Opinion
1:23-CV-00086-SPB
05-09-2024
ANTHONY HAMMOND MURPHY, Plaintiff v. ROLEX WATCH USA, INC., ROLEX SA, Defendants
REPORT AND RECOMMENDATION ON DEFENDANT ROLEX SA'S MOTION TO DISMISS
IN RE: ECF NO. 28
RICHARD A. LANZILLO CHIEF UNITED STATES MAGISTRATE JUDGE
I. Recommendation
Plaintiff Anthony Hammond Murphy (“Murphy”) filed this action claiming that a website (www.Rolex.com) allegedly owned or controlled by Defendant Rolex Watch USA, Inc. or Defendant Rolex SA (“Rolex SA”) discriminates against visually impaired individuals in violation of Title III of the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12181-12189. See ECF No. 16 (Amended Complaint). Rolex SA has moved to dismiss Murphy's Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(6). See ECF No. 28.
For the reasons discussed herein, it is respectfully recommended that (1) Rolex SA's motion to dismiss be DENIED to the extent it requests dismissal under Fed.R.Civ.P. 12(b)(2) and (2) GRANTED to the extent it seeks dismissal under Fed.R.Civ.P. 12(b)(6). It is further respectfully recommended that Murphy's Amended Complaint be dismissed without prejudice and with leave to file a second amended complaint.
II. Report
A. Factual and Procedural Background
Murphy is one of many blind or visually impaired individuals who use the Internet to purchase products and services and who rely on “screen access software to access digital content, like an email, a website, or an app.” See, e.g., id., ¶¶ 21, 45. His Amended Complaint identifies Rolex SA as “a Swiss corporation operating throughout the United States, including in the Commonwealth of Pennsylvania, and specifically in the Western District of Pennsylvania, where the sale of Rolex watches are (sic) promoted and facilitated” through its website. ECF No 16, ¶ 24. Murphy alleges that he is being deprived of “full and equal access” to Rolex SA's products and services because its website is not fully compatible with screen reader software as required by Title III of the ADA. Id., ¶¶ 45-47.
Rolex SA has moved to dismiss the Amended Complaint pursuant to Rule 12(b)(2), arguing that this Court lacks personal jurisdiction over it and, alternatively, pursuant to Rule 12(b)(6), challenging the sufficiency of Murphy's allegations to state a claim under Title III of the ADA See ECF No. 28. Murphy has filed a response in opposition (ECF No. 31), and Rolex SA, with leave, filed a reply brief (ECF No. 34). Rolex SA's motion is ripe for consideration.
B. Standards of Review
1. Fed.R.Civ.P. 12(b)(2) - Lack of Personal Jurisdiction
Where a defendant moves to dismiss an action for lack of personal jurisdiction pursuant to Rule 12(b)(2), the plaintiff bears the burden to show that the court has personal jurisdiction over the moving defendant. See D 'Jamoos ex rel. Est. of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009); Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). Ultimately, the plaintiff must prove personal jurisdiction by a preponderance of the evidence. Mellon Bank (E.) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). But at an early stage of litigation, without an evidentiary hearing on a Fed.R.Civ.P. 12(b)(2) motion, “the plaintiff need only establish aprima facie case of personal jurisdiction.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). The plaintiff presents theprima facie existence of personal jurisdiction by “establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Mellon Bank (East) PSFS, Nat. Ass 'n, 960 F.2d at 1223 (citing Provident Nat. Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434 (3d Cir. 1987)).
Courts reviewing a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) conduct a burden-shifting analysis, initially “accepting] all of the plaintiff's allegations as true and constru[ing] disputed facts in favor of the plaintiff.” Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002) (citing Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir. 1992)). If the plaintiff's factual allegations, taken as true, do not establish personal jurisdiction, then a court must grant the motion and dismiss all claims against the defendant. Id.; Knopick v. UBS AG, 2016 WL 7212952, at *1 (M.D. Pa. Apr. 5, 2016) (dismissing claims when allegations “[were] insufficient to withstand any minimum contacts scrutiny that the Court could apply.”). Otherwise, the defendant's motion must include evidence sufficient to challenge personal jurisdiction. If it does, the burden reverts to the plaintiff because, at this point, a Fed.R.Civ.P. 12(b)(2) motion “requires resolution of factual issues outside the pleadings, i.e., whether in personam jurisdiction actually lies.” Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984). Now, the plaintiff must support the prima facie existence of personal jurisdiction with “sufficient jurisdictional facts by affidavit, depositions or other competent evidence.” McMullen v. Eur. Adoption Consultants, Inc., 129 F.Supp.2d 805, 810 (W.D. Pa. 2001) (citation omitted). See also Time Share Vacation Club, 735 F.2d at 63, 66 n.9. The plaintiff's reliance “on the bare pleadings alone” is insufficient; the “plaintiff must respond with actual proofs, not mere allegations.” Id. (citing Int'l Ass'n of Machinists & Aerospace Workers v. Nw. Airlines, Inc., 673 F.2d 700, 711-12 (3d Cir. 1982)). Examining the evidence, the court construes any disputed facts supported by competent evidence in the plaintiff's favor. See Carteret Sav. Bank, 954 F.2d at 142 n.1.
“Once the plaintiff has made out a prima facie case in favor of personal jurisdiction,” the burden shifts back to the defendant one last time to “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable,” including constitutional requirements of due process. Mellon Bank (East) PSFS, Nat. Ass 'n, 960 F.2d at 1226 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985) (other citation omitted)). See also Gibbs v. Trans Union LLC, 2021 WL 2375898, at *1 (E.D. Pa. June 10, 2021).
“The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts.” Walden v. Fiore, 571 U.S. 277, 283, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). The constitutional inquiry examines “whether the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.'” Burger King Corp., 471 U.S. at 476 (quoting Int'l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310, 320). In determining whether it may exercise personal jurisdiction over a defendant, a federal district court looks first to the long-arm statute of the forum state. Fed.R.Civ.P. 4(k)(1)(A). Pennsylvania's long-arm statute permits the exercise of personal jurisdiction to the fullest extent allowed by the Due Process Clause of the Fourteenth Amendment. See 42 Pa. Stat. and Cons. Stat. Ann. § 5322; O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007). This inquiry asks whether the defendant established minimum contacts that have a substantial connection with the forum. Burger King Corp., 471 U.S. at 475 (citing cases); Int'l Shoe Co., 326 U.S. at 319. Such minimum contacts may be shown under two theories: general jurisdiction or specific jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). “To achieve general jurisdiction over an individual or corporation, affiliations with the forum state must be ‘so continuous and systematic as to render them essentially at home in the forum state.'” Koch v. Pechota, 744 Fed.Appx. 105, 110 (3d Cir. 2018) (quoting Daimler AG v. Bauman, 571 U.S. 117 127 (2014)). “[A]n individual is subject to general jurisdiction in her place of domicile.” Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 592 U.S. 351, 141 S.Ct. 1017, 1024 (2021) (citing Daimler AG v. Bauman, 571 U.S. 117, 137 (2014)). “And the ‘equivalent' forums for a corporation are its place of incorporation and principal place of business.” Id.
2. Fed.R.Civ.P. 12(b)(6) - Failure to State a Claim
A motion to dismiss filed under Rule 12(b)(6) tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A plaintiff must allege sufficient facts that, if accepted as true, state a claim for relief plausible on its face. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A court must accept all well-pleaded factual allegations as true and view them in the light most favorable to a plaintiff. See Doe v. Princeton Univ., 30 F.4th 335, 340 (3d Cir. 2022); see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Although a court must accept the allegations in the complaint as true, it is “not compelled to accept unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation.” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (citations omitted).
The “plausibility” standard required for a complaint to survive a motion to dismiss is not akin to a “probability” requirement but asks for more than mere “possibility.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In other words, the complaint's factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations are true even if doubtful in fact. Twombly, 550 U.S. at 555. Facial plausibility is present when a plaintiff pleads factual content that allows the court to draw the reasonable inference that a defendant is liable for the misconduct alleged. Iqbal, 556 U.S. at 678.
C. Discussion and Analysis
1. Rolex SA's Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction The allegations of the Amended Complaint do not support that Rolex SA's affiliations with Pennsylvania are “so continuous and systematic” as to subject it to general jurisdiction. See Koch, 744 Fed.Appx. at 110 (quoting Daimler, 571 U.S. at 127). And the evidentiary record produced by Rolex SA belies such affiliations. Rolex SA is a Swiss company based in Geneva, Switzerland. See ECF No. 29-1, ¶ 1 (Boetsch declaration). It has no manufacturing facilities in the United States and has no employees in this country. Id., ¶ 4. Rolex SA is not registered to do business in Pennsylvania or anywhere else in the United States. Id., ¶ 7. As such, it cannot be considered to be “at home” in Pennsylvania.
Therefore, if this Court is to exercise personal jurisdiction over Rolex SA, it must do so based on specific jurisdiction. Specific jurisdiction “covers defendants less intimately connected with a State, but only as to a narrower class of claims.” Ford Motor Co. v. Montana Eighth Judicial Court, ---U.S.-----, 141 S.Ct. 1017, 1024 (2021). See also O'Keefe v. Rustic Ravines, LLC, 2023 WL 2602071, at *1-6 (W.D. Pa. Mar. 22, 2023). In Ford Motor, the Supreme Court explained that specific jurisdiction inquiry focuses on whether the defendant has purposefully availed itself of the privilege of conducting activities within the forum State. 141 S.Ct. at 1024. The defendant's contacts with the forum state must be the product of the defendant's own choice and not random, isolated, or fortuitous. Id. (citations omitted). Put another way, the contacts must show that the defendant deliberately reached out beyond its home, for example, by exploiting a market in the forum State or entering a contractual relationship centered there. Id. Even where the court finds that the defendant purposefully availed itself of the privilege of conducting activities in the forum state, its inquiry is not at an end. The court may exercise specific jurisdiction only if the plaintiff's claims arise out of or relate to the defendant's forum state contacts.
In Toys “R” Us, Inc. v. Step Two, S.A., the Court of Appeals for the Third Circuit noted that “the mere operation of a commercially interactive web site should not subject the operator to jurisdiction anywhere in the world.” 318 F.3d 446, 454 (3d Cir. 2003). Thus, the existence of Rolex SA's website and its accessibility in Pennsylvania alone is not sufficient to confer specific jurisdiction over Rolex SA even though Murphy's claim is based on the accessibility of the website. Instead, the Court must first consider whether Rolex SA purposefully availed itself of the privilege of conducting activities in Pennsylvania. This inquiry focuses on whether Rolex SA took deliberate action to conduct activities in Pennsylvania.
Second, the Court must examine the relationship between Rolex SA's contacts and Murphy's claim. To support specific jurisdiction, a strong relationship between Rolex SA's Pennsylvania contacts and Murphy's claim must exist. And finally, if the foregoing two elements are supported, the Court must determine whether its exercise of jurisdiction is reasonable and does not “offend ‘traditional notions of fair play and substantial justice.'” See O'Keefe, 2023 WL 2602071, at *2 (quoting International Shoe Co. v. State of Wash., Office of Unemployment Compensation and Placement, 326 U.S. 310 (1945) (in turn quoting Milliken v. Meyer, 311 U.S. 457 (1940)).
In determining whether a defendant purposefully availed itself of the privilege of conducting activities in Pennsylvania through its website, courts in this Circuit regularly look to the framework described by this Court in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997). The Court in Zippo Mfg. recognized that websites fall along a spectrum ranging from “passive” websites, which allow for little or no user interactivity, to “active” websites, which facilitate significant user interactivity, including the ability to contract for the purchase of goods or services. Id., at 1124. The Court explained:
At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise [of] personal jurisdiction. The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.Id.
A passive website is characterized by “low-level, non-commercial interactions between an internet user and website owner.” O'Keefe, 2023 WL 2602071, at *3. It “is akin to a billboard on the roadside” in that like “a passerby [who] may .. slow down and read” a billboard but not interact with it, . a passive website is a website that an internet user may pass by or may slow down and read in detail” but it “does not enable the internet user to ‘reach out' through that website and connect with the website's owner.” Id. If a website is passive, “jurisdiction is unavailable, full stop.” Johnson v. The HuffingtonPost.com, Inc., 21 F.4th 314, 318 (5th Cir. 2021). Rolex SA contends that its website falls into this category because it is merely “informational” with its main purpose being to “inform visitors about Rolex SA and its products and to provide consumers with a list of official Rolex SA retailers.” ECF No. 29-1, ¶ 9.
At the other end of the Zippo Mfg. spectrum, are websites from which a defendant clearly “does business over the internet by entering into contracts with residents of other states, which involve the knowing and repeated transmission of computer files over the internet.” 721 Bourbon, Inc. v. House of Auth, LLC, 2014 F.Supp.3d 586, 594 (E.D. La. Oct. 19, 2015) (quoting Zippo Mfg., 952 F.Supp. at 1124). Murphy contends that Rolex SA's website is active because Rolex SA uses it to conduct business over the internet by, among other things, providing site users who wish to purchase a timepiece with the “telephone numbers, addresses, hours of operation, and links to websites” of certified Rolex SA dealers. See ECF No. 31-1, ¶ 8.
The record in this case does not place Rolex SA's website squarely in either the passive or active category. The Rolex SA's website allows a user to exchange information with the host computer but does not provide a vehicle for users to purchase any product directly from Rolex SA or otherwise provide a portal through which Rolex SA “enter[s] into contracts with residents of [Pennsylvania] ....” See Vonberger v. Liberty Mutual Ins. Co., 2023 WL 8569004, at *7 (E.D. Pa. Dec. 11, 2023) (citing Zippo, 952 F.Supp. at 1124)). See also ECF No. 29-1, ¶¶ 8-9 (Boetsch Declaration). Rolex SA's website, however, serves as more than a static billboard advertisement for its products; rather, it provides varying levels of interactivity between users and Rolex SA. For example, Rolex SA's website invites a visitor to use it to “find your Rolex,” “configure” a watch to the user's own personal specifications, connect with jewelry stores and other retailers where Rolex SA watches are sold, and search available inventory. See ECF No. 31-1, generally (Fisher Declaration). Thus, the website allows potential customers to interact with Rolex SA about specific products and services and identify independent retail locations, although it stops short of allowing customers to contract directly with Rolex SA to purchase a watch. These attributes place Rolex SA's website squarely within Zippo Mfg.'s middle ground. See, e.g., Square D Co. v. Scott Elec. Co., 2008 WL 4462298, at * 8 (W.D. Pa. Sep. 30, 2008) (citing Zippo Mfg., 952 F.Supp. at 1124)).
“However, ‘[t]he mere operation of a commercially interactive website should not subject the operator to jurisdiction anywhere in the world.'” Britax Child Safety, Inc. v. Nuna Int'l B.V., 321 F.Supp.3d 546, 556 (E.D. Pa. 2018) (quoting Gammino v. SBC Communications, Inc., 2005 WL 724130, at *3 (E.D. Pa. Mar. 29, 2005)). Instead, when a defendant's website falls within Zippo Mfg.'s “middle ground,” courts examine “the level of interactivity and commercial nature of the exchange of information that occurs on the Web site” to determine personal jurisdiction. Ackourey v. Sonellas Custom Tailors, 573 Fed.Appx. 208, 211-12 (3d Cir. 2014) (citing, Zippo Mfg., supra., and Toys “R” Us, 318 F.3d at 452. And the reasonableness of a court's exercise of personal jurisdiction is “directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.” See Zippo, 952 F.Supp. at 1124. This qualitative and quantitative inquiry is inherently fact intensive. In Ackourey, for example, the website at issue listed a travel schedule and allowed potential customers to email requests for appointments, but it did not permit customers to place orders, make payments, or engage in any business transactions. Id. The Court of Appeals held that “[t]his low degree of commercial activity renders Defendants' website essentially passive.” Id. In contrast, in Square D Co., the Court concluded that the exchange of information through the defendants' website was sufficiently “commercial in nature” to support personal jurisdiction where the website had a “Contact Us” link, permitted a potential customer to “input a particular product found on the website, specify the manufacturer, and request a certain quantity.” Id., at *8. The website also included information on product warranties and allowed visitors to “input payment information in order to finalize a sale.” Id. The Court concluded that this level of interactive commercial activity demonstrated that the defendants had purposefully availed themselves of “conducting activity in this state by knowingly interacting with residents of [Pennsylvania] via its website.” Id. at *9 (citing Toys “R” Us, 318 F.3d at 454)).
The Pennsylvania directed commercial interaction available via Rolex SA's website are greater than those considered in Ackourey but not as significant as those examined in Square D Co. The ultimate question is whether they are “sufficiently robust and focused, so as to be considered a targeted ‘commercial activity' towards a forum such that a company should be subject to specific jurisdiction there.” Allied Ins. Co. of Am. v. JPaulJones L.P., 491 F.Supp.3d 472, 475 (E.D. Mo. 2020). Rolex SA argues that its website's store locator merely “provides a map listing all of the official Rolex SA retailers around the world,” and “[n]owhere does the website solicit any information from users or attempt to engage in or direct any commercial activity in any particular location.” ECF No. 29, p.10. This is not a fair description of the interactive functionality of Rolex SA's website. Rolex SA's website not only advertises its products to users, but it also allows users to configure or customize products to their tastes and preferences, and upon doing so, it directs users to a “Discover” button which, upon clicking, takes them to a locator page where they can enter their zip codes and be given a list of local Rolex SA dealers from whom they can purchase their watches. See ECF No. 31-1, ¶ 8. The website's “store locator” is thus more than a simple list of all retailers who sell Rolex SA watches. Rather, this interactive functionality serves “as a type of advertising” directing users to locations within Pennsylvania to purchase Rolex SA's products. See, e.g., Ahlschlager v. Braga Fresh Family Farms, Inc., 2023 WL 5152298, at *5 (D.S.D. Aug. 9, 2023) (website's store locator directed activities toward the forum state and thus served as a type of advertising in the forum state) (citing Asahi Metal Indus. v. Sup. Ct. of Calif., 480 U.S. 102, 113 (1987) (“Additional conduct .. may indicate an intent or purpose to serve the market in the forum state, for example, . advertising in the forum state ...”)). Although the retailers are independent of Rolex SA, the purpose and function of Rolex SA's website are clearly directed at promoting and ultimately selling its products in Pennsylvania, which weighs in favor of the exercise of specific personal jurisdiction in this case. See Orange Electronics Co. Ltd. v. Autel Intelligent Technology Corp. Ltd., 2022 WL 4368160, at *5 (E.D. Tex. Sep. 21, 2022) (website that provides users with the location of retailers and dealers to where they can purchase defendant's products was sufficient to conclude that personal jurisdiction exists); Rudy v. Polaris Industries, Inc., 2022 WL 628416, at *8 (M.D. Pa. Mar. 3, 2022) (personal jurisdiction found where website “allowed visitors to search for where to purchase [defendant's] products in Pennsylvania; and additional website had “similar feature that allowed visitors to ‘Find a Dealer' and showed all dealers in Pennsylvania that sold [defendant's] products.”); Republic Technologies (NA), LLC v. BBK Tobacco and Foods, LLP, 2017 WL 338611, at *5 (N.D. Ill. Aug. 7, 2017) (store locator listing six stores in Illinois on defendant's website “provides an even stronger basis for asserting specific personal jurisdiction).
Rolex SA's interactive commercial activity directed within Pennsylvania through its website is sufficiently robust and focused to support this Court's exercise of specific personal jurisdiction over it. As noted, Murphy's claim arises directly out of the Pennsylvania contacts created by Rolex SA's website. And nothing in the record supports that the exercise of personal jurisdiction in this case would be unreasonable or offend traditional notions of fair play and substantial justice. “The existence of minimum contacts makes jurisdiction presumptively constitutional, and the defendant ‘must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'” Miller Yacht Sales, Inc., 384 F.3d at 97 (citations omitted). Courts consider several factors when balancing the reasonableness of an exercise of specific jurisdiction, including “the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies.” Burger King, 471 U.S. at 477 (citations and quotations omitted). Here, it would not be unreasonable or unfair to require Rolex SA to face trial in forum. The alleged denial of Murphy's statutory right to full and equal access to the products and services offered by Rolex SA through its website occurred in Pennsylvania; Pennsylvania has substantial interests in protecting the rights of its disabled residents and ensuring their access to means of commerce within the Commonwealth; and the interstate judicial system's interest in the efficient resolution of this case can readily be accommodated in this federal judicial district. These factors all weigh in favor of this Court's exercise of personal jurisdiction over Rolex SA. And Rolex SA has not presented any cogent argument that “the presence of some other considerations would render jurisdiction unreasonable.” See Burger King, 471 U.S. at 477; see also Miller Yacht Sales, Inc., 384 F.3d at 100 (“There is no compelling evidence of record why it would be unfair or unjust to litigate this dispute in New Jersey. Without such compelling evidence, [the defendants] cannot avoid the District Court's appropriate jurisdiction.”).
For the foregoing reasons, the Court should deny Rolex SA's motion to dismiss to the extent it requests dismissal pursuant to Rule 12(b)(2)based on lack of personal jurisdiction.
2. Rolex SA's Rule 12(b)(6) motion to dismiss for failure to state a claim Having concluded that the Court has personal jurisdiction over Rolex SA, the undersigned must now address Rolex SA's argument that Murphy's Amended Complaint should be dismissed pursuant to Rule 12(b)(6) for failure state a claim under Title III of the ADA. See ECF No. 29, pp. 8-9.
Title III of the ADA states as a “general rule”:
No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.42 U.S.C. §12182(a) (emphasis supplied).
The Amended Complaint alleges that Murphy “cannot fully and equally access” Rolex SA's website and affiliated digital platform because Rolex SA's “accessibility policies and practices have made it impossible to perceive, understand, or operate the platform's content with screen reader auxiliary aids,” such as those used by Murphy. ECF No. 16, ¶ 11. The Amended Complaint further alleges that “the access barriers” presented by Rolex SA's website deny “Murphy full and equal access to Defendants' online store and deter him from returning to the store in the future.” Id. ¶ 46. For purposes of its motion to dismiss, Rolex SA does not contest Murphy's allegations that it owns or operates the website or that the website's incompatibility with aspects of screen reader technology denies him full and equal access to its products and services. Rather, it challenges the legal sufficiency of Murphy's Title III claim on the grounds that its website is not a “place of public accommodation” within the meaning of 42 U.S.C. § 12182(a).
Although the Court of Appeals for the Third Circuit has yet to address directly whether a website can be considered a “place of public accommodation,” it has “taken the position that the term is limited to physical accommodations.” Peoples v. Discover Financial Serv., Inc., 387 Fed.Appx. 179, 183 (3d Cir. 2010). In order to satisfy this requirement, the Court of Appeals has “required at the very least some ‘nexus' between the physical place of public accommodation and the services denied in a discriminatory manner.” Menkowitz v. Pottstown Memorial Med. Cntr., 154 F.3d 113, 120 (3d Cir. 1998) (citing Parker v. Metropolitan Life Ins. Co., 121 F.3d 1006 (6th Cir. 1997) (en banc)). The Court of Appeals first alluded to the nexus requirement in Ford v. Schering-Plough Corp., where it reasoned that “[t]he plain meaning of Title III is that a public accommodation is a place, leading to the conclusion that ‘[i]t is all of the services which the public accommodation offers, not all services which the lessor of the public accommodation offers[,] which fall within the scope of Title III.'” 145 F.3d 601, 612 (3d Cir. 1998) (citing Ford, 145 F.3d at 213). The Court also found support for this interpretation in “the host of examples of public accommodations provided by the ADA, all of which refer to places.” Id. at 612-13. See also, Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 1114 (9th Cir. 2000) (“Title III provides an extensive list of ‘public accommodations' in § 12181(7) ... All the items on this list, however, have something in common. They are actual, physical places where goods or services are open to the public, and places where the public gets those goods or services . [T]his context suggests that some connection between the good or service complained of and an actual physical place is required.”). Based on these principles, the Court in Ford rejected the plaintiff's Title III claim that an insurance company had discriminated against her in the payment of disability benefits received through her employer because no connection existed between the discriminatory benefits and the insurer's physical place of public accommodation. Id. at 613. The Court explained that “[s]ince Ford received her disability benefits via her employment at Schering, she had no nexus to MetLife's ‘insurance office' and thus was not discriminated against in connection with a public accommodation.” Id., at 612-13.
Later, in Peoples v. Discover Financial Services, the Court of Appeals followed Ford in affirming the district court's dismissal of a Title III claim against the plaintiff's credit card servicing company for failing to consider his blindness when he disputed an allegedly fraudulent credit card charge by a service provider. 387 Fed.Appx. 179 (3d Cir. 2010). The Court explained:
Under Ford, [plaintiff's] argument fails because the communication between [the service provider's] credit card processing terminal and [credit card servicing company] is not a “public accommodation” within the meaning of the ADA. ... As the District Court noted, “[t]he evidence is that [plaintiff] used his Discover Card to pay for the transactions with [the service provider] at her apartment,” and, “[t]hough [the company's] credit services can be used by cardmembers at a merchant's place of accommodation, [the credit card servicing company] itself does not own, lease or operate those locations.” Thus, because [the credit card servicing company's] alleged discrimination (i.e., the supposedly insufficient investigation of [plaintiff's] fraud claim) in no way relates to the equal enjoyment of goods, services, facilities, privileges, advantages, or accommodations on physical property that [the credit card servicing company], rather than [the service provider], owns, leases, or operates, the District Court correctly granted summary judgment against [plaintiff] on his ADA claim.Id., 387 Fed.Appx. at 183-84 (emphasis supplied). In other words, the plaintiff failed to demonstrate the required nexus between the defendant credit card servicing company's physical place of public accommodation and its discriminatory denial of services because the credit card servicing company did not own, lease, or operate any physical property from which it discriminated against the plaintiff.
In contrast to Ford and Peoples, the Court of Appeals in Menkowitz found a nexus “between the services or privileges denied and the physical place of the [defendant] hospital as a public accommodation” sufficient to support the plaintiff's Title III claim. Menkowitz, 154 F.3d at 122. The plaintiff, a medical doctor with staff privileges at the defendant hospital, claimed that it denied him “full and equal enjoyment of .. privileges, advantages, or accommodations of [a] place of public accommodation” in violation of Title III when it suspended his staff privileges without reasonable accommodation of his attention deficit disorder disability. Id. at 115. Unlike in Ford and Peoples, the discrimination alleged-suspension of the plaintiff's hospital privileges-denied him equal enjoyment of privileges that had the requisite nexus to a physical place owned, operated, or leased by the defendant-hospital.
“While [most] courts agree a nexus is necessary, few have defined the nexus precisely.” Gomez v. Gen. Nutrition Corp., 323 F.Supp.3d 1368, 1375 (S.D. Fla. 2018). But what seems to be essential to the Third Circuit's nexus requirement is an allegation that a website's inaccessibility interferes with the “full and equal enjoyment” of the goods and services offered at a corresponding physical location. Tawam v. APCI Fed. Credit Union, 2018 WL 3723367, at *6 (E.D. Pa. Aug. 6, 2018) (quoting 42 U.S.C. § 12182(a)). The Court need not precisely define the requisite “nexus” in this case, however, because Murphy's Amended Complaint presently includes no allegations regarding any physical location owned, leased, or operated by Rolex SA.
Relying upon Ford, Peoples, and Menkowitz, some district courts in this Circuit have held that a website can be considered a place of public accommodation only if the plaintiff alleges a nexus between the defendant's discrimination and a physical place. See, e.g., Mahoney v. Herr Foods Inc., 2020 WL 1979153, at *3 (E.D. Pa. Apr. 24, 2020) (holding “a website, on its own, is not a public accommodation within the meaning of the ADA.”); Mahoney v. Bittrex, Inc., 2020 WL 212010, at *2 (E.D. Pa. Jan. 14, 2020) (holding that a website falls within the scope of Title III on “if Plaintiff alleges that it shares some nexus with a physical place of public accommodation”); Tawam v. APCI Fed. Credit Union, 2018 WL 3723367, at *6 (E.D. Pa. Aug. 6, 2018) (“The website is a service offered by [defendant] and therefore may be subject to the ADA if it has a sufficient nexus to [defendant's] physical location.”). See also Demetro v. Nat'l Ass'n of Bunco Investigations, 2019 WL 2612687, at *15 (D.N.J. June 25, 2019) (“None of these enumerated places of public accommodation are electronic in nature, or online” and .. “the Third Circuit has held that, in the context of Title III of the [ADA], the term ‘public accommodation' ... is limited to physical accommodations.”) (emphasis in original); Doe v. Independence Blue Cross, 2023 WL 8050471, at *7 (E.D. Pa. Nov. 21, 2023) (recognizing the general applicability of the “nexus test”).
This view, however, is far from unanimous. For example, in Gniewkowski v. Lettuce Entertain You Enterprises, Inc., 251 F.Supp.3d 908, 915 (W.D. Pa. 2017), the Court acknowledged the Ford and Peoples decisions but nonetheless held a bank's website to be a place of public accommodation for purposes of an ADA claim. The Court distinguished Ford and Peoples on the grounds that the alleged discrimination took place “at a location where neither the insurance carrier in Ford, nor the credit card company in Peoples, had ownership or possession, or exercised control.” Id. at 918. The Court reasoned that because the alleged discrimination in Gniewkowski took place on property the defendant owned and operated (namely, its website), Ford and Peoples did not apply. Id. See also, West v. DocuSign, Inc., 2019 WL 38443054 (W.D. Pa. August 28, 2019); Suchenko v. ECCO USA, Inc., 2018 WL 3933514, at *3 (W.D. Pa. Aug. 16, 2018).
When the ADA was adopted in 1990, commercial websites did not exist. Indeed, the first web server in the United States did not go online until December of 1991, and by some estimates, the first commercial sale of an item from a website did not take place until 1994. See A Short History of the Web, CERN, available at https://home.cern/science/computing/birth-web/short-history-web (last visited on July 9, 2023). Given this history, Congress could not have foreseen the existence of websites or their centrality to twenty-first century commerce when it debated and ultimately passed the ADA. See id. The ADA does not necessarily place websites beyond the reach of Title III, but the application of Title III to websites must at least have some grounding in the language of the statute itself. The ADA does not define the term “place,” but it does list the “private entities [that] are considered public accommodations for purposes of [Title III], if the operations of such entities affect commerce.” 42 U.S.C. § 12181(7). All are physical places of business. See id. And the remainder of the text of the statute is not sufficiently plain or clear to support an interpretation that its accessibility requirements apply to “virtual” or “electronic” places of business over Third Circuit decisions requiring a nexus to a physical location. It is also not enough that legislative history suggests that Congress would have included websites within the scope of the statute had it foreseen their future existence. See Long v. Se. Pennsylvania Transportation Auth., 903 F.3d 312, 318 (3d Cir. 2018) (“Following the Supreme Court's directives, we ‘look to the text of the statute, rather than the legislative history, to interpret a statute or determine legislative intent as an aid to interpretation.'”) (quoting Thorpe v. Borough of Thorpe, 770 F.3d 255, 263 (3d Cir. 2014)). Accordingly, support for the application of Title III to websites must be grounded in the language of the statute itself, see id., and the Court of Appeals has held that this language contemplates “at the very least some ‘nexus' between the physical place of public accommodation and the services denied in a discriminatory manner.” Menkowitz, 154 F.3d at 120. Therefore, absent clarification by the Court of Appeals or action by Congress, it appears that the Court is constrained to apply the nexus test to the facts alleged in this case. See Mahoney v. Bittrex Inc., 2020 WL 212010, at *3 (E.D. Pa. Jan. 14, 2020) (observing that “[b]ecause the Third Circuit has not extended the ADA's protections to websites beyond the nexus requirement, this Court cannot”).
Because Murphy has failed to allege facts to support a nexus between a physical place of public accommodation owned, operated, or leased by Rolex SA and the goods or services Rolex SA offers and to which its website allegedly denies equal access, Murphy's Amended Complaint (ECF No. 16) fails to state a claim under Title III of the ADA. Accordingly, Rolex SA's motion to dismiss at ECF No. 28 should be granted to the extent it is asserted pursuant to Rule 12(b)(6).
D. Leave to Amend Should Be Granted.
Because further amendment may cure the deficiency of Murphy's Amended Complaint, it cannot be said that such amendment would be futile or inequitable. Therefore, the Amended Complaint should be dismissed without prejudice and Murphy should be permitted the opportunity to file a second amended complaint.
III. Conclusion
For the reasons discussed, it is respectfully recommended that (1) Rolex SA's motion to dismiss [ECF No. 28] be DENIED to the extent it requests dismissal under Fed.R.Civ.P. 12(b)(2) and (2) GRANTED to the extent it seeks dismissal under Fed.R.Civ.P. 12(b)(6). It is further respectfully recommended that Murphy's Amended Complaint be dismissed without prejudice and with leave to file a second amended complaint.
IV. Notice to Parties Concerning Objections
In accordance with the Magistrate Judges Act, 28 U.S.C. § 636(b)(1), Fed.R.Civ.P. 72((b)(2), and Local Rule 72(D)(2), the parties are permitted to file written objections in accordance with the schedule established in the docket entry reflecting the filing of this Report and Recommendation. Failure to timely file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n. 7 (3d Cir. 2011). Any party opposing objections may file their response to the objections within fourteen (14) days thereafter in accordance with Local Civil Rule 72(D)(2).