Thursday, September 30, 2010

Seventh Circuit Opinion Regarding Personal Jurisdiction For Online Actions

In uBID, Inc. v. The GoDaddy Group, Inc., the Seventh Circuit released an interesting opinion relating to personal jurisdiction.  The court stated:
Plaintiff uBID, Inc. is a Chicago-based company that auctions the excess inventory of manufacturers and retailers over the Internet. It brought suit in Illinois against The GoDaddy Group, Inc., which operates the well-known domain name registration site In its complaint, uBID alleged that GoDaddy violated the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), by intentionally registering domain names that are confusingly similar to uBID’s trademarks and domain names for the purpose of profiting from uBID’s marks and exploiting web surfers’ confusion by selling advertising for those confusingly similar websites. The district court dismissed the case for lack of personal jurisdiction, holding that GoDaddy, which is headquartered in Arizona, lacked sufficient contacts with Illinois to be sued there. See uBID, Inc. v. GoDaddy Group, Inc., 673 F. Supp. 2d 621 (N.D. Ill. 2009). We reverse. We conclude that due process is not violated when a defendant is called to account for the alleged consequences of its deliberate exploitation of the market in the forum state.
After a discussion of GoDaddy's contacts with Illinois and the law relating to personal jurisdiction, the court stated:
GoDaddy has thoroughly, deliberately, and successfully exploited the Illinois market. Its attempt to portray itself either as a local Arizona outfit or as a mindless collection of servers is unconvincing. This is a company that, like the national magazine in Keeton, has conducted extensive national advertising and made significant national sales. GoDaddy has aired many television advertisements on national networks, including six straight years of Super Bowl ads. It has engaged in extensive venue advertising and celebrity and sports sponsorships. All of this marketing has successfully reached Illinois consumers, who have flocked to GoDaddy by the hundreds of thousands and have sent many millions of dollars to the company each year. These contacts establish GoDaddy’s minimum contacts with the state for claims sufficiently related to those contacts.
GoDaddy seeks to distance itself from Illinois by casting the Illinois market as simply one among many, a place of no particular interest to it. Although its ads can be seen on Illinois television sets and computer screens and at Illinois sports venues, GoDaddy contends that these are only parts of a national advertising campaign and that it does not target its advertising toward Illinois residents in particular. Likewise, GoDaddy argues that its sales in Illinois are merely “the unilateral activity of Illinois residents” entered into “at the initiative of the customers,” and processed automatically by GoDaddy’s servers in Arizona. These characterizations of GoDaddy’s contacts with Illinois are inaccurate.
Mere minimum contacts, however, are not sufficient to establish specific personal jurisdiction. As the Supreme Court has emphasized, it is essential not only that the defendant have minimum contacts with the forum state but also that the plaintiff’s claim against the defendant “arise out of or relate to” those contacts......
The relationship between GoDaddy’s Illinois contacts and uBID’s claims is close enough to make the relatedness quid pro quo balanced and reasonable. GoDaddy has reached hundreds of thousands of people in Illinois with its advertising, which we know because it has made hundreds of thousands of sales in Illinois. How has GoDaddy advertised and made these sales? Based on the allegations in uBID’s complaint, it has done so “by offering ‘free parking’ of a registrant’s domain name.”
The text above is only a small portion of the Court's majority opinion.  Judge Manion wrote a concurring opinion that stated:
I agree with the court that personal jurisdiction in Illinois is proper.  I write separately because under the facts of this case, I would apply a more limited formula for connecting GoDaddy’s contacts in Illinois with uBID’s claim. In my view, personal jurisdiction in Illinois is proper for the simple reason that uBID is headquartered in Illinois, and that is where GoDaddy has directed, and uBID will be affected by, the harm at issue....The court’s formula for connecting GoDaddy’s contacts in Illinois with uBID’s claim is, in my view, unnecessarily broad.
Earlier this year, the Florida Supreme Court released an opinion relating to personal jurisdiction over a person  who made posts on a website.  That case was discussed at the following post: "Posting Statements On A Website Subjects A Person To Suit Under Florida's Long Arm Statute."


Post a Comment