United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 17, 1999 Decided January 11, 2000
No. 99-7097
GTE New Media Services Incorporated,
Appellee
v.
BellSouth Corporation, et al.,
Appellants
Appeal from the United States District Court
for the District of Columbia
(No. 97cv02314)
Edwards, Chief Judge : The matter at hand involves an interlocutory appeal brought pursuant to 28 U.S.C. § 1292(b). The issues presented are whether the District Court may assert personal jurisdiction over the defendants and whether venue is proper in the District of Columbia ("District") when the defendants' sole contact with this forum is the operation of Internet websites that are accessible to persons in the District. The District Court tentatively concluded that the quality and nature of the websites militated in favor of personal jurisdiction. The trial judge noted, however, that "[a]ll of the interactive website cases reviewed [by the Dis- trict Court] involved defendants with at least some physical contact with the forum," whereas the defendants in this case have no physical contact with the forum.
GTE contends that the defendants engaged in a conspiracy with an illicit purpose to dominate the Internet business directories' market. The defendants, in turn, moved to dismiss the complaint for want of personal jurisdiction. The defendants argue that the mere ability of District residents to access the defendants' Internet Yellow Pages from locations within the city is insufficient to establish personal jurisdiction.
On the record at hand, we hold that the District Court erred in concluding that there is sufficient evidence here to support personal jurisdiction. However, at this juncture of the case, GTE is still free to supplement the record through jurisdictional discovery. The case is hereby remanded to the District Court for further proceedings, including additional discovery and possible amendments to the complaint, should that be deemed warranted. We reject GTE's theory of jurisdiction, which appears to rest on a view that mere accessibility to an Internet site in the District is enough of a foundation upon which to base personal jurisdiction.
The relevant facts are relatively simple. GTE alleges that in July 1997, five regional Bell operating companies (Ameritech Corp., Bell Atlantic, BellSouth, SBC Corp., US West) and their relevant subsidiaries conspired to capture, control, and dominate the Internet business directories' market.
On October 6, 1997, GTE filed its complaint against the five regional Bell operating companies, Netscape, and Yahoo, claiming, among other things, violations of Sections 1 and 2 of the Sherman Antitrust Act. Several defendants (i.e. , Bell- South, SBC Corp. and US West, excepting US West Dex, Inc.) moved to dismiss the complaint for lack of personal jurisdiction; two (i.e. , BellSouth and SBC Corp.) also argued that venue was improper in the District of Columbia. On September 28, 1998, the District Court denied both motions to dismiss, finding that (1) the court had personal jurisdiction under section 13-423(a)(4) of the D.C. long-arm statute, because GTE had sufficiently alleged a tortious injury in the District caused by the defendants' acts outside of the District; and (2) because venue is proper under 28 U.S.C. § 1391 wherever a party is subject to personal jurisdiction, the finding of personal jurisdiction also resolved the venue question. On March 29, 1999, however, the District Court certified an order for interlocutory appeal and ordered a stay of proceedings. The District Court noted that, although it had found that the defendants operated an interactive website that supported a finding of personal jurisdiction, "the instant case differs from any other reported case ... in that it involves an interactive website with no other contacts with the District of Columbia . All of the inter- active website cases reviewed by this court involved defendants with at least some physical contact with the forum. While this court has concluded that the quality and nature of the [operating companies'] website favors the exercise of personal jurisdiction in the District of Columbia, certainly a substantial ground for difference of opinion concerning the ruling exists."
The District's long-arm statute provides, in relevant part, that
[a] District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's- (1) transacting any business in the District of Columbia; ... (4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he [i] regularly does or solicits business, [ii] engages in any other persistent course of conduct, or [iii] derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia.D.C. Code Ann. § 13-423(a) (1981). A plaintiff seeking to establish jurisdiction over a non-resident under the foregoing provisions of the long-arm statute must demonstrate, pursuant to section (a)(1), that the plaintiff transacted business in the District, or show, pursuant to section (a)(4), that the plaintiff caused a tortious injury in the District, the injury was caused by the defendant's act or omission outside of the District, and the defendant had one of the three enumerated contacts with the District.
Even when the literal terms of the long-arm statute have been satisfied, a plaintiff must still show that the exercise of personal jurisdiction is within the permissible bounds of the Due Process Clause. In other words, a plaintiff must show "minimum contacts" between the defendant and the forum establishing that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington , 326 U.S. 310, 316 (1945) (internal quotation marks omitted). Under the "minimum contracts" standard, courts must insure that "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297 (1980).
Cases applying the familiar personal jurisdiction analysis to the Internet are thus far relatively scarce; only the Second, Fifth, Sixth, and Ninth Circuits have ventured into this domain. Three decisions among the five issued by these four appellate courts have dismissed complaints for want of personal jurisdiction.
In Bensusan Restaurant Corp. v. King , 126 F.3d 25, 29 (2d Cir. 1997), for example, the Second Circuit found that the operator of a Missouri jazz club named "The Blue Note" did not commit tortious acts in New York within the meaning of New York's long-arm statute when he established an Internet website for his club that contained a hyperlink to a New York club of the same name. The court held that, because the Missouri club operator should not have reasonably expected his allegedly tortious acts to have consequences in New York and because he did not significantly engage in interstate commerce, it would not extend long-arm jurisdiction under another subsection of the long-arm statute.
Similarly, in Mink v. AAAA Development LLC , 190 F.3d 333, 336-37 (5th Cir. 1999), the Fifth Circuit declined to find personal jurisdiction in a case in which the developer of a computer software program brought an action against pur- ported competitors and sought to rest personal jurisdiction on a finding that the defendant operated an Internet website that was accessible by residents in the forum state. The court reasoned that "[t]here was no evidence that [the defen- dant] conducted business over the Internet by engaging in business transactions with forum residents or by entering into contracts over the Internet." Id . at 337. Thus, although the defendant's website had an e-mail address that allowed consumers to interact with the company, the court noted that
"[t]here is no evidence ... that the website allows [the defendant] to do anything but reply to e-mail initiated by website visitors." Id . The court also noted that the website was not interactive enough to support a finding of jurisdic- tion, because customers could not purchase anything on-line. See id .Finally, in Cybersell, Inc. v. Cybersell, Inc. , 130 F.3d 414, 419-20 (9th Cir. 1997), the Ninth Circuit declined to find personal jurisdiction in an infringement action in Arizona against a Florida corporation that provided consulting ser- vices for strategic management on the web and used the same name as the plaintiff's corporation. The court found that the challenged web page was essentially passive. The court found that there was "no question that anyone, anywhere could access that home page and thereby learn about the services offered," but it failed to "see how from that fact alone it can be inferred that [the defendant] deliberately directed its merchandising efforts toward Arizona residents." Id . at 419. In addition, the court noted that because the defendant did not encourage people in Arizona to access its sites and there was no evidence that any part of the defendant's business was sought or achieved in Arizona-in fact, no Arizona resident other than the plaintiff had ever "hit" the defendant's site-there was no purposeful availment and thus no personal jurisdiction. See id .
The two decisions in which appellate courts have found personal jurisdiction in cases involving Internet-related dis- putes present facts that are quite different from those in the instant case. In CompuServe, Inc. v. Patterson , 89 F.3d 1257, 1264 (6th Cir. 1996), for example, the Sixth Circuit found personal jurisdiction over a defendant in Ohio, because the defendant had entered into a contract that allowed him to market his software in other states with Ohio-based CompuServe acting as his distributor. The court concluded that it was reasonable to subject the defendant to suit in Ohio, because it was home to the computer network service that he himself had chosen to employ. The court also determined that the defendant was on notice that he had created a connection with Ohio, because (1) he had entered into contracts that would be governed by Ohio law with an Ohio-based company; and (2) he sent his software, via electronic links, to Ohio and advertised his products on CompuServe. The court highlighted that "it is Patterson's relationship with CompuServe as a software provider and marketer that is crucial to this case." Id . at 1264. In this case, however, GTE has yet to offer evidence of either a contractual relationship or a comparable marker of activity directed uniquely toward the District.
Likewise, in Panavision International, L.P. v. Toeppen , 141 F.3d 1316 (9th Cir. 1998), the Ninth Circuit upheld personal jurisdiction in a case involving a "cyber-pirate" ( i.e. , someone who steals valuable trademarks, establishes domain names on the Internet using the trademarks, and then offers to sell the domain names back to the rightful trademark owners), see id . at 1318, by employing the "effects doctrine," which holds that "jurisdiction may attach if the defendant's conduct is aimed at or has an effect in the forum state." Id . at 1321. The court concluded that "[t]he brunt of the harm to Panavision was felt in California," given that Panavision's principal place of business was in California and "the heart of the theatrical motion picture and television industry is located there." Id . In the instant case, unlike Panavision , there is nothing as yet to indicate that the defendants engaged in unabashedly malignant actions directed at or felt in this forum.
The District Court in this case asserted personal jurisdiction, pursuant to D.C. Code Ann. § 13-423(a)(4), on the ground that the defendants allegedly caused tortious injury in the District by an act outside the District followed by a persistent course of conduct in the District. Under this theory of jurisdiction, it does not matter that the defendants have no demonstrated physical contacts in the District. Rather, it is enough, according to the District Court, that the defendants entered into an agreement outside of the District with an eye toward attracting Internet users in the District to their websites (instead of to GTE's SuperPages) and thereby draw advertisers away from GTE. The District Court found that, on these asserted facts alone, the defendants foreseeably caused tortious injury to GTE's business in this forum. See Ameritech Corp. , Mem. Op. at 10, reprinted in J.A. 190. The defendants' course of conduct was seen to be "persistent" by the District Court, because their websites are "highly interactive" with District users and significantly commercial in both quality and nature. Id . at 11-12, reprinted at J.A. 191-92. We disagree with this line of reasoning.
There is no evidence in this record to support the claim that the defendants "secured advertising revenue by increasing the user traffic on their websites." Id . at 13, reprinted at J.A. 193. At best, GTE has provided only conclusory statements and intimations to buttress its assertion that it lost advertising revenues as a result of the defendants' actions. These are not enough. Cf . First Chicago Int'l v. United Exchange Co. , 836 F.2d 1375, 1378-79 (D.C. Cir. 1988) ("Conclusory statements ... '[do] not constitute the prima facie showing necessary to carry the burden of establishing personal jurisdiction.' ... [T]he 'bare allegation' of conspiracy or agency is insufficient to establish personal jurisdiction." (cita- tion omitted)). We will neither assume nor infer that the alleged conspiracy had substantial effects of the sort alleged by GTE, because to do so would be to assume or infer the answer to the very question that is before us.
Furthermore, it is difficult to understand, at least on the present record, what tortious injury has been suffered by GTE in the District . GTE claims that it has lost advertising revenues by virtue of the defendants' allegedly unlawful conspiracy. However, nothing has been offered to indicate that these advertising revenues were lost in the District, either by lost sales or lost revenue collections.
Additionally, personal jurisdiction surely cannot be based solely on the ability of District residents to access the defendants' websites, for this does not by itself show any persistent course of conduct by the defendants in the District. Access to a website reflects nothing more than a telephone call by a District resident to the defendants' computer servers, all of which apparently are operated outside of the District. And, as this court has held, mere receipt of telephone calls outside the District does not constitute persistent conduct "in the District" within the meaning of the long-arm statute. See Tavoulareas v. Comnas , 720 F.2d 192, 194 (D.C. Cir. 1983).
Finally, GTE appears to suggest that, when a District resident accesses the defendants' Yellow Pages websites, the defendants are somehow "transacting business" in the District. This is a far-fetched claim on this record. Access to an Internet Yellow Page site is akin to searching a telephone book-the consumer pays nothing to use the search tool, and any resulting business transaction is between the consumer and a business found in the Yellow Pages, not between the consumer and the provider of the Yellow Pages. In short, there is nothing here to indicate that District residents actually engage in any business transactions with the defendants.
When stripped to its core, GTE's theory of jurisdiction rests on the claim that, because the defendants have acted to maximize usage of their websites in the District, mere accessibility of the defendants' websites establishes the necessary "minimum contacts" with this forum. See Br. for Appellee at 16. This theory simply cannot hold water. Indeed, under this view, personal jurisdiction in Internet-related cases would almost always be found in any forum in the country. We do not believe that the advent of advanced technology, say, as with the Internet, should vitiate long-held and inviolate principles of federal court jurisdiction. The Due Process Clause exists, in part, to give "a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." World-Wide Volkswagen Corp. , 444 U.S. at 297 . In the context of the Internet, GTE's expansive theory of personal jurisdiction would shred these constitutional assurances out of practical existence. Our sister circuits have not accepted such an approach, and neither shall we.
For the foregoing reasons, the case is hereby remanded to the District Court for further proceedings.