Today, virtually every company has some form of web presence, and developing cutting-edge methods for interacting with potential customers may mean the difference between success and failure in the modern business world. In doing so, companies must carefully consider the potential consequences of increased connectivity with customers around the country, as the allure of offering a more interactive Internet experience may come at the cost of being subjected to expensive and unwanted litigation in jurisdictions located far from a company’s home offices.
Accordingly, it is crucial that businesses carefully consider a recent ruling by a federal court in New York, where it was held that a nonresident website was properly subjected to personal jurisdiction in the state because its national marketing campaign specifically sought a response from residents of all fifty states. See Mrs. U.S. Nat’l Pageant Inc. v. Miss U.S. of Am. Org., No. 6:12-cv-06137-DGL (W.D.N.Y. July 13, 2012). According to the ruling, a website may be found to “target” a forum state for the purposes of personal jurisdiction merely by actively soliciting responses from residents of every state, and it is therefore unnecessary for the website to specifically single out the forum state as a particular focus of its commercial activity.
Federal courts have personal jurisdiction over a defendant based on the law of the forum state in which the court is located. Personal jurisdiction is also subject to the Due Process Clause of the US Constitution, which prohibits plaintiffs from haling nonresident defendants into a given court unless they have had “minimum contacts” with the forum state related to the cause of action, and which requires that the exercise of personal jurisdiction be reasonable under the circumstances. A specific doctrine has arisen in the context of personal jurisdiction based on Internet marketing, under which courts consider the defendant’s activity on a sliding scale: at one end lie purely passive websites that essentially offer nothing more than information, while at the other, websites that interact with forum residents by passing computer files back and forth. See Best Van Lines v. Walker, 490 F.3d 239 (2d Cir. 2007); Zippo Mfg. Co. v. Zippo Dot Com Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). Where a website falls in the middle of this spectrum, such as by offering links that enable visitors to purchase logoed paraphernalia or to apply to join an organization, jurisdiction depends on an examination of the level of interactivity and the commercial nature of the exchange of information taking place on the website.
In the Miss United States of America case, the plaintiff, a New York corporation which has operated “Mrs. United States” beauty pageants around the country for the past 25 years and owns numerous federal trademark registrations for “Miss United States” and other variants of the mark, filed suit in the US District Court for the Western District of New York on March 16, 2012, claiming that the defendants had infringed upon its trademarks by means of their commercial use of variations of the term “Miss United States of America.” Specifically, the plaintiffs alleged that the defendants intended to conduct a nationwide beauty pageant for the title of “Miss United States of America” in late July and had created a website to promote the pageant at www.missunitedstatesofamerica.com. The plaintiff subsequently moved for a preliminary injunction to prevent the defendants from using the allegedly infringing marks. The defendants responded with a motion to dismiss the case, arguing that the court lacked personal jurisdiction over them because they neither lived nor worked in New York and had not purposefully aimed their website at New York residents.
On July 13, 2012, the court ruled in favor of the plaintiff, concluding that there was enough evidence to establish personal jurisdiction over the defendants, and ultimately granting the plaintiff’s request for a preliminary injunction. Specifically, the court found that the defendants’ website fell in the middle of the sliding scale of interactivity, reasoning that by providing a means for residents in every state to become contestants in their pageant through downloadable forms hosted on their website, the defendants had sought to solicit New York residents, as well as residents of the other forty-nine states, to become contestants, and that “(s)uch activity indicates that defendants knowingly and purposefully reached out to New York residents in furtherance of their pageant business.” Notwithstanding the defendants’ contention that the plaintiff lacked evidence that they specifically “targeted” the forum state, the court indicated that it would be neither sensible nor equitable “to interpret the references in the case law to ‘targeting’ a jurisdiction as meaning that the defendants must have singled out New York as a particular focus of their commercial activity.” Rather, it reasoned, by soliciting business from a nationwide base of potential consumers and indicating that it sought contestants from every state in the union, the defendants chose to reach out to every state, and “should not be heard to complain if they are hauled into court in one of those states as a result of that activity.”
In coming to this conclusion, the court distinguished the present case from one in which a website simply could be accessed by a user from any given state, but the defendant had no particular interest in soliciting business from the forum state in particular. See BE2 LLC v. Ivanov, 642 F.3d 555 (7th Cir. 2011). The court noted that unlike the online dating site at issue in the cited case, the defendants’ website indicated their wish to have at least one contestant from each state.