Where Eagles Fly: Personal Jurisdiction for Web-Businesses

The trademark infringement case Eagle Coffee Co. v. Eagle Coffee Int’l, Inc., addressed whether a web-based vendor could be subject to personal jurisdiction in any state they had customers.  Eagle Coffee Co. v. Eagle Coffee Int’l, Inc., 2010 U.S. Dist. LEXIS 9642 (D. Md. Feb. 4, 2010). 

The short answer: No. 

Flight of the Eagles

Eagle Coffee Company, the Plaintiff, had been in business since 1921 in Baltimore.  The Defendant, Eagle Coffee International, had been in business based in Carmel, New York, since 1983.  Eagle, at *2-4.  The Defendant’s business model was for customers to purchase products from their website.

The Plaintiff argued in Federal Court in Baltimore that the Defendant had violated the Plaintiff’s trademark with the Defendant’s online retail store services.  Eagle, at *4. 

The Defendants claimed jurisdiction in Maryland was improper. 

Eagle Down: Plaintiff’s Arguments Supporting Personal Jurisdiction

The Plaintiff argued that the Defendant was subject to jurisdiction in Maryland because of “ongoing business with Marylanders, as evidenced by its seven Maryland customers and its use of the phrase ‘please come again’ in confirmatory emails following each purchase.” Eagle, at *4. 

The Plaintiff further claimed that the Defendant made one phone call to a Maryland customer after the customer placed an online order. Eagle, at *4.

Finally, the Plaintiff claimed the Defendant purposely availed itself to the laws of Maryland by delivering products to seven customers in the forum state. Eagle, at *5. 

The Talons of Personal Jurisdiction

It is a Constitutional “given” that jurisdiction of a nonresident defendant must first satisfy Due Process, requiring the defendant to have “minimum contacts” with the forum state, so that a defendant can reasonably anticipate being involved in litigation in the forum state.  Eagle, at *6, International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945). 

A Court must consider the following in determining whether there is specific personal jurisdiction over a nonresident defendant: 

(1) The extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state;

(2) Whether the plaintiff’s claims arise out of those activities directed at the state; and  

(3) Whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.'”

Eagle, at *7-8, citations omitted.

The Court must also evaluate the quality of the forum state contacts, not just the quantity of the contacts.  Eagle, at *8.

The Eagle Has Landed: The Court’s Decision

The Court held that the Defendant was not subject to personal jurisdiction in Maryland, because it had not purposefully directed activities to Maryland residents.  Eagle, at *12.

The Court explained nothing on the Defendant’s website demonstrated any targeted intent at Maryland residents more so than any other state.  The fact the Defendant conducted online sales did not “demonstrate that [it] took actions purposefully directed toward Maryland specifically.”  Eagle, at *12, citations omitted. 

The Court explained that the message “please come again,” plus one phone call and using a nationwide delivery service over a 25 year period to service seven customers were isolated occurrences that did not show “significant activities” or “continuing obligations” within the state of Maryland.  Eagle, at *13.

The Court further ruled that the “isolated” instances of selling products to seven Maryland consumers did not show any directed activity towards Maryland residents.  Eagle, at *12.

Bow Tie Thoughts

Personal jurisdiction cases will continue to haunt lawyers well beyond their first year Civil Procedure finals.  The interconnectivity of online relationships and business requires attorneys to review where there is proper personal jurisdiction and venue for cases originating from online disputes.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s