Opinion ID: 779795
Heading Depth: 2
Heading Rank: 3

Heading: Whether the District Court Properly Dismissed for Lack of In Rem Jurisdiction

Text: 18 The issue of in rem jurisdiction, which is one of first impression in this Circuit, presents greater complexities. The ACPA, under 15 U.S.C. § 1125(d)(1), allows a trademark owner to pursue an in personam civil action against an alleged trademark infringer. If the court finds that in personam jurisdiction is not available or that the infringer cannot be located, § 1125(d)(2) allows the trademark owner to proceed against the domain name itself. Id. § 1125(d)(2)(A)(ii). This in rem jurisdiction was provided in part to address the situation where a non-U.S. resident cybersquats on a domain name that infringes upon a U.S. trademark. 145 Cong. Rec. H10,823, H10,826 (Oct. 26, 1999) (section-by-section analysis of ACPA); see also Standing Stone Media, Inc. v. Indiancountrytoday.com, 193 F.Supp.2d 528, 532 (N.D.N.Y.2002) (noting that the ACPA's in rem jurisdiction was provided to counter the unlawful activity of foreign-resident cybersquatters). 19 The registrant of captainbarbie.com is an Australian entity over which Mattel alleged in its complaint, and the district court apparently found, that Mattel was unable to obtain personal jurisdiction. 6 Consequently, Mattel sought to obtain in rem jurisdiction over captainbarbie.com pursuant to § 1125(d)(2)(A)(ii)(I). Because the parties effectively agree that in rem jurisdiction is available in some judicial district within the United States, we turn to the question of whether the Southern District of New York is a proper judicial district for entertaining this in rem action. To answer that question, we analyze the language and structure of § 1125(d)(2) as well as the legislative history of the ACPA. 20
21 The parties dispute the meaning and function of two subsections of 15 U.S.C. § 1125(d)(2). Subsection (d)(2)(A) provides that an in rem civil action may be filed in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located .... Id. § 1125(d)(2)(A). Subsection (d)(2)(C) states that the situs of a domain name in an in rem action shall be deemed to be 22 in the judicial district in which (i) the domain name registrar, registry, or other domain name authority that registered or assigned the domain name is located; or (ii) documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court. 23 Id. § 1125(d)(2)(C). Mattel argues that the latter subsection supplements and effectively expands the jurisdictional grant contained in the former subsection by permitting suit to be brought in any judicial district in which sufficient documents evidencing the disputed domain name are deposited with the district court. Accordingly, Mattel contends that it was simply following statutory instructions when it opted to file suit in the Southern District of New York and then arranged to have the Maryland registrar deposit domain-name documentation with that court. Captainbarbie.com argues, however, that subsection (d)(2)(A) provides the sole basis for in rem jurisdiction under the ACPA, and that subsection (d)(2)(C) simply describes the legal situs of the domain name once an in rem action has been properly commenced in the judicial district in which the domain-name registrar or a similar authority is located. 24 We begin, as we must, with a plain-meaning analysis of the language and structure of § 1125(d)(2). Williams v. Taylor, 529 U.S. 420, 431, 120 S.Ct. 1479, 146 L.Ed.2d 435 (2000); Senator Linie Gmbh & Co. Kg v. Sunway Line, Inc., 291 F.3d 145, 154 (2d Cir.2002); see also Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982) (There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. (internal quotation marks omitted)). The plain meaning of § 1125(d)(2) suggests that an in rem action may be brought only in that judicial district in which the domain name registrar, domain name registry or other authority that registered or assigned the domain name is located. The structure of § 1125(d)(2) is fully consistent with this plain meaning. A careful inspection of § 1125(d)(2) reveals that the sequence of its subsections generally traces the progress of an in rem action from the filing of suit and the service of process, id. § 1125(d)(2)(A)-(B), to the securing of the court's control and authority over the domain name, after suit has been commenced, through measures that ensure that the disputed property's 7 legal situs is within the judicial district, id. § 1125(d)(2)(C), to the granting of remedies against a domain name that has been found liable for cybersquatting, id. § 1125(d)(2)(D)(i). Section 1125(d)(2) then concludes by setting forth steps to be taken and actions to be avoided by the registrar or other domain-name authority if it wishes to avoid exposing itself to liability. Id. § 1125(d)(2)(D)(i)-(ii). 25 Thus, the arrangement of § 1125(d)(2) separates, conceptually and chronologically, the prescriptive jurisdiction-granting language of subsection (d)(2)(A) from the descriptive language of legal situs in subsection (d)(2)(C). Cf. FleetBoston, 138 F.Supp.2d at 128 (holding that § 1125(d)(2) assumes a temporal sequence that makes it impossible for [§ (2)(C)] to provide jurisdiction independent of subparagraph (2)(A)). Moreover, while subsection (d)(2)(A) speaks of fil[ing] an in rem civil action, subsection (d)(2)(C), which begins with the words [i]n an in rem action under this paragraph, plainly presupposes that such an action has already been filed in a judicial district referred to in subsection (d)(2)(A), and then proceeds to describe the domain name's legal situs during that action. Thus, by the time we reach subsection (d)(2)(C), we are already in litigation that was commenced pursuant to subsection (d)(2)(A). Nothing on the face of the statute suggests that a plaintiff may alter this procedural sequence, as Mattel did, by filing suit in a judicial district of its own choosing, and then attempting unilaterally to relocate the domain name's legal situs to buttress that choice. 26 In addition to the plain meaning of the statute's language, the canon of statutory interpretation known as generalia specialibus non derogant — general provisions do not qualify specific ones — is applicable here. See Senator Linie Gmbh, 291 F.3d at 157. It would be odd for Congress to have taken pains to enact subsection (d)(2)(A) with its specific procedure for filing an in rem action in the judicial district in which the domain registrar ... is located, only to qualify, and indeed nullify, that circumscribed requirement by effectively creating nationwide in rem jurisdiction in subsection (d)(2)(C). Such a reading of subsection (d)(2)(C) would have the effect of rendering the language of subsection (d)(2)(A) superfluous — a result frowned upon by courts. See Duncan v. Walker, 533 U.S. 167, 174, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001) (It is our duty to give effect, if possible, to every clause and word of a statute. (internal quotation marks omitted)); Washington Mkt. Co. v. Hoffman, 101 U.S. 112, 115-16, 25 L.Ed. 782 (1879) (As early as in Bacon's Abridgment, sect. 2, it was said that `a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.'); see also Cable News Network L.P., L.L.L.P. v. CNNews. com, 162 F.Supp.2d 484, 489 n. 15 (E.D.Va. 2001) ([W]ere both Section 1125(d)(2)(A) and Section 1125(d)(2)(C) [of the ACPA] to be read as providing in rem jurisdiction, all of Section 1125(d)(2)(A) and portions of Section 1125(d)(2)(C) would be rendered redundant, an impermissible result.); FleetBoston, 138 F.Supp.2d at 126 ([T]here is redundancy in plaintiff's position... because its broad reading of subparagraph (d)(2)(C) [to permit jurisdiction other than in the district of the domain name's registration] would essentially consume the narrower reach of subparagraph (d)(2)(A).).
27 The legislative history of the ACPA underscores the temporal sequencing that we have identified in § 1125(d)(2): 28 When a court of appropriate jurisdiction receives a complaint filed pursuant to this section, the court will notify the registrar, registry, or other authority who shall expeditiously deposit with the court documents to establish control and authority regarding the disposition of the registration and use of the domain name. 29 145 Cong. Rec. at H10,826. Congress's reference to a court of appropriate jurisdiction receiv[ing] a complaint filed pursuant to this section would be practically meaningless if it were read to suggest that the filing of a complaint in any district court in the United States could render that court one of appropriate jurisdiction. Clearly, appropriate jurisdiction is a status that precedes and is independent of the filing of the complaint, and is conferred by the presence of the registrar or other domain-name authority within that judicial district. Subsection (d)(2)(D) of the ACPA, echoing the language of subsection (d)(2)(A), reflects this intention of Congress: 30 Upon receipt of written notification of a filed, stamped copy of a complaint filed by the owner of a mark in a United States district court under this paragraph, the domain name registrar, domain name registry, or other domain name authority shall expeditiously deposit with the court documents sufficient to establish the court's control and authority regarding the disposition of the registration and use of the domain name to the court. 31 15 U.S.C. § 1125(d)(2)(D)(i)(I) (emphasis added). Thus, both the language of the statute and its legislative history indicate that in rem jurisdiction is a preexisting fact determined by the location of the disputed domain name's registrar or a similar authority, and that the subsequent deposit of sufficient documents with a court of appropriate jurisdiction confirms the domain name's legal situs as being in that judicial district for purposes of the litigation. 32 Because we base our conclusion on an analysis of the language and structure of § 1125(d)(2), it is unnecessary to reach any constitutional questions. Cf. United States v. Five Gambling Devices, 346 U.S. 441, 448, 74 S.Ct. 190, 98 L.Ed. 179 (1953) (The principle is old and deeply imbedded in our jurisprudence that this Court will construe a statute in a manner that requires decision of serious constitutional questions only if the statutory language leaves no reasonable alternative.). Nevertheless, we note, as part of our analysis of the legislative history, that in enacting subsection (d)(2)(A), Congress plainly sought to allay any concerns that the ACPA's in rem jurisdiction might offend due process or principles of international comity: 33 This type of in rem jurisdiction still requires a nexus based upon a U.S. registry or registrar [that] would not offend international comity.... Finally, this jurisdiction does not offend due process, since the property and only the property is the subject of the jurisdiction, not other substantive personal rights of any individual defendant. 34 H.R.Rep. No. 106-412, at 14 (1999). This language makes it clear that Congress considered the registry or registrar to provide a nexus for in rem jurisdiction under the ACPA. Nowhere does the legislative history suggest that this nexus might be supplied by domain-name documentation alone. Rather, it is the presence of the domain name itself — the property [that] is the subject of the jurisdiction — in the judicial district in which the registry or registrar is located that anchors the in rem action and satisfies due process and international comity. 35 The legislative history also shows that Congress conceived of § 1125(d)(2) as authorizing the type of in rem proceeding that, in contrast to  quasi in rem `attachment' jurisdiction, was found by the Supreme Court in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), to present few if any due process concerns. 8 145 Cong. Rec. S14,696, 14,714 (Nov. 17, 1999) (section-by-section analysis of the ACPA); see also 145 Cong. Rec. H11,769, 11,799 (Nov. 9, 1999) (conference report on H.R. 1554) (same). The Court in Shaffer observed that 36 when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would be unusual for the State where the property is located not to have jurisdiction. In such cases, the defendant's claim to property located in the State would normally indicate that he expected to benefit from the State's protection of his interest. 37 Shaffer, 433 U.S. at 207-08, 97 S.Ct. 2569; see also Chapman v. Vande Bunte, 604 F.Supp. 714, 716-17 (E.D.N.C.1985) (In a true in rem proceeding, in order to subject property to a judgment in rem, due process requires only that the property itself have certain minimum contacts with the territory of the forum.); cf. 145 Cong. Rec. at S14,714 (citing these passages from Shaffer and Chapman, and stating that the [ACPA] reinforces the view that in rem jurisdiction has continuing constitutional vitality); see also 145 Cong. Rec. at H11,799 (same). 38 In sum, we find that the legislative history of the ACPA reveals Congress's concern to establish a circumscribed basis for in rem jurisdiction that is grounded in the nexus provided by the registrar or other domain-name authority having custody of the disputed property. This congressional solicitude is fully consistent with what we find to be the plain meaning of § 1125(d)(2)(A): that an in rem action may be brought only in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located. 9 39
40 Mattel contends that if subsection (d)(2)(A) required a trademark owner to commence an in rem action only in the judicial district in which the domain-name registrar or a similar authority is located, then subsection (d)(2)(C)(ii) would be rendered meaningless because subsection (d)(2)(C)(i) would always apply. Another way of phrasing Mattel's argument is to ask why Congress chose to conjoin subsections (d)(2)(C)(i) and (d)(2)(C)(ii) by or instead of and — the more logical choice, at first glance, if Congress's intention had been to confine in rem litigation to the judicial district of registration. 10 Assuming, as we must, that Congress's choice of the disjunctive carries significance, see Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979) (Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise ....), we find no inconsistency between the implied possibility of more than one domain-name situs under subsection (d)(2)(C) and the clear limitation of in rem jurisdiction to one judicial district under subsection (d)(2)(A). Mattel's error is in assuming that subsections (d)(2)(A) and (d)(2)(C) both address jurisdiction. They do not. We have already observed that the former subsection is the operative jurisdiction-granting provision within § 1125(d)(2), while the latter serves to describe the legal situs of the disputed property for purposes of securing the district court's control and authority over that property during the litigation. Cf. Cable News Network, 162 F.Supp.2d at 489 n. 15 (holding that subsection (d)(2)(C) does not confer in rem jurisdiction but merely describes the domain name's legal situs). Moreover, as noted above, subsections (d)(2)(A), (d)(2)(C), and (d)(2)(D) work together to indicate that the legal situs of a domain name must be a judicial district in which an in rem action was properly commenced. 41 It is not difficult to imagine scenarios in which the disjunctive or in subsection (d)(2)(C) might become meaningful. 11 Suppose, for example, that an in rem action is properly commenced by the filing of a complaint in the Southern District of New York, where the disputed domain name's registrar is located. Prior to depositing documentation with the district court pursuant to subsection (d)(2)(D), however, the registrar relocates to the Northern District of Oklahoma, effectively removing the subject property from the Southern District. 12 The or in subsection (d)(2)(C) recognizes that the action could continue in the Southern District of New York once the registrar had dispatched documents from Oklahoma sufficient to secure the Southern District as the legal situs of the domain name. 13 See Standing Stone Media, 193 F.Supp.2d at 535 ([S]ubsection (d)(2)(C) may also be read as a savings provision in the event that the registrar of a domain name moves out of the judicial district where the action was commenced, goes out of business or sells its interests to another company in the time period between the filing of the complaint and the deposit of the required certificates of registration.). 42 Suppose, again, that the disputed domain name's registrar is located in the Southern District of New York, but the domain name's registry is based in the Northern District of Oklahoma. 14 The trademark owner has properly filed an in rem action in the Southern District of New York, where the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located, 15 U.S.C. § 1125(d)(2)(A) (emphasis added), only to discover that the Oklahoma registry, not the New York registrar, is the entity that maintains and issues official records regarding domain-name registration. Rather than refiling the in rem action in the Northern District of Oklahoma, the plaintiff or the court, supported by the language of subsection (d)(2)(C), could simply see to it that the Oklahoma registry deposited documentation sufficient to establish the domain name's legal situs within the Southern District of New York. Cf. Fleet-Boston, 138 F.Supp.2d at 125 (Subparagraph (2)(C), which defines the situs of the domain name either in the judicial district of the domain name registrar, registry, or other domain name authority ((C)(i)), or where documents establishing control of the registration are deposited with the court, ((C)(ii)), exists to facilitate the continuation of litigation in one of the districts identified in subparagraph (2)(A). (emphasis in original)). 43 Each of these hypothetical scenarios is consistent with the language and structure of § 1125(d)(2), which require that an in rem action under the ACPA be commenced in the judicial district in which the subject domain name's registrar, registry, or other authority is located, followed by deposit of sufficient domain-name documentation with the court in that district. No scenario consistent with this statutory scheme, however, would permit an ACPA plaintiff to establish in rem jurisdiction by filing a complaint in a judicial district not contemplated by subsection (d)(2)(A) and then unilaterally seeking to effect a transfer of legal situs to that district. Cf. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943 (4th Cir.1999) (holding that when a res is not in the court's actual or constructive possession, traditional principles of in rem jurisdiction dictate that the court may not adjudicate rights to the res and effectively bind others who may have possession); see also Restatement (Second) of Conflicts of Laws § 60 cmt. d (1971) (A State will not usually exercise judicial jurisdiction to affect interests in a chattel brought into its territory without the consent of the owner....). 44 It follows that, in the present case, Mattel's unauthorized arrangement to have registrar's certificates for captainbarbie.com and the other Domain Names transferred from Maryland, Virginia, and California for deposit with the Southern District of New York was an inappropriate and ineffectual method of establishing in rem jurisdiction under the ACPA. Cf. Greatdomains.Com, 177 F.Supp.2d at 659 (holding an ACPA plaintiff's actions insufficient to establish in rem jurisdiction and to satisfy the fairness requirements of the Constitution where [t]he only connection between the domain names and the forum... is that the domain names have been `brought' into the forum by [plaintiff] to facilitate its convenience in litigating the matter). Simply put, Mattel attempted to create jurisdiction in a judicial district where the disputed property or its legal situs was not voluntarily or legitimately located for purposes of in rem jurisdiction. 45 In sum, we hold that the ACPA's basic in rem jurisdictional grant, contained in subsection (d)(2)(A), contemplates exclusively a judicial district within which the registrar or other domain-name authority is located. A plaintiff must initiate an in rem action by filing a complaint in that judicial district and no other. Upon receiving proper written notification that the complaint has been filed, the domain-name authority must deposit with the court documentation sufficient to establish the court's control and authority regarding the disposition of ... the domain name, as required by subsection (d)(2)(D). This combination of filing and depositing rules encompasses the basic, mandatory procedure for bringing and maintaining an in rem action under the ACPA. Subsection (d)(2)(C) contributes to this scheme by descriptively summarizing the domain name's legal situs as established and defined in the procedures set forth in subsections (d)(2)(A) and (d)(2)(D). Accordingly, we affirm the district court's conclusion that it did not have in rem jurisdiction over the Domain Names in this action.