In November 2004, I wrote an article for this column entitled "Personal Jurisdiction.com: How Much Interactivity is Enough?" which addressed the question of whether a company that maintains Internet webpages accessible in Illinois but has few or no other contacts with the State is transacting business in Illinois such that an Illinois court could properly exercise personal jurisdiction over it. That article also addressed Jennings v. AC Hydraulic A/S, 383 F.3d 546 (7th Cir. 2004), a September 2004 opinion that demonstrated the relative complexity of the analysis undertaken by the Seventh Circuit in deciding this jurisdictional question, when compared to the analysis undertaken by the Illinois state courts up to that time, but also noted the Jennings court's determination that it need not decide what level of "interactivity is sufficient to establish personal jurisdiction. This month we examine the search for guidance in answering the question left undecided in Jennings, as illustrated by three recent opinions in which federal and state courts looked beyond Jennings when confronted with defendants' motions arguing that the websites in question were not interactive enough to justify the exercise of jurisdiction.
As of November 2004, the question of whether maintenance of Internet webpages accessible in Illinois, without other substantial contacts with the State, is a basis for personal jurisdiction had only been squarely addressed in two reported Illinois opinions, Forrester v. Seven Seventeen HB St. Louis Redevelopment Corp., 336 Ill.App.3d 572, 784 N.E.2d 834 (4th Dist. 2002), and Riemer v. KSL Recreation Corp., 348 Ill.App.3d 26, 807 N.E.2d 1004 (1st Dist. 2004). Both the Forrester and Riemer courts characterized maintenance of Internet webpages accessible in Illinois as advertising or mere solicitation which did not amount to doing business in Illinois. So, while the plaintiffs in those cases could have made reservations at the out-of-state hotels where the alleged torts occurred via a webpage accessible in Illinois, that ability to book accommodations online was not deemed a sufficient basis for personal jurisdiction.
While the Forrester and Riemer courts ended their jurisdictional analyses with the determination that the respective defendants™ Internet activities were advertising and mere solicitation, the U.S. Court of Appeals for the 7th Circuit took another step in Jennings and asked whether the defendant™s website, which was both accessible in the state where the alleged tort took place and also advertising, was passive or interactive. So, according to the Court of Appeals, the dispositive question is not whether an out-of-state defendant™s website is advertising, for it almost certainly is, but instead whether that website is passive or interactive:
Other circuits have recognized that the operation of an interactive website, such as one. . .on which consumers can order the defendant™s goods or services, may subject a defendant to the exercise of personal jurisdiction (either specific or general). . . .We need not decide in this case what level of interactivity is sufficient to establish personal jurisdiction based on the operation of an interactive website. Rather, it is enough to say that this logic certainly does not extend to the operation of a passive website, such as the one that [defendant] maintains, which merely makes available information about the company and its products. The exercise of personal jurisdiction based on the maintenance of a passive website is impermissible because the defendant is not directing its business activities toward consumers in the forum state. . . . Jennings, 383 F.3d at 549.
While the Jennings court™s determination that it did not need to decide what level of interactivity is necessary to establish personal jurisdiction based on the operation of an interactive website was understandable in light of the fact-specific nature of that inquiry. The Seventh Circuit™s hesitance to expound upon or develop the concept of interactivity in Jennings left an analytical void which both the U.S. District Court for the Northern District of Illinois and the Appellate Court of Illinois, Third District have recently tried to fill by resorting to opinions not cited in Jennings, including Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Penn. 1997), and Berthold Types Ltd. v. European Mikrograf, Corp., 102 F.Supp.2d 928 (N.D.Ill. 2000).
In one of those cases, Bombliss v. Cornelson, 355 Ill.App.3d 1107, 824 N.E.2d 1175 (3d Dist. 2005), both plaintiffs and defendants were dog breeders specializing in Tibetan mastiffs. Defendants Anne and Jim Cornelson, Oklahoma residents, had a written agreement with Richard Eichhorn, a third party residing in California, that Eichhorn would provide to the Cornelsons a dam or female mastiff named Drakyi Mulan (Mulan) for breeding purposes, and that Mulan would be free of genetic defects. In exchange, Eichhorn would be entitled to odd-numbered pups from Mulan™s first two litters. However, in the event of a genetic defect, Eichhorn would not get any puppies. Eichhorn delivered Mulan to the Cornelsons, but upon receipt the Cornelsons noticed that the dog was infected with worms and ticks.
Nevertheless, when Mulan gave birth to her first litter, Anne Cornelson called the plaintiffs, who were residents of Illinois, to tell them that defendants had Tibetan mastiff puppies for sale. Plaintiffs replied that they were interested in purchasing two females of breeding quality, and defendants agreed to sell same for $2,000 apiece. Plaintiffs subsequently traveled from Illinois to Oklahoma to purchase the puppies, one of which was named Mohanna. During their visit to Oklahoma, the plaintiffs noticed that both Mulan and some of her other puppies that they did not purchase were sick and worm-infested. When they mentioned this to Anne Cornelson, she told them that Mulan had arrived from California in that state, that she was angry at Eichhorn for sending a sick dog to her, and that she wanted to prevent Eichhorn from getting any of Mulan™s pups. Bombliss, 355 Ill.App.3d at 1110, 824 N.E.2d at 1177. Plaintiffs paid for their puppies and returned to Illinois.
Approximately two months later, Anne Cornelson posted messages in a YAHOO! Tibetan mastiff chat room on the Internet in which she indicated that one of the pups from the same litter that produced Mohanna was ill, that she believed the sick pup suffered from a genetic disease, and that all of the pups from that litter should be spayed or neutered rather than being bred. Bombliss, 355 Ill.App.3d at 1111, 824 N.E.2d at 1178. Plaintiffs later alleged that Anne Cornelson posted these messages in retaliation against Eichhorn for sending defendants a sick dam and as cover for defendants™ plan to breach their agreement with Eichhorn by failing to give him any of the pups from Mulan™s first two litters. Despite having posted messages in the YAHOO! chat room impugning the genetic integrity of Mohanna™s littermate, defendants registered Mohanna with the American Kennel Club, indicating that she was suitable for breeding.
Several months later, plaintiffs learned of Anne Cornelson™s chat room postings regarding Mohanna™s littermate. They subsequently subjected Mohanna to two rounds of blood tests, both of which were negative for genetic disorders. Plaintiffs then sued defendants in Illinois state court, claiming that the Cornelsons knowingly published false statements about Mohanna™s genetic line in retaliation against Eichhorn, and that plaintiffs consequently lost customers who would otherwise have purchased puppies from them, were denied membership in Internet discussion groups, and suffered damage to their reputation as dog breeders.
Defendants appeared specially and moved to dismiss the complaint for lack of jurisdiction. In support of their motion, defendants filed an affidavit stating that they maintained an interactive website that allowed potential customers in foreign jurisdictions to communicate with them, but that all sales took place in Oklahoma. The trial court found that defendants™ alleged acts were insufficient to establish personal jurisdiction pursuant to the Illinois long arm statute, 735 ILCS 5/2-209, and granted the Cornelson™s Motion to Dismiss. On appeal, the Appellate Court of Illinois, Third District, disagreed and reversed, but Justice Holdridge dissented. Bombliss, 355 Ill.App.3d at 1117, 824 N.E.2d at 1182. In its opinion, the Bombliss majority, having perhaps realized the insufficiency of the website-as-mere solicitation approach employed by Illinois courts so far, made no reference whatsoever to either the Forrester or Riemer opinions.
Instead, the Bombliss majority noted that [t]he type of Internet activity that is sufficient to establish personal jurisdiction remains an ongoing area of jurisprudence, Bombliss, 355 Ill.App.3d at 1114, 824 N.E.2d at 1180, and illustrated that ongoing development via reference to Jennings, Zippo, and Berthold:
For ease of analysis, a sliding scale approach has been adopted. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D.Pa. 1997). At one end, jurisdiction may be asserted if the defendant transacts business in foreign jurisdictions via an interactive website where contracts are completed online and the defendant derives profits directly from web-related activity. At the opposite end of the scale, jurisdiction does not attach where the nonresident maintains a passive website that merely provides information about the defendant™s products. Jennings, 383 F.3d 546. Between these types of websites lies a third category that is interactive, in that it allows customers in foreign jurisdictions to communicate regarding the defendant™s services or products. Berthold Types, 102 F.Supp.2d at 932-33. This third category may or may not be sufficient to assert in personam jurisdiction, depending on the level of interactivity and the commercial nature of the information exchanged. Berthold Types, 102 F.Supp.2d 928. Id.
It was apparently necessary for the Bombliss court to augment Jennings, a Seventh Circuit opinion from 2004, with Zippo and Berthold, district court cases from 1997 and 2000, respectively, because the Cornelson™s dog breeding website was not readily characterized according to the passive versus interactive analysis adopted by the Jennings court. That is, while the Cornelson™s website was interactive as that term might ordinarily be understood, because it included a link to the Cornelson™s e-mail address, it was not interactive as the Jennings court defined that term because it did not enable customers to order a puppy from the Cornelsons or to otherwise transact any business. See Jennings at 549. Consequently, because the Cornelson™s website advertis[ed] their pups and encourage[ed] visitors to communicate with them about potential purchases of puppies via a direct link to defendants™ e-mail address, but did not enable the visitors to transact business, the Bombliss court determined that [i]t is clear to us that defendants™ website falls within the third category (i.e., the third category identified in Berthold Types). Bombliss, 355 Ill.App.3d at 1114, 824 N.E.2d at 1180.
And to complicate the minimum contacts analysis further, the Bombliss court went beyond consideration of the type of website maintained by the defendant contesting personal jurisdiction to also consider other Internet activity conducted by the Cornelsons. Specifically, the court found that:
If defendants™ commercial website inviting prospective puppy purchasers to communicate with them by e-mail were the full extent of their Internet activity, we would not find sufficient purposeful contacts with Illinois to assert long arm jurisdiction. See Jennings, 383 F.3d 546. However, the pleadings at issue establish that defendants™ activity in the Tibetan mastiff chat rooms also concerned the dog breeding business and should be considered, especially since defendants™ messages in the chat rooms pertained to the lineage of plaintiffs™ AKC-registered, breeding quality pup in Illinois. Bombliss, 355 Ill.App.3d at 1114, 824 N.E.2d at 1180-1181.
It was, concluded the Bombliss court, the totality of defendants™ activities in Illinois, including both maintenance of a commercial interactive website and use of Tibetan mastiff chat rooms to reach potential customers of Tibetan mastiff breeders, including plaintiffs, which established the Cornelson™s minimum contacts in Illinois under federal due process analysis. Bombliss, 355 Ill.App.3d at 1115, 824 N.E.2d at 1181.
In his dissent, Justice Holdridge appeared to disagree with the majority™s characterization of Anne Cornelson™s postings in the Tibetan mastiff chat room as reaching into Illinois and adversely affecting plaintiffs™ Illinois dog-breeding operation, Bombliss, 355 Ill.App.3d at 1115, 824 N.E.2d at 1181, because he distinguished between actions that matter for the purpose of establishing Illinois jurisdiction (apparently the operation by defendants of their website) and actions that do not matter for that purpose (apparently the postings Anne Cornelson made to the Tibetan mastiff chat room). These conclusions, however, are not entirely clear from the brief dissent because the term message is ambiguous as employed therein and could refer to the information on defendants™ website, although it seems more likely to be a reference to the chat room postings:
The instant cause of action arose out of information placed on the Internet by Anne (an Oklahoma resident). She provided the information in the spirit of mere communication. Her message was not limited to any particular state, and she did not use the message to transact any business in Illinois. I simply disagree with the majority™s decision to nonetheless extend Illinois jurisdiction based on the totality of Anne™s actions. The actions that matter do not warrant Illinois jurisdiction. Bombliss, 355 Ill.App.3d at 1117, 824 N.E.2d at 1182-1183.
But regardless of the ambiguity in his dissent, Justice Holdridge makes a good point when he questions whether the majority should have considered the totality of Anne Cornelson™s actions, because the leap from considering (during jurisdictional analysis) whether defendant™s overtly business-related website is passive or interactive to considering both the nature of the website and defendant™s other, arguably extra-business Internet activity (e.g. chat room postings) is one which risks the universal personal jurisdiction the Jennings court warned against. See Jennings, 383 F.3d at 550. That is, if increasing numbers of people are using the Internet for both business purposes (e.g. marketing a dog-breeding enterprise) and personal purposes (e.g. chat room postings about a sick dog), and if courts are going to consider both types of Internet use in determining whether jurisdiction has been established, then the line between business and personal use may eventually blur or even disappear, rendering any defendant who does business on the Internet subject to jurisdiction in any forum in which the defendant™s extra-business postings or even e-mails are accessible or received.
The Cornelsons, of course, all but invited the court™s consideration of Anne™s chat room postings when they allegedly admitted that the purpose of same was to prevent Eichhorn from getting any of Mulan™s pups and thereby themselves obliterated the line between business and personal use of the Internet. But the precedent is nevertheless an alarming one if the judicial goal is to make as predictable as possible the answer to the question of whether someone doing business via the Internet is subjecting themselves to the jurisdiction of a given court or not.
The U.S. District Court for the Northern District of Illinois has also recently resorted to opinions not cited by the Jennings court in order to answer the question of whether a company that maintains Internet webpages accessible in Illinois but has few or no other contacts with the State has provided thereby a basis for personal jurisdiction, and in one very recent instance, Images of the World, Inc. v. Continental American Industries, Inc., Slip Copy, 2005 WL 2171193 (N.D.Ill.), the court made no mention of Jennings and relied exclusively on Zippo. In the first of those two cases, Edelson v. Raymond K.F. Ch™ien, 352 F.Supp.2d 861 (N.D. 2005), plaintiff, a resident of New Jersey, sued defendant, a resident of Hong Kong, and other defendants for breach of fiduciary duty in the Northern District of Illinois. Soon after plaintiff filed his complaint, Chinadotcom, one of the defendants, filed its own action against plaintiff in the High Court of Hong Kong and followed that with a press release, posted on its website, which indicated that plaintiff had breached his fiduciary duties to Chinadotcom and had therefore not been re-elected to the company™s board of directors.
Plaintiff, a venture capitalist, amended his complaint to allege tortious interference with an economic advantage. Specifically, he claimed that the press release, which was readily available to the entire world via the Internet, had thrown a taint on his character and made it impossible for him to raise funds for his various projects. Edelson, 352 F.Supp.2d at 864-865. Defendant Ch™ien filed a Rule 12(b)(2) motion to dismiss, arguing that the Chinadotcom website was not active and that the posting of a press release on that website was therefore not a basis for specific personal jurisdiction. Plaintiff responded that Ch™ien had ultimate responsibility for Chinadotcom™s dissemination of the press release into Illinois via the Internet, and that Chinadotcom™s website was active because it provided e-mail links to stock analysts and company representatives, so that Ch™ien had purposefully established minimum contacts with Illinois by posting the press release on a website accessible in Illinois. Id. at 868.
The district court agreed with Ch™ien that the Chinadotcom website is not the type of ˜active™ website that permits specific personal jurisdiction. Id. In support of its decision, the Edelson court dutifully noted Jennings, but was also required to cite and consider the Zippo and Berthold cases because plaintiff argued that Chinadotcom™s website was in the middle category (or the third category, as it was characterized by the Berthold and Bombliss courts), and there was insufficient analytical space within the Jennings opinion for the Edelson court to address plaintiff™s argument that the Chinadotcom website was somewhere in between passive and interactive:
The Seventh Circuit recently confirmed that œa defendant™s maintenance of a passive website does not support the exercise of personal jurisdiction in that particular forum just because the website can be accessed there. Jennings v. AC Hydraulic, 383 F.3d 546 (7th Cir. 2004). . . .While the Seventh Circuit declined to address the analysis for determining whether a website is passive or active, the court did note that it was joining several circuits that have addressed [the issue of passive websites.] Jennings, 383 F.3d at 550 [citing various cases which all apply the ˜sliding scale™ test set forth in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D. Pa. 1997) to determine whether a website is ˜passive™ or ˜active.™] Other courts in this district have also adopted the Zippo approach [citing Berthold and other cases]. Under the sliding scale approach, a defendant™s Internet activity falls under one of three categories [i.e. interactive, passive, or middle category]. Edelson, 352 F.Supp.2d at 868-869 (first set of brackets in original).
Having established the three categories framework via Zippo and Berthold, the Edelson court proceeded to determine that any aspects of interactivity Chinadotcom™s website may have exhibited were insufficient to establish jurisdiction over defendants, despite the fact that the website provided e-mail links by which potential customers could contact the company:
[P]roviding e-mail links for customers to contact the company typically does not make a website active. . . .Notably, Edelson does not present evidence or argue that the website enables anyone to perform any transaction. Nor does Edelson present evidence or argue that the press release was ever e-mailed or purposefully pointed out to anyone. Therefore, the posting of the press release on Chinadotcom™s website does not qualify as Ch™ien purposefully establishing minimum contacts within the forum State. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). Accordingly, this Court may not exercise specific personal jurisdiction over Ch™ien on the basis that he directed the posting of the press release on Chinadotcom™s website. Edelson, 352 F.Supp.2d at 869-870.
The Bombliss court found that the Cornelsons had purposely directed their activities at Illinois, not by operating their third or middle category dog-breeding website accessible in Illinois, but by post[ing] messages in Internet chat rooms [accessible in Illinois] impugning the genetic integrity of a puppy living in Illinois. Bombliss, 355 Ill.App.3d at 1115-1116, 824 N.E.2d at 1181-1182. Ch™ien, the defendant in Edelson, posted a press release on his third or middle category website, also accessible in Illinois, which arguably impugned the plaintiff™s integrity, but the court found that Ch™ien™s actions did not establish personal jurisdiction over the defendants because Chinadotcom™s website did not enable customers to perform transactions and, significantly, because Ch™ien never purposefully pointed out to anyone Edelson™s alleged wrongdoing. So, while the defendants in both cases arguably operated interactive websites of the third or middle category and used the internet to attack or strike back at someone they perceived as a wrongdoer, only one set of defendants thereby subjected themselves to the jurisdiction of the court chosen by their opponent. The reason appears to be that the Cornelsons reached into Illinois by making statements about an Illinois puppy in an Internet chat room accessible in Illinois while Ch™ien placed statements about a New Jersey resident on Ch™ien™s own company™s website, which was also accessible in Illinois, but did not reach beyond his company™s own website via, for example, a chat room posting or perhaps e-mail. If the fact that the statements of both the Cornelsons and Ch™ien were ultimately accessible in Illinois via the Internet, regardless of the respective methods by which they became accessible there, renders the distinction between the two fact patterns a distinction without a difference, it is nevertheless a good example of the fine distinctions courts will be required to make in the future as they struggle with this emerging area of jurisprudence.
Finally, in Images of the World, Inc. v. Continental American Industries, Inc., Slip Copy, 2005 WL 2171193 (N.D.Ill.), the second of the two recent opinions in which the U.S. District Court for the Northern District of Illinois has resorted to opinions not cited in Jennings in order to answer the question of whether a company that maintains Internet webpages accessible in Illinois but has few or no other contacts with the State has provided thereby a basis for personal jurisdiction, an Illinois owner of copyrights to four adult films sued California distributors of those films for copyright infringement in the Northern District of Illinois. Defendants filed a Rule 12(b)(2) motion to dismiss, arguing that their website, which had a high level of interactivity. . .enabl[ing] customers to browse through an online catalog and place orders over the Internet, was an insufficient basis for personal jurisdiction because defendants neither advertised in Illinois nor specifically targeted customers in Illinois. Id. at 4. The court disagreed and denied the motion, despite the fact that only $341.98 of the $7,587.31 generated by defendants™ sales of the four disputed films had come from Illinois customers:
Defendants made a repeated and conscious choice to process orders placed by Illinois residents. Defendants knew that processing the orders would lead to sending films into Illinois; an action entirely within the Defendants™ control. . . .Defendants™ contention that only a small amount of business was conducted does not alter the conclusion that personal jurisdiction is proper. Even a single contact can be sufficient. . . . Defendants™ website is one where business is actively conducted over the Internet, and Defendants sold films to Illinois residents. The exercise of specific personal jurisdiction over Defendants is proper. Id. at 4.
Images is remarkable not for its result, but instead for the fact that the District Court made no mention whatsoever of Jennings, despite the fact that Jennings, a Seventh Circuit Court of Appeals opinion, is on point. Instead, the Images court relied on Zippo: The sliding scale analysis for Internet jurisdiction first set forth in Zippo has been used to determine what level of website interaction subjects a defendant to personal jurisdiction. The Zippo court identified three categories of website activity. . . In the case at hand, defendants fall under the first category. Id. at 4.
Review of these three opinions, Bombliss, Edelson, and Images of the World, indicates that Jennings, lacking as it does any substantial guidance regarding the level of interactivity necessary to establish personal jurisdiction, has so far been of limited practical utility to lower federal and state courts seeking gu
