ABSTRACT

The Seventh Circuit reversed the district court’s finding of personal jurisdiction where the defendant’s interactive dating website had users in, but did not “target,” the forum state. The Seventh Circuit held that the website’s mere 20 members in Illinois did not show that the defendant deliberately targeted or exploited the Illinois market, and thus could not give rise to personal jurisdiction without offending traditional notions of fair play and substantial justice.

CASE SUMMARY

FACTS

be2 LLC (“be2”) operates an Internet dating website located at be2.com, with users in 36 countries, including the United States.

Nikolay Ivanov is a New Jersey resident who allegedly founded and owned the website be2.net. In December 2006, Ivanov moved his existing online dating website from sladurana.com to be2.net. be2 alleged that this move was made deliberately “with the intention of misleading consumers” looking for be2’s website at be2.com.

be2 sued Ivanov in the U.S. District Court for the Northern District of Illinois for trademark infringement under federal and state law, and for violating the Illinois Deceptive Business Practices Act. When Ivanov did not answer the complaint, default judgment was entered against him.

To prove damages, be2 submitted a declaration that included documents showing that 20 Chicago residents registered for dating services on the be2.net website one year earlier. Additional documents, taken from sladurana.com, identified Ivanov as the CEO and cofounder of be2.net, and the “one responsible for [the website’s] censorship, profile approval, and advertising.”

After default judgment was entered, Ivanov appeared in the case for the first time and moved to vacate the judgment for lack of personal jurisdiction. Ivanov submitted an affidavit contesting be2’s account of his relationship with the be2.net website. Ivanov claimed that he had never received any “financial benefit” from be2.net and had never set foot in Illinois.

Relying on “the whole list of Chicago contacts, the result of Mr. Ivanov’s activity,” the district court concluded that Ivanov had made himself susceptible to personal jurisdiction in Illinois. Ivanov appealed the decision, arguing that the evidence did not support a finding of personal jurisdiction.

ANALYSIS

The specific issue before the Seventh Circuit on appeal was whether the evidence submitted by be2 showed that Ivanov had purposefully availed himself of the Illinois market. To be sufficient, the evidence must establish that Ivanov had minimum contacts with Illinois such that defending the case there would “not offend traditional notions of fair play and substantial justice.”

The Seventh Circuit warned that questions of personal jurisdiction involving online contacts should be decided carefully to ensure that defendants are not haled into court simply because they own or operate a website in the forum state, even if that site is “highly interactive.” Beyond simply operating an interactive website, the defendant must in some way target or exploit the forum state to become subject to personal jurisdiction.

The Seventh Circuit concluded that the record before it did not show that Ivanov had deliberately targeted or exploited the Illinois market. The court dismissed the 20 Chicago members of be2.net as “attenuated contacts” that could not give rise to personal jurisdiction. “[T]he constitutional requirement of minimum contacts is not satisfied simply because a few residents have registered accounts on be2.net.”

The Seventh Circuit distinguished this case from uBID v. GoDaddy Group, 623 F.3d 421 (7th Cir. 2010), where GoDaddy was found to have subjected itself to personal jurisdiction by exploiting the Illinois market through an advertising campaign producing hundreds of thousands of customers in the state and millions of dollars in annual revenues. Unlike GoDaddy’s advertising specifically targeting Illinois residents, the court commented that the 20 Chicagoans who created free profiles on be2.net may have done so simply by “stumbling across the website and clicking a button that automatically published their dating preferences online.” Such contacts on their own do not support a finding of personal jurisdiction.

CONCLUSION

This decision is interesting because it rejects a finding of personal jurisdiction for a “highly interactive” website even where the defendant has users of that website (albeit a relatively minimal number) in the forum state.