Court Opinion

ID: 2981867
Source: CourtListenerOpinion
Date Created: 2015-09-22 19:53:43.660241+00
Date Added: 2024-06-11T15:45:01.253117
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 13a0570n.06

                                             No. 12-4139                                    FILED
                                                                                        Jun 11, 2013
                           UNITED STATES COURT OF APPEALS                         DEBORAH S. HUNT, Clerk
                                FOR THE SIXTH CIRCUIT

TRATON NEWS, LLC,                                  )
                                                   )
        Plaintiff-Appellant,                       )
                                                   )
v.                                                 )
                                                   )    ON APPEAL FROM THE UNITED
TRATON CORP., et al.,                              )    STATES DISTRICT COURT FOR THE
                                                   )    SOUTHERN DISTRICT OF OHIO
        Defendants-Appellees.                      )

Before: GIBBONS and WHITE, Circuit Judges; COHN, Senior District Judge*

        JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-appellant Traton News, LLC appeals

the district court’s dismissal of this suit for lack of personal jurisdiction. Plaintiff claims that the

district court had personal jurisdiction over defendants based on a forum selection clause in a

browsewrap agreement1 on traton.com. Assuming, without deciding, that the browsewrap agreement

and forum selection clause are enforceable, we find that plaintiff’s Lanham Act claims against

defendant Traton Homes, LLC do not fall within the scope of the forum selection clause because

       *
       The Honorable Avern Cohn, Senior United States District Judge for the Eastern District of
Michigan, sitting by designation.
       1
        A browsewrap agreement discloses terms on a website that offers a product or service to the
user, and the user assents by visiting the website to purchase the product or enroll in the service.
Schnabel v. Trilegiant Corp., 697 F.3d 110, 129 n.18 (2d Cir. 2012). Browsewrap agreements may
be contrasted with “clickwrap” agreements, which require the user to manifest assent to the terms
by clicking on an icon. Id.

                                                  -1-
these claims do not “arise out of or relate to” the “use” of traton.com. Without personal jurisdiction

over Traton Homes with respect to the Lanham Act claims, the district court properly exercised its

discretion to dismiss the remaining state law claims asserted against the defendants. We therefore

affirm the district court’s dismissal of this action.

                                                    I.

        Defendants Traton Corporation and its affiliated company Traton Homes, LLC (collectively

referred to as “Traton defendants”) build homes and develop communities in and around Atlanta,

Georgia. Several years ago, Christopher Moses, represented by Sam Han, filed suit in Georgia state

court against Traton Corporation alleging that the company trespassed on his property. Moses v.

Traton Corp., 650 S.E.2d 353 (Ga. Ct. App. 2007). The Court of Appeals affirmed the lower court’s

entry of summary judgment for Traton Corporation. Id. at 354. In March 2006, Moses registered

Traton News, LLC as a Georgia entity (“Traton News (Georgia)”). The following month, Traton

News (Georgia) applied to register the mark “Traton” with respect to “news reporting services.” The

U.S. Patent and Trademark Office (“PTO”) registered the mark “Traton” on February 13, 2007.

Moses voluntarily dissolved Traton News (Georgia) on January 15, 2008. Meanwhile, Moses moved

from Georgia to Virginia and registered the entity Traton News, LLC in Virginia on September 10,

2007. The Commonwealth of Virginia cancelled Traton News, LLC on December 31, 2008, for

failure to pay fees. In 2011, Han registered Traton News, LLC in Ohio (“Traton News (Ohio)”).

Traton News (Ohio) is the plaintiff in this case.

        Traton.com has been in operation since spring 2006. Plaintiff claims that it owns the

“Traton” mark and that it operates traton.com. According to Han, traton.com posts articles on a

variety of topics, including “chess, intellectual property, Traton Homes, other homebuilders in the

                                                    -2-
Atlanta area, a meteor shower, Star Trek, and others.” Defendants allege that plaintiff’s only purpose

in operating traton.com is to publish false and defamatory information about the Traton defendants

and their employees. A browsewrap agreement is located on the homepage of traton.com. It states

that: “none of these materials may be used for the benefit of Traton Corp. . . . and/or its affiliates for

any reason whatsoever.” The browsewrap agreement includes a forum selection clause that provides

that the user “consent[s] to the exclusive jurisdiction and venue of courts in or nearest to the United

States District Court for the Southern District of Ohio, Western Division, in all disputes arising out

of or relating to the use of this Web site.”

        In response to the negative information published on traton.com, Traton Homes consulted

with Flammer Relations, Inc., a public relations and social media firm. In August 2010, Traton

Homes hired mRELEVANCE, LLC to assist in the creation of a blog to publicize positive news and

events about Traton Homes. Flammer Relations is part owner of mRELEVANCE and worked

through    mRELEVANCE             to   assist   in     the   creation   and    maintenance       of   the

blog—tratonhomesblog.com. In addition, Traton Homes has maintained its regular business website,

tratonhomes.com, since before 2005. According to plaintiff, Traton Homes also has registered the

domain names tratonnews.com and tratonnews.net since 2009, but has not maintained any content

on those sites.

        Traton News (Ohio) filed its amended complaint in the Southern District of Ohio on February

24, 2012, against Traton Corporation, Traton Homes, Flammer Relations, and mRELEVANCE. The

amended complaint brings the following Lanham Act claims solely against Traton Homes:

(1) cyberpiracy in violation of 15 U.S.C. § 1125(d); (2) trademark infringement in violation of 15

U.S.C. § 1114; (3) false designation in violation of 15 U.S.C. § 1125(a); and (4) false description

                                                     -3-
in violation of 15 U.S.C. § 1125(a). The amended complaint also brings breach of contract claims

against Traton Corporation, Traton Homes, Flammer Relations, and mRELEVANCE. Plaintiff

alleges that each defendant breached the terms of the browsewrap agreement by monitoring

traton.com and using information on traton.com for the benefit of the Traton defendants.

        Defendants filed motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2),

(6), and (7). The district court granted defendants’ motions to dismiss for lack of personal

jurisdiction. It found that Traton Homes did not consent to personal jurisdiction in the Southern

District of Ohio based on the forum selection clause for two independent reasons: (1) the Lanham

Act claims fall outside the scope of the forum selection clause, and (2) the browsewrap agreement

is unenforceable for lack of consideration. Next, the district court determined that plaintiff did not

make a prima facie showing that Traton Homes has sufficient contacts with the State of Ohio to

satisfy the Due Process Clause of the Fourteenth Amendment. The district court concluded that it

would be improper to exercise jurisdiction over the remaining breach of contract claims. Plaintiff

has appealed the district court’s dismissal of this action. Because we find that the Lanham Act

claims fall outside the scope of the forum selection clause, we do not address the district court’s

alternative basis for finding that it lacked personal jurisdiction over defendants. On appeal, plaintiff

has abandoned its argument that Traton Homes has sufficient contacts with the State of Ohio to

confer personal jurisdiction under the Due Process Clause.

                                                    II.

        This court reviews de novo the district court’s dismissal of this action for lack of personal

jurisdiction. City of Monroe Emps. Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 664 (6th Cir. 2005).

A party may consent to the personal jurisdiction of a particular court through a forum selection clause.

                                                   -4-
Preferred Capital, Inc. v. Power Eng’g Grp., Inc., 860 N.E.2d 741, 744 (Ohio 2007). A forum

selection clause confers personal jurisdiction on a court over only those disputes that the parties agreed

to litigate in that forum. The forum selection clause in the browsewrap agreement states: “You hereby

consent to the exclusive jurisdiction and venue of courts in or nearest to the United States District Court

for the Southern District of Ohio, Western Division, in all disputes arising out of or relating to the use

of this Web site.”

        Ohio cases typically interpret the meaning of the phrases “arise out of” and “relate to” in the

context of arbitration agreements.2 Ohio has a strong public policy favoring arbitration, and when there

is doubt as to whether an arbitration clause covers a dispute, such doubts should be resolved in favor

of arbitration. Council of Smaller Enters. v. Gates, McDonald & Co., 687 N.E.2d 1352, 1356 (Ohio

1998). By contrast, there is no principle that favors application of forum selection clauses. An

arbitration clause that contains the phrase “any claim or controversy arising out of or relating to the

agreement” is considered a “broad” arbitration clause. Mak v. Silberman, No. 95590, 2011 WL 683899,

at *3 (Ohio Ct. App. Feb. 24, 2011) (slip copy). A broad arbitration clause “embraces all disputes

between the parties having a significant relationship to the contract regardless of the label attached to

the dispute.” Blanchard Valley Health Ass’n v. ProMedica Health Sys., No. 5-06-13, 2006 WL
3257716, at *6 (Ohio Ct. App. Nov. 13, 2006) (alterations omitted). However, a claim likely falls

outside the scope of a broad arbitration clause “if [the] action could be maintained without reference

to the contract or relationship at issue.” Silberman, 2011 WL 683899 at *3 (internal quotation marks

       2
        The browsewrap agreement provides that it is governed by Ohio law without regard to
Ohio’s conflict-of-law principles. Because we do not reach the issue whether the agreement is
enforceable and neither party disputes that Ohio law applies, we assume, without deciding, that Ohio
law controls in determining the scope of the forum selection clause.

                                                   -5-
omitted). Broad arbitration clauses typically require arbitration of disputes arising out of or relating to

the agreement containing the arbitration clause. By contrast, the forum selection clause here requires

arbitration of “all disputes arising out of or relating to the use of this Web site.” We therefore ask

whether the Lanham Act claims have a significant relationship to the use of traton.com and whether the

action could be maintained without reference to the use of traton.com.

        In count one, plaintiff claims that Traton Homes violated the Anticybersquatting Consumer

Protection Act, 15 U.S.C. § 1125(d),3 which provides for civil liability when a plaintiff proves that

“(1) the defendant registered, trafficked in, or used a domain name; (2) the domain name is identical

or confusingly similar to a protected mark owned by the plaintiff; and (3) the defendant acted ‘with bad

faith intent to profit from that mark.’” DSPT Int’l, Inc. v. Nahum, 624 F.3d 1213, 1218–19 (9th Cir.

2010) (quoting 15 U.S.C. § 1125(d)(1)(A)). Plaintiff contends that Traton Homes is liable because it

registered the domain names tratonnews.com and tratonnews.net and then failed to maintain any content

on those sites. Plaintiff further alleges that these domain names are confusingly similar to the “Traton”

mark with respect to news reporting services.

        In count two, plaintiff alleges that Traton Homes violated 15 U.S.C. § 1114, which imposes

civil liability on a person who, without consent of the registrant of a trademark, uses the mark in

commerce in connection with the sale of any good or service and as a result, is likely to cause

confusion. Plaintiff claims that Traton Homes used the “Traton” mark in commerce and that its use of

the term has caused confusion.

       3
           The Anticybersquatting Consumer Protection Act is in Subchapter III of the Lanham Act.

                                                    -6-
       In count three, plaintiff claims that Traton Homes violated 15 U.S.C. § 1125(a), which imposes

civil liability on a person who

       in connection with any goods or services . . . uses in commerce any word, term, [or]
       name . . . which . . . is likely to cause confusion, or to cause mistake, or to deceive as to
       the affiliation, connection, or association of such person with another person, or as to
       the origin, sponsorship, or approval of his or her . . . services . . . by another person[.]

Specifically, plaintiff alleges that “Traton Defendants’ use of the mark [‘Traton’] in reference to a blog

and the link for News on that blog constitutes a false designation of origin of being associated with

Traton News.” Plaintiff contends that “Traton Homes’[s] use of News on its blog site is likely to cause

confusion, to cause mistake, to deceive, or a combination thereof with Traton News.”

       In count four, plaintiff claims that Traton Homes violated 15 U.S.C. § 1125(a) by falsely

describing marketing on its website as news reporting services. According to plaintiff, “Traton Homes

has, in promotion, misrepresented the nature, characteristics, quality or a combination thereof by calling

the self-promotion and marketing ‘News’ of a news reporting service.”

       These Lanham Act claims relate to actions taken by Traton Homes on its own

websites—tratonhomes.com, tratonhomesblog.com, tratonnews.com, and tratonnews.net. Plaintiff

alleges that by maintaining tratonnews.com and tratonnews.net, Traton Homes committed cyberpiracy.

Plaintiff also alleges that Traton Homes committed trademark infringement, false designation, and false

description by using the mark “Traton” and term “News” on tratonhomes.com and

tratonhomesblog.com. Plaintiff claims that these actions violate its rights to the mark “Traton” with

respect to news reporting services. The Lanham Act claims do not depend upon or involve anyone’s

use of traton.com. In fact, as the district court observed, counts one through four of the complaint do

not mention the use of traton.com or its browsewrap agreement. Thus, the Lanham Act claims do not

                                                   -7-
have a “significant relationship” to the use of traton.com, and the Lanham Act claims can be maintained

without reference to the use of traton.com.

       We reject plaintiff’s invitation to expand the meaning of the phrase “arise out of or relate to.”

Plaintiff argues that counts two through four relate to the use of traton.com because defendants accessed

traton.com often in the weeks leading up to the launch of tratonhomesblog.com. Plaintiff claims that

“[i]t is virtually impossible to ignore the connection between [defendants’] two-week spike in

harvesting information from Traton’s website and the creation of the [Traton Homes’s] weblog [sic]

using the harvested information, immediately following the two-week spike.” Plaintiff also argues that

count one is related to the use of traton.com because Traton Homes’s motivation for maintaining the

domain names tratonnews.com and tratonnews.net is to prevent Internet traffic from reaching

traton.com. According to plaintiff, “[r]educing web traffic to Traton’s website is directly related to the

use of Traton’s website.” Plaintiff claims that the reason Traton Homes took actions that allegedly

violate the Lanham Act was because it was unhappy with the content on traton.com. Even if this is true,

the rights plaintiff seeks to vindicate in the Lanham Act claims do not relate to the use of traton.com

because they arise from its purported ownership of the mark “Traton” and not from the browsewrap

agreement. Ohio law instructs that the Lanham Act claims fall outside the scope of this forum selection

clause if they “could be maintained without reference” to the use of traton.com. Silberman, 2011 WL
683899 at *3. As discussed above, we find that they could. Accordingly, we do not expand our inquiry

to whether there are any other underlying factual connections between the use of traton.com and the

Lanham Act claims or why Traton Homes acted in a way that allegedly violates the Lanham Act.

       The contract claims may indeed arise out of the use of traton.com and the browsewrap

agreement could potentially provide a basis for personal jurisdiction over Traton Homes. Yet, we need

                                                   -8-
not resolve that issue because no basis for federal subject matter jurisdiction exists other than the

Lanham Act claims. The district court did not abuse its discretion in refusing to exercise supplemental

jurisdiction over the breach of contract claims and dismissing them without prejudice.

                                                   III.

       Because we find that the Lanham Act claims fall outside the scope of the forum selection clause,

we affirm the district court’s dismissal of this action for lack of personal jurisdiction.

                                                   -9-