Opinion
CIVIL ACTION No. 02-CV-7219.
June 10, 2003
MEMORANDUM
Presently before the Court are Defendant's Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), Plaintiff's Memorandum in Opposition thereto, Defendant's Reply to Plaintiff s Memorandum, and Plaintiff's Sur-Reply in Opposition. For the reasons set forth below, Defendant's motion will be denied.
I. BACKGROUND
Plaintiff Advertising Specialty Institute ("ASI"), a Pennsylvania corporation, filed a Complaint against Defendant Vermotion, Inc. ("Vermotion"), a Utah corporation, for copyright infringement, unfair competition, tortious interference with contract, fraud, and conversion. This court has subject matter jurisdiction over Plaintiff's claims due to the presence of a federal question and diversity of citizenship. See 28 U.S.C. § 1331, 1332. Plaintiff claims that Defendant copied ASI's Register, a copyrighted listing that distributors use to identify promotional goods suppliers, to Vermotion's website. Compl. ¶¶ 10, 11. Plaintiff alleges it discovered Defendant's unauthorized use of ASI's Register in August 2002. Id. at ¶¶ 15, 16. Plaintiff maintains that it advised Defendant to stop using the unauthorized posting or face legal action. Id. at ¶ 20; Pl.'s Mem. Opp. Dis., Ex. 1. Pursuant to this notice, Defendant allegedly disregarded Plaintiff's warning and issued ASI a response letter, stating Plaintiff was making frivolous claims against Vermotion. Compl. ¶ 21; Pl.'s Mem. Opp. Dis., Ex. 2.
Plaintiff further contends that Defendant immediately thereafter contacted ASI's actual and prospective distributors and publicized these allegations of frivolity via e-mail. Compl. ¶¶ 17, 22. In the e-mail, Defendant allegedly presented a survey about Plaintiff that included disparaging statements. Pl.'s Mem. Opp. Dis. at 4, Ex. 3. Although the e-mail itself did not reproduce Plaintiff's copyrighted data, the e-mail included links to ASI's warning letter, Defendant's response, and Defendant's website posting of Plaintiff's data that was available to distributors while promoting Vermotion's business. Def.'s Reply Pl.'s Mem. Opp. Dis. at 4; Compl. ¶¶ 18, 19. Plaintiff claims that in one day Defendant's correspondence misrepresented the dispute to thousands of distributors in the industry, including at least five Pennsylvania distributors that were customers of ASI. Compl. ¶¶ 1, 25; Pl.'s Mem. Opp. Dis. at 4, Exs. 6-10. Defendant subsequently deleted Plaintiff's data from the website, but allegedly refused to relinquish Vermotion's copies or retract the e-mail. Compl. ¶ 23.
II. DISCUSSION
Plaintiff maintains that this Court can properly exercise specific jurisdiction over Defendant, by virtue of Vermotion's sufficient contacts with Pennsylvania, thereby establishing personal jurisdiction. However, Defendant contends that this Court cannot properly exercise general or specific jurisdiction over it. In opposition to general jurisdiction, Defendant alleges that Plaintiff failed to establish the existence of Vermotion's continuous or systematic contacts with Pennsylvania. Defendant denies both contractual ties to Pennsylvania and marketing to persons in Pennsylvania. See Def.'s Mem. Supp. Dis. ¶¶ 4, 5. Defendant also contends this Court lacks specific jurisdiction, arguing the lack of physical presence and purposeful basis in Pennsylvania. In particular, Defendant states that it has neither established a physical Pennsylvania address, nor attended a Pennsylvania sales convention. See Def.'s Mem. Supp. Dis. ¶¶ 2, 3. Defendant further claims that website operation by its nature is insufficient to invoke jurisdiction.
A federal district court can exercise personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of the state. See Provident Nat'l Bank v. California Fed. Sav. Loan Ass'n, 819 F.2d 434, 436 n. 1 (3d Cir. 1987). "Under Pennsylvania's long-arm statute, jurisdiction may be exercised to the fullest extent allowed under the Constitution of the United States." 42 Pa. Con. Stat. Ann. § 5322(b). "The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n. 1 (1985).
"When a defendant raises the defense of lack of personal jurisdiction, the plaintiff has the burden of establishing sufficient facts to show that jurisdiction is proper." Carteret Sav. Bank v. Shushan, 954 F.2d 141, 146 (3d. Cir. 1992). "A plaintiff meets this burden by establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). A plaintiff s allegations that defendant has sufficient contacts with the forum state to warrant a court's exercise of personal jurisdiction over the defendant must be supported with affidavits, documents, or other evidence, because a Rule 12(b)(2) motion "requires resolution of factual issues outside the pleadings." Time Share Vacation Club v. Atlantic Resorts. Ltd., 735 F.2d 61, 67 n. 9 (3d Cir. 1997).
A prima facie case of general jurisdiction requires that a defendant has "continuous and substantial contact with the forum state." Pennzoil Products Company v. Colelli Associates, Inc., 149 F.3d 197, 200 (3d Cir. 1998). Although Plaintiff argues that the quality of Defendant's purposeful contact is adequate for this Court's exercise of general jurisdiction, Defendant's contact with Pennsylvania does not satisfy the requirement. Defendant's single response letter and its lone counterpart, e-mailed to five Pennsylvania distributors out of thousands in one day, do not rise to the level of substantiality or continuity. This Court, therefore, cannot exercise general jurisdiction over Defendant.
In order for this Court to exercise specific jurisdiction over a defendant, three elements must exist: the defendant must have "minimum contacts" with the forum state; the cause of action "must arise from the defendant's forum related activities;" and the exercise of jurisdiction must be reasonable or fair. North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 690 (3d Cir. 1990). Plaintiff has met this burden.
First, Defendant's Pennsylvania business contacts with Pennsylvania distributors establish the requisite minimum contacts. The Supreme Court has held that jurisdiction is proper when a defendant purposefully establishes "minimum contacts" in the forum state, by deliberately engaging in significant activities, or by creating continuing obligations such that defendant has "availed [itself] of the privilege of conducting business there." Burger King, 471 U.S. at 475. Defendant argues that the mere existence of Plaintiff s entries on Vermotion's website fails to establish jurisdiction underRemick v. Manfredy, 238 F.3d 248, 254 (3d Cir. 2001). There, the court exercised caution with the scope of liability for information simply present on-line. Remick avoided the slippery slope of a national jurisdiction by upholding a standard higher than mere existence of information on a website. The same logic, however, does not apply to the case at bar. Plaintiff's data did not randomly exist on Defendant's website. Plaintiff claims that Defendant actively used the data before deliberately sending the allegedly damaging correspondence to Pennsylvania distributors. See Pl.'s Mem. Opp. Dis. at 5. "If a defendant web site operator intentionally targets the site to the forum state, and/or knowingly conducts business with forum state residents via the site, then the `purposeful availment' requirement for personal jurisdiction is satisfied." Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 452 n. 2 (3d Cir. 2003). Plaintiff claims that Defendant's website deliberately promoted its services to Pennsylvania. See Pl.'s Sur-Reply Opp. Dis. at 2. In support, Plaintiff alleges Defendant sent disparaging e-mail to five distributors. See Pl.'s Mem. Opp. Dis. at 4, Exs. 6-10. Accordingly, I find that Defendant's Pennsylvania business contacts establish minimum contacts with the forum state.
Minimum contacts are also established when the defendant has availed itself of the privilege of conducting business in the forum, resulting in being subject to personal jurisdiction in this district. The Third Circuit expanded the scope of purposeful availment to include a defendant's continued efforts to market in regions where the defendant has made sales previously. See Hendrickson v. Reg O Company, 657 F.2d 9, 15 (3d Cir. 1981). Defendant's e-mail allegedly targeted five Pennsylvania distributors, further indicating intent to solicit in-state business. Prior to the e-mail, Plaintiff asserts that Defendant already had two Pennsylvania-based clients. See Pl.'s Mem. Opp. Dis. at 12-13. Defendant's business with these two Pennsylvania distributors and marketing to the five additional customers satisfy the requirements for minimum contacts. Hendrickson, 657 F.2d at 15.
In addition, Plaintiff s causes of action arise from Defendant's contact with the forum. North Penn Gas, 879 F.2d at 690. The defendant must have "purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities." Burger King, 471 U.S. at 472 n. 3. Plaintiff's causes of action arise from Defendant's correspondence with five distributors in Pennsylvania. See Pl.'s Mem. Opp. Dis. at 4, Exs. 7-10. Plaintiff states that Defendant encroached upon ASI's copyrighted property, and misrepresented the validity of Plaintiff s legal claims and Vermotion's use of ASI's copyrighted material, via the website and e-mail to Plaintiff s current and prospective distributors, some of whom are Pennsylvania companies. Pl.'s Sur-Reply Opp. Dis. at 4. Defendant's contact with Pennsylvania relates to Plaintiff's causes of action.
Finally, the Court's exercise of jurisdiction over Defendant is reasonable and fair. See North Penn Gas, 879 F.2d at 690.BP Chemicals Ltd. v. Formosa Chemical Fibre Corp., 229 F.3d 254 (3d Cir. 2000) affirms that it is essential "that the defendant's conduct and connection with the forum . . . are such that [the defendant] should reasonably anticipate being haled into court there." Id. at 259 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). Furthermore, "the relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation to defend the particular suit which is brought there."International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945). Under this progeny, the exercise of jurisdiction must adhere to the "notions of fair play and substantial justice."Id. at 316. These requirements have been met in the instant matter. Defendant made allegedly disparaging remarks about Plaintiff, a Pennsylvania corporation, to Pennsylvania customers, thereby possibly causing harm in Pennsylvania. Moreover, Plaintiff alleges it warned Defendant that ASI would take legal action. See Compl. ¶ 20. For these reasons, this Court's exercise of specific jurisdiction over Defendant is appropriate.
III. CONCLUSION
In the instant matter, Plaintiff has alleged and supported, by affidavits and other supporting documentation, the requisite conditions to permit the Court to exercise specific jurisdiction over Defendant. First, Defendant's Pennsylvania business contacts with Pennsylvania distributors establish the requisite minimum contacts. Second, Plaintiff's Complaint arises from Defendant's correspondence with five distributors in Pennsylvania. Third, the Court's exercise of jurisdiction over Defendant, for its remarks to Pennsylvania customers about Pennsylvania-based Plaintiff, is reasonable and fair. Accordingly, Defendant's motion will be denied. An appropriate order follows.
ORDER
AND NOW, this _____ day of June, 2003, upon consideration of Defendant's Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) and Plaintiff's Memorandum in Opposition thereto, it is hereby ORDERED that Defendant's Motion is DENIED.