavlovich did not encourage use of DeCSS to infringe (particularly in CA)
  • Mere knowledge alone of impact in CA is insufficient - no express aim at CA
  • Impact, if at all, on plaintiff is in DE not CA
  • EFF California Court Cannot Lasso Texas Resident into DVD Case Nov 25, 2002
  • Yahoo v. France
  • “On Dec. 2, 2002 a US federal appeals court heard oral argument in a case challenging a ruling by a French court that had ordered Yahoo! To block French citizens from accessing Nazi items offered for sale by third parties on Yahoo.com’s auctions site.  The French court directed Yahoo! “to take all necessary measures to dissuade and render impossible any access via Yahoo.com to the Nazi artifact auction service and to any other site or service that may be construed as constituting an apology for Nazism or a contesting of Nazi crimes.”  A lower US federal court ruled September 2001 that the French order was not enforceable against Yahoo in any US court.  The US court determined that enforcement of the French order would violate Yahoo’s First Amendment rights.  The court of appeals should rule in the first half of 2003.”  -CDT
  • AOL v Huang, 106 FSupp2d 848 (ED Va 2000) :  Case dismissed, including ACPA cause of action, for failure of court to have jurisdiction over defendants; mere registration of domain name with NSI a Virginia corporation was insufficient to haul defendant into Virginia court.
  • Harrods Limited v. Sixty Internet Domain Names, 110 F.Supp. 2d 420 (EDVa 2000) :
  • Trademark infringement, trademark dilution, and federal unfair competition causes of action dismissed as unavailable in an in rem action
  • ACPA cause of action dismissed without prejudice for failure to allege bad-faith intent but noting the inability to locate or access the defendant necessitating an in rem proceeding was itself a factor that substantiates bad faith.

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  • Connecticut Blogger Not Subject to Texas Jurisdiction--Healix Infusion v. Helix Health, Tech & Marketing Law 5/28/2008
  • eBay auction not enough to confer personal jurisdiction, Internet Cases 4/12/2007