Opinion ID: 176145
Heading Depth: 3
Heading Rank: 2

Heading: The Relationship Between Defendant's Contacts and Plaintiff's Claim

Text: 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. Burger King, 471 U.S. at 472-73, 105 S.Ct. 2174, quoting Helicopteros Nacionales, 466 U.S. at 414, 104 S.Ct. 1868; Tamburo, 601 F.3d at 708. GoDaddy argues that all of its contacts with Illinois are irrelevant to the constitutional analysis because they are unrelated to uBID's lawsuit. This argument fails because it misunderstands the reason why due process requires that the claim and the contacts be related. On this relationship, our opinion in RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272 (7th Cir.1997), is instructive. We cannot simply aggregate all of a defendant's contacts with a stateno matter how dissimilar in terms of geography, time, or substanceas evidence of the constitutionally-required minimum contacts. 107 F.3d at 1277. To do so would mean that people and companies would have to conduct interstate business without the confidence that transactions in one context will not come back to haunt them unexpectedly in another. Id. at 1278. That kind of uncertainty surrounding the consequences of one's actions in another state is precisely what the due process clause aims to prevent in the context of specific jurisdiction. Id. at 1277-78; accord, International Shoe, 326 U.S. at 317, 66 S.Ct. 154 (subjecting a corporate defendant to suit on claims with no connection to its activities in the forum state has been thought to lay too great and unreasonable a burden on the corporation to comport with due process). Can we say more precisely how the plaintiff's claim and the defendant's contacts must be related? Illustrating competing approaches to this question, some circuits have analogized the required relationship between contacts and claims to the tort concepts of but-for and proximate causation. See Tamburo, 601 F.3d at 708-09, comparing Massachusetts School of Law at Andover, Inc. v. American Bar Ass'n, 142 F.3d 26, 35 (1st Cir.1998) (requiring for a tort claim that the defendant's contacts be the proximate or legal cause of the plaintiff's injury); with Doe v. American Nat'l Red Cross, 112 F.3d 1048, 1051 n. 7 (9th Cir.1997) (requiring only that the defendant's contacts be the but-for cause of the plaintiff's injury); Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1270 n. 21 (5th Cir.1981) (same). We have not previously endorsed either approach, see Tamburo, 601 F.3d at 709, and we decline to do so now. The Third Circuit's opinion in O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312 (3d Cir.2007), shows why neither of those conceptions of relatedness is entirely satisfactory. In O'Connor, the plaintiffs were a Pennsylvania couple who had been heavily solicited in Pennsylvania by a resort in Barbados and contracted with the resort for a spa vacation there. One of the plaintiffs suffered an injury during their stay, and they sued the resort for negligence in Pennsylvania. The Third Circuit held that the resort was subject to personal jurisdiction in Pennsylvania. The court followed the Supreme Court's lead in declining to apply a mechanical test, but tried to provide structured guidance for district courts and litigants. The Third Circuit focused on the tacit quid pro quo that makes litigation in the forum reasonably foreseeable: out-of-state residents may avail themselves of the benefits and protections of doing business in a forum state, but they do so in exchange for submitting to jurisdiction in that state for claims arising from or relating to those activities. See id. at 322, citing Burger King, 471 U.S. at 475-76, 105 S.Ct. 2174. On this understanding of relatedness, neither but-for causation nor proximate causation is a satisfactory guide. But-for causation would be vastly overinclusive, haling defendants into court in the forum state even if they gained nothing from those contacts. The tacit quid pro quo would break down. See O'Connor, 496 F.3d at 322-23. On the other hand, requiring proximate causation between contacts and claim would exclude too many claims like the one in O'Connor, where the defendant's contacts with Pennsylvania proved little about the plaintiff's negligence claim, but undoubtedly gave the defendant fair warning that the very business it sought in Pennsylvania might injure a Pennsylvania resident. See id. at 323-24. The precise causal relationship between contacts and claim was not important; what was required was that the relationship be intimate enough to keep the quid pro quo proportional and personal jurisdiction reasonably foreseeable. Id. at 323. The Third Circuit's approach follows carefully the Supreme Court's guidance on the question of relatedness. See International Shoe, 326 U.S. at 319, 66 S.Ct. 154 (identifying exchange of protection of laws of forum state for obligation to respond there, and authorizing jurisdiction where the obligations to respond arise out of or are connected with the activities within the state); Burger King, 471 U.S. at 475-76, 105 S.Ct. 2174. It is also consistent with our own precedent on this subject. See RAR, 107 F.3d at 1278 (rejecting but-for causation in contract case, and recognizing that the line will not always be a bright one). 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. Complaint ¶ 20. Looking to the forum state's side of the bargain, what does the plaintiff charge GoDaddy with doing? The greatest part of uBID's complaint is devoted to allegations that, as the licensee of its registrants, GoDaddy used and trafficked in the free parked pages with bad-faith intent to profit from uBID's marks. Complaint ¶¶ 20-22; Ex. A. Substantively, the contacts alleged in uBID's complaint and the wrongs alleged in uBID's complaint are so intimately related that GoDaddy cannot reasonably have been surprised to find itself sued in Illinois. Temporally, too, the claim and the contacts are inseparable. The allegedly infringing parked pages were all active and garnering income at the time uBID filed its complaint, see Compl. Ex. A, during which time GoDaddy was also advertising and selling domain names in Illinois through its parked page service. Cf. GCIU-Employer Retirement Fund v. Goldfarb Corp., 565 F.3d 1018, 1024-25 (7th Cir.2009) (affirming dismissal for lack of personal jurisdiction where defendant surrendered its controlling interest in a subsidiary in the forum months before the sale of the subsidiary gave rise to the lawsuit). The concept of a geographical nexus is harder to apply to cases like this one, where the alleged wrong can fairly be characterized as occurring anywhere the Internet is accessible. In other words, uBID has the same claim against GoDaddy whether the customer who registered or another similar domain name did so from Illinois, from Wyoming, or from China. One conclusion we might draw from this fact is that a physical geographical nexus is simply less important in cases where the alleged harm occurred over the Internet. Such a conclusion would not necessarily be inconsistent with due process. After all, the geographical relationship between claim and contacts is only one facet of the constitutional inquiry. The plaintiff must still prove that the defendant had constitutionally sufficient contacts with the forum and that the defendant's contacts were temporally and substantively related to the lawsuit. Without that showing, the mere fact that the defendant allegedly caused harm by conducting business or advertising over the Internet is not adequate to establish jurisdiction in the plaintiff's chosen forum state. See, e.g., GTE New Media Services Inc. v. BellSouth Corp., 199 F.3d 1343, 1350 (D.C.Cir.2000); Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 418 (9th Cir. 1997). [3] GoDaddy argues that the alleged injury to uBID was not complete until GoDaddy connected the newly registered domain name to the parked page service. By this logic, the location of GoDaddy's alleged misconduct was Arizona, no matter where the GoDaddy customer lived, and uBID's claim arising out of that misconduct is unrelated to any of GoDaddy's contacts with Illinois. Due process does not require us to slice GoDaddy's alleged wrongdoing so finely. When customers go to GoDaddy.com and register for GoDaddy's parked page or cash parking services, they pay a fee with the expectation that they will get what they've paid for. At that point, GoDaddy is contractually obligated to commit the wrong alleged by uBID. Where GoDaddy chooses to locate the servers that complete the task is irrelevant. The claim brought by uBID in Illinois arises directly out of GoDaddy's registration of the infringing domain names bought by customers it has solicited in Illinois and many other states. The claim bears a sufficient relationship to GoDaddy's business activities in Illinois to expect GoDaddy to defend itself in Illinois without violating the due process clause.