INTERNET MATERIALS FOR CHAPTER 4
Sufficient Minimum Contacts Rule
Mink v. AAAA Development LLC
Venue
Massey v.Mandell
Excepts from Foreign Intelligence Surveillance Act
Title 50 U.S. Code Sections 1802- 1805
Sufficient Minimum Contacts Rule
David Mink v. AAAA Development LLC
U.S. Court of Appeals for the 5th Circuit
No. 98-20770
September 17, 1999
Robert M. Parker, Circuit Judge:
David Mink appeals the district court’s dismissal of his complaint for lack of personal jurisdiction. We affirm.
<CS-OU-H>I. Facts and Proceedings
David Mink is a Texas resident who works in the retail furniture business. In January 1997, Mink claims that he began to develop a computer program, the Opportunity Tracking Computer System (“OTC”), designed to track information on sales made and opportunities missed on sales not made. On May 13, 1997, Mink submitted a patent application for the computer software and hardware that he developed to the United States Patent and Trademark Office. He also submitted a copyright application for the OTC to the United States Copyright Office.
Mink claims that in June 1997 he was approached by a Colorado resident named Richard Stark at a trade show. Stark allegedly asked Mink if he would be interested in marketing the OTC product with Stark’s software at an upcoming computer seminar. Mink gave Stark a full demonstration of the OTC system, including its written material. While Mink initially declined Stark’s offer to market the software together, Mink later contacted Stark to discuss the possibility of Stark marketing his product.
Between June 1997 and October 1997, Stark allegedly shared all of Mink’s ideas and information on the OTC system with David Middlebrook. According to Mink’s complaint, Middlebrook and two companies, AAAA Development and Profitsystems, conspired to copy Mink’s copyrighted and patent-pending OTC system and create an identical system of their own for financial gain. AAAA Development is a Vermont corporation with its principal place of business in Vermont. Middlebrook is a Vermont resident. Neither AAAA Development nor Middlebrook own property inTexas. Mink is silent concerning where his contacts with the defendants occurred. However, we infer that the contacts were not in Texas based on the statement in Middlebrook’s affidavit that AAAA has not made any sales in Texas nor has it had any agents or employees travel to Texas or represent it in Texas. The company has advertised in a national furniture trade journal and maintains a website advertising its sales management software on the Internet.
On November 7, 1997, Mink filed his original complaint in the United States District Court for the Southern District of Texas against AAAA Development and David Middlebrook, alleging that they conspired to copy Mink’s computer program in violation of federal copyright and patent pending rights. AAAA Development and Middlebrook moved to dismiss for lack of personal jurisdiction. The district court granted their motions. Mink filed a motion for reconsideration of the order dismissing AAAA and Middlebrook, adding allegations that the defendants had been actively targeting customers inTexas with cold calls and asserting for the first time that AAAA’s Internet website, accessible from Texas, could fulfill the minimum contacts requirement for the exercise of personal jurisdiction. The district court denied the motion for reconsideration. . . .
<CS-OU-H>II. Discussion
The sole issue on appeal is whether the district court erred in dismissing defendants AAAA and Middlebrook for a lack of personal jurisdiction. . . . When a nonresident defendant challenges personal jurisdiction, the plaintiff bears the burden of establishingthe district court’s jurisdiction over the defendant. . . .
The Due Process Clause of the Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing “minimum contacts” with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend “traditional notions of fair play and substantial justice.” . . .
The “minimum contacts” aspect of the analysis can be established through “contacts that give rise to ‘specific’ personal jurisdiction or those that give rise to ‘general’ personal jurisdiction.” . . . Specific jurisdiction exists when the nonresident defendant’s contacts with the forum state arise from, or are directly related to, the cause of action. . . . General jurisdiction exists when a defendant’s contacts with the forum state are unrelated to the cause of action but are “continuous and systematic.” . . . Because we conclude that Mink has not established any contacts directly related to the cause of action required for specific jurisdiction, we turn to the question of whether general jurisdiction has been established.
At the outset, we note that Mink has not met his burden of establishing that the district court had personal jurisdiction over defendant Middlebrook. Mink, however, contends that the district court could exercise personal jurisdiction over AAAA because its World Wide Website is accessible byTexas residents. The issue of exercising personal jurisdiction over a defendant who operates an Internet website without other contacts with the forum state is a question of first impression in the Fifth Circuit.
Courts addressing the issue of whether personal jurisdiction can be constitutionally exercised over a defendant look to the “nature and quality of commercial activity that an entity conducts over the Internet.”. . . The Zippo [Manufacturing Co. v. Zippo Dot Com Inc., 952 F.Supp.1119 (W.D. Pa 1997)] decision categorized Internet use into a spectrum of three areas. At the one end of the spectrum, there are situations where 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. . . .” . . . In this situation, personal jurisdiction is proper. . . . At the other end of the spectrum, there are situations where a defendant merely establishes a passive website that does nothing more than advertise on the Internet. With passive websites, personal jurisdiction is not appropriate. . . . In the middle of the spectrum, there are situations where a defendant has a website that allows a user to exchange information with a host computer. In this middle ground, “the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the Website.”. . . We find that the reasoning of Zippo is persuasive and adopt it in this Circuit.
Applying these principles to this case, we conclude that AAAA’s website is insufficient to subject it to personal jurisdiction. Essentially, AAAA maintains a website that posts information about its products and services. While the website provides users with a printable mail-in order form, AAAA’s toll-free telephone number, a mailing address and an electronic mail (“e-mail”) address, orders are not taken through AAAA’s website. This does not classify the website as anything more than passive advertisement which is not grounds for the exercise of personal jurisdiction. . . .
This case does not fall into the spectrum of cases where a defendant clearly conducted business over the Internet nor does it fall into the middle spectrum of interactivity where the defendant and users exchange information through the Internet. There was no evidence that AAAA conducted business over the Internet by engaging in business transactions with forum residents or by entering into contracts over the Internet. . . .
We note that AAAA’s website provides an e-mail address that permits consumers to interact with the company. (1) There is no evidence, however, that the website allows AAAA to do anything but reply to e-mail initiated by website visitors. In addition, AAAA’s website lacks other forms of interactivity cited by courts as factors to consider in determining questions of personal jurisdiction. For example, AAAA’s website does not allow consumers to order or purchase products and services on-line. . . . In fact, potential customers are instructed by the website to remit any completed order forms by regular mail or fax.
In this case, the presence of an electronic mail access, a printable order form, and a toll-free phone number on a website, without more, is insufficient to establish personal jurisdiction. Absent a defendant doing business over the Internet or sufficient interactivity with residents of the forum state, we cannot conclude that personal jurisdiction is appropriate.
<CS-OU-H>III. Conclusion
Based on the foregoing, the district court’s decision to dismiss Defendants Middlebrook and AAAA Development for lack of personal jurisdiction is AFFIRMED.
Venue
Maureen Massey v. Joanne Mandell
614 N.W.2d 70
Michigan Supreme Court
July 11, 2000
Taylor, J.
We granted leave to appeal to consider defendants Camp Niobe's and Joanne Mandell's claim that the trial court had erred in denying their motion to change venue from Wayne County to Lapeer County. Because we conclude that venue in Wayne County was proper, we affirm the judgment of the trial court.
I. Facts and Proceedings Below.
Plaintiff's decedent, nine-year-old Jeremy Massey, was a foster child in Detroit. On June 28, 1998, Jeremy participated in an outing sponsored by the Children's Center of Detroit at Camp Niobe in Lapeer County. Tragically Jeremy drowned while in the swimming area at the camp. Maureen Massey filed a lawsuit in Wayne County as personal representative of Jeremy's estate. The lawsuit named as defendants the Children's Center and one of its employees, Lisa Dilg, and Camp Niobe and some of its employees, including Mandell.
The camp and Mandell filed a motion for change of venue, arguing that venue in Wayne County was improper and that, pursuant to MCL 600.1629(1)(a); MSA 27A.1629(1)(a) venue in Lapeer County was proper because the camp was located and conducts business in Lapeer County and the drowning took place in Lapeer County. Plaintiff opposed the motion, arguing that the criteria under subd (1)(a) and (b) of the statute did not apply, but that venue in Wayne County was proper pursuant to subd (1)(c) n2 because plaintiff resided there and the Children's Center did business there.
The trial court denied the motion to change venue on the basis that both the plaintiff and the Children's Center were in Wayne County. Camp Niobe and Mandell filed an application for leave to appeal, a motion for immediate consideration, and a request for a stay with the Court of Appeals. The Court of Appeals granted immediate consideration and denied the application and stay "for lack of merit in the grounds presented." The camp and Mandell then filed a motion for immediate consideration, an application for leave to appeal, and a motion for stay with this Court. This Court granted immediate consideration and granted a stay and leave to appeal.
II. Standard of Review.
This Court reviews a trial court's ruling in response to a motion to change improper venue under the clearly erroneous standard. Shock Bros, Inc v Morbark Industries, Inc, 411 Mich. 696, 698-699; 311 N.W.2d 722 (1981). Clear error exists when the reviewing court is left with a definite and firm conviction that a mistake has been made. People v Kurylczyk, 443 Mich. 289, 303; 505 N.W.2d 528 (1993).
IIIPrinciples of Statutory Construction.
In examining a statute, it is our obligation to discern the legislative intent that may reasonably be inferred from the words expressed in the statute. White v Ann Arbor, 406 Mich. 554, 562; 281 N.W.2d 283 (1979). One fundamental principle of statutory construction is that "a clear and unambiguous statute leaves no room for judicial construction or interpretation." Coleman v Gurwin, 443 Mich. 59, 65; 503 N.W.2d 435 (1993). Thus, when the Legislature has unambiguously conveyed its intent in a statute, the statute speaks for itself and there is no need for judicial construction; the proper role of a court is to apply the terms of the statute to the circumstances in a particular case. Turner v Auto Club Ins Ass'n, 448 Mich. 22, 27; 528 N.W.2d 681 (1995). Concomitantly, it is our task to give the words used by the Legislature their common, ordinary meaning. MCL 8.3a; MSA 2.212(1).
IV. The Statute.
MCL 600.1629; MSA 27A.1629 in full provides: (1) Subject to subsection (2) in an action based on tort or another legal theory seeking damages for personal injury, property damage, or wrongful death, all of the following apply: (a) The county in which the original injury occurred and in which either of the following applies is a county in which to file and try the action: (i) The defendant resides, has a place of business, or conducts business in that county. (ii) The corporate registered office of a defendant is located in that county. (b) If a county does not satisfy the criteria under subdivision (a), the county in which the original injury occurred and in which either of the following applies is a county in which to file and try the action: (i) The plaintiff resides, has a place of business, or conducts business in that county. (ii) The corporate registered office of a plaintiff is located in that county. (c) If a county does not satisfy the criteria under subdivision (a) or (b), a county in which both of the following apply is a county in which to file and try the action: (i) The plaintiff resides, has a place of business, or conducts business in that county, or has its corporate registered office located in that county. (ii) The defendant resides, has a place of business, or conducts business in that county, or has its corporate registered office located in that county. (d) If a county does not satisfy the criteria under subdivision (a), (b), or (c), a county that satisfies the criteria under section 1621 or 1627 is a county in which to file and try an action. (2) Any party may file a motion to change venue based on hardship or inconvenience. (3) For the purpose of this section only, in a product liability action, a defendant is considered to conduct business in a county in which the defendant's product is sold at retail. [Emphasis added.]
V. Analysis.
The parties agree that the original injury for purposes of construing §§ 1629 was the drowning and that the drowning occurred in Lapeer County. The camp and Mandell argue that they satisfy subd (1)(a) of §§ 1629 because the original injury occurred in Lapeer County and they reside, have a place of business, or conduct business in Lapeer County. The plaintiff argues however that when subd (1)(a) is carefully analyzed the argument for mandatory venue in Lapeer County fails.
Subd (1)(a) provides that, using the place of original injury (Lapeer County) as the referent, the inquiry is then if either of the following apply: (i) The defendant resides, has a place of business, or conducts business in that county. (ii) The corporate registered office of a defendant is located in that county.
Accordingly, subd (1)(a)(i) requires that "the defendant" reside, have a place of business, or conduct business in the county. Here, we have a case with four defendants. The camp and Mandell would satisfy subd (1)(a)(i) if either were the only defendant. Moreover, the Children's Center and Lisa Dilg would not satisfy subd (1)(a)(i) even if they were the only defendant. These circumstances are fatal to the camp's and Mandell's reliance on subd (1)(a)(i).
Having determined that subd (1)(a)(i) does not apply, we next must determine if subd (1)(a)(ii) required venue be established in Lapeer County. Under this subdivision, venue would be required to be in the county where the original injury occurred if a defendant is a corporation and its registered corporate office is in the same county. "A," as the above makes clear, should be understood to cover a case with more than one defendant and one of them is a corporation. In the case at bar none of the defendants has asserted that it is a corporation or that it has its corporate registered office in Lapeer County. Accordingly, subd (1)(a)(ii) is also inapplicable.
The statute next instructs that, if a county does not satisfy the criteria in subd (1)(a), one must look to subd (1)(b). Under subd (1)(b), Lapeer County would be the proper venue if "the plaintiff" resided there, or had a place of business there or conducted business there or if "a plaintiff" had a registered corporate office there. None of these criteria are satisfied. The statute next instructs that if a county does not satisfy subd (1)(a) or (1)(b) that one must look to subd (1)(c). Under subd (1)(c), the county in which the original injury occurred is no longer a consideration. Rather, if there is a county wherein "the plaintiff" resides, or has a place of business, conducts business or has its registered office, and at the same time "the defendant" resides or has a place of business or conducts business or has its registered corporate office, then such a county is a county in which to try an action. Plaintiff argues that Wayne County comes within subd (1)(c). We cannot agree. There is no question that plaintiff resides in Wayne County. However, subd (1)(c)(ii) also requires that "the defendant" reside, have a place of business, conduct business, or have its registered office in Wayne County before Wayne County would be "a county in which to file and try the action . . . ." MCL 600.1629(1)(c); MSA 27A.1629(1)(c). As before, "the" does not mean "a" and thus the requirements of subd (1)(c)(ii) are not satisfied merely because one or more of the defendants reside or have a place of business or conduct business in Wayne County.