Verizon Trademark Services LLC et al v. The Producers, Inc. et al
Filing
178
ORDER: Intercosmos Media Group, Inc., directNIC, LLC, and Domain Contender, LLC's Motion to Dismiss the Amended Complaint for Lack of Personal Jurisdiction 82 is GRANTED. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 8/25/2011. (KAK)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
VERIZON TRADEMARK SERVICES, LLC
and VERIZON LICENCING COMPANY,
INC.,
Plaintiffs,
vs.
Case No. 8:10-cv-665-T-33EAJ
THE PRODUCERS, INC.; INTERCOSMOS
MEDIA GROUP, INC. d/b/a DirectNIC.
com; DIRECTNIC, LTD; DOMAIN
CONTENDER, LLC; SIGMUND J. SOLARES;
MICHAEL H. GARDNER; NOAH S. LIESKE;
and DOES 1-10,
Defendants.
/
ORDER
This
matter
comes
before
the
Court
pursuant
to
Intercosmos Media Group, Inc., directNIC, LLC, and Domain
Contender, LLC’s Motion to Dismiss the Amended Complaint for
Lack of Personal Jurisdiction (Doc. # 82), filed on October
28,
2010.
Verizon
Trademark
Services,
LLC
and
Verizon
Licencing Company, Inc. (collectively, “Verizon”) filed a
Response in Opposition to the Motion on November 12, 2010.
(Doc. # 97). Intercosmos Media Group, Inc., directNIC, LLC,
and Domain Contender, LLC (hereafter, “the IMG Defendants”)
filed a Reply Memorandum on February 3, 2011. (Doc. # 128).
For the reasons that follow, the Court grants the Motion to
Dismiss.
I.
Background
Verizon initiated this action against the IMG Defendants,
among other defendants, on March 19, 2010, and filed an
amended complaint (245 pages in length including exhibits), on
October 7, 2010. (Doc. # 68). Verizon, a Delaware entity with
its
principal
place
of
business
in
Arlington,
Virginia,
alleges that the IMG Defendants violated the Lanham Act, 15
U.S.C. § 1125(d), by cybersquatting.
Essentially, Verizon
contends that the IMG Defendants have violated Verizon’s
trademark and service mark rights by the registration of,
trafficking in, and use of Verizon-related Internet secondlevel domain names without Verizon’s authorization. (Doc. #
68).
The IMG Defendants each have their principal place of
business in Louisiana and seek to be dismissed from this
action on the basis of lack of personal jurisdiction.
II. Legal Standard
A court must dismiss an action against a defendant over
which it has no personal jurisdiction.
Smith v. Trans-
Siberian Orchestra, 689 F. Supp. 2d 1310, 1312 (M.D. Fla.
2010)(citing Posner v. Essex Ins. Co., Ltd., 178 F.3d 1209,
1214 n.6 (11th Cir. 1999)). Whether the court has personal
jurisdiction over a defendant is governed by a two-part
analysis.
Cable/Home Commc’n Corp. v. Network Prod., Inc.,
902 F.2d 829, 855 (11th Cir. 1990).
First, the court must determine whether the plaintiff has
-2-
alleged facts sufficient to subject the defendant to Florida's
long-arm statute.
Future Tech. Today, Inc. v. OSF Healthcare
Sys., 218 F.3d 1247, 1249 (11th Cir. 2000).
“When a federal
court uses a state long-arm statute, because the extent of the
statute is governed by state law, the federal court is
required to construe it as would the state’s supreme court.”
Lockard v. Equifax, Inc., 163 F.3d 1259, 1265 (11th Cir.
1998).
Second, once the court has determined that the long-arm
statute is satisfied, the court must determine whether the
exercise of jurisdiction over the defendant comports with the
Constitution's requirements of due process and traditional
notions of fair play and substantial justice.
Inc.
v.
Century
Arts,
94
F.3d
623,
626
Sculptchair,
(11th
Cir.
1996)(quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316
(1945)). In assessing personal jurisdiction, each defendant’s
contacts with the forum state must be weighed individually.
Calder v. Jones, 465 U.S. 783, 790 (1984).
III. Analysis
A.
Florida Long-Arm Statute
The burden-shifting scheme outlined in Walt Disney Co. v.
Nelson, 677 So. 2d 400 (Fla. 5th DCA 1996) applies in this
case:
-3-
The burden of demonstrating the applicability of §
48.193 may initially be met by pleading facts
within a jurisdictional basis contained in the
statute. If the plaintiff has pled a prima facie
case for jurisdiction, a simple motion to dismiss
for lack of jurisdiction must fail, as a motion to
dismiss without more, challenges only the facial
sufficiency of the jurisdictional pleading. If,
however, the defendant supplements the motion with
an affidavit contesting jurisdiction, then the
burden returns to the plaintiff who must, by
affidavit or other sworn statement, prove a
sufficient jurisdictional basis.
Id. at 402 (internal citations omitted); see also Future Tech.
Today, Inc., 218 F.3d at 1249. When the plaintiff’s complaint
and
supporting
evidence
conflict
with
the
defendant’s
affidavits, the Court must construe all reasonable inferences
in favor of the plaintiff.
Madara v. Hall, 916 F.2d 1510,
1514 (11th Cir. 1990); Meier ex rel. Meier v. Sun Int’l
Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002).
In the amended complaint, Verizon alleges that personal
jurisdiction over Intercosmos Media Group, Inc. (also known as
“IMG”) and directNIC, LLC (also known as “DNLLC”) exists
because IMG and DNLLC “conducted systematic and continuous
business with Florida acting as part of a consolidated group
of companies that operate the registrar business that uses the
domain
name
directNIC.com.
This
consolidated
group
of
companies has an office located in Tampa, Florida.” (Doc. # 68
at ¶¶ 8, and 11).
-4-
As for Domain Contender, LLC (also known as “DC”) Verizon
alleges in the amended complaint, “This Court has personal
jurisdiction over Domain Contender, because it has conducted
systematic and continuous business with Florida.” (Id. at ¶
17).1
The
IMG
Defendants
have
challenged
Verizon’s
jurisdictional allegations by filing the affidavits of its
Vice President.
Thus, the burden has been shifted back to
Verizon to prove a sufficient jurisdictional basis.
1.
The IMG Defendants’ Evidence
David Vinterella, the present Vice President of the IMG
Defendants, filed two detailed affidavits that shed light on
important corporate nuances in this case. (Doc. ## 84, 129).
At the outset it should be noted that Domain Contender, LLC is
a wholly owned subsidiary of directNIC, LLC, and directNIC,
LLC is a wholly owned subsidiary of Intercosmos Media Group,
Inc.
(Doc. # 84 at ¶¶ 10-11).
As to each of these three
Defendants, Vinterella states:
1
Verizon articulated a different jurisdictional basis
for IMG and DNLLC (continuous and systematic business in
Florida and having an office in Florida) and DC (continuous
and systematic business in Florida). However, in response to
the Motion to Dismiss, Verizon disregards this differentiation
and attributes the actions of one Defendant to the other
Defendants as if only one entity were being examined in this
jurisdictional analysis.
-5-
The Defendants have not, and do not, operate,
conduct, engage in, or carry one business within
Florida. The Defendants have never owned, used,
possessed, or held a mortgage or other lien on any
real property within the State of Florida. The
Defendants do not now, and never have, maintained
any office or place of business in Florida. The
Defendants not do now, and never have, purchased or
sold goods in Florida, engaged in or solicited
business in Florida or advertised in Florida. The
Defendants have never maintained a lawsuit in
Florida, do not pay taxes, and are not required to
pay taxes in Florida, and have never availed
themselves of the benefits or protections of the
laws of the State of Florida.
(Doc. # 84 at ¶¶ 19-24).
In addition, the IMG Defendants do
not have licenses to conduct business in Florida and “have no
office, agency, affiliates, employees, or agents in Florida.”
Id. at ¶¶ 36-37. Furthermore, the IMG Defendants “remain
active companies solely in Louisiana . . . [they] have not,
and they still do not, conduct business within the State of
Florida.” Id. at ¶ 43.
Vinterella also specifies, “The
Plaintiffs’ assertion that the Defendants operated with the
other corporate Defendants in the operation of a domain
registration business purportedly in Tampa, Florida is false.
IMG,
DNLLC,
and
DC
have
always
conducted
business
independently from their New Orleans, Louisiana office.” Id.
at ¶ 35.
Vinterella also provides pertinent affidavit statements
with respect to the separate entities as follows.
-6-
a.
Intercosmos Media Group, Inc.
Vinterella states that IMG was incorporated in Delaware
in 1999, and IMG has its principal place of business in New
Orleans, Louisiana. Id. at ¶ 5.
IMG has maintained a license
to do business in Louisiana since 2000, when it began offering
domain name registration services as a reseller of Internet
second level domain names.
Id. at ¶¶ 6, 14.
IMG uses the
trade name directNIC. Id. at ¶ 14. IMG’s computer servers are
located in New Orleans, Louisiana. Id. at ¶ 18.
Vinterella
also indicates:
IMG contracted with the Internet Corporation for
Assigned Names and Numbers (“ICANN”) in its own
name in 2001 to serve as a registrar of Internet
domain names. IMG contracted with its current
customers under its registered name for all
transactions throughout its 8 years of providing
domain name registration service.
IMG regularly
filed all applicable annual reports and paid all
relevant taxes and fees to remain in good standing
with the States of Delaware and Louisiana.
All
other corporate formalities of IMG, including but
not limited to keeping of corporate minutes, [and]
the passing of board resolutions, were observed
from IMG’s principal place of business in New
Orleans, Louisiana.
IMG maintained separate
corporate records from the other company Defendants
in this case.
IMG maintained separate bank
accounts from each of the other Defendants named in
this litigation.
(Doc. # 129 at ¶¶ 9-14). The Producers, Inc. held IMG’s stock
for one year, until January 2007, when 100% of IMG’s stock was
transferred to individual shareholders. (Doc. # 84 at ¶ 30).
However, Vinterella also specifies that “IMG always operated
-7-
independent of TPI [The Producers, Inc.] IMG was never an
‘alter ego’ of [The Producers, Inc.].” (Doc. # 84 at ¶ 34).
Vinterella further submits that “[t]hroughout the time of IMG
providing a domain name registration service, an aggregate
total of over 10.9 million domain names were registered. From
this total, Plaintiffs allege that 30 were sold to the Florida
Residents (e.g. Defendants Solares, Gardner, and Lieske),
which
equates
to
0.000275
percent
of
IMG’s
overall
registrations.” Id. at ¶ 33.
b.
Domain Contender, LLC
DC is a Louisiana limited liability company with its
principal place of business in New Orleans, Louisiana. Id. at
¶ 8.
DC has been licensed to conduct business in Louisiana
since
2003.
Id.
IMG
and
DC
operate
their
domain
name
registration business from the same New Orleans address, and
their computer servers, operating equipment, and employees are
located in New Orleans. Id. at ¶¶ 12, 18, 25, 39.
Vinterella
indicates, “IMG and DC have never operated their domain
registration business from Florida, or in conjunction with the
other corporate Defendants.” Id. at ¶ 28. Furthermore, “IMG
and DC’s Websites never ‘targeted’ the State of Florida.” Id.
at 41.
Vinterella also submits that “[t]hroughout the time of DC
providing a domain name registration service, an aggregate
-8-
total of over 1.4 million domain names were registered.
From
this total, Plaintiffs allege that 0 were sold to the Florida
Residents.” Id. at ¶ 34.
c.
DirectNIC, LLC
DNLLC has been licenced to do business in Louisiana since
2006. Id. at ¶ 13. However, “DNLLC never actually carried on
a business.” (Doc. # 129 at ¶ 20). DNLLC “has served various
ministerial and administrative functions for IMG’s and DC’s
businesses since its formation in 2006. DNLLC has served in
these
capacities
solely
from
Louisiana,
and
has
had
no
business in Florida.” (Doc. # 84 at ¶ 13).
DNLLC has its own Employer Identification Number and
maintains separate corporate records and bank accounts from
the other Defendants in this case. (Doc. # 129 at ¶¶ 20, 22,
23).
2.
Verizon’s Evidence
Verizon filed the declaration of its attorney, Anne F.
Bradley, Esq. as well as various exhibits. (Doc. # 98-1).
Bradley indicates that Defendant Solares is a resident of
Tampa, Florida and that, in a different case, he filed a
declaration
stating
shareholder
of
that
he
Intercosmos
is
Media
Contender, LLC. Id. at ¶¶ 2-3.
-9-
the
CEO
Group,
and
Inc.
member
and
and
Domain
Solares’s declaration, which
is attached to Bradley’s declaration, also indicates that
Defendants Michael Gardner and Noah Lieske are shareholders or
members of Intercosmos Media Group, Inc. and Domain Contender,
LLC. Id. at ¶ 3.
Bradley also mentions various Internet announcements
describing the IMG Defendants’ plans for the future and
various job postings.
Bradley also summaries the nature of
Internet registrar businesses Id. at ¶ 8.
In addition, she
notes that Danny Simonton, the Chief Information Officer for
Intercosmos
Media
Group,
Inc.,
was
a
presenter
at
the
“T.R.A.F.F.I.C.” conference in Hollywood, Florida on October
11,
2007.
Id.
T.R.A.F.F.I.C.
at
¶
15.
conference
The
Court
surmises
a
trade
show
is
for
that
the
Internet
registrar companies.
3. Specific Jurisdiction
Verizon
jurisdiction
contends
over
the
that
IMG
this
Court
Defendants
has
specific
pursuant
to
48.193(1)(a) of Florida’s long-arm statute, which reads:
(1) Any person . . . who . . . does any of the acts
enumerated in this subsection thereby submits
himself . . . to the jurisdiction of the courts of
this state for any cause of action arising from the
doing of any of the following acts:
(a) Operating, conducting, engaging in, or carrying
on a business or business venture in this state or
having an office or agency in this state.
-10-
§
Fla. Stat. § 48.193(1)(a),(d). Specific jurisdiction, whether
based on operating a business in Florida, or any of the other
specific items enumerated in § 48.193(1)(a), requires “some
direct affiliation, nexus, or substantial connection between
the cause of action and the defendant’s activities within the
state.”
Venezia Amos, LLC v. Favret, Case No. 3:07-cv-146-
MCR, 2008 U.S. Dist. LEXIS 10452, at *16
2008).
(N.D. Fla. Feb. 12,
That is, a court may exercise specific jurisdiction
over a non-resident defendant only when the plaintiff’s cause
of action arises from or is directly related to a defendant’s
contacts with the forum state. Stubbs v. Wyndham Nassau
Resort, 447 F.3d 1357, 1360 (11th Cir. 2006).
Verizon argues that the IMG Defendants are subject to
specific jurisdiction under the long-arm statute because they
purportedly have an office in Florida.
However, as pointed
out by the IMG Defendants, there is not a shred of plausible
evidence in support of this contention.
Verizon points to a
December 23, 2008, Internet announcement from the directNIC
website. (Doc. # 98-1 at 17).
That web-posting indicates,
On January 7th, 2009 Intercosmos Media Group, Inc.,
doing
business
as
directNIC.com,
will
be
transferring its ICANN registrar accreditation to
DirectNIC, LTD At the conclusion of this process,
our consolidated group of companies will have
offices
in
New
Orleans,
LA;
Tampa,
FL;
Schaffhausen, Switzerland; and Grand Cayman, Cayman
Islands, which is the jurisdiction for DirectNIC,
LTD The same owners will still be here to ensure
-11-
that your customer service experience exceeds all
of your expectations.
Id.
The press release Verizon relies upon for the proposition
that the IMG Defendants have an office in Florida predates the
filing of this action by 15 months, and such press release
does not specifically state that the IMG Defendants have an
office in Tampa, Florida.
Rather, it discusses the prospect
of the creation of a Florida office at some time in the
future.
Verizon has not submitted any evidence showing that
the IMG Defendants are operating an office in Florida or have
operated
such
an
office.
As
stated
by
Defendants,
“Plaintiffs’ contention that specific jurisdiction exists over
the Company Defendants based on a single computer printout of
a press release concerning a location in Florida for a future
office
dated
well
over
a
year
ago,
without
more,
is
insufficient for this Court to conclude that the Company
Defendants have a Florida office.” (Doc. # 128 at 8).
The Court is not convinced that the IMG Defendants have
an office in Florida.
The Court is also unconvinced that the
IMG Defendants have operated a business in Florida.
In
Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421
F.3d 1162, 1167 (11th Cir. 2005), the Court listed some
“relevant, but not dispositive,” factors to consider when
evaluating whether a defendant is carrying on a business in
-12-
Florida: (1) the presence and operation of an office in
Florida; (2) the possession and maintenance of a license to do
business in Florida; (3) the number of Florida clients served;
and (4) the overall revenue gleaned from Florida clients.
In the present case, each of these factors militates
against Verizon.
As noted, Verizon alleged in the amended
complaint that the IMG Defendants have an office in Florida.
The IMG Defendants responded by filing affidavits specifically
stating that they do not have an office in Florida.
That
shifted the burden back to Verizon to persuade the Court that
the IMG Defendants do have such an office. Verizon has failed
to do so.
There is simply no evidence on file that the IMG
Defendants have an office in Florida.
In addition, the record lacks evidence that the IMG
Defendants possess a Florida business license, and there is no
evidence on file tending to show that any revenues were
gleaned from Florida clients.
In Florida, long-arm statutes are strictly construed,
see, e.g., Bank of Wessington v. Winters Gov’t Sec. Corp., 361
So. 2d 757, 759 (Fla. 4th DCA 1978), and the language of the
statute does not support a finding that the IMG Defendants
carry on a business venture in Florida or have an office in
Florida.
Thus, the Court will move on to Verizon’s general
jurisdiction contentions.
-13-
4.
General Jurisdiction
General jurisdiction arises from a defendant’s contacts
with the forum that are not necessarily related to the cause
of action being litigated.
Consol. Dev. Corp. v. Sherritt,
Inc., 216 F.3d 1286, 1293 (11th Cir. 2000).
Florida’s long-
arm statute permits a court to exercise general jurisdiction
over a defendant “who is engaged in substantial and not
isolated activity within this state . . . whether or not the
claim
arises
from
that
activity.”
Florida
Statute
§
48.193(2).
The continuous and systematic contacts sufficient to
confer general jurisdiction present a “much higher threshold”
than
those
jurisdiction.
contacts
necessary
to
support
specific
Seabra v. Int’l Specialty Imp’s, Inc., 869 So.
2d 732, 734 (Fla. 4th DCA 2004); see also Croft v. Lewis, Case
No. 8:09-cv-1370-T-27AEP, 2010 U.S. Dist. LEXIS, at *9-10
(M.D. Fla. Apr. 1, 2010)(no general jurisdiction over a
foreign
corporation
in
trademark
case
even
considering
defendants’ website in combination with 6% of gross worldwide
sales to Florida residents.)
The Court has not been supplied with evidence tending to
show
that
the
IMG
Defendants
engaged
systematic contacts with Florida.
in
continuous
and
Verizon has not countered
the affidavit statements from Vinterella indicating that the
-14-
IMG
Defendants
have
servers in Florida.
no
employees,
property,
or
computer
In addition, Verizon has not challenged
Vinterella statements that it has never sold goods in Florida,
has never engaged in or solicited business in Florida, and has
never paid taxes in Florida.
Thus, the Court does not find
general jurisdiction over the IMG Defendants.
5.
Alter Ego and Mere Instrumentality
It is not contested that: (1) Defendant The Producers,
Inc. is a Florida corporation; (2) Defendants Michael Gardner,
Noah Lieske, and Sigmund Solares reside in Florida; (3) Domain
Contender, LLC is a wholly owned subsidiary of directNIC, LLC;
(4) directNIC, LLC is a wholly owned subsidiary of Intercosmos
Media Group, Inc.; (5) in January 2006, 100% of IMG’s stock
was transferred to The Producers, Inc. for one year; and (6)
in January 2007, 100% of IMG’s stock was transferred to
individual shareholders. (Doc. # 84 at ¶¶ 10-11, 30).
As a general principle, personal jurisdiction over a
Florida
parent
corporation
will
not
equate
to
personal
jurisdiction over a subsidiary. See Hobbs v. Don Mealey
Chevrolet, Inc., 642 So. 2d 1149, 1155-56 (Fla. 5th DCA 1994).
An exception arises when the subsidiary is merely the alter
ego or mere instrumentality of the Florida parent corporation,
over which the Court does have personal jurisdiction. Id.
Verizon asserts that this Court should exercise jurisdiction
-15-
over the IMG Defendants because they are merely alter egos or
mere instrumentalities of The Producers, Inc. or of another
Florida defendant in this case (i.e, Gardner, Lieske, and
Solares).
Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114,
1120-21 (Fla. 1984), governs this Court’s analysis.
There,
the Court noted:
The corporate veil will not be penetrated . . .
unless it is shown that the corporation was
organized or employed to mislead creditors or to
work a fraud upon them.
Every corporation is
organized as a business organization to create a
legal entity that can do business in its own right
and on its own credit as distinguished from the
credit and assets of its individual stockholders.
The mere fact that one or two individuals own and
control the stock structure of a corporation does
not lead inevitably to the conclusion that the
corporate entity is a fraud that is necessarily the
alter ego of its stockholders to the extent that
the debts of the corporation should be imposed upon
them personally. If this were the rule, it would
completely destroy the corporate entity as a method
of doing business and it would ignore the
historical
justification
for
the
corporate
enterprise system.
Id. (quoting Advertects, Inc. v. Sawyer Indus., Inc., 84 So.
2d 21, 23-24 (Fla. 1955)).
Thus, under Florida law, Verizon must allege both that
the IMG Defendants were used for an improper purpose and that
the IMG Defendants were alter egos or mere instrumentalities
of The Producers, Inc. or another Florida defendant.
-16-
Along
these lines, the Eleventh Circuit has recognized that “Florida
law allows a party to pierce the corporate veil and hold a
parent corporation liable for its subsidiary’s actions if it
can
demonstrate
first,
that
the
subsidiary
was
a
mere
instrumentality of the parent and that the parent engaged in
improper conduct through its organization or use of the
subsidiary.” Seb S.A. v. Sunbeam Corp., 148 F. App’x 774, 800
(11th
Cir.
omitted).
2005)(internal
citations
and
quotation
marks
When alter ego is alleged in an effort to satisfy
Florida’s long-arm statute, the Court, once again, engages in
a burden-shifting scheme. Bellairs v. Mohrmann, 716 So. 2d
320, 323 (Fla. 2d DCA 1998).
In an attempt to allege alter ego jurisdiction over the
IMG Defendants, Verizon contends in the amended complaint:
“Plaintiffs are informed . . . that at all times material to
this action, each of the Defendants and the False Identities,
was
the
agent,
servant,
employee,
partner,
alter
ego,
subsidiary, or joint venturer of each of the other Defendants
and
False
Identities
and
that
the
acts
of
each
of
the
Defendants and each of the False Identities were in the scope
of such relationship.” (Doc. # 68 at ¶ 86).2
2
This Court is
In the amended complaint, Verizon defines the “False
Identities” as “shell companies,” which follow: “NOLDC, Inc.,
Spiral Matrix, Kenyatech a/k/a Kentech, Speedy Web, Unused
Domains, and Belize WHOIS Service, LT.” (Doc. # 68 at ¶ 81).
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not
convinced
that
Verizon
has
satisfied
the
pleading
requirements of Dania Jai-Alai, but will conduct its analysis
assuming that such elements have been articulated in the
amended complaint.
In response to Verizon’s alter ego allegations, the IMG
Defendants
filed
the
present
Motion
to
Dismiss
and
the
affidavits of Vinterella. The IMG Defendants concede that the
amended complaint alleges that IMG and DC were used for an
improper purpose–-cyberquatting.
However, each of the IMG
Defendants has provided the Court with uncontested affidavit
statements tending to negate the allegation that the IMG
Defendants are or were a mere instrumentality or alter ego of
any other entity or individual.
Verizon
statements
has
that
not
the
challenged
IMG
Vinterella’s
Defendants
observe
all
affidavit
relevant
corporate formalities. Vinterella specifically noted that IMG
filed all applicable annual reports and paid all required
taxes and fees to remain in good standing with the States of
Delaware and Louisiana, observed the corporate formalities of
keeping of corporate minutes and passing board resolutions,
and maintained separate corporate records and bank accounts
from the other Defendants in this case.
14).
(Doc. # 129 at ¶¶ 9-
Vinterella also testified that “IMG always operated
-18-
independent of TPI [The Producers, Inc.] IMG was never an
‘alter ego’ of TPI.” (Doc. # 84 at ¶ 34).
As for DNLLC and DC, both are licensed to do business in
Louisiana
and
keep
corporate
minutes
in
New
Louisiana. (Doc. # 129 at ¶¶ 17, 19, 24, 29).
Orleans,
DNLLC and DC
regularly file all applicable annual reports and pays taxes
and
fees
to
Louisiana.
remain
Id.
at
in
¶¶
good
21,
standing
28.
with
the
and
DC
DNLLC
State
have
of
also
maintained separate corporate records and bank accounts from
the other Defendants. Id. at ¶¶ 22, 23, 30, 31.
In
its
response
to
the
Motion
to
Dismiss,
Verizon
represents that the “Company Defendants” have (1) “directly
registered
domain
names
that
are
confusingly
similar
to
Plaintiffs’ trademarks which form the basis for this lawsuit;”
(2) “operate an office in Tampa, Florida;” and (3) solicit
domain name business in Florida through a “highly interactive
website.” (Doc. # 97 at 2).
In addition, Verizon has pointed
out some common ownership and leadership between the IMG
Defendants.3
However, Verizon has not come forward with any
3
The Producers, Inc. is currently the parent company of
directNIC, Ltd. (Doc. # 85 at ¶ 14).
The Producers, Inc.
formerly owned defendant Intercosmos Media Group (“IMG”).
(Doc. # 84 at ¶ 29-32). From 2001, to 2008, IMG listed the
domain name directnic.com and operated as an ICANN accredited
domain name registrar. Id. at ¶¶ 14-16. In January 2009, IMG
transferred its ICANN accreditation to directNIC, Ltd. (Doc.
# 85 at ¶ 8). When directNIC, LLC was formed, it was a wholly
owned subsidiary of The Producers, Inc. (Doc. # 84 at ¶ 9).
-19-
evidence to support its allegation of mere instrumentality or
alter ego with respect to the IMG Defendants.
The fact that the Producers held IMG’s stock for one year
does not equate to jurisdiction over IMG (and its subsidiary
companies).
Likewise, the IMG Defendants’ affiliation with
various Florida defendants does not lead to an automatic
finding of alter ego or mere instrumentality jurisdiction.
This Court will not consider the actions of other defendants
in this case as the actions of the IMG Defendants for the
purposes of conducting a jurisdictional analysis.
This Court
is loathe to pierce the corporate veil and will not do so
unless the plaintiff has satisfied the requirements enunciated
in Dania Jai-Alai, 450 So. 2d at 1120-21.
This Court has determined that the Florida long-arm
statute has not been satisfied. Nevertheless, this Court will
briefly
discuss
salient
due
process
concerns
which
also
In 2007, ownership of directNIC, LLC was transferred to IMG.
Id.
Further, Domain Contender, LLC is a wholly owned
subsidiary of directNIC, LLC. Id. at ¶ 10-11. In addition,
Gardner, Lieske, and Solares are or were the officers,
directors, managing members or owners of IMG, directNIC, Ltd.,
DNLLC, The Producers, Inc., and DC. (Doc. # 97 at 4). However,
personal jurisdiction over the IMG Defendants is not
established merely because the IMG Defendants and another
defendant, subject to personal jurisdiction, shared officers
and directors, had a unified goal, and performed services for
one another. See Gadea v. Star Cruises, Ltd., 949 So. 2d 1143,
1146 (Fla. 3d DCA 2007).
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militate against exercising personal jurisdiction over the IMG
Defendants.
B. Due Process
1. Minimum Contacts
In the amended complaint, Verizon alleges that the IMG
Defendants
Florida
by
commercial
established
operating
domain
sufficient
a
name
minimum
registrar
registration
contacts
business
services
that
to
with
sells
Florida
residents, including Gardner, Lieske, and Solares, through the
website at directnic.com. (Doc. # 68 at ¶¶ 80, 89, 90, 95, 97;
Exh. 11, 12, 16).
“This website, which is accessible in
Florida, allows Florida residents to create accounts, process
payments, manage domain name portfolios, and web hosting
configurations,
and
manage
technical
support
requests.
(Bradley Decl. ¶ 13).” (Doc. # 97 at 17).
In determining whether sufficient minimum contacts exist
with the state of Florida, the Court assesses whether the
defendant has purposefully availed itself of the privilege of
conducting activities in the forum state, thus invoking the
benefits and protections of its laws.
Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985). The purposeful availment
requirement ensures that a defendant will not be hauled into
a jurisdiction solely as a result of random, fortuitous, or
attenuated contacts, or of the unilateral activity of another
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party or third person. Id.
In the Motion to Dismiss, the IMG Defendants remark:
[T]here were no forum-related activities engaged in
by the IMG Defendants that are related to any
alleged injury sustained by the Plaintiffs.
IMG
and DC operated such a domain name registration
company strictly out of Louisiana with no ties to
the State of Florida, and DNLLC did not even
operate such a business.
Additionally, IMG and
DC’s network of computer servers used to run its
business were also located in Louisiana.
(Doc. # 82 at 22).
In response to the Motion to Dismiss, Verizon improperly
lumps together certain defendants without distinguishing the
separate actions of each defendant and argues,
“As the alter
egos of TPI [The Producers, Inc.], and the Florida Residents
[Gardner,
Liesks,
[including
and
directNIC,
Solares],
Ltd.]
have
the
Company
Defendants
established
sufficient
contacts with Florida to support personal jurisdiction.” (Doc.
# 97 at 17).
Verizon focuses its arguments on the existence
of the offending website: directnic.com.
First, the Court rejects Verizon’s attempt to lump all of
the Defendants together in an effort to establish that the
acts of one corporate defendant constitute the acts of another
corporate defendant.
of
the
defendants
Verizon’s arguments aggregate a number
together,
and
in
this
jurisdictional
analysis, the Court must assess the actions of each defendant
-22-
separately, especially because the Court has determined that
Verizon’s alter ego theory is unsuccessful.
Second,
the
Court
determines
that
the
offending
interactive website, which Verizon collectively attributes to
the IMG Defendants and the other Defendants in this case, does
not
show
activity
that
at
the
the
Manufacturing
IMG
forum
Defendants
state.
purposefully
Verizon
relies
directed
upon
Zippo
Co. v. Zippo DOT com, 952 F. Supp. 1119, 1124
(W.D. Penn. 1997).
That case, which is persuasive but not
binding, describes the spectrum of Internet business for the
purpose of conducting a jurisdictional analysis: “at one end
of the spectrum are situations where a defendant clearly does
business over the Internet.
If the defendant enters into
contracts
a
with
residents
of
foreign
jurisdiction
that
involve the knowing and repeated transmission of computer
files over the Internet, personal jurisdiction is proper.” Id.
At the other end of the spectrum are defendants who have
“simply posted information on an Internet website which is
accessible to users in foreign jurisdictions.” Id.
Verizon contends that the interactive website in question
is at one end of the spectrum, and the IMG Defendants argue
that the website is at the other end of the spectrum.
In
Zippo, the district court was persuaded that the defendant’s
conduct over the Internet constituted purposeful availment
-23-
into the forum state because the defendant “contracted with
approximately 3,000 individuals and seven Internet access
providers in [the forum state].
transactions
has
been
the
The intended object of these
downloading
of
the
electronic
messages that form the basis of this suit.” Id. at 1126.
Recently reviewing a district court’s jurisdictional
determination, the Eleventh Circuit applied a common-sense
test concerning the presence of an interactive website and
ultimately
determined
that
the
district
court
erred
in
exercising specific personal jurisdiction over a foreign
defendant. Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d
1210, 1219-1224 (11th Cir. 2011).
In that case, the Eleventh
Circuit commented on the Zippo case but did not adopt its
sliding-scale framework for evaluating contacts with the forum
state through a website. Id. at 1219-1220.
As stated in Goforit Entm’t, LLC v. Digitalmedia.com
L.P., 513 F. Supp. 2d 1325, 1329 (M.D. Fla. 2007), “[T]he
Internet
does
not
provide
cause
to
abandon
traditional
principles guiding the personal jurisdiction analysis.”
Regardless of the presence of a website, this Court must
evaluate the defendant’s actions in relation to the forum
state and determine whether purposeful availment exists.
The
Internet activity in this case, even under Zippo, does not
establish minimum contacts with the forum state.
-24-
In Zippo,
the court found personal jurisdiction appropriate in light of
thousands of contracts in the forum state through the website.
In contrast, Verizon has not contested Vinterella’s affidavit
statement that “[t]hroughout the time of IMG providing a
domain name registration service, an aggregate total of over
10.9 million domain names were registered.
From this total,
Plaintiffs allege that 30 were sold to the Florida Residents
(e.g. Defendants Solares, Gardner, and Lieske), which equates
to 0.000275 percent of IMG’s overall registrations.” (Doc. #
84 at ¶ 33).
It also appears to be uncontested that DC and
DNLLC did not provide domain name registration services to any
of the Florida Residents.
In
addition,
the
non-Internet
activity
alleged
(specifically, the presence of one IMG employee at a Florida
trade show) does not constitute minimum contacts with Florida.
See e.g. N. Ins. Co. of N.Y. v. Constr. Navale Bordeaux, Case
No. 11-cv-60462, 2011 U.S. Dist. LEXIS 74132, at *15 (S.D.
Fla. July 11, 2011)(no minimum contacts with Florida despite
20 sales in Florida over two years, the appearance at six
Florida trade shows, and industry advertizing in Florida).
2. Fair Play and Substantial Justice
Considerations of fair play and substantial justice also
weigh against finding personal jurisdiction over the IMG
Defendants. The Court must balance the burdens on the IMG
-25-
Defendants in litigating in the forum state against various
countervailing considerations, which include (1) the interests
of the forum state; (2) the plaintiff’s interest in obtaining
relief; (3) judicial economy; and (4) social policy.
World-
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).
These considerations do not leave the Court with the
impression
that
it
would
be
fair
jurisdiction over the IMG Defendants.
to
exercise
personal
Neither Plaintiff is
from Florida, and the amended complaint does not allege an
injury to a Florida resident.
Thus, the forum state has
little, if any, interest in the prosecution of this suit.
In
addition, there are no public policy or judicial economy
concerns raised by the parties that favor exercising personal
jurisdiction over the IMG Defendants.
Accordingly, it is hereby
ORDERED, ADJUDGED, and DECREED:
Intercosmos Media Group, Inc., directNIC, LLC and Domain
Contender, LLC’s Motion to Dismiss the Amended Complaint for
Lack of Personal Jurisdiction (Doc. # 82) is GRANTED.
DONE and ORDERED in Chambers in Tampa, Florida, this 25th
day of August, 2011.
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Copies: Counsel of Record
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