Amberson Holdings LLC v. Westside Story Newspaper

• Decision Date: 22 August 2000
• Docket Number: No. CIV.A. 00-1108 NHP.,CIV.A. 00-1108 NHP.
• Citation: 110 F.Supp.2d 332
• Parties: AMBERSON HOLDINGS LLC, and Amberson, Inc. v. WESTSIDE STORY NEWSPAPER, Wallace J. Allen and W.J. Allen Multimedia Productions, Inc.
• Court: New Jersey Supreme Court

110 F.Supp.2d 332

AMBERSON HOLDINGS LLC, and Amberson, Inc. v. WESTSIDE STORY NEWSPAPER, Wallace J. Allen and W.J. Allen Multimedia Productions, Inc.

No. CIV.A. 00-1108 NHP.

United States District Court, D. New Jersey.

August 22, 2000.

David A. Picon, Proskauer Rose LLP, Newark, NJ, for Plaintiffs.

Dennis W. Blake, Rubenstein, Rudolph, Meyerson & Blake, P.A., Oakland, NJ, Rickey Ivie, Ivie, McNeill & Wyatt, Los Angeles, CA, for Defendants.

POLITAN, District Judge.

Dear Counsel:

This matter comes before the Court on the motion by defendants Westside Story Newspaper, Wallace J. Allen and W.J. Allen Multimedia Productions, Inc., to dismiss the Complaint of plaintiffs Amberson Holdings LLC, and Amberson, Inc., for lack of personal jurisdiction. This matter was resolved without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated herein, the motion by defendants' Westside Story Newspaper, Wallace J. Allen and W.J. Allen Multimedia Productions, Inc. Motion to Dismiss is GRANTED and the Complaint of plaintiffs is DISMISSED WITHOUT PREJUDICE. Accordingly, this case is CLOSED.

STATEMENT OF FACTS

Defendants Westside Story Newspaper, Wallace J. Allen and W.J. Allen Multimedia Productions, Inc. (hereinafter collectively referred to as "defendants"), own and operate a weekly newspaper that is based in Southern California. See Affidavit of Wallace Allen, ¶ 4. It is alleged that Westside is the alter ego of defendants Wallace J. Allen and W.J. Allen Productions, Inc. and vice versa. See id., ¶ 6. Plaintiffs' trademark, "West Side Story", is incorporated into the title of defendants newspaper. See Complaint, ¶ 27.

In addition to the allegations of infringement based on the title of defendants newspaper, plaintiffs claim that defendants have further infringed their trademark by registering with Network Solutions, Inc., the exclusive registrar of domain names, for the Internet domain name "westsidestory.com". See id., ¶ 30. After completing registration of its domain name, defendants assigned, by written contract, "westsidestory.com" to a "host server"¹ that is owned and operated by a New Jersey corporation. See Affidavit of Andrew L. Lee at Exhibit B.

With its new domain name up and running, defendants began publishing and maintaining a website at "westsidestory.com" without plaintiffs' permission. See Complaint, ¶ 48. It is common knowledge that defendants generate significant revenue from its website by way of "click-through" advertising. See id., ¶ 36.

Plaintiffs contacted defendants regarding the alleged infringement and were met with an invitation to purchase "westsidestory.com". See Affidavit of Andrew L. Lee, ¶ 9. Defendants rejected the offer and, shortly thereafter, Congress passed the Anticybersquatting Consumer Protection Act, 15 U.S.C. Section 1125(d), which made it illegal for an individual or entity to register a trademark as a domain name with the intent to sell it for a profit to the rightful owner. See Complaint, ¶ 46. To protect against a possible lawsuit, defendants immediately added a disclaimer to their website stating, "Westside Story Not Affiliated with West Side Story the Musical." See id., ¶ 47.

Ultimately, plaintiffs filed an action seeking redress for the alleged infringements. Defendants responded with the subject Motion to Dismiss plaintiffs' claim for lack of personal jurisdiction and for failure to state a claim upon which relief can be granted.

DISCUSSION

The Supreme Court has expressly mandated that a plaintiff must establish certain procedural prerequisites before a federal court can exercise personal jurisdiction. See Omni Capital Intern. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). Once the procedural prerequisites have been met, the next question, then, is whether the district court may exercise in personam jurisdiction over the particular defendant.

A district court may exercise jurisdiction over a nonresident of the state in which that court sits only to "the extent authorized by the laws of that state." Provident Nat'l Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3d Cir.1987). New Jersey's long-arm statute permits courts to exercise jurisdiction to the fullest extent under the Constitution. See Avdel Corp. v. Mecure, 58 N.J. 264, 268, 277 A.2d 207 (1971); N.J. CT. R. 4:4-4. Accordingly, this Court's analysis must focus on whether an exercise of jurisdiction comports with the requirements of the Due Process Clause of the Fourteenth Amendment.

The constitutional touchstone of this analysis is whether the "defendant purposefully established `minimum contacts' in the forum State." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)(quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The minimum contacts must have a basis in "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." Rudzewicz, 471 U.S. at 475, 105 S.Ct. 2174. "The `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts, Keeton v. Hustler Magazine, Inc., 465 U.S. at 774, 104 S.Ct. at 1478; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. at 299, 100 S.Ct. at 568, or of the "unilateral activity of another party or third person," Helicopteros Nacionales de Columbia, S.A. v. Hall, supra, 466 U.S. at 417, 104 S.Ct. at 1873." "Jurisdiction is proper ... where the contacts proximately result from actions by the defendant himself that create a `substantial connection' with the forum State." Id. (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957)). Once minimal contacts are established, the court must ensure that the maintenance of the lawsuit does not offend "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316, 66 S.Ct. 154.

In Helicopteros Nacionales de Colombia v. Hall, the Supreme Court distinguished the exercise of specific jurisdiction from general jurisdiction. 466 U.S. 408, 414-15, 104 S.Ct. 1868 (1984). When the litigation is related to or arises out of a defendant's contacts with the forum, the jurisdictional analysis focuses on the "relationship among the defendant, the forum and the litigation." Id. at 414, 104 S.Ct. 1868 (citing Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)). This requirement is satisfied provided that the contacts resulted from the defendant's purposeful conduct and not the plaintiff's unilateral activities. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The courts have referred to this principle as "specific jurisdiction." Provident, 819 F.2d at 437.

Alternatively, when the cause of action does not relate to or arise out of the defendant's forum-related contacts, jurisdiction may be properly asserted without offending due process if the defendant has sufficient "continuous and systemic" contacts with the forum. The threshold for exercising this "general jurisdiction" is, consequently, significantly greater than the exercise of specific jurisdiction. Id. at 437 (citing Dollar Sav. Bank v. First Sec. Bank of Utah, 746 F.2d 208, 212 (3d Cir. 1984)).

Once a defendant raises the issue of personal jurisdiction, the plaintiff then bears the burden to demonstrate, by a preponderance of the evidence, that the defendant indeed had contacts sufficient to give the district court jurisdiction. See Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146-47 (3d Cir.), cert. denied, 506 U.S. 817, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992) (citing Time Share Vacation v. Atlantic Resorts, Ltd., 735 F.2d 61, 65 (3d Cir.1984)). Moreover, the plaintiff is required to sustain its burden through sworn affidavits or other competent evidence; at no point may a plaintiff rely on the pleadings alone in order to withstand an in personam jurisdictional attack. See Stranahan Gear Co., Inc. v. NL Indus., 800 F.2d 53, 58 (3d Cir.1986); Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir.1984).

In this matter, the factual record reveals that defendants' contacts with New Jersey are not sufficient to support an exercise of personal jurisdiction. To reach this finding, however, this Court has had the additional burden of exploring the issue of personal jurisdiction in the context of the Internet. Although there is no published case in the Third Circuit dealing with this issue, there is no lack of well-reasoned guidance.

Plaintiffs argue that this Court has specific personal jurisdiction over defendants because defendants have: (1) maintained a contractual relationship with a New Jersey company that provides "hosting services" for defendants' website on its Internet servers in New Jersey; (2) on at least two occasions represented to Network Solutions, Inc. that the data making up defendants' website is physically located on servers belonging to a New Jersey corporation and operated and maintained in New Jersey; (3) on those same two occasions, affirmatively instructed Network Solutions, Inc. to arrange for all Internet requests for access to defendants' website be directed to Internet servers physically located in New Jersey; (4) continuously communicated and interacted with visitors to their website via Internet servers physically located in New Jersey; and (5) regularly transmitted electronic files into New Jersey for storage and operation on Internet servers located in New Jersey for the purpose of establishing and updating their website and conducting business over the Internet using plaintiffs' trademark. See Affidavit of Andrew L. Lee, ¶ 2 to 9.

This Court will first address plaintiffs' contract argument. Ge...