398 F.3d 1125 (9th Cir. 2005), 02-15035, Gator.Com Corp. v. L.L. Bean, Inc.

Docket Nº:02-15035.
Citation:398 F.3d 1125
Party Name:73 U.S.P.Q.2d 1795 GATOR.COM CORP., Plaintiff-Appellant, v. L.L. BEAN, INC., Defendant-Appellee.
Case Date:February 15, 2005
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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398 F.3d 1125 (9th Cir. 2005)

73 U.S.P.Q.2d 1795

GATOR.COM CORP., Plaintiff-Appellant,


L.L. BEAN, INC., Defendant-Appellee.

No. 02-15035.

United States Court of Appeals, Ninth Circuit

February 15, 2005

Argued and Submitted June 22, 2004

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Michael Traynor, Cooley Godward LLP, San Francisco, CA, argued the cause for the appellant; Thomas J. Friel, Jr., and Brian E. Mitchell, Cooley Godward LLP,

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San Francisco, CA, and L. Scott Primak, Redwood City, CA, were on the briefs.

Daniel J. Bergeson and Melinda M. Morton, Bergeson, LLP, San Jose, CA, were substituted as counsel for the appellant after oral argument.

Peter J. Brann, Brann & Isaacson, Lewiston, Maine, argued the cause for the appellee; Kevin J. Beal, Brann & Isaacson, Lewiston, ME, was on the brief.

Alan E. Untereiner, Kathryn Schaefer Zecca, and Max Huffman, Robbins, Russell, Englert, Orseck & Untereiner LLP, Washington, D.C., and Robin S. Conrad and Stephanie A. Martz, Washington, D.C., were on the brief for amicus curiae The Chamber of Commerce of the United States.

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.


O'SCANNLAIN, Circuit Judge:

We must decide whether a declaratory judgment action initiated to determine the legality of a software vendor's pop-up advertising program is rendered moot by a settlement under which the vendor permanently modified its software and the website owner relinquished all claims.


Gator.com Corporation 1 is the proprietor of a software program that enables computer users to store personal information--including addresses, credit card numbers, and passwords--in a "digital wallet." When a website prompts the user for such information, Gator's digital wallet automatically inputs it. The program also provides users with discount coupons and other special offers that "pop up" on the computer screen when the user visits certain websites preselected by Gator. Until November 20, 2004, one of the targets of Gator's pop-up advertisements was the website operated by L.L. Bean, Inc., a clothing manufacturer that sells its products over the Internet, via a mail-order catalog, and in retail stores. When a user of computer equipment on which the Gator software was installed visited L.L. Bean's website, the program triggered a discount coupon for Eddie Bauer--an L.L. Bean competitor--to appear on the screen.


In a cease-and-desist letter sent to Gator in March 2001, L.L. Bean alleged that these pop-up advertisements misappropriated the good will associated with its trademark and threatened to initiate legal action if Gator did not discontinue this advertising practice. Gator responded by filing suit against L.L. Bean in the United States District Court for the Northern District of California. Gator requested a declaratory judgment that its 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." Compl. at 4. Gator sought no other forms of relief.

L.L. Bean moved to dismiss the suit on the ground that the district court lacked personal jurisdiction because L.L. Bean was incorporated and headquartered in

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Maine and maintained no physical presence in California. Upon concluding that both general and specific personal jurisdiction over L.L. Bean were absent, the district court granted the motion to dismiss. Gator timely appealed.


After the parties had briefed the personal jurisdiction issue and the en banc court had heard oral argument, the parties jointly informed us that they had reached a confidential settlement of other litigation in which they were involved. The parties assured us, however, that the settlement "does not provide for the dismissal of this appeal." Joint Letter of Sept. 1, 2004. Mindful of our constitutional obligation to police jurisdictional matters assiduously, we nevertheless requested a copy of the settlement agreement, which the parties submitted under seal. 2

Under the terms of the settlement, Gator agreed to place no more than twenty-five pop-up advertisements per month on the L.L. Bean website between August 21, 2004, and November 20, 2004. The agreement further provided that, after this three-month period had elapsed, Gator would permanently discontinue the use of all such advertisements on the L.L. Bean website. Gator also agreed to make a monetary payment to L.L. Bean. In exchange for these concessions, L.L. Bean renounced all claims arising from Gator's use of pop-up advertisements prior to--or in accordance with--the agreement.

Regarding this litigation, the parties agreed:

L.L. Bean may, at its sole discretion, require[Gator] to file an agreed upon motion to dismiss the appeal without costs to any party; if the decision of the United States District Court for the Northern District of California issued on November 21, 2001 is affirmed, finally, then [Gator] shall pay L.L. Bean an additional $10,000; in the event the decision of the United States District Court for the Northern District of California issued on November 21, 2001 is not affirmed, finally, no payment shall be owed to any party.

Settlement Agreement ¶ 3.2.

After reviewing the settlement agreement, we issued an order to show cause why this appeal should not be dismissed as moot. Both parties have submitted responses opposing dismissal.


It is an inexorable command of the United States Constitution that the federal courts confine themselves to deciding actual cases and controversies. See U.S. CONST. art. III, § 2, cl. 1. For a case to fall within the parameters of our limited judicial power, "it is not enough that there may have been a live case or controversy when the case was decided by the court whose judgment we are reviewing." Burke v. Barnes, 479 U.S. 361, 363, 107 S.Ct. 734, 93 L.Ed.2d 732 (1987). Rather, Article III requires that a live controversy

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persist throughout all stages of the litigation. See Steffel v. Thompson, 415 U.S. 452, 459 n. 10, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974) ("an actual controversy must be extant at all stages of review, not merely at the time the complaint is filed"). Where this condition is not met, the case has become moot, and its resolution is no longer within our constitutional purview. See Foster v. Carson, 347 F.3d 742, 747 (9th Cir. 2003) ("We do not have the constitutional authority to decide moot cases."). Because "[m]ootness is a jurisdictional issue," id. at 745, we are obliged to raise it sua sponte. See Demery v. Arpaio, 378 F.3d 1020, 1025 (9th Cir. 2004).

The limitations that Article III imposes upon federal court jurisdiction are not relaxed in the declaratory judgment context. Indeed, the case-or-controversy requirement is incorporated into the language of the very statute that authorizes federal courts to issue declaratory relief. See 28 U.S.C. § 2201 (" In a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration...." (emphasis added)). The "test for mootness in the context of a case, like this one, in which a plaintiff seeks declaratory relief ... is 'whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' " Biodiversity Legal Found. v. Badgley, 309 F.3d 1166, 1174-75 (9th Cir. 2002) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941)). Stated another way, the "central question" before us is "whether changes in the circumstances that prevailed at the beginning of litigation have forestalled any occasion for meaningful relief." West v. Sec'y of the Dep't of Transp., 206 F.3d 920, 925 n. 4 (9th Cir. 2000) (quoting 13A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3533.3, at 268 (1984)).


The Supreme Court has repeatedly held that the requisite case or controversy is absent where a plaintiff no longer wishes--or is no longer able--to engage in the activity concerning which it is seeking declaratory relief.

In Golden v. Zwickler, 394 U.S. 103, 105-06, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969), for example, the plaintiff sought a declaratory judgment that it was unconstitutional for the State of New York to prohibit him from distributing anonymous election leaflets about a specific member of Congress seeking re-election. The Supreme Court dismissed the case as moot because, after the case was brought, the member of Congress in question was appointed to serve as a state court judge. Id. at 109-10, 89 S.Ct. 956. The plaintiff was thus no longer able to engage in the electioneering activity about which he had requested declaratory relief. Id. at 109, 89 S.Ct. 956.

Similarly, in Steffel v. Thompson, 415 U.S. at 454-55, 94 S.Ct. 1209, the plaintiff sought a declaratory judgment that a state criminal trespass statute was being applied in a manner that deprived him of his First Amendment right to distribute handbills protesting the Vietnam War. After the suit was filed, however, the United States sharply decreased its military presence in Southeast Asia. Id. at 460, 94 S.Ct. 1209. The Court...

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