Gator.Com Corp. v. L.L. Bean, Inc.

• Decision Date: 02 September 2003
• Docket Number: No. 02-15035.,02-15035.
• Parties: GATOR.COM CORP., Plaintiff-Appellant, v. L.L. BEAN, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

341 F.3d 1072

GATOR.COM CORP., Plaintiff-Appellant, v. L.L. BEAN, INC., Defendant-Appellee.

No. 02-15035.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 2, 2002 — San Francisco, California.

Filed September 2, 2003.

Michael Traynor (argued), San Francisco, California, Cooley Godward (appeared only), Reston, Virginia, and Brian E. Mitchell, San Francisco, California, for the plaintiff-appellant.

Peter J. Brann, Lewiston, Maine, for the defendant-appellee.

Appeal from the United States District Court for the Northern District of California; Maria-Elena James, Magistrate Judge, Presiding. D.C.No. CV-01-01126-MEJ.

Before Warren J. FERGUSON, BRUNETTI, Melvin Brunetti, and A. Wallace TASHIMA, Circuit Judges.

OPINION

FERGUSON, Circuit Judge.

This case presents the issue of whether the District Court has personal jurisdiction over Defendant-Appellee L.L. Bean, Inc. ("L.L. Bean"), either because L.L. Bean's contacts with California as a result of its sales and other activities in California are "substantial" or "continuous and systematic," or because L.L. Bean sent a cease-and-desist letter to the Plaintiff, Gator.com Corp. ("Gator"), at its office in California. In response to L.L. Bean's motion for dismissal, the District Court determined that it did not have in personam jurisdiction. Because we determine that L.L. Bean's contacts with California, in particular its substantial mail-order and internet-based commerce in the state, are sufficient to support the assertion of general personal jurisdiction, we reverse the District Court's decision and remand for further proceedings.

I.

A. Factual Background

Defendant/Appellee L.L. Bean is a Maine corporation with its principal place of business in that state. Its corporate offices, distribution facilities, and manufacturing facilities are all located in Maine. L.L. Bean sells clothing and outdoor equipment and maintains stores in Maine, Delaware, New Hampshire, Oregon, and Virginia. In total, L.L. Bean sells over one billion dollars worth of merchandise annually to consumers in 150 different countries.

A very large percentage of L.L. Bean's sales come from mail-order and internet business. The company ships approximately 200 million catalogs each year. In 2000, its website sales accounted for over two hundred million, or about 16 percent, of its total sales. A September 2000 New York Times article described L.L. Bean as "an e-commerce star that is out-performing all but a few companies in its categories on the Web." Bob Tedeschi, L.L. Bean Beats the Current by Staying in Midstream, N.Y. Times, Sept. 20, 2000, at H7. The same article quoted an L.L. Bean senior executive as stating that "[t]he Web is the fastest-growing, most profitable source of revenue for [L.L. Bean], ... [a]nd it's been the primary area for generating new customers." Id.

L.L. Bean is not authorized to do business in California, has no agent for service of process in California, and is not required to pay taxes in California. However, in the year 2000 alone, L.L. Bean sold millions of dollars worth of products in California (about six percent of its total sales) through "its catalog, its toll-free telephone number, and its Internet website." See Appellee's Br. at 41. In the same year, L.L. Bean also mailed a substantial number of catalogs and packages to California residents, targeted substantial numbers of California residents for direct email solicitation, and maintained substantial numbers of "on-line" accounts for California consumers. See id. at 5. Like other internet customers, California residents may view and purchase products on-line as well as interact with L.L. Bean customer service representatives "live" over the internet if they have questions or concerns with an L.L. Bean product.¹

In addition, L.L. Bean conducts national print and broadcast marketing efforts that include, but according to L.L. Bean do not target, California. L.L. Bean also maintains relationships with numerous California vendors from whom they purchase products. See Appellee's Br. at 5. Other than for the year 2000, L.L. Bean has not provided information regarding the contacts its employees have had with California or any purchases of goods from California.

Plaintiff/Appellant Gator.com Corp. is a Delaware corporation with its principal place of business in California. Gator develops and distributes software ("the Gator program") to consumers who purchase goods or services over the internet. The Gator program provides a "digital wallet" which stores computer user passwords to various websites, user personal information, and credit card information. In addition, when a user visits a website on the internet, the Gator program analyzes the Uniform Resource Locator ("URL") associated with that web page. When it recognizes certain URLs that have been pre-selected by Gator, the program displays a pop-up window offering a coupon for a competitor. Gator users who visit L.L. Bean's website are offered coupons for one of L.L. Bean's competitors, Eddie Bauer, via a pop-up window that at least partially obscures L.L. Bean's website.

On March 16, 2001, L.L. Bean's counsel mailed Gator a cease-and-desist letter requesting that Gator stop its pop-up windows from appearing when customers visited L.L. Bean's website. Although the letter stated that "L.L. Bean has no particular desire to engage in costly and time-consuming litigation," it stated that "if necessary, [L.L. Bean] will undertake all means available to prevent this activity from continuing." The letter also stated L.L. Bean's counsel's opinion that the pop-up windows "unlawfully appropriate[d] the good will associated with L.L. Bean's famous trademark, create[d] confusion about the source of the products and services offered at llbean.com, and suggest[ed] an affiliation or connection between or among L.L. Bean, Gator.com, and Eddie Bauer that does not in fact exist." In addition, the letter stated that "[u]nder applicable federal and state law, L.L. Bean is entitled to an injunction against such unlawful conduct."

B. Procedural History

On March 19, 2001, Gator filed a declaratory judgment action in the District Court for the Northern District of California, requesting a judgment that the Gator program "does not infringe, or dilute, directly or contributorily, any trademark held by [L.L. Bean] and does not constitute unfair competition, a deceptive or unfair trade or sales practice, false advertising, fraud, or any other violation of either federal or state law." On July 16, 2001, L.L. Bean filed a Motion to Dismiss, along with a Declaration of Support, alleging that the District Court lacked personal jurisdiction. On November 21, 2001, after a hearing, the District Court granted L.L. Bean's motion, finding that neither general nor specific jurisdiction existed. On December 21, 2001, Gator filed this timely appeal.

II.

A district court's determination of whether personal jurisdiction exists is reviewed de novo. Sher v. Johnson, 911 F.2d 1357, 1360 (9th Cir.1990). The factual findings underlying the jurisdiction determination are reviewed for clear error. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir.1998). It is the plaintiff's burden to establish that a district court has jurisdiction. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir.2001) (citation omitted). For purposes of a Motion to Dismiss, the plaintiff's version of the facts are assumed to be true unless directly controverted. Id. "`[C]onflicts between the facts contained in the parties' affidavits must be resolved in [plaintiffs'] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.'" Id. (quoting AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.1996)).

III.

Since there is no applicable federal statute governing jurisdiction in the instant case, we apply the law of the state in which the district court sits, i.e., California. Panavision, 141 F.3d at 1320 (citing Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1484 (9th Cir.1993)). "California permits the exercise of personal jurisdiction to the full extent permitted by due process." Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000).

The assertion of personal jurisdiction satisfies due process so long as there are "minimum contacts" with the forum state "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). These requirements "give[] a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559 (1980).

Personal jurisdiction may be either general or specific. Panavision, 141 F.3d at 1320. General jurisdiction exists when there are "substantial" or "continuous and systematic" contacts with the forum state, even if the cause of action is unrelated to those contacts. Bancroft, 223 F.3d at 1086 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). Specific jurisdiction may be asserted "if the case arises out of certain forum-related acts." Id. "Whether dealing with specific or general jurisdiction, the touchstone remains `purposeful availment' ... [to] ensure[ ] that `a defendant will not be haled into a jurisdiction solely as a result of "random," "fortuitous," or "attenuated" contacts.'" Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir.2002) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)) (other citations omitted). The...