LACK OF PERSONAL JURISDICTION?
As with any other lawsuit, the initial instinct when you receive a spam lawsuit is to figure out how to get it dismissed, ASAP. Let’s say your client, or your company receives a summons and complaint. You look at it and it may as well have been scrawled out by hand on a napkin. On second glance you see that the plaintiff is located in Nevada. Your company is located one state over in California. Your company doesn’t do much business in Nevada. You don’t have any customers there. No sales people. No offices. You thumb through your bar-bri bar review books from several years ago. Recall something about International Shoe, Pennoyer, Mullane, and Asahi and think. “Bing.” I’m going to bring a Motion to Dismiss based on lack of personal jurisdiction.
Not so fast. The faux realization that parties who do business via the Internet – be they plaintiff or defendant – operate in a contact-less ether, pretty much fell out of favor with the dot com bust (the first bust, not the impending one). At first, the notion of determining whether a non-resident defendant had the requisite “contacts” with the forum state based on activities in cyberspace seemed exciting. It spawned many law review articles and discussions. In short order, lawyers and judges realized that there’s nothing different about the Internet. Not when it comes to jurisdiction. Not when it comes to anything for that matter. If anything, courts came to realize that accepting the argument that someone who sends emails to every jurisdiction should not be subject to jurisdiction in a particular locale because they did not aim their activities there could leave people not subject to jurisdiction anywhere. This is plainly untenable, particularly where your client is accused of sending (or causing to be sent) emails into the forum state. As one court noted:
Unless your facts are compelling, or unless you want to force opposing counsel (and in the process the court) to expend some cycles, there’s no real benefit of bringing a Motion to Dismiss based on personal jurisdiction. You are likely to lose, and in the process, embolden opposing counsel. This is not say that a Motion to Dismiss is never appropriate. If the non-resident defendant has no significant web presence, and does not engage in significant online marketing activities you may have a shot. (Where there is a single email involved and you do not have a presence in the forum state you should consider this.) You may even win attorney’s fees pursuant to the state’s long arm statute. But this is the exception. Another thing to keep in mind is that if you bring the jurisdictional motion you are likely to have to deal with jurisdictional discovery. And this may not be to your advantage. There may be other means available to obtain dismissal of the case. Why run the risk of exposing yourself to jurisdictional discovery by bringing a jurisdictional motion that you will most likely lose?
More: a friend emails to alert me to Pebble Beach Co. v. Caddy, [.pdf] where the Ninth Circuit held that California courts could not assert personal jurisdiction over a UK resident who operated a web site which potentially infringed on the California plaintiff's intellectual property. THE Pebble Beach golf course sued Michael Caddy, a UK resident who operated a bed and breakfast named "Pebble Beach" in the coast of England. The Ninth Circuit affirmed the district court's order dismissing the lawsuit for lack of personal jurisdiction (because Caddy did not aim his activities to California) and denying jurisdictional discovery. While at first glance the opinion may offer hope to defendants in spam cases I would not be too hopeful. Running a web site which can be accessed by users when and if they choose is fundamentally different from sending email solicitations into the forum state. In the former case, contacts may occur fortuitously. In the latter case, contacts are much less fortuitous -- the location of the contacts may be, but the fact that someone comes across your advertisement is not. I guess courts increasingly take the view that, at least for jurisdictional puposes, you email at your peril.
Not so fast. The faux realization that parties who do business via the Internet – be they plaintiff or defendant – operate in a contact-less ether, pretty much fell out of favor with the dot com bust (the first bust, not the impending one). At first, the notion of determining whether a non-resident defendant had the requisite “contacts” with the forum state based on activities in cyberspace seemed exciting. It spawned many law review articles and discussions. In short order, lawyers and judges realized that there’s nothing different about the Internet. Not when it comes to jurisdiction. Not when it comes to anything for that matter. If anything, courts came to realize that accepting the argument that someone who sends emails to every jurisdiction should not be subject to jurisdiction in a particular locale because they did not aim their activities there could leave people not subject to jurisdiction anywhere. This is plainly untenable, particularly where your client is accused of sending (or causing to be sent) emails into the forum state. As one court noted:
By sending an e-mail solicitation to the far reaches of the earth for pecuniary gain, one does so at her own peril, and cannot then claim that it is not reasonably foreseeable that she will be haled into court in a distant jurisdiction to answer for the ramifications of that solicitation.Internet Doorway, Inc. v. Parks, 138 F. Supp. 2d 773, 779-780 (S.D. Miss. 2001).
Unless your facts are compelling, or unless you want to force opposing counsel (and in the process the court) to expend some cycles, there’s no real benefit of bringing a Motion to Dismiss based on personal jurisdiction. You are likely to lose, and in the process, embolden opposing counsel. This is not say that a Motion to Dismiss is never appropriate. If the non-resident defendant has no significant web presence, and does not engage in significant online marketing activities you may have a shot. (Where there is a single email involved and you do not have a presence in the forum state you should consider this.) You may even win attorney’s fees pursuant to the state’s long arm statute. But this is the exception. Another thing to keep in mind is that if you bring the jurisdictional motion you are likely to have to deal with jurisdictional discovery. And this may not be to your advantage. There may be other means available to obtain dismissal of the case. Why run the risk of exposing yourself to jurisdictional discovery by bringing a jurisdictional motion that you will most likely lose?
More: a friend emails to alert me to Pebble Beach Co. v. Caddy, [.pdf] where the Ninth Circuit held that California courts could not assert personal jurisdiction over a UK resident who operated a web site which potentially infringed on the California plaintiff's intellectual property. THE Pebble Beach golf course sued Michael Caddy, a UK resident who operated a bed and breakfast named "Pebble Beach" in the coast of England. The Ninth Circuit affirmed the district court's order dismissing the lawsuit for lack of personal jurisdiction (because Caddy did not aim his activities to California) and denying jurisdictional discovery. While at first glance the opinion may offer hope to defendants in spam cases I would not be too hopeful. Running a web site which can be accessed by users when and if they choose is fundamentally different from sending email solicitations into the forum state. In the former case, contacts may occur fortuitously. In the latter case, contacts are much less fortuitous -- the location of the contacts may be, but the fact that someone comes across your advertisement is not. I guess courts increasingly take the view that, at least for jurisdictional puposes, you email at your peril.
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