Opinion
Civ. No. 01-807 (WGB)
June 14, 2002
James P. Krupka. Esq., Gaccione, Pomaco Beck, P.C., Belleville, New Jersey, Attorneys for Plaintiffs.
David A. Semple, Esq., Newman, Fitch, Altheim Myers, Newark, New Jersey, Attorneys for Defendants.
OPINION
This action arises from personal injuries allegedly sustained by plaintiff Joseph Imundo ("Joseph") when he slipped and fell on the property owned and operated by defendants Pocono Palace, Inc., Cove Haven, Inc. and/or John Does 1-5. This Court has subject matter jurisdiction pursuant to 18 U.S.C. § 1332 (diversity) because Plaintiffs are citizens of New Jersey and Defendant is a citizen of Pennsylvania. Defendant moves to dismiss for lack of personal jurisdiction. For the following reasons, Defendants' motion is granted.
I. FACTUAL BACKGROUND
The Complaint alleges that on or about December 30, 1998, Joseph was caused to slip and fall due to ice conditions in the parking lot on Defendants' premises. The Complaint further alleges that as a result, Joseph suffered personal injuries and his wife suffered the loss of his consortium. Joseph and his wife brought this action in the Superior Court of New Jersey, Law Division, Essex County, on December 22, 2000, to recover damages for their injuries.
On February 14, 2001, Defendants removed this action to this Court and interposed an Answer, asserting the affirmative defense of lack of personal jurisdiction. Defendants now make this motion to dismiss the Complaint for lack of personal jurisdiction.
It is undisputed that Defendants are Pennsylvania corporations, having their principal place of business in the Commonwealth of Pennsylvania, where they operate vacation resorts, one of which is where Joseph allegedly slipped and fell, sustaining personal injuries. Defendants contend that they have no connection to the State of New Jersey and, thus, are not amenable to the jurisdiction of this Court.
II. APPLICABLE LAW
Under Fed.R.Civ.P. 12(b)(2), if the Court lacks personal jurisdiction over one or more of the defendants, it may dismiss the action against those defendant(s). "Once a defendant properly raises a jurisdictional defense the plaintiff bears the burden of demonstrating sufficient contacts with the forum state to support personal jurisdiction."Electro-Catheter Corp. v. Surgical Specialties Instrument Co., Inc., 587 F. Supp. 1446, 1450, citing Compagnie des Bauxites de Guinee v. L'Union Atlantique S.A. d'Assurances, 723 F.2d 357, 362 (3d Cir. 1983). The plaintiff can sustain its burden through "sworn affidavits or other competent evidence." North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 692 (3d Cir. 1990), quoting, Stranahan Gear Co. v. N L Indust., 800 F.2d 53, 58 (3d Cir. 1986). In deciding a motion to dismiss pursuant to 12(b)(2), the Court must consider the written submissions in a light most favorable to the plaintiff. One World Botanicals Ltd. v. Gulf Coast Nutritionals, Inc., 987 F. Supp. 317, 322 (D.N.J. 1997).
District Courts can exercise personal jurisdiction over non-resident defendants to the extent authorized under the law of the forum state in which the district court sits. Fed.R.Civ.P. 4(e); accord Decker v. Circus Hotel, 49 F. Supp.2d 743 (D.N.J. 1999). Pursuant to New Jersey's long arm statute, courts can exercise personal jurisdiction over a defendant to the full extent permitted by the Due Process Clause of the Fourteenth Amendment of the United States Constitution. N.J. Sup. Ct. R. 4:4-4(c)(1); accord Weber v. Jolly Hotels, 977 F. Supp. 327, 330 (D.N.J. 1997).
Due process requires that in order for personal jurisdiction to exist over a non-resident defendant, he must have "minimum contacts" with the forum state 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 (1945). Minimum contacts are purposeful acts, directed toward a State, which make it reasonable for the defendants to anticipate being haled into court there. World Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 311 (1980). At least some act is required by which the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus evoking the benefits and protections of its laws. Hanson v. Denckla, 357 U.S. 235 (1958).
Minimum contacts can be satisfied in two ways: specific or general. Specific jurisdiction exists when the nonresident defendant has at least some contact with the forum state and the cause of action arises out of or relates to that contact. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408n. 8 (1984). General jurisdiction exists where the plaintiff's cause of action does not arise out of or relate to defendant's contacts but defendant's contacts with the forum state are so continuous and systematic that the defendant has established a presence in the state, making it amenable to jurisdiction there. American Tel. Tel. Co. v. MCI Communications Corp., 736 F. Supp. 1294, 1302 (D.N.J. 1990). To establish general jurisdiction, the extent of the defendant's contacts with the forum state must be significantly more substantial. Decker, 49 F. Supp.2d at 747.
III. DISCUSSION
Defendants claim that the Complaint must be dismissed because Plaintiff cannot demonstrate that they have sufficient minimum contacts with New Jersey for personal jurisdiction to exist. Plaintiffs contend that the bases for this Court's jurisdiction over Defendants are that Defendants (1) operate a Web site (www.caesarspoconoresorts.com); (2) advertise in national publications; and (3) contact former guests by telephone.
A. Specific Jurisdiction
Plaintiffs do not allege that their cause of action arose from or was related to any of the foregoing actions by Defendants. Plaintiffs do not contend that they made their reservations on the Web site. Nor do they contend that they were enticed to visit Defendants' hotel as a result of the Web site, an advertisement, or a telephone call from Defendant. Therefore, Plaintiffs cannot establish specific jurisdiction. See Bell v. Imperial Palace Hotel/Casino, Inc., 2001 WL 1862870, *5 (E.D.Mo. Oct. 25, 2001).
Even if Plaintiffs had made their hotel reservation over Defendants' Web site, the personal injuries at the heart of this lawsuit arose from the allegedly negligent conduct of Defendants in Pennsylvania. Absent the requisite nexus, there is no basis for asserting specific jurisdiction over Defendants. Accordingly, this Court must determine whether it can exercise general jurisdiction over the nonresident defendants.
B. General Jurisdiction
The maintenance of an Internet site can sometimes constitute minimum contacts sufficient to establish general jurisdiction over a nonresident defendant. Decker, 49 F. Supp.2d at 747; Weber, 977 F. Supp. at 333;Zippo Manuf. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D.Pa. 1996). The cases addressing "the relationship between the Internet and personal jurisdiction 'reveal that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.'" Weber, 977 F. Supp. at 333, citing, Zippo, 952 F. Supp. at 1124. Courts have, therefore, distinguished between interactive and passive Web sites in determining the issue of personal jurisdiction.
Passive Web sites merely provide information or advertisements to users, without the ability to exchange information with the host computer. The posting of such Web sites is typically found not to create jurisdiction. Amberson Holdings, LLC, Inc. v. Westside Story Newspaper, 110 F. Supp.2d 332, 336 (D.N.J. 2000); Osteotech, Inc. v. GenSci Regeneration Sciences, Inc., 6 F. Supp.2d 349, 354; Weber, 977 F. Supp. at 333. Interactive Web sites, on the other hand, may provide the requisite minimum contacts, depending on the nature and level of the interaction. VP Intellectual Properties, LLC v. Imtec Corp., No. 99-3136, 1999 WL 1125204, *3 (D.N.J., Dec. 9, 1999); Zippo, 952 F. Supp. at 1124.
To find that an interactive Web site warrants the exercise of jurisdiction, "the court must find 'something more' than an advertisement or solicitation for sale of goods to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state." Amberson, 110 F. Supp.2d at 336. Because the internet is a world-wide medium, a web site that meets the constitutional minimum contacts requirements would consequently result in the operator of the Web site being subject to nationwide jurisdiction.Weber, 977 F. Supp at 333. Therefore, the Court must carefully analyze the contacts so as to determine whether the exercise of jurisdiction would violate due process.
Courts have generally found personal jurisdiction over a nonresident defendant based on the existence of an Internet site in two situations: (1) where the site is used to actively transact business; and (2) where a user can exchange information with the host computer. Decker, 49 F. Supp.2d at 748. In the first category of cases, jurisdiction exists over the operators of such active Web sites because the defendants "enter into contracts with residents of a foreign jurisdiction that involve knowing and repeated transmission of computer files over the Internet."Weber, 977 F. Supp. at 133, quoting, Zippo, 952 F. Supp. at 1124. The second category of cases involve a determination of jurisdiction "by examining the level of interactivity and commercial nature of the exchange of information that occurs on the web site." Weber, 977 F. Supp. at 133.
For example, personal jurisdiction has been found over operators of Web sites who could enter into contracts through the Web site to provide goods and services over the Internet. CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996) (contracts to distribute software over the Internet); Zippo, 952 F. Supp. at 1126 (contracts to provide news service over the internet); Thompson v. Handa Lopez, Inc., 998 F. Supp. 738, 744 (W.D.Tex. 1998) (continuous interaction with players on their casino Web site). Courts have also found jurisdiction where users could register with a Web site to receive services over the internet. Moritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, 1330 (E.D.Mo. 1996) (users could register for mailbox and receive advertisements on the Internet). On the other hand, merely placing information about hotels on an Internet site as an advertisement and having the added feature of enabling a user to contact the defendant through its Web site has been found insufficient to confer personal jurisdiction on defendants who operate them. Weber, 977 F. Supp. at 333-34.
Plaintiffs contend that Defendants operate an interactive Web site and, therefore, this Court should exercise general jurisdiction over them. Plaintiffs provided this Court with printed pages of Defendants' Web site. See Krupka Cert, Exhibit A (copies of printed pages from Defendants' Web site). Additionally, the Court undertook its own investigation of the Web site.
The current version of Defendants' Web site provides descriptions and photographs of Defendants' four resorts (Cove Haven, Paradise Stream, Pocono Palace and Brookdale). It also enables users to send e-mail to Defendants, register with Defendants to receive information regarding Defendants' resorts, special packages and discounts, and request brochures. One can even watch a one minute video clip. The Web site also provides information about job opportunities and benefits and enables users to e-mail someone for more information. Additionally, users can check rates and room availability and even make an online reservation at any one Defendants' three hotels through the Web site.
Defendants argue that the Web site did not exist in this format until January 2001, well after Plaintiffs' cause of action accrued. Defendants contend that on December 30, 1998, the date Plaintiff was allegedly injured, the Web site did not allow patrons to register with Defendants to receive brochures, special packages or discounts to prospective vacationers, nor did it allow for prospective patrons to make reservations. Trecoske Aff., at¶ 5. At the time, it was merely informational. In other words, the Web site was a passive one and, thus, not an appropriate basis for jurisdiction.
The issue is whether the Court, in determining the issue of jurisdiction, should consider the current version of Defendants' Web site, which did not exist prior to the accrual of the cause of action and the filing of this lawsuit. In determining the issue of personal jurisdiction, courts have considered a defendant's activities in the forum state subsequent to the accrual of the cause of action, where those activities occurred prior to the institution of suit. Radigan v. Innisbrooke Resort Golf Club, 142 N.J. Super. 419, 424 (Law Div. 1976); Scaffer v. Granit Hotel, Inc., 110 N.J. Super. 1, 6 (App.Div. 1970); but see Merced v. JLG Industries, 170 F. Supp.2d 65 (D.Mass. 2001) (suggesting in dictum that the existence of a Web site was not enough to establish personal jurisdiction, where it only became interactive and began to support online ordering after the cause of action accrued). These opinions suggest that the filing of the lawsuit is the point at which the Court no longer considers defendant's activities.
In Educational Testing Service v. Katzman, 631 F. Supp. 550, 555 (D.N.J. 1986) ("ETS"), the district court went one step further and held that all contacts between the nonresident defendant and the forum state, even subsequent to filing of the complaint, were relevant to determining whether the defendant was subject to the court's jurisdiction, so long as they were not simply the result of defending the case. In declining to hold that the moment of the filing of a complaint to be the watershed mark after which defendant's activities with the forum state should no longer be considered, the Court found that it was appropriate to consider defendant's post-lawsuit activities in order to determine whether it could exercise personal jurisdiction over defendant.
The Court found that this was particularly appropriate where those activities are substantial enough to create a continuous and systematic presence in the forum state. Moreover, the Court pointed out that due process is not offended since once a defendant is served with the complaint, he is on notice that he may be subject to jurisdiction in that forum. Id.
This Court finds that it is appropriate to consider the current version of Defendants' Web site in determining whether Defendants have established minimum contacts with New Jersey, particularly where it became operational within only days of the filing of this lawsuit. Defendants knew at the time they created/updated the Web site in January 2001, that they were being sued in New Jersey by Plaintiff and risked the possibility that the Web site might subject them to this Court's personal jurisdiction. They could have taken steps to avoid establishing an internet presence by choosing not to alter the Web site. Instead they chose to operate the Web site in its current version, thereby risking the possibility of establishing Internet presence in New Jersey.
Next, this Court must determine whether the current version of Defendants' Web site is interactive, and if so, whether it reaches the level of interactivity required to establish their presence in New Jersey. Defendants' Web site does more than merely advertise or solicit business. By logging onto Defendants' Web site, users are able to register and, more importantly, make reservations by accessing the Web site. The question is whether this is enough activity to confer jurisdiction.
The Court in Decker suggested in dictum that a hotel internet Web site which provides customers the ability to reserve a room through the Web site is sufficient to establish general jurisdiction. Decker, 49 F. Supp.2d at 748. The Decker Court, however, enforced the defendants' forum selection clause and declined to exercise personal jurisdiction over defendants who operated the hotel Web site. Plaintiffs here point out that Defendants do not have a similar clause.
Nevertheless, this Court has been unable to find a case where the Court actually predicated personal jurisdiction on the operation of a Web site that enabled users to make hotel reservations. The factually analogous case of Bell v. Imperial Palace, No. 4:01-CV-0883, 2001 WL 1862670 (E.D.Mo. Oct. 25, 2001) is instructive. In Bell, the Court observed that, unlike internet cases involving the sale of goods, where the entire transaction (order, payment and confirmation) can be completed online, the exchange in the hotel context is "simply preliminary to the individual traveling outside the forum to use the service." Id. at *4. In this respect the Court found that it was analogous to having a toll free reservations hotline, which allows interested consumers, at their own discretion and by their own will, to contact the hotel (whether it be by telephone or internet) and make a reservation. Id.; see also Rodriguez v. Circus Circus Casinos, Inc., No. 00-6559, 2001 WL 21244 (S.D.N.Y. Jan. 9, 2001) (unpublished)("there is no material difference between using the internet to make a reservation with an out-of-state entity and placing a telephone call to that entity for the same purpose.").
This Court agrees. Defendants should not be subject to the jurisdiction of every Court in the nation simply because they maintain a Web site that is accessible by residents of that state. As the Bell Court noted "[s]uch a conclusion would turn the notion of federal personal jurisdiction on its head, eliminating the protections that jurisdictional requirements were designed to safeguard." Id. at *7, citing, Int'l. Shoe, 326 U.S. at 316. Additionally, the nature of Defendants' business is to provide a service in Pennsylvania and is not one that can be conducted entirely over the Internet. Moreover, it is not specifically targeted to New Jersey residents.
Plaintiff contends that in addition to the Web site, Defendants have advertised in national publications and have a policy of contacting by telephone individuals who have stayed at the defendants' resorts in the past. Defendants advertise their resorts in such national publications as Bride's Magazine, Bridal Guide Magazine, Modern Bride Magazine, Cosmopolitan Magazine and Playboy Magazine. The law is clear in this Circuit that advertisements in national publications alone are not sufficient to establish general jurisdiction. Gehling v. St. George School of Medicine Ltd., 773 FD.2d 539, 542 (3d Cir. 1985); Reliance Steel Products v. Watson, Ess, Marshall Enggas, 675 F.2d 587, 589 (3d Cir. 1982); Decker, 49 F. Supp.2d at 748. In Decker, the Court found that the combination of national advertising on television and in national publications and the mailing of information to former guests were insufficient to confer general jurisdiction over nonresident defendants. Moreover, these modest contacts with New Jersey, even coupled with the existence of the Web site, are not sufficient to subject Defendants to suit in every state.
Here, Defendants are Pennsylvania corporations, having their principal place of business in the Commonwealth of Pennsylvania, where they operate vacation resorts. They allege that they do not transact business in New Jersey, nor are they authorized to transact business in New Jersey; they do not maintain an office, employees, agents, bank accounts, telephone listings or real estate in New Jersey; they do not supply goods or services in the State of New Jersey. Moreover, the incident giving rise to this lawsuit did not occur in New Jersey, but in Pennsylvania.
Finally, even if the Court found that Defendants established minimum contacts with New Jersey, the Court may consider additional factors in determining whether the exercise of personal jurisdiction comports with fair play and substantial justice. Penzoil, 149 F.3d at 201, citing,Burger King, 471 U.S. at 476-78. The court may consider the burden on the defendant, the forum state's interest in obtaining the most efficient relief, judicial economy. Id. Considerations such as these may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum-related activities. Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102, 113-16 (1987). Here, the burden on Defendants of traveling to New Jersey to defend themselves is much greater than the burden on Plaintiffs of traveling to Pennsylvania to litigate their claims. All the defendants, including the John Does, are likely to be citizens of Pennsylvania. Most witnesses for Defendants and possibly for Plaintiffs are likely to be citizens of Pennsylvania. Plaintiffs have already traveled to Pennsylvania at least once (when the alleged injury occurred). Finally, the site of the alleged incident is located in Pennsylvania, so that Pennsylvania has more interest in the outcome of this litigation. Accordingly, to exercise personal jurisdiction over Defendants in this action would violate due process and offend notions of fair play and substantial justice.
IV. CONCLUSION
For the foregoing reasons, the motion to dismiss for lack of personal jurisdiction is granted.