Carefirst of Maryland v. Carefirst Pregnancy Ctrs.

Citation334 F.3d 390
Decision Date02 July 2003
Docket NumberNo. 02-1137.,02-1137.
PartiesCAREFIRST OF MARYLAND, INCORPORATED, d/b/a Carefirst Blue Cross/Blue Shield, Plaintiff-Appellant, v. CAREFIRST PREGNANCY CENTERS, INCORPORATED, d/b/a Carefirst, Defendant-Appellee, and NetImpact, Incorporated, Defendant.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

ARGUED: Ruth Mae Finch, Stevens, Davis, Miller & Mosher, L.L.P., Washington, D.C., for Appellant. Frederick Christopher Laney, Niro, Scavone, Haller & Niro, Chicago, Illinois, for Appellee. ON BRIEF: Barth X. deRosa, Stevens, Davis, Miller & Mosher, L.L.P., Washington, D.C., for Appellant. Raymond P. Niro, Jr., Matthew G. McAndrews, Niro, Scavone, Haller & Niro, Chicago, Illinois, for Appellee.

Before WILKINS, Chief Judge, and MOTZ and KING, Circuit Judges.

Affirmed by published opinion. Judge KING wrote the opinion, in which Chief Judge WILKINS and Judge DIANA GRIBBON MOTZ joined.

OPINION

KING, Circuit Judge:

In this appeal, we address whether an Illinois organization subjected itself to personal jurisdiction in Maryland by operating an Internet website that allegedly infringed the trademark rights of a Maryland insurance company. Carefirst of Maryland ("Carefirst") accuses Chicago-based Carefirst Pregnancy Centers, Inc. ("CPC") of selecting the name CAREFIRST, despite having notice both of Carefirst's federal registrations for CAREFIRST and of Carefirst's common law use of the CAREFIRST mark. Carefirst brought suit against CPC in the District of Maryland, alleging infringement and dilution of its trademark. The court dismissed the case without prejudice for lack of personal jurisdiction over CPC. Carefirst asks that we vacate the dismissal on the ground that Carefirst has made the requisite prima facie showing that CPC is subject to personal jurisdiction in Maryland. In the alternative, Carefirst seeks remand to the district court for jurisdictional discovery. Because the district court properly resolved the jurisdictional issue, we affirm its dismissal of this trademark action.

I.
A.

Carefirst, a Maryland corporation with its principal place of business in Maryland, is one of the nation's largest healthcare insurance companies. It is a non-profit BlueCross BlueShield licensee, primarily in the business of selling prepaid healthcare plans. BlueCross Blue-Shield is an association of independent health plans, which, since the 1930s, have been chartered to operate in geographically distinct territories. Carefirst operates exclusively within the mid-atlantic region of the United States; the majority of its 3.1 million members resides in Maryland and in the nearby states of Pennsylvania and West Virginia.

Among the services covered by Carefirst's trademark and service mark in the CAREFIRST name are "educational services, namely, conducting seminars, classes, workshops and lectures on nutrition, infant care, prenatal care, fitness, weight reduction, stress management and substance abuse." Carefirst advertises and promotes its products and services extensively via the Internet at www.carefirst.com. Its website includes information on health education classes in pregnancy, child birth, and infant care, and it provides pregnancy-related educational materials.

B.

CPC, an Illinois corporation with its principal place of business in Illinois, is a non-profit, evangelical, pro-life advocacy organization. CPC's professed mission is to "care[ ] for Chicago-area women in pregnancy-related crisis by meeting their emotional, physical and spiritual needs, enabling them to choose life." The organization originally incorporated in 1985 under the name "Loop Crisis Pregnancy Center," but it changed its name in 1993 to "ChicagoCare Pregnancy Centers," and then in 1999 to "Carefirst Pregnancy Centers, Inc. d/b/a Carefirst."

CPC is headquartered in Chicago, Illinois, and it has no physical presence in Maryland: it has no offices, no telephone listing, no employees, and no agents there. Nor does CPC directly solicit funds from individuals in Maryland. And, according to the declaration of CPC's president, Nancy W. Good, CPC has never even provided counseling services to anyone in Maryland. CPC's sole contact with Maryland springs from its operation of an Internet website, accessible from anywhere in the world through any one of several web addresses.

In 1998, CPC entered into a contract with NetImpact, Inc., a web hosting1 and web development2 company incorporated in Delaware and headquartered in Ocean Pines, Maryland. On CPC's behalf, NetImpact purchased several domain names,3 including "www.carefirstpc.com," "www.carefirstpc.org," "www.carefirstpc.net," "chicagocare.org," "love4real.org," and "care1pregnancy.com." Between November 5, 1998, and November 20, 2001, NetImpact submitted twenty-three invoices to CPC's Illinois address for the web hosting services that NetImpact provided during the period.4

CPC uses its various domain names to direct Internet traffic to CPC's website, throughout which the CAREFIRST name appears. On that website, CPC solicits donations; educates pregnant women about nutrition, infant care, and prenatal care; provides references to Chicago-area medical doctors and hospitals; promotes its counseling services and parenting classes; and advertises the pregnancy tests and ultrasound services that it offers free of charge. The website asserts at several points that the geographic focus of CPC's activities is the Chicago metropolitan area.

In soliciting donations, CPC's website offers prospective donors two methods of contribution: (1) they can call an advertised toll-free number and make a credit card transaction over the phone; or (2) they can make a credit card donation directly through the website. In either case, the donor's name and address are recorded in CPC's database, and the donor thereafter receives advertising materials through the mails. If the donation is made online, the donor also receives a thank-you e-mail.

CPC has acknowledged that it received $1,542 in donations (about 0.0174% of its total donation receipts) from Maryland residents between 1991 and September of 2001. Of this amount, only $120 was donated (by nine different Marylanders) after CPC adopted the name "Carefirst Pregnancy Centers, Inc.," in 1999. Apart from a single online donation made by the lawyer for Carefirst in this proceeding, there is no evidence that the Maryland donations were made through the website.

II.

On October 26, 2000, shortly after learning of CPC's use of the CAREFIRST name and mark, Carefirst transmitted a cease-and-desist letter to CPC. After attempting to resolve the dispute, Carefirst, on May 31, 2001, filed suit against CPC and NetImpact in the District of Maryland.

CPC responded by filing a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, supported by the declaration of its president, Nancy W. Good. After obtaining several extensions of time, Carefirst filed a motion requesting both limited jurisdictional discovery and another extension of time in which to respond to the motion to dismiss. CPC opposed Carefirst's motion, maintaining that discovery was unwarranted since Carefirst had failed to make a prima facie case for personal jurisdiction.

On January 2, 2002, the court dismissed the action, without prejudice, for lack of personal jurisdiction, and it denied Carefirst's discovery request.5 Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., Mem. Op., Civ. No. CCB-01-1578 (D.Md. Jan. 2, 2002) (the "Opinion"). In granting CPC's motion to dismiss for lack of personal jurisdiction, the court found that CPC operated primarily in Chicago; had no office, telephone listing, employees, agents, or sales representatives in Maryland; had never directly solicited funds from Maryland residents or otherwise targeted the forum; had received a de minimus portion of its charitable contributions from Maryland residents; and had recived nearly all of those contributions by mail, rather than online. Opinion at 1. The court went on to find that CPC's only connections to Maryland arose from the facts that (1) its website could be accessed from anywhere in the world, including Maryland; and (2) the website's "host" was a Maryland corporation. Id. On this basis, the court concluded that CPC did not have sufficient contacts with Maryland to support personal jurisdiction in the Maryland courts. Id.6

On January 11, 2002, Carefirst sought reconsideration of the dismissal. Then, on March 12, 2002, it filed a motion to vacate the dismissal on the basis of newly discovered evidence of CPC's contacts with Maryland, which Carefirst had obtained from NetImpact's president. The court denied the motion for reconsideration on March 29, 2002, Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., Order, Civ. No. CCB-01-1578 (D.Md. Mar. 29, 2002), and it denied the motion to vacate on July 17, 2002, Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., Order, Civ. No. CCB-01-1578 (D.Md. July 17, 2002) (the "July Order"). Carefirst timely appealed the dismissal of its complaint, the denial of its motion for reconsideration, and the denial of its motion to vacate. We possess jurisdiction pursuant to 28 U.S.C. § 1291.

III.

We review de novo a dismissal for lack of personal jurisdiction, Koehler v. Dodwell, 152 F.3d 304, 307 (4th Cir.1998), though we review any underlying factual findings for clear error, see In re Celotex Corp., 124 F.3d 619, 627 (4th Cir.1997). When personal jurisdiction is properly challenged under Rule 12(b)(2), the jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence. Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993). When, however, as here, a district court decides a pretrial personal jurisdiction motion without conducting an evidentiary hearing, the...

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