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PREPARING A CASE BRIEF FOR CASE 3.1
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Lindgren v GDT, LLC
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312 F.Supp.2d 1125 (S.D. Iowa 2004)
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Jangling Jewels on the Internet: Can the Court Loop Them In?
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GM520: Legal, Political, and Ethical Dimensions
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CASE BRIEF: CASE 3.1
Case Name: Lindgren v GDT, LLC
Case Citation: Lindgren v GDT, LLC312 F.Supp.2d 1125 (S.D. Iowa 2004)
Procedural History:
Ms. Lindgren filed suit in federal district court in Iowa against GDT for infringement. Ms. Lindgren says that GDT has a Web site and is selling its jewels to residents in Iowa and must come to Iowa to defend a suit because it is doing business there. GDT filed a motion to dismiss the case for lack of in personam jurisdiction.
The application of [the minimum contacts] rule will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. Hanson v Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). The Supreme Court repeatedly has applied the “purposefully avails” requirement of Hanson. The contacts with the forum state must be more than “‘random,’ ‘fortuitous,’ or ‘attenuated.’” Minimum contacts must exist either at the time the cause of action arose, the time the suit is filed, or within a period of time immediately prior to the filing of the lawsuit.
The personal jurisdiction issue in this case is a close question. As the Supreme Court has noted, the determination of whether minimum contacts exist “is one in which few answers will be written ‘in black or white. The greys are dominant and even among them the shades are innumerable.” In the present case, GDT’s site consists primarily of single point-of-sale transactions rather than … continuous, long-term contracts. While GDT’s site allows visitors to establish an online account, the account is for convenience purposes only and entails no continuing obligations.
Prior to the filing of this action, GDT’s only conduct directed at Iowa was the state’s inclusion on a drop-down menu on the shipping page of GDT’s Web site. “The fact that someone who accesses defendants’ Web site can purchase a [JEAN JEWEL] does not render defendants’ actions ‘purposely directed’ at this forum.” As GDT’s Web site could be accessed anywhere, including Iowa, its existence does not demonstrate intent to purposefully target Iowa.
There is no evidence that GDT took any purposeful action towards Iowa—it did not direct any paid advertising to Iowa or solicit Iowa residents to visit its Web site. It merely processed the orders from Iowa customers who visited its site. Furthermore, under both the California and Iowa versions of the U.C.C., the sales were made F.O.B. seller with the carrier acting as the buyer’s agent. Consequently, the Internet sales were clearly made in California, and are an insufficient basis for personal jurisdiction over GDT in Iowa.
Viewing the circumstances of this case as a whole, Lindgren has failed to make a prima facie case of personal jurisdiction over GDT. GDT lacks minimum contacts with Iowa and considerations of fairness and justice do not warrant an exercise of personal jurisdiction by this Court. Although this Court lacks jurisdiction, it finds that Lindgren’s claims may continue in the Central District of California, Western Division. Therefore, GDT’s Motion to Dismiss is DENIED.
Statement of Facts:
Gail Lindgren is an entrepreneur who runs a small business called Moonbeams based in West Des Moines, Iowa. In 1997, Ms. Lindgren designed and began selling JEANJANGLES, jewelry that hangs from the belt loops on jeans. Ms. Lindgren obtained a patent for the trinkets in 2000. JEANJANGLES are designed to hang from the belt loop and are made from sterling silver or gold-filled wire, with pieces incorporating such items as gold nuggets, glass, or abalone.
GDT, began selling “Jeans for the Hip,” also called JEAN JEWEL. GDT filed a trademark application for JEAN JEWEL on May 21, 2002. GDT’s jewelry is made from sterling silver or gold and may contain semi-precious stones or glass. JEAN JEWEL merchandise is also available at foreign and domestic retail outlets, although not in Iowa. GDT’s principal place of business is Pacific Palisades, California.
Ms. Lindgren became aware of GDT, its Web site, and its product when People magazine did a feature story on the jean trinkets and friends called to congratulate her on her national success. There was further product confusion when singer Lance Bass of N’Sync referred to the California products during a national radio interview that had listeners thinking again that Ms. Lindgren’s product was enjoying newfound notoriety.
Issues:
Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.
Answers:
The court employed a “sliding scale” to measure the nature and quality of the commercial activity central to its personal jurisdiction analysis. It noted:
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.
Viewing the circumstances of this case as a whole, Lindgren has failed to make a prima facie case of personal jurisdiction over GDT. GDT lacks minimum contacts with Iowa and considerations of fairness and justice do not warrant an exercise of personal jurisdiction by this Court. Although this Court lacks jurisdiction, it finds that Lindgren’s claims may continue in the Central District of California, Western Division. Therefore, GDT’s Motion to Dismiss is DENIED.
Reasoning:
Based on the conclusion of the case, it relied on several facts. The Eighth Circuit recently has indicated that when specific jurisdiction is premised on defendant’s Web site contacts with the forum, the appropriate analytical framework is that of Zippo Manufacturing Co. v Zippo Dot Com. Inc., 952 F.Supp. 1119, 1124 (W.D.Pa. 1997). The Zippo court observed that “the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of the commercial activity that an entity conducts over the Internet.” Due process requires that, in order to subject a nonresident to the jurisdiction of a state’s courts, the nonresident must have “certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
The application of [the minimum contacts] rule will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. Hanson v Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). The Supreme Court repeatedly has applied the “purposefully avails” requirement of Hanson.
Holding:
Viewing the circumstances of this case as a whole, Lindgren has failed to make a prima facie case of personal jurisdiction over GDT. GDT lacks minimum contacts with Iowa and considerations of fairness and justice do not warrant an exercise of personal jurisdiction by this Court. Although this Court lacks jurisdiction, it finds that Lindgren’s claims may continue in the Central District of California, Western Division. Therefore, GDT’s Motion to Dismiss is DENIED.