Court Opinion

ID: 5127845
Source: CourtListenerOpinion
Date Created: 2021-11-20 01:00:37.9484+00
Date Added: 2024-06-11T08:23:03.036438
License: Public Domain

Case: 21-30098     Document: 00516102145         Page: 1     Date Filed: 11/19/2021

           United States Court of Appeals
                for the Fifth Circuit                               United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                   November 19, 2021
                                  No. 21-30098                        Lyle W. Cayce
                                                                           Clerk

   Admar International, Incorporated; Luv N Care,
   Limited,

                                                           Plaintiffs—Appellants,

                                      versus

   Eastrock, L.L.C., doing business as Haakaa U S A,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                            USDC No. 3:20-CV-904

   Before Higginbotham, Smith, and Ho, Circuit Judges.
   James C. Ho, Circuit Judge:
         Merely running a website that is accessible in all 50 states, but that
   does not specifically target the forum state, is not enough to create the
   “minimum contacts” necessary to establish personal jurisdiction in the
   forum state under International Shoe Co. v. Washington, 326 U.S. 310, 316
   (1945). The defendant must take the additional step of targeting the forum
   state in a manner that reflects “purposeful availment” of the opportunity to
   do business in that state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
Case: 21-30098       Document: 00516102145             Page: 2   Date Filed: 11/19/2021

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   (1985). No such step was taken here, so we affirm the dismissal of this case
   for lack of personal jurisdiction.
                                             I.
          Plaintiffs Luv N’ Care, Ltd. and Admar International, Inc. are in the
   baby products business. They allege that Eastrock, LLC—a Wisconsin
   company with its principal place of business in Wisconsin—committed
   copyright and trade dress infringement by displaying copies of their products
   on its website.
          Plaintiffs might have sued Eastrock in Wisconsin. They instead chose
   Louisiana. But Eastrock has no offices, no salespeople, and no stores in that
   state. Nor is Eastrock licensed to do business there. And although a few
   third-party stores in Louisiana carry Eastrock’s products, none of these
   stores carry the products at issue in this appeal.
          Instead, the accused products are available only on Eastrock’s
   website, as well as on three third-party sites: Amazon.com, Target.com, and
   buybuybaby.com. Eastrock has neither sold nor shipped a single accused
   product to a Louisiana resident through its website. As for Amazon and
   Target, Eastrock delivers the products to distribution centers—none of
   which are in Louisiana—but is not involved in sales or shipments to
   consumers. Finally, Eastrock “drop-ships” products for BuyBuyBaby—that
   is, BuyBuyBaby first sells a product to a consumer, and then it purchases the
   product from Eastrock, who then ships the item directly to the consumer.
   Under this scheme, only one accused product has been shipped to a
   Louisiana resident.
          To be sure, Eastrock does publicly display the accused products on its
   website, where it advertises the products and offers them for sale. But
   Eastrock does not direct any advertising at Louisiana in particular. Eastrock

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   simply runs an interactive website that is accessible throughout the United
   States.
             Eastrock moved to dismiss for lack of personal jurisdiction. The
   magistrate judge determined that Eastrock’s website was not enough to
   create minimum contacts with Louisiana and thus recommended that the
   motion be granted.       The district court agreed and dismissed the suit.
   Plaintiffs now appeal.
                                           II.
             Personal jurisdiction is a question of law reviewed de novo. Mink v.
   AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999). The Supreme Court has
   repeatedly reaffirmed that, as a matter of due process, courts may exercise
   personal jurisdiction over a nonresident defendant only if “(1) that defendant
   has purposefully availed himself of the benefits and protections of the forum
   state by establishing ‘minimum contacts’ with the forum state; and (2) the
   exercise of jurisdiction . . . does not offend ‘traditional notions of fair play
   and substantial justice.’” Id. at 336 (quoting Int’l Shoe, 326 U.S. at 316).
             Forum contacts may be sufficient to give rise to either specific or
   general jurisdiction. “Specific jurisdiction exists when the nonresident
   defendant’s contacts with the forum state arise from, or are directly related
   to, the cause of action. General jurisdiction exists when a defendant’s
   contacts with the forum state are unrelated to the cause of action but are
   ‘continuous and systematic.’” Id. (citations omitted). In this appeal,
   Plaintiffs rely only on specific jurisdiction.
             We apply a three-step test to determine whether specific jurisdiction
   exists. First, Plaintiffs must show that Eastrock has minimum contacts with
   Louisiana—that Eastrock purposefully directed its activities at Louisiana and
   availed itself of the privilege of doing business there. See, e.g., Seiferth v.
   Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). Second,

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   Plaintiffs must show that their cause of action arises out of Eastrock’s
   Louisiana contacts. See id. And third, if Plaintiffs satisfy the first two steps,
   then Eastrock must show that exercising jurisdiction would prove unfair or
   unreasonable. See id. We conclude that Plaintiffs have failed at the first
   step—purposeful availment—and thus have no occasion to address steps two
   and three.
          “The analysis applicable to a case involving jurisdiction based on the
   Internet should not be different at its most basic level from any other personal
   jurisdiction case.” Pervasive Software, Inc. v. Lexware GmbH & Co. KG, 688
   F.3d 214, 226–27 (5th Cir. 2012) (cleaned up). To assess the existence or
   absence of purposeful availment based on activities on the Internet, this court
   has adopted the framework set forth in Zippo Manufacturing Co. v. Zippo Dot
   Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). See Mink, 190 F.3d at 336.
   Under Zippo, a defendant has purposefully availed itself of the benefits and
   protections of the forum state if it “enters into contracts with residents of
   [the] foreign jurisdiction that involve the knowing and repeated transmission
   of computer files over the Internet.” 952 F. Supp. at 1124. It has not done
   so simply by posting information on a passive website. Id. Between those
   extremes, purposeful availment turns on “the level of interactivity and
   commercial nature of the exchange of information that occurs on the Web
   site.” Id.
          At bottom, Zippo seeks to answer the question: Has the defendant
   targeted the forum state? See Pervasive Software, 688 F.3d at 228. The
   touchstone of personal jurisdiction remains the existence of “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.” Id. at 222 (quotations omitted).

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          Plaintiffs essentially rest their case for personal jurisdiction on
   Eastrock’s website. Their argument can be distilled to this: (1) Eastrock runs
   an interactive website; (2) the accused products are illegally displayed,
   advertised, promoted, and offered for sale on the website; (3) the website
   targets the entire United States, so Eastrock has minimum contacts with
   Louisiana, and (4) this suit arises from those contacts.
          Missing here is any evidence that Eastrock’s website specifically
   targets Louisiana. To be sure, Eastrock’s website is more than passive—the
   site receives purchases, allows customers to create accounts, and accepts
   product reviews. But there is no evidence that Eastrock has “engag[ed] in
   business transactions with forum residents” or entered contracts with them.
   Mink, 190 F.3d at 337 (citing Zippo, 952 F. Supp. at 1125–26).
          That leaves us in the middle of the Zippo spectrum, so we must
   consider “the level of interactivity” of Eastrock’s website. Id. at 336. And
   as we explained in Pervasive Software, “[w]ebsite interactivity is important
   only insofar as it reflects . . . purposeful targeting of residents of the forum
   state.” 688 F.3d at 228 (quotations omitted). See also id. at 227 n.7.
          Plaintiffs contend that Eastrock’s interactive website targets the
   entire United States, and so it necessarily targets Louisiana. But we have
   previously rejected this “greater includes the lesser” theory. In Revell v.
   Lidov, 317 F.3d 467 (5th Cir. 2002), the plaintiff brought a defamation action
   in Texas against two out-of-state defendants. Id. at 469. The suit arose from
   an article that one defendant posted to an online bulletin board published and
   operated by the other defendant from New York. Id. We rejected personal
   jurisdiction over both defendants, reasoning that the allegedly defamatory
   article was accessible in Texas, but it “was not directed at Texas readers as
   distinguished from readers in other states.” Id. at 473. See also id. at 475
   (“[T]he post to the bulletin board here was presumably directed at the entire

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   world, or perhaps just concerned U.S. citizens. But certainly it was not
   directed specifically at Texas.”).
          Similarly, in Pervasive Software, we observed that a German defendant
   “ha[d] no offices or sales agents in Texas and solicit[ed] no business there
   through advertising targeted specifically to Texas.” 688 F.3d at 228 (emphasis
   added). Although the defendant’s “website [was] accessible worldwide,” id.
   at 218, its “actions of making its [products] internet-accessible were not
   purposely directed toward Texas,” id. at 227. We concluded that personal
   jurisdiction failed because the defendant’s website was merely accessible in
   the forum and did not target the forum. Id. at 227–28.
          So too here. Louisiana residents can access Eastrock’s website, no
   less than residents of other states. But as our cases suggest, and as we now
   expressly hold, a defendant does not have sufficient minimum contacts with
   a forum state just because its website is accessible there. The defendant must
   also target the forum state by purposefully availing itself of the opportunity
   to do business in that state. And here, there is no evidence that Eastrock
   targets Louisiana: Eastrock has not sold a single accused product to a
   Louisiana resident, and it solicits no business there through targeted
   advertising. That ends this case.
          Our sister circuits have confronted the same question we face today
   and reached the same outcome. See, e.g., be2 LLC v. Ivanov, 642 F.3d 555,
   559 (7th Cir. 2011) (“If the defendant merely operates a website, even a
   ‘highly interactive’ website, that is accessible from, but does not target, the
   forum state, then the defendant may not be haled into court in that state
   without offending the Constitution.”); Shrader v. Biddinger, 633 F.3d 1235,
   1241 (10th Cir. 2011) (“The maintenance of a web site does not in and of
   itself subject the owner or operator to personal jurisdiction, even for actions
   relating to the site, simply because it can be accessed by residents of the

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   forum state.”); GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343,
   1350 (D.C. Cir. 2000) (rejecting argument that the “mere accessibility of the
   defendants’ websites establishes the necessary ‘minimum contacts’ with
   [the] forum”).
           To hold otherwise would be too much. Take this case: If Eastrock has
   minimum contacts with Louisiana, then it has minimum contacts with all 50
   states, for no other reason than that it put up a website. No other circuit has
   endorsed such a sweeping view. Neither do we. 1
                                               ***
           The Internet is premised on the lack of territorial limits. Personal
   jurisdiction works just the opposite. Merely running a website that is
   accessible in the forum state does not constitute the purposeful availment
   required to establish personal jurisdiction under longstanding principles of
   due process. We accordingly affirm.

           1
              Plaintiffs also suggest in passing that Eastrock may have established minimum
   contacts with Louisiana when it shipped an accused product for BuyBuyBaby. But
   Eastrock’s delivery of a single $13 product to Louisiana is the type of isolated act that does
   not create minimum contacts. See Pervasive Software, 688 F.3d at 228 (“A corporation’s
   sales to forum residents must be more than ‘isolated’ occurrences for the assertion of
   jurisdiction to satisfy the requirements of due process.”).

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