Opinion ID: 780718
Heading Depth: 2
Heading Rank: 1

Heading: Personal Jurisdiction Based on the Operation of a Web Site

Text: 16 The advent of the Internet has required courts to fashion guidelines for when personal jurisdiction can be based on a defendant's operation of a web site. Courts have sought to articulate a standard that both embodies traditional rules and accounts for new factual scenarios created by the Internet. Under traditional jurisdictional analysis, the exercise of specific personal jurisdiction requires that the plaintiff's cause of action is related to or arises out of the defendant's contacts with the forum. Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir.2002). Beyond this basic nexus, for a finding of specific personal jurisdiction, the Due Process Clause of the Fifth Amendment requires (1) that the defendant ha[ve] constitutionally sufficient `minimum contacts' with the forum, id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)), and (2) that subjecting the defendant to the court's jurisdiction comports with `traditional notions of fair play and substantial justice,' id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The first requirement, minimum contacts, has been defined as `some act 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.' Asahi Metal Indus. Co., Ltd. v. Superior Court of California, 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (quoting Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174). Second, jurisdiction exists only if its exercise comports with traditional notions of fair play and substantial justice, i.e., the defendant should reasonably anticipate being haled into court in that forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). 17 The precise question raised by this case is whether the operation of a commercially interactive web site accessible in the forum state is sufficient to support specific personal jurisdiction, or whether there must be additional evidence that the defendant has purposefully availed itself of the privilege of engaging in activity in that state. Prior decisions indicate that such evidence is necessary, and that it should reflect intentional interaction with the forum state. If a defendant web site operator intentionally targets the site to the forum state, and/or knowingly conducts business with forum state residents via the site, then the purposeful availment requirement is satisfied. Below, we first review cases from this and other circuits that articulate this requirement. Next, we consider the role of related non-Internet contacts in demonstrating purposeful availment. We then assess whether the purposeful availment requirement has been satisfied in the present case. 18
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20 The opinion in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa. 1997) has become a seminal authority regarding personal jurisdiction based upon the operation of an Internet web site. The court in Zippo stressed that the propriety of exercising jurisdiction depends on where on a sliding scale of commercial interactivity the web site falls. In cases where the defendant is clearly doing business through its web site in the forum state, and where the claim relates to or arises out of use of the web site, the Zippo court held that personal jurisdiction exists. Id. at 1124. In reaching this conclusion, the Zippo court relied on CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996), which found the exercise of personal jurisdiction to be proper where the commercial web site's interactivity reflected specifically intended interaction with residents of the forum state. Zippo, 952 F.Supp. at 1124 (citing CompuServe, 89 F.3d at 1264-66). 21 Analyzing the case before it, the Zippo court similarly underscored the intentional nature of the defendant's conduct vis-a-vis the forum state. In Zippo, the defendant had purposefully availed itself of doing business in Pennsylvania when it repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords, knowing that the contacts would result in business relationships with Pennsylvania customers. Id. at 1126. The court summarized the pivotal importance of intentionality as follows: 22 When a defendant makes a conscious choice to conduct business with the residents of a forum state, `it has clear notice that it is subject to suit there.'... If [the defendant] had not wanted to be amenable to jurisdiction in Pennsylvania,... it could have chosen not to sell its services to Pennsylvania residents. 23 Id. at 1126-27 (citing World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559). 24 Since Zippo, several district court decisions from this Circuit have made explicit the requirement that the defendant intentionally interact with the forum state via the web site in order to show purposeful availment and, in turn, justify the exercise of specific personal jurisdiction. See, e.g., S. Morantz, Inc. v. Hang & Shine Ultrasonics, Inc., 79 F.Supp.2d 537, 540 (E.D.Pa.1999) (observing that a web site targeted at a particular jurisdiction is likely to give rise to personal jurisdiction.). As another district court in this Circuit put it, [c]ourts have repeatedly recognized that there must be `something more' ... to demonstrate that the defendant directed its activity towards the forum state.  Desktop Technologies, Inc. v. Colorworks Reprod. & Design, 1999 WL 98572, at  (E.D.Pa. Feb.25, 1999) (citation omitted) (emphasis added). 25
26 Several Courts of Appeals decisions have adopted purposeful availment requirements that are consistent with the principles articulated in the Zippo line of cases. The Fourth Circuit, in ALS Scan v. Digital Service Consultants, Inc., 293 F.3d 707 (4th Cir.2002), expressly incorporated an intentionality requirement when fashioning a test for personal jurisdiction in the context of the Internet: 27 a State may, consistent with due process, exercise judicial power over a person outside of the State when that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) that activity creates, in a person within the State, a potential cause of action cognizable in the State's courts. 28 Id. at 714 (emphasis added). 29 In Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir.1997), the Ninth Circuit considered an infringement action brought against a Florida web site operator whose allegedly infringing site was accessible in Arizona, the state where the plaintiff had its principal place of business. In declining to exercise specific personal jurisdiction, the Cybersell court found there must be `something more' [beyond the mere posting of a passive web site] to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state. Id. at 418. Decisions from other circuits have articulated similar standards. See, e.g., Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 890 (6th Cir.2002) (holding that the purposeful availment requirement is satisfied if the web site is interactive to a degree that reveals specifically intended interaction with residents of the state) (citation omitted) (emphasis added).
30 In deciding whether to exercise jurisdiction over a cause of action arising from a defendant's operation of a web site, a court may consider the defendant's related non-Internet activities as part of the purposeful availment calculus. One case that relies on non-Internet contacts for the exercise of jurisdiction — a case Toys repeatedly cites — is Euromarket Designs, Inc. v. Crate and Barrel Ltd., 96 F.Supp.2d 824 (N.D.Ill.2000). In Euromarket, the court exercised jurisdiction over an Irish manufacturer based on its commercially interactive web site, even though the products purchased through the web site could not be shipped to Illinois. The court identified a number of non-Internet contacts between the defendant and Illinois, including the fact that the defendant's vendors included Illinois suppliers, its attendance at trade shows in Illinois, and its advertisement in publications that circulate in the United States (albeit originating outside). Id. at 838. The Euromarket court also relied on the fact that the defendant billed Illinois customers, collected revenues from Illinois customers, and recorded sales from goods ordered from Illinois, id., and that the web site was designed to accommodate addresses in the United States. Id. at 836. 31 Thus far, Toys has not shown that Step Two maintained the type of contacts that supported jurisdiction in Euromarket — i.e., that the defendant intentionally and knowingly transacted business with residents of the forum state, and had significant other contacts with the forum besides those generated by its web site. This limited record does not provide an occasion for us to spell out the exact mix of Internet and non-Internet contacts required to support an exercise of personal jurisdiction. That determination should be made on a case-by-case basis by assessing the nature and quality of the contacts. Zippo, 952 F.Supp. at 1127 (quoting Int'l Shoe, 326 U.S. at 320, 66 S.Ct. 154). However, non-internet contacts such as serial business trips to the forum state, telephone and fax communications directed to the forum state, purchase contracts with forum state residents, contracts that apply the law of the forum state, and advertisements in local newspapers, may form part of the something more needed to establish personal jurisdiction. See Barrett v. Catacombs Press, 44 F.Supp.2d 717, 726 (E.D.Pa.1999), and cases there collected. It is noteworthy that the Supreme Court in Burger King Corp., when expounding on the minimum contacts requirement, referred generally to a defendant's activities in the forum state — a term that includes the aforementioned non-Internet contacts. Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174.
32 As Zippo and the Courts of Appeals decisions indicate, the mere operation of a commercially interactive web site should not subject the operator to jurisdiction anywhere in the world. Rather, there must be evidence that the defendant purposefully availed itself of conducting activity in the forum state, by directly targeting its web site to the state, knowingly interacting with residents of the forum state via its web site, or through sufficient other related contacts. 33 Based on the facts established in this case thus far, Toys has failed to satisfy the purposeful availment requirement. Step Two's web sites, while commercial and interactive, do not appear to have been designed or intended to reach customers in New Jersey. Step Two's web sites are entirely in Spanish; prices for its merchandise are in pesetas or Euros, and merchandise can be shipped only to addresses within Spain. Most important, none of the portions of Step Two's web sites are designed to accommodate addresses within the United States. While it is possible to join Club Imaginarium and receive newsletters with only an email address, Step Two asks registrants to indicate their residence using fields that are not designed for addresses in the United States. 34 Moreover, the record may not now support a finding that Step Two knowingly conducted business with residents of New Jersey. The only documented sales to persons in the United States are the two contacts orchestrated by Toys, and it appears that Step Two scarcely recognized that sales with U.S. residents had been consummated. 5 35 At best, Toys has presented only inconclusive circumstantial evidence to suggest that Step Two targeted its web site to New Jersey residents, or that it purposefully availed itself of any effort to conduct activity in New Jersey. Many of the grounds for jurisdiction that Toys advanced below have been deemed insufficient by the courts. First, the two documented sales appear to be the kind of fortuitous, random, and attenuated contacts that the Supreme Court has held insufficient to warrant the exercise of jurisdiction. See Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174 (citations omitted). As for the electronic newsletters and other email correspondence, telephone communication or mail sent by a defendant [do] not trigger personal jurisdiction if they `do not show purposeful availment.' Barrett, 44 F.Supp.2d at 729 (quoting Mellon Bank (East) PSFS, N.A. v. DiVeronica Bros., Inc., 983 F.2d 551, 556 (3d Cir.1993)). The court in Barrett found that the exchange of three emails between the plaintiff and defendant regarding the contents of the defendant's web site, without more, did not amount to the level of purposeful targeting required under the minimum contacts analysis. Id. at 729; see also Machulsky v. Hall, 210 F.Supp.2d 531, 542 (D.N.J. 2002) (minimal email correspondence, by itself or even in conjunction with a single purchase, does not constitute sufficient minimum contacts.). Non-Internet contacts, such as Mr. Tena's visits to New York and the relationships with U.S. vendors, have not been explored sufficiently to determine whether they are related to Toys' cause of action, or whether they reflect purposeful availment. 36 Absent further evidence showing purposeful availment, Toys cannot establish specific jurisdiction over Step Two. 6 However, any information regarding Step Two's intent vis-a-vis its Internet business and regarding other related contacts is known by Step Two, and can be learned by Toys only through discovery. The District Court's denial of jurisdictional discovery is thus a critical issue, insofar as it may have prevented Toys from obtaining the information needed to establish personal jurisdiction. We next turn to whether the District Court properly denied Toys' request for jurisdictional discovery.