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People Solutions, Inc. v. People Solutions, Inc.

United States District Court, N.D. Texas, Dallas Division
Jul 25, 2000
CIVIL ACTION NO. 3:99-CV-2339-L (N.D. Tex. Jul. 25, 2000)

Summary

dismissing trademark infringement action for lack of personal jurisdiction in case involving "interactive" Internet website operated by nonresident defendant where record contained no evidence of actual sales over the website to Texas residents

Summary of this case from Global 360, Inc. v. Spittin' Image Software, Inc.

Opinion

CIVIL ACTION NO. 3:99-CV-2339-L

July 25, 2000.


MEMORANDUM OPINION AND ORDER


Before the court is Defendant's Motion to Dismiss or, In the Alternative, Motion to Transfer Venue, filed December 6, 1999. After careful consideration of the motion, response, reply, the record evidence, and the applicable law, the court grants Defendant's Motion to Dismiss, and denies as moot Defendant's Motion to Transfer Venue.

Defendant filed its Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(3) — improper venue. The resolution of the venue issue in this case necessarily requires a determination of whether the court has personal jurisdiction over Defendant, because a defendant corporation is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. 28 U.S.C. § 1391(c). The parties have fully briefed the issue of personal jurisdiction. Accordingly, the court treats Defendant's Motion to Dismiss as one filed pursuant to Fed.R.Civ.P. 12(b)(2) — lack of jurisdiction over the person.

I. Factual and Procedural Background

Plaintiff People Solutions, Inc. is a Texas corporation that provides human resources management, consulting, outsourcing, and executive search services. Plaintiff uses the mark "PEOPLE SOLUTIONS" in its business, and has been granted federal registration of the mark by the United States Patent and Trademark Office.

Defendant People Solutions, Inc. is a California corporation that has its principal place of business in Pleasant Hill, California. Defendant is a research and consulting company that offers human resources related products and services to other organizations. Defendant maintains an internet website using the "PEOPLE SOLUTIONS" name. Defendant's web site provides detailed descriptions and interactive pages regarding the products and services it offers. The web site also contains interactive pages that allow customers to test Defendant's products, download product demos, obtain product brochures and information, and order products online.

Plaintiff has sued Defendant over Defendant's alleged use of the "PEOPLE SOLUTIONS" trademark in its business. Plaintiff contends that it is the owner of the "PEOPLE SOLUTIONS" trademark and that Defendant should cease using it. Plaintiff filed its Complaint on October 13, 1999, asserting claims for federal trademark infringement, common law trademark infringement, unfair competition, state trademark infringement, and injury to business reputation. Defendant now moves to dismiss this action under Fed.R.Civ.P. 12(b)(3), contending that venue is improper in the Northern District of Texas.

II. Defendant's Motion to Dismiss for Improper Venue

In its Complaint, Plaintiff alleges that venue is proper in the Northern District of Texas under 28 U.S.C. § 1391(b) and (c). Under 28 U.S.C. § 1391(b), a civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought in a judicial district where any defendant resides, if all defendants reside in the same state, or a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated. 28 U.S.C. § 1391 (b)(1) and (2). For purposes of venue, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. 28 U.S.C. § 1391 (c). Therefore, the court should examine whether it has personal jurisdiction over Defendant. Defendant contends that venue is improper here because the court lacks personal jurisdiction over Defendant, and because a substantial part of the acts giving rise to this action did not take place in this district. Defendant therefore requests the court to dismiss this case for improper venue pursuant to Fed.R.Civ.P. 12(b)(3).

Section 1391(b)(3) also provides that venue is properly laid in a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought. Neither party has asserted that this subsection of the statute applies to the court's analysis of proper venue in this case.

A. Personal Jurisdiction

A determination of personal jurisdiction over a nonresident defendant consists of two elements. First, the court must determine whether the nonresident is subject to jurisdiction under the law of the state in which it sits, and secondly, it must determine whether the exercise of jurisdiction over the defendant comports with the due process requirements of the United States Constitution. Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir. 1985); CD Solutions, Inc. v. Tooker, 965 F. Supp. 17, 19 (N.D. Tex. 1997). Plaintiff contends that the exercise of personal jurisdiction over Defendant is appropriate in this case pursuant to the Texas long-arm statute. The Texas long-arm statute has been interpreted to extend as far as the limits of constitutional due process permit. Stuart, 772 F.2d at 1189. Therefore, the court is only required to consider whether an exercise of jurisdiction over Defendant satisfies constitutional due process. Stuart, 772 F.2d at 1189; CD Solutions, 965 F. Supp. at 19.

The due process inquiry is further divided into two parts. First, it must be established that the nonresident has "minimum contacts" with the forum resulting from an affirmative act on its part, and second, if minimum contacts are established, the exercise of jurisdiction must be fair and reasonable to the defendant. Id. The "minimum contacts" required can be established either through contacts sufficient to support specific jurisdiction, or contacts that adequately support general jurisdiction. Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000); Wilson v. Belin, 20 F.3d 644, 647 (5th Cir.), cert. denied, 513 U.S. 930 (1994). Specific jurisdiction arises when the Defendant has purposefully directed activities toward the forum state, from which the litigation arises or to which it relates. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985); Alpine View, 205 F.3d at 215. General jurisdiction will attach where the Defendant's contacts with the forum state are not related to the Plaintiff's cause of action, but are continuous and systematic. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984); Alpine View, 205 F.3d at 215.

Defendant claims that this case should be dismissed because it is not subject to personal jurisdiction in Texas. Defendant is a California corporation with its principal place of business in Pleasant Hill, California. It is undisputed that Defendant has no offices in Texas, no employees in Texas, owns no property in Texas and has no registered agent for service in Texas. Defendant therefore argues that it does not have the "minimum contacts" with this forum that are required for personal jurisdiction. Plaintiff contends that the following contacts with Texas show that Defendant is subject to personal jurisdiction here: 1) Defendant has a web site which can be accessed and viewed by Texas residents; and 2) Plaintiff has a client located in Farmers Branch, Texas. The court will examine each of these contacts to determine whether they provide a basis for personal jurisdiction over Defendant, either alone or in combination.

1. Defendant's Web Site

Plaintiff contends that specific jurisdiction over Defendant is present because it uses the "PEOPLE SOLUTIONS" name on its web site. The Fifth Circuit has recently addressed the impact of an Internet website that is accessible to Texas residents on the customary personal jurisdiction analysis. See Mink v. AAAA Development, LLC, 190 F.3d 333 (5th Cir. 1999). Prior to the Mink decision, many courts faced with this issue, including this one, used the analysis presented in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997). See, e.g., Fix My PC, LLC v. N.F.N. Associates, Inc., 48 F. Supp.2d 640, 643 (N.D. Tex. 1999); Thompson v. HandaLopez, Inc., 998 F. Supp. 738, 742-43 (W.D. Tex. 1998); Mieczkowski v. Masco Corp., 997 F. Supp. 782, 786 (E.D. Tex. 1998). In Mink, the Fifth Circuit embraced the use of the Zippo analysis when evaluating minimum contacts which may be established by a Defendant's Internet activities. 190 F.3d at 336.

The Zippo decision instructs courts to look to the "nature and quality of commercial activity that an entity conducts over the Internet." 952 F. Supp. at 1124; see also Mink, 190 F.3d at 336. This test examines a Defendant's Internet activities in relation to a spectrum of three areas. Mink, 190 F.3d at 336. At one end of the spectrum are defendants who are conducting their businesses over the Internet, entering into contracts with residents of other states involving the "knowing and repeated" transmission of computer files over the Internet. Id. "Passive" web sites are at the other end of the scale. Mink, 190 F.3d at 336; Thompson, 998 F. Supp. at 743. These web sites do nothing more than provide information and advertising to those who access the site. Mink, 190 F.3d at 336; Fix My PC, 48 F. Supp.2d at 643. Passive web sites, on their own, do not provide for personal jurisdiction over the owner of the site. Mink, 190 F.3d at 336; Fix My PC, 48 F. Supp.2d at 643. Interactive web sites that allow Internet users to communicate and exchange information with the organization sponsoring the site are in the middle of the spectrum. Mink. 190 F.3d at 336; Fix My PC, 48 F. Supp.2d at 643; Thompson, 998 F. Supp. at 743. In this "middle ground," the exercise of jurisdiction depends upon "the level of interactivity and commercial nature of the exchange of information" conducted on the defendant's web site. Mink, 190 F.3d at 336, quoting Zippo, 952 F. Supp. at 1124.

The facts related to Defendant's web site in this case are as follows: the web site contains several interactive pages which allow customers to take and score performance tests, download product demos, and order products online. The web site also provides a registration form whereby customers may obtain product brochures, test demonstration diskettes, or answers to questions. Defendant has sold no products exclusively through its web site. It further has sold no products or contracted for services with anyone in Texas through the web site or as a result of any Texan's interaction with the web site.

Defendant attempts to argue that these facts render its web site "passive" and thus not a basis for personal jurisdiction. Based upon the facts set forth above, the court disagrees with Defendant. The court does not believe, however, that the evidence supports a finding that Defendant has, through its web site, repeatedly contracted with Texas residents over the Internet, as described in Zippo, 952 F. Supp. at 1124 and Mink, 190 F.3d at 336. Therefore, the court finds that Defendant's web site is of the type that falls into the "middle ground" identified in Zippo and adopted by the Fifth Circuit in Mink, 190 F.3d at 336. Despite this categorization of Defendant's web site, the court finds that in this case, the relevant facts do not support a finding of personal jurisdiction over Defendant. Although Defendant appears to have the potential to interact with, sell products to, and contract with Texas residents on its web site, the evidence does not support a finding that this level of activity has taken place. Personal jurisdiction should not be premised on the mere possibility, with nothing more, that Defendant may be able to do business with Texans over its web site; rather, Plaintiff must show that Defendant has "purposefully availed itself" of the benefits of the forum state and its laws. Defendant's web site alone does not subject it to personal jurisdiction here; therefore the court must consider any additional contacts Defendant has with the forum.

2. Defendant's Texas Client

Plaintiff contends that its argument for personal jurisdiction is reinforced by the fact that Defendant has a client located in Farmers Branch, Texas. According to Plaintiff, when this fact is considered in combination with Defendant's web site, personal jurisdiction over Defendant is established. The court disagrees. The record reflects that Defendant's contacts with this client are made through the client's Menlo Park, California and Chicago, Illinois offices. At the client's behest, Defendant sends invoices to this client's branch offices in Texas. These attenuated contacts do not sufficiently establish a basis for personal jurisdiction over Defendant. See Burger King, 471 U.S. at 475; Guardian Royal Exchange, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). Furthermore, the combination of Defendant's web site with its contacts related to its Farmers Branch, Texas client does not sufficiently satisfy the "purposeful availment" requirement for personal jurisdiction.

Plaintiff does not allege that Defendant's contacts with the Farmers Branch client are related to the issues in this lawsuit; therefore, the court views this argument as an attempt to assert "general" personal jurisdiction over Defendant.

For the reasons stated herein, this court has no personal jurisdiction over Defendant. Defendant's Motion to Dismiss is granted, and this action must be dismissed.

B. Venue

Because the court has determined that it lacks personal jurisdiction over Defendant, it is not necessary to reach the issue of whether venue is proper in this district. Accordingly, Defendant's Motion to Transfer Venue is denied as moot.

III. Conclusion

The court has considered the parties' briefing on this matter, the record evidence, and the applicable case law. For the reasons stated herein, Defendant's web site and other contacts with Texas do not, alone or in combination, establish that the court may exercise personal jurisdiction over Defendant. This action is hereby dismissed without prejudice because the court does not have personal jurisdiction over Defendant. For this reason, the court did not reach the issue raised in Defendant' spending motion, specifically, whether the Northern District of Texas is the proper venue for this lawsuit, and Defendant's Motion to Transfer Venue is denied as moot.

It is so ordered.


Summaries of

People Solutions, Inc. v. People Solutions, Inc.

United States District Court, N.D. Texas, Dallas Division
Jul 25, 2000
CIVIL ACTION NO. 3:99-CV-2339-L (N.D. Tex. Jul. 25, 2000)

dismissing trademark infringement action for lack of personal jurisdiction in case involving "interactive" Internet website operated by nonresident defendant where record contained no evidence of actual sales over the website to Texas residents

Summary of this case from Global 360, Inc. v. Spittin' Image Software, Inc.
Case details for

People Solutions, Inc. v. People Solutions, Inc.

Case Details

Full title:People Solutions, Inc., Plaintiff, v. People Solutions, Inc., Defendant

Court:United States District Court, N.D. Texas, Dallas Division

Date published: Jul 25, 2000

Citations

CIVIL ACTION NO. 3:99-CV-2339-L (N.D. Tex. Jul. 25, 2000)

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