Hearst Corp. v. Goldberger

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Hearst Corp. v. Goldberger
USDCSDNY.jpg
United States District Court for the Southern District of New York
Full case nameHearst Corporation v. Goldberger
Date decidedFebruary 26, 1997
Docket nos.1:96-cv-03620
Citations 1:96-cv-03620; 1997 WL 97097; 1997 U.S. Dist. Lexis 2065
Judge sitting Andrew J. Peck

Hearst Corp. v. Goldberger was a case out of the U.S. District Court for the Southern District of New York in which the court developed a reasoned framework to determine the proper exercise of personal jurisdiction in cases involving activity in cyberspace. The court determined that it lacked jurisdiction over an out-of-state defendant whose website was accessible to New York residents. [1]

Personal jurisdiction is a court's jurisdiction over the parties to a lawsuit, as opposed to subject-matter jurisdiction, which is jurisdiction over the law and facts involved in the suit. If a court does not have personal jurisdiction over a party, its rulings or decrees cannot be enforced upon that party, except by comity; i.e., to the extent that the sovereign which has jurisdiction over the party allows the court to enforce them upon that party. A court that has personal jurisdiction has both the authority to rule on the law and facts of a suit and the power to enforce its decision upon a party to the suit. In some cases, territorial jurisdiction may also constrain a court's reach, such as preventing hearing of a case concerning events occurring on foreign territory between two citizens of the home jurisdiction.

Cyberspace notional environment in which communication over computer networks occurs

Cyberspace is widespread, interconnected digital technology. The term entered the popular culture from science fiction and the arts but is now used by technology strategists, security professionals, government, military and industry leaders and entrepreneurs to describe the domain of the global technology environment. Others consider cyberspace to be just a notional environment in which communication over computer networks occurs. The word became popular in the 1990s when the uses of the Internet, networking, and digital communication were all growing dramatically and the term "cyberspace" was able to represent the many new ideas and phenomena that were emerging. It has been called the largest unregulated and uncontrolled domain in the history of mankind, and is also unique because it is a domain created by people vice the traditional physical domains.

Contents

Background

The rise of the Internet has posed difficulties for courts trying to determine the proper exercise of jurisdiction. In applying traditional doctrines, courts have arrived at inconsistent and sometimes contradictory results. [2]

The established test for determining personal jurisdiction over an out-of-state defendant asks a court to evaluate whether the activity in question was purposefully directed toward the forum state such that the exercise of jurisdiction would not violate the defendant's due process rights. The second prong of the test requires that the defendant have "minimum contacts" with the forum state such that he/she could reasonably anticipate being called into court there. [3]

Minimum contacts Legal term

Minimum contacts is a term used in the United States law of civil procedure to determine when it is appropriate for a court in one state to assert personal jurisdiction over a defendant from another state. The United States Supreme Court has decided a number of cases that have established and refined the principle that it is unfair for a court to assert jurisdiction over a party unless that party's contacts with the state in which that court sits are such that the party "could reasonably expect to be haled into court" in that state. This jurisdiction must "not offend traditional notions of fair play and substantial justice". A non-resident defendant may have minimum contacts with the forum state if they 1) have direct contact with the state; 2) have a contract with a resident of the state; 3) have placed their product into the stream of commerce such that it reaches the forum state; 4) seek to serve residents of the forum state; 5) have satisfied the Calder effects test; or 6) have a non-passive website viewed within the forum state.

Where the Internet is concerned, jurisdictional issues are more difficult. Most Internet users are unaware that they have transcended state borders and are subject to the jurisdiction of a different state. Thus, the exercise of personal jurisdiction over an Internet user may not comport with due process, since a user cannot purposefully avail himself of a particular jurisdiction if he has no indication of where is he in cyberspace.

Due process Requirement that courts respect all legal rights owed to people

Due process is the legal requirement that the state must respect all legal rights that are owed to a person. Due process balances the power of law of the land and protects the individual person from it. When a government harms a person without following the exact course of the law, this constitutes a due process violation, which offends the rule of law.

Facts

Goldberger (defendant), a New Jersey resident and attorney, had developed a website to provide legal support services to solo attorneys. [4] At the time of the lawsuit, the website was not yet operational, consisting merely of a homepage describing the services he planned to offer. Hearst, the publisher of Esquire , filed an action alleging that Goldberger's domain name, Esqwire.com, infringed on its trademark. [5] Hearst brought suit in New York, stating that the venue was proper because the website was accessible to New York residents. The New York long-arm statute allows a non-resident who does not transact business in New York to be sued if the non-resident has committed a tortious act within the state of New York, or if he commits such an act outside of the state with expected harm occurring within the state and he derives substantial revenue from interstate commerce.

Trademark recognizable sign, design or expression which identifies products or services

A trademark, trade mark, or trade-mark is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others, although trademarks used to identify services are usually called service marks. The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher, or on the product itself. For the sake of corporate identity, trademarks are often displayed on company buildings.

Holding and reasoning

The court held that the defendant's "out-of-state creation of an Internet web site that is accessible in New York, standing alone, does not provide personal jurisdiction over defendant in New York". [6] New York's long-arm statute states that an out-of-state defendant must transact business within the state, and the cause of action must arise out of such a transaction, in order for jurisdiction to lie in New York. The court analogized to a previous case where advertisements directed toward consumers in New York were insufficient to satisfy the requirement of transacting business. It reasoned that Goldberger's website was not targeted at residents of New York or any other state in particular. His contacts were minimally intrusive, since he had not yet sold any products at the time the lawsuit was brought. [7] On that basis, the court concluded that the website was "analogous to an advertisement in a national publication." Because placing an advertisement does not constitute transacting business under New York law, [8] Goldenberg's activities did not constitute sufficient contacts with New York to justify the exercise of jurisdiction. The opinion also made the policy argument that allowing activity in cyberspace to establish sufficient minimum contacts would be too broad an extension of personal jurisdiction.

Defendant accused person

A defendant is a person accused of committing a crime in criminal prosecution or a person against whom some type of civil relief is being sought in a civil case.

This holding rejected Maritz , [3] Inset, [9] Heroes, Inc., etc., which held that the existence of a web site available to forum residents, combined with tortious injury in the forum state, was sufficient to sustain jurisdiction. [10]

Subsequent treatment

Weber v. Jolly Hotels [11] treated the Goldberger decision approvingly and also declined to grant general personal jurisdiction to the plaintiff in that case, as doing so would "violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution." [12]

See also

Related Research Articles

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Long-arm jurisdiction is the ability of local courts to exercise jurisdiction over foreign defendants, whether on a statutory basis or through a court's inherent jurisdiction. This jurisdiction permits a court to hear a case against a defendant and enter a binding judgment against a defendant residing outside the jurisdiction concerned.

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Perkins v. Benguet Mining Co., 342 U.S. 437 (1952) was a United States Supreme Court case which held that an Ohio state court could exercise general personal jurisdiction over a foreign corporation on the basis of that company's "continuous and systematic" contacts with the state of Ohio. Benguet Consolidated Mining Co. was a Philippine mining corporation, owned by American John W. Hausermann, that temporarily stopped its mining operations and relocated its president to Ohio during the World War II Japanese occupation of the Philippines. The Court held that the president's use of his office in Ohio to carry on continuous business activities during this period allowed Ohio to properly assert general jurisdiction over his company.

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<i>Cybersell, Inc. v. Cybersell, Inc.</i>

Cybersell, Inc. v. Cybersell, Inc. was a trademark infringement case based on the use of an internet service mark. The United States District Court for the District of Arizona was asked to review whether the allegedly infringing use of a service mark in a home page on the World Wide Web suffices for personal jurisdiction in the state where the holder of the mark has its principal place of business. The Cybersell holding illustrated that passive websites do not establish personal jurisdiction outside the state in which they are based.

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<i>Rescuecom Corp. v. Google Inc.</i>

Rescuecom Corp. v. Google Inc. 562 F.3d 123, was a United States Court of Appeals for the Second Circuit case in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement. The case involved Rescuecom, a computer repair and support company, and Google, a web search and advertising company. Prior to the case's resolution, Google recommended the 'Rescuecom' trademark to businesses, that were buying keywords through Google's AdWords product.

<i>Bensusan Restaurant Corp. v. King</i>

Bensusan Restaurant Corp. v. King, 126 F.3d 25, is a 1997 United States Court of Appeals for the Second Circuit case that helped define the parameters of personal jurisdiction in the Internet context, specifically for passive websites that only advertise local services. The opinion, written by Judge Ellsworth Van Graafeiland, affirmed the United States District Court for the Southern District of New York's holding that defendant Richard B. King's Internet website did not satisfy New York's long-arm statute requirements for plaintiff Bensusan Restaurant Corporation to bring a trademark infringement suit in New York. The District Court's decision also likened creating a website to merely placing a product into the stream of commerce, and held that such an act was insufficient to satisfy due process and personal jurisdiction requirements.

Pavlovich v. Superior Court, 29 Cal. 4th 262, is a California Supreme Court case in which the court declined to find personal jurisdiction over a non-resident defendant who had no personal contacts with California. The Court found that the posting of a misappropriated trade secret on a Web site which could result in harm to California residents was not sufficient to show he had purposely availed himself of the forum state by expressly aiming his conduct at residents of California.

<i>Penguin Group (USA) Inc. v. American Buddha</i>

Penguin Group (USA) Inc. v. American Buddha, 640 F.3d 497, was a case in which United States Court of Appeals for the Second Circuit reversed the decision of the United States District Court for the Southern District of New York, which had granted American Buddha's motion to dismiss Penguin Group (USA) Inc. ("Penguin")'s copyright infringement action for lack of personal jurisdiction. The appellate court remanded the case for further proceedings.

<i>Mavrix Photo, Inc. v. Brand Technologies, Inc.</i>

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<i>CompuServe, Inc. v. Patterson</i>

CompuServe, Inc. v. Patterson was a court case heard before the Sixth Circuit Court of Appeals which held that contacts and contracts negotiated through the Internet with a party in a different state were sufficient to grant personal jurisdiction in that state. In particular, the court held that Patterson's use of storage, electronic transmission of files, and advertisement through CompuServe's network in Ohio were sufficient to grant Ohio personal jurisdiction over Patterson.

<i>Illinois v. Hemi Group LLC</i>

Illinois v. Hemi Group, LLC, 622 F.3d 754, was a personal jurisdiction case in which the United States Court of Appeals for the Seventh Circuit affirmed the United States District Court for the Central District of Illinois' ruling finding personal jurisdiction based on Internet transactions. In the initial filing, the state of Illinois sued Hemi Group LLC (Hemi) for selling cigarettes to Illinois residents over the Internet in violation of state law and for failing to report those sales in violation of federal law. Hemi moved to dismiss the suit for lack of personal jurisdiction, but the district court found that the Internet transactions provided a basis for Hemi to be sued in Illinois.

<i>Boschetto v. Hansing</i>

Boschetto v. Hansing, 539 F.3d 1011 is a diversity jurisdiction case brought by California resident, Paul Boschetto ("Boschetto") against certain private corporations with their principal place of business in Wisconsin. The case involved the determination of the question whether the sale of an item via the internet consumer-to-consumer trading portal, eBay, by the defendants in Wisconsin to the plaintiff in California, was sufficient to confer personal jurisdiction over a non-resident defendant in the buyer's forum state. At the first instance, the United States District Court for the Northern District of California decided against Boschetto and held that a lone “eBay sale consummated with a California purchaser, was insufficient to establish jurisdiction over any of the defendants.” Boschetto appealed against the decision to the United States Court of Appeals for the Ninth Circuit. The appellate court affirmed the decision of the district court and denied relief to Boschetto. The Court became the first federal appellate court to address whether personal jurisdiction in a forum state could be established when an out-of-state resident makes use of an intermediary website accessible by forum-state citizens.

<i>Maritz, Inc. v. Cybergold, Inc.</i>

Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, was a personal jurisdiction case in which the United States District Court for the Eastern District of Missouri ruled that operator of website, for which server was located in California, was subject to personal jurisdiction in Missouri under "commission of a tortious act" provision of Missouri's long-arm statute, §506.500 RSMo. The case was brought before the court by Marits, Inc. alleging that the Cybergold's use of mark for advertising internet site was a trademark infringement. Cybergold moved to dismiss the suit for lack of personal jurisdiction, but the court found that the operational nature of the Internet based service provided a connection for Cybergold to be sued in Missouri.

References

  1. ↑ Hearst Corp. v. Goldberger, No. 1:96-cv-03620, 1997 U.S. Dist. LEXIS 2065, 1997 WL 97097 (S.D.N.Y. Feb. 26, 1997). PD-icon.svg This article incorporates public domain material from this U.S government document.
  2. ↑ PERSONAL JURISDICTION AND CYBERSPACE: ESTABLISHING PRECEDENT IN A BORDERLESS ERA, Nagy, 1998
  3. 1 2 Maritz, Inc. v. CyberGold, Inc., 947F. Supp.1328 , 1329(E.D. Mo.1996).
  4. ↑ Goldberger Aff. ¶ 3; Goldberger Dep. at 10–11.
  5. ↑ Lanham Act and New York State Law
  6. ↑ 1997 WL 97097, p. 16
  7. ↑ 11/25/96 Tr. at 15.
  8. ↑ Simplicity Machine & Mfg. Co. v. Stevens Co
  9. ↑ Inset Systems, Inc. v. Instruction Set, Inc., 937F. Supp.161 (D. Conn.1996).
  10. ↑ Internet Library of Law and Court Decisions, Analysis of Hearst v. Goldberger, Samson
  11. ↑ Weber v. Jolly Hotels, 977F. Supp.327 (D.N.J.1997).
  12. ↑ Emerging Technologies and the Law: Forms and Analysis, Volume 1, Raysman, 2002
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