On July 14, 2017, Judge Boyle issued an Order (available here) in Springboards to Education v. Hamilton County transferring the case out of the Northern District of Texas due to lack of personal jurisdiction. The case involved allegations of trademark infringement. Plaintiff argued that defendant (a county in Tennessee) was subject to specific personal jurisdiction in the Northern District on account of its website—i.e., that defendant “transacts a sufficient amount of business in Texas through[] the use of its interactive website and promotional materials.” Judge Boyle rejected this argument: “That argument fails because Plaintiff has not alleged that a single disinterested Texas resident used Defendant’s website at all, let alone purchased an infringing product through it.”
In rejecting the argument, Judge Boyle set forth the test applied by the Fifth Circuit for personal jurisdiction vis-à-vis websites (based on the famed Zippo case), as follows:
The Fifth Circuit has adopted what is known as the Zippo sliding scale test for determining whether internet-based contacts establish personal jurisdiction over a nonresident defendant. The aim of the Zippo test is to measure an internet site’s connection to a forum state, using a three-point spectrum of connectivity: low, medium, or high. On the low end where a website is nothing more than a passive advertisement, the court must decline to exercise personal jurisdiction. Conversely, on the high end where a website facilitates contractual relationship and the knowing and repeated transmission of computer files on the Internet, personal jurisdiction is proper. And in the middle where a website falls somewhere in between, the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the website.
(citations and quotations omitted).
Judge Boyle determined that defendant’s website fell in the middle of the Zippo spectrum, as the website states that any individual, no matter his or her place of residence, may register for the relevant event, donate books and to make monetary donations. The website also had a link to download the relevant app from the Apple App Store or the Android App on Google Play. But the website mainly provides contact information and volunteer resources; it does not allow the ordering of goods or services, one to enroll in memberships, or otherwise interact with defendant’s staff members. As such, the Court found that, while the website is more than a passive advertisement, it is not a “virtual store” facilitating contractual relationships.
Ultimately, the Court found that, “[t]ogether, Plaintiff’s allegations—that Defendant has national partnerships, allows people to register for a reading pledge, takes donations, and offers apps for download—fail to meet the minimum threshold for specific jurisdiction. Under Zippo, personal jurisdiction is based on actual internet sales to forum residents, not the mere possibility of sales. Plaintiff fails to allege, let alone offer prima facie proof, that a single disinterested Texas resident purchased an infringing product on Defendant’s website or, for that matter, accessed the website at all.” (quotations omitted; emphasis in original).
Judge Boyle also denied the plaintiff jurisdictional discovery. “When seeking jurisdictional discovery, a plaintiff must make a preliminary showing of jurisdiction.” (quotations omitted). Because “Plaintiff has not pled, let alone with particularity, any sales to, donations by, downloads by, or website access by Texas residents” but only “described a largely, if not entirely, non-commercial website with no tie to Texas residents other than being accessible on the web—in short, a site of the variety insufficient to confer personal jurisdiction under Zippo”, the plaintiff had not made a preliminary showing of jurisdiction and jurisdictional discovery was unwarranted.
Because the Court, when it finds lack of personal jurisdiction, may either dismiss the lawsuit or transfer it to a district in which it could have been brought, and courts generally prefer transfer to dismissal, the Court decided to transfer the case to Tennessee, where defendant is based.
