Cases where exercise of jurisdiction would not be fair play and substantial justice and substantial justice

defendant was aware of plaintiff in Indiana prior to it's incorporation, in 1992 in Florida. The defendant could not reasonably anticipate being haled into court in Indiana.⁵⁷¹

2. Cases where exercise of jurisdiction would not be fair play

The court in Winfield Collection, Ltd. v. McCauley⁵⁷⁶ held that the result of two auction sales underpinning the instant dispute, and over which defendant had little, if any, control, was fortuitous and de minimus contacts. Therefore, it would offend traditional notions of fair play and substantial justice to exercise personal jurisdiction.⁵⁷⁷

Like an isolated advertisement in nationally-distributed magazine – No S jurisdiction (G not asserted) - auction-sales via E-bay – competitors in home-craft patterns – product-copyright infringement

Texas Defendant produced home-craft patterns through a website which could send and receive messages, including responding to purchase orders.

No evidence that website had resulted in the development of any customer base in the forum state.

Defendant claimed sales were made upon submitting her crafts for sale on

“E-bay”, an on-line auction house.

Court noted that the function of an auction is to permit the highest bitter to purchase the property offered for sale, and the choice of that highest bidder is therefore beyond the control of the seller. Thus, a defendant can no be said from such auctions sales to have “purposefully availed” of the privilege of doing business in the forum state.⁵⁷⁸ Without such indications of active efforts to secure customers in the forum state through the website the use of the Internet alone is no more indicative of local jurisdictional contacts than an isolated advertisement in a nationally-distributed magazine.⁵⁷⁹ The court in Pres-Kap found it wildly beyond the reasonable expectations of computer-information users, and also offending traditional notions of fair play and substantial justice, if users of 'on-line' services soliciting, engaged, and serviced entirely in state by the supplier's local representatives, could be brought into court in the state in which supplier's billing office and database happen to be located.⁵⁸⁰

In Millennium Enterprise the court rejected on the ground of the notions of “fair play and substantial justice” that an interactive website could constitute “purposeful availment” of a forum, specific personal jurisdiction, by simply being continuously accessible to residents of that forum. The court also rejected that such an website could be considered

“continuous and systematic” for purposes of general jurisdiction.

576Winfield Collection, Ltd. v. McCauley, 105 F.Supp.2d 746 (E.D.Mich. 2000).

577Winfield Collection at 751.

578Winfield Collection at 749.

579Winfield Collection at 750.

580Pres-Kap v. System One at p. 1353.

Otherwise, the “logical conclusion” would be that, “a plaintiff could sue a foreign defendant in any forum and claim jurisdiction based on the defendant’s interactive Website, even if the cause of action is unrelated to the Website.”⁵⁸¹ “Businesses offering products through the Internet, particular small businesses, might forego this efficient and accessible avenue of commerce if faced with the “litigious nightmare of being subject to suit” in every jurisdiction in this country.”⁵⁸²

Until transactions with [the forum courts] residents are consummated through the defendants' Website, defendants cannot reasonably anticipate that they will be brought before the forum court, simply because they advertise their products through a global medium which provides the capability of engaging in commercial transactions. It is, therefore,

"presumptively ... unreasonable to require [them] to submit to the burdens of litigations" in this forum.⁵⁸³

The court in Stomp pointed out that if the exercise of jurisdiction via the Internet served to expose an entity to state law claims which it had no notice of, or which were entirely foreign to the laws of its home forum, then a closer inspection of the fundamental fairness of such jurisdiction might be required.⁵⁸⁴

The court agreed with other courts that have feared that exercise of jurisdiction based on an entity's Internet activities would open “the Web user up to inconsistent regulations” and “raises the specter of dramatically chilling what may well be the most participatory marketplace of mass speech that this country--and indeed the world--has yet seen.”

The Stomp court recognized that a broad exercise of personal jurisdiction over defendants who engage in commerce over the Internet might have devastating effects on local merchants and small businesses that seek to expand through the Internet.⁵⁸⁵

These small businesses make up the backbone of the American economy and should not have to bear the burden of defending suits in distant fora when they mean only to allow local consumers to buy their wares from the convenience of their own homes.

But the Stomp Court next pointed out that the concern for commercial defendant “must be balanced against the ability of a distant consumer to press its cause against a defendant who uses the Internet to do business within the forum while remaining outside the boundaries of the

581Millennium Enterprises at 923.

582Millennium Enterprises at 923.

583Millennium Enterprises at 923.

584Stomp at 1080.

585Stomp at 1081.

jurisdiction.

In Expert Pages v. Buckalew⁵⁸⁶ the court held exercise of personal jurisdiction would be constitutionally unreasonable in view of defendant’s limited contact with California, and the overwhelming burden defending the case in that district court would impose on defendant. The court noted that it appeared from the record in the case that if that court were to exercise personal jurisdiction, the defendant would be deprived of an opportunity to defend himself.

Plaintiff claimed its copyright was violated by defendant making an unauthorized copy of a website for the purpose of sending electronic mail messages to the persons advertising on the site.

Defendants business did not appear to have been terribly successful - has only twelve paying customers.

The e-mail messages allegedly disparaged plaintiff and offered defendant’s service as an alternative.

The court pointed out that other than the operation of defendant’s website, defendant did not appear to have any other commercial or business activities. He resided on the other side of the country and had not had occasion to travel to California since he was very young.

While defendant has minimum contacts with this state, these contacts are barely greater than the constitutional threshold.

The court in TY, Inc. v. Clark⁵⁸⁷ found personal jurisdiction over the defendant based upon the presence of their website unappropriate.

The case dealt with a British defendant that used a domain name very similar to plaintiffs world famous registered mark for its website where defendant advertised in U.S. dollars most of plaintiff’s products in competition with plaintiff.

In Callaway Golf Corp. v. Royal Canadian Golf Association⁵⁸⁸ the court noted that even if the defendant had purposely availed itself of California’s benefits and protections, exercise of jurisdiction over defendant in California would be unreasonable.⁵⁸⁹

586 Expert Pages v. Buckalew, 1997 WL 488011 (N.D.Cal. 1997).

587 TY, Inc. v. Clark, 2000 WL 51816 (N.D.Ill., 2000).

588 Callaway Golf Corp. v. Royal Canadian Golf Association, --F.Supp.2d--, 2000 WL 1910560 (C.D.Cal. 2000).

589Callaway Golf Corp. v. Royal Canadian Golf Association at *10.