Sterling Currency Group LLC v. Doe
Filing
22
ORDER granting Defendants' 11 Motion to Dismiss for Lack of Personal Jurisdiction; Plaintiff's 14 Motion for Permission to Conduct Jurisdiction Discovery is DENIED; Plaintiff's 16 Motion for Leave to Amend Complaint is DENIED; and Plaintiff's complaint is DISMISSED WITHOUT PREJUDICE. Signed by Judge Richard W. Story on 8/5/2013. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
STERLING CURRENCY GROUP
LLC,
Plaintiff,
v.
JAMES MAURER and
MONETIZERS LLC,
Defendants.
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CIVIL ACTION NO.
1:12-CV-03022-RWS
ORDER
This case comes before the Court on the Motion to Dismiss [11] of
Defendants James Maurer and Monetizers LLC and the Motion to Conduct
Jurisdictional Discovery [14] and the Motion for Leave to Amend the
Complaint [16] of Plaintiff Sterling Currency Group LLC. After reviewing the
record, the Court enters the following Order.
Background
This is a trademark infringement action brought by Plaintiff Sterling
Currency Group LLC (“Sterling”) against Defendants James Maurer and
Monetizers LLC (“Monetizers”). Sterling alleges in its First Amended
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Complaint1 that it is a money services business, which buys and sells foreign
currencies, including primarily the Iraqi Dinar, to the general public through its
websites. (Pl.’s First Am. Compl. (“Compl.”), Dkt. [2] ¶¶ 22, 30.) Sterling
operates its business through the websites, “SterlingCurrencyGroup.com” and
“DinarBanker.com.” (Id. ¶ 1.) Sterling uses the marks STERLING
CURRENCY GROUP, STERLINGCURRENCYGROUP.COM, DINAR
BANKER, and DINARBANKER.COM. (Id. ¶¶ 6-8).
In order to promote its business, Sterling relies heavily on its organic
search rankings with Google. (Id. ¶ 31.) These organic search rankings are
search engine results pages that appear because of their relevance to the search
terms and not due to advertisements. (Id. ¶ 31 n.2.)
For many years, Google ranked a website higher and considered it to be
important if links to that particular website appeared on many other websites.
(Id. ¶ 32.) Thus, a website with many links was ranked higher by Google than
similar websites with fewer links. (Id.) The industry developed ways to
1
Plaintiff amended its complaint pursuant to Fed. R. Civ. P. 15(a)(1)(A), which
allows a plaintiff to amend the complaint once as a matter of course within twenty-one
days after serving it.
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artificially post many links to websites. (Id. ¶33.)2 Google caught on to this
practice and stopped using the number of links to determine a website’s ranking
or importance. (Id. ¶ 34.) Additionally, Google started punishing websites that
it believed had engaged in this practice of artificial linking or “bad links.” (Id. ¶
35.) The punishment was for Google to significantly lower a website’s ranking,
resulting in that website being shown much lower on Google’s results pages
and fewer Google users seeing the listing for that website. (Id.)
Google’s punishments became known throughout the industry. Some
individuals learned that they could take advantage of Google’s new policy by
running campaigns to place artificial links to their competitor’s websites. (Id. ¶
36.) This is known as “Google Bowling.” (Id.) The result is that the
competitor’s site will be punished by Google for having the bad links and will
be listed lower on Google’s rankings. (Id.)
2
One example of this is where the owner of a website creates artificial links to
other websites and then links these artificial links to their own website. (Id. ¶ 33.)
Thus, the owner would create many artificial websites with the sole purpose of using
those sites to post links to the owner’s website. (Id.)
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Plaintiff alleges that Defendants run a variety of informational websites,
including one on the Iraqi Dinar at “IraqiDinar.com.”3 (Compl., Dkt. [2] ¶ 37.)
Plaintiff alleges that in or about April 2012, Defendants started posting artificial
links to Sterling’s websites using a linking network called “Link-Vault.com.”
(Id. ¶ 39.) Plaintiff asserts that Defendants undertook this campaign knowing
that these artificial or bad links would cause Google to punish Sterling’s
website. (Id.) As a result, Defendants caused at least 500 bad links to be posted
against Sterling’s website. (Id. ¶ 40.)
Plaintiff alleges that as a result of Defendants’ bad links campaign,
Sterling’s websites appeared much lower on Google’s results pages. (Id. ¶¶ 4445.) This resulted in a rapid decline in the visibility of Sterling’s websites and a
significant drop in the number of visitors to Sterling’s sites and the number of
sales. (Id.) Plaintiff alleges that Defendants benefitted from lowering the high
rankings of Sterling’s websites because more Google users would see and visit
3
Plaintiff alleges in the First Amended Complaint that Defendants’ website is
both “Iraqidinar.com” and “IraqiDinar.org.” (Id. ¶ ¶ 9-10.) Defendants explain in
their motion to dismiss that they do not own “Iraqidinar.com” and instead own
“Iraqidinar.org.” (Defs.’ Mem. of Law in Support of Their Mot. to Dismiss (“Defs.’
Br.”), Dkt. [11-1] at 4, n.3.) Based on the information provided by the parties, as well
as the Court’s own review of each website, the correct website for purposes of this
action is “Iraqidinar.org.”
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Defendants’ own website at Iraqidinar.org and other related Iraqi Dinar
websites that Defendants may own or operate. (Id. ¶ 41.) Plaintiff alleges that
Defendants’ wrongful acts have injured Plaintiff in excess of five million
dollars ($5,000,000.00). (Id. ¶ 47.)
In its First Amended Complaint, Plaintiff brings claims against
Defendants for trademark infringement, trademark dilution, tortious
interference with business relations, unfair competition, fraud, injunctive relief,
punitive damages, attorneys’ fees, and pre- and post-judgment interest. (Id. ¶
3.)
Defendants now move to dismiss Plaintiff’s First Amended Complaint
for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). (Defs.’
Mot. to Dismiss, Dkt. [11].) In addition to filing a response to Defendants’
Motion to Dismiss, Plaintiff has also filed a Motion For Permission to Conduct
Jurisdictional Discovery (Dkt. [14]), and a Motion for Leave to Amend the
Complaint (Dkt. [16].)
Discussion
I.
Defendants’ Motion to Dismiss For Lack of Personal Jurisdiction
Pursuant to Federal Rule Civil Procedure 12(b)(2)
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Plaintiff alleges in its First Amended Complaint that it is organized under
the laws of the State of Georgia with its principal place of business in Atlanta.
(Compl., Dkt. [2] ¶ 5.) Defendant James Maurer is an individual residing in
North Muskego, Michigan. (Id. ¶ 9; James Maurer Affidavit, Dkt. [11-2] ¶ 2.)
He is the agent and sole member and employee of Monetizers and the operator
of the website at IraqiDinar.org. (Compl., Dkt. [2] ¶ 9; Maurer Aff., Dkt. [11-2]
¶ 4.) Monetizers is a limited liability company organized under the laws of the
State of Michigan with its principal place of business in Michigan. (Maurer
Aff., Dkt. [11-2] ¶ 3.) Monetizers does business as IraqiDinar.org and operates
a website at this internet domain name. (Compl., Dkt. [2] ¶ 10.)
To support personal jurisdiction, Sterling alleges in its First Amended
Complaint that Defendants transact business within Georgia and regularly do
and solicit business in Georgia. (Id. ¶16.) Plaintiff contends further that
Defendants engage in persistent courses of conduct in Georgia or have
continuous and systematic contacts with Georgia. (Id.) Plaintiff asserts that
Defendants have committed unlawful and intentional tortious acts outside the
jurisdiction of the Court with the full knowledge that their acts would cause
injury in this jurisdiction. (Id. ¶17.) Plaintiff argues that Defendants’ unlawful
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and intentional tortious acts outside the jurisdiction of the Court have caused
injury to Sterling within the State of Georgia. (Id. ¶18.)
“A plaintiff seeking the exercise of personal jurisdiction over a
nonresident defendant bears the initial burden of alleging in the complaint
sufficient facts to make out a prima facie case of jurisdiction.” United Techs.
Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009). “Where, as here, the
defendant challenges jurisdiction by submitting affidavit evidence in support of
its position, ‘the burden traditionally shifts back to the plaintiff to produce
evidence supporting jurisdiction.’” Id. (quoting Meier ex rel. Meier v. Sun Int'l
Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002)). “Where 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.” Meier,
288 F.3d at 1269.
The Court uses a two-step inquiry to determine whether personal
jurisdiction exists over a nonresident defendant. Henriquez v. El Pais
Q’Hubocali.com, 500 F. App’x 824, 827 (11th Cir. 2012). First, the Court must
examine whether the exercise of personal jurisdiction is appropriate under
Georgia’s Long-Arm statute. Id. at 828. Second, the Court must determine
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whether the exercise of jurisdiction violates the Due Process Clause of the
Fourteenth Amendment to the United States Constitution. Id.
Georgia’s Long-Arm statute provides as follows:
A court of this state may exercise personal jurisdiction over any
nonresident . . . , as to a cause of action arising from any of the
acts, omissions, ownership, use, or possession enumerated in this
Code section, in the same manner as if he or she were a resident of
this state, if in person or through an agent, he or she:
(1) Transacts any business within this state;
(2) Commits a tortious act or omission within this state,
except as to a cause of action for defamation of character
arising from the act; [or]
(3) Commits a tortious injury in this state caused by an act
or omission outside this state if the tort-feasor regularly does
or solicits business, or engages in any other persistent course
of conduct, or derives substantial revenue from goods used
or consumed or services rendered in this state[.]
O.C.G.A. § 9-10-91.4 Although Defendants argue in their motion that none of
these subsections confers personal jurisdiction over them, Plaintiff responds
that personal jurisdiction is established under subsection 3. (Defs.’ Br., Dkt.
[11-1] at 13-23; Pl.’s Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Opp’n”), Dkt.
4
The remaining three provisions of this code section are not relevant to this
action because they apply to ownership of real property and domestic relations. See
O.C.G.A. § 9-10-91(4)-(6).
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[15] at 11-18.) Plaintiff has not contested Defendants’ arguments for dismissal
for lack of personal jurisdiction under subsections 1 or 2. (Pl.’s Opp’n, Dkt.
[15] at 11-18.) Accordingly, the Court will focus only on subsection 3.
A. Tortious Injury
Defendants argue that Plaintiff has failed to plead that they committed a
tortious act outside of Georgia that caused injury inside Georgia and instead
only offers conclusory statements and legal conclusions. (Defs.’ Br., Dkt. [111] at 19.) Defendants contend that Plaintiff only provided one example in its
complaint of a “bad link,” but that the example provides no evidence that the
post on the internet was an actual link as opposed to text and there is no
evidence that Defendants actually placed the link there. (Id. at 19-20.)
In response, Plaintiff argues that it has sufficiently alleged that
Defendants committed a tortious injury by alleging that trademark infringement
occurred outside the state, and presumably in Michigan, where Defendants are
residents. (Pl.’s Opp’n, Dkt. [15] at 11.) Plaintiff contends that it has
sufficiently alleged that it suffered tortious injuries here in the form of
economic harm in the amount of $5,000,000.00. (Id.)
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After a review of Plaintiff’s First Amended Complaint, the Court finds
that Sterling has sufficiently alleged that Defendants committed a tortious
injury against Sterling in Georgia in the form of economic harm caused by
Defendants placing bad links to Sterling’s website while outside of Georgia.
B. Business in Georgia
Defendants argue that Plaintiff has not alleged sufficient facts to show
that Defendants regularly conduct or solicit business in Georgia or that
Defendants derive substantial revenue from goods used or services rendered in
Georgia. (Defs.’ Brief, Dkt. [11-1] at 21.) Relying on the affidavit of Mr.
Maurer, Defendants argue that the only business Monetizers did with Georgia
residents involved the sale of fourteen electronic books over the course of three
years from 2008 - 2011. (Id. at 21; Maurer Aff. ¶ 26.) Defendants contend that
the only action that could be considered solicitation is the maintenance of its
website, which did not target Georgia residents. (Defs.’ Brief, Dkt. [11-1] at
22.) Moreover, Defendants argue that merely maintaining a website that is
accessible to Georgia residents is not regular solicitation. (Id.)
Plaintiff responds that Defendants’ conduct and the interactive and
commercial nature of its website demonstrate Defendants’ engagement in a
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persistent course of conduct that satisfies Georgia’s Long-Arm statute. (Pl.’s
Opp’n, Dkt. [15] at 13, 15.) Plaintiff contends that Defendants regularly
conducted and solicited business in Georgia as evidenced by the fourteen
electronic books Defendants sold through their website to Georgia residents.
(Id. at 16.) Plaintiff avers that Defendants conduct business with Google and
depend on Google for the success of their website. (Id.) Furthermore, Plaintiff
argues that Defendants’ other business activities are connected to Georgia, and
their past dealings with Sterling, including communications with Sterling’s
agent, meet the requirements of O.C.G.A. § 9-10-91(3). (Id.)
In response to Plaintiff’s arguments, Defendants reply that Plaintiff’s
cause of action is completely unrelated to the interactive and commercial nature
of Defendants’ website. (Defs.’ Reply Mem. of Law in Support of Their Mot.
to Dismiss (“Defs.’ Reply), Dkt. [18] at 4, 9.) Defendants assert that any sales
of electronic books to Georgia residents were de minimis and did not generate
substantial revenue. (Id. at 9.) Defendants contend further that none of the
minimal contacts Defendants had with Plaintiff, Georgia, or Google give rise to
personal jurisdiction. (Id. at 11.) Finally, Defendants assert that all of
Plaintiff’s arguments relate solely to Mr. Maurer’s actions taken on behalf of
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Monetizers, and there is no allegation that Mr. Maurer conducted any business
or derived any revenue as a result of actions he took individually on his own
behalf. (Id. at 13-14.)
The Court finds that Plaintiff has failed to establish personal jurisdiction
over Defendants. First, on behalf of Monetizers, as its sole member and
employee, Mr. Maurer states that Monetizers has never been registered to do
business in Georgia, and it has never owned real property, had an office, kept a
financial account, or maintained any phone listing here. (Maurer Aff. ¶¶ 6-9.)
He explains further that Monetizers has never transacted business with Plaintiff
and does not regularly transact or solicit business in Georgia. (Id. at ¶ 14.)
Additionally, Monetizers does not derive any revenue from selling goods or
rendering services in Georgia.5 (Id. at ¶ 15.) Plaintiff has not pointed to
evidence to show otherwise.
Second, Defendants’ maintenance of a website that is accessible to
Georgia residents is not the regular solicitation of business. See Jordan Outdoor
Enterprises, Ltd. v. That 70's Store, LLC, 819 F. Supp. 2d 1338, 1345 (M.D.
5
As discussed more fully infra, Monetizers does not derive any revenue from
selling electronic books. (Id. at ¶¶ 29, 30).
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Ga. 2011) (rejecting the argument that a defendant regularly solicits business in
Georgia by operating websites that are accessible in Georgia as well as
everywhere else).
Third, in a case such as this where Plaintiff relies on specific, rather than
general, jurisdiction, “[i]t is well established that in order for the minimum
contacts requirement to be met, the contacts must be related to the plaintiff’s
cause of action.” Barton S. Co., Inc. v. Manhole Barrier Sys., Inc., 318 F. Supp.
2d 1174, 1178 (N.D. Ga. 2004); see also Sloss Indus. Corp. v. Eurisol, 488 F.3d
922, 925 (11th Cir. 2007).
Plaintiff argues that the section of Defendants’ website that allowed for
individuals to make comments and to communicate with Defendants and each
other satisfies the statute because this constitutes an interactive website on
which a visitor can exchange information with a host computer.6 (Pl.’s Opp’n,
Dkt. [15] at 14.) Plaintiff asserts that Defendants’ website is also interactive
because visitors can access various calculators to assess Iraqi Dinar purchases
that they have already made or are contemplating making. (Id. at 15.) Plaintiff
6
Plaintiff states that the “comments” feature of Defendants’ website has now
been removed. (Id. at 14. n.3.)
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contends that although visitors are not making purchases through the site, their
interactions with the site may determine whether they enter into subsequent
transactions to buy or sell Iraqi Dinar, which constitutes commerce. (Id.)
The Court, however, finds that Plaintiff’s cause of action for bad links is
not related to the comments section and calculator of Defendants’ website.
Those individuals who chose to post a comment or used the calculator had
nothing to do with the alleged posting of bad links. See Schutz Container Sys.,
Inc. v. Mauser Corp., No. 1:09-CV-03609-RWS, 2010 WL 5087865, at *3
(N.D. Ga. Dec. 7, 2010) (interactivity of website was insufficient to establish
personal jurisdiction because the cause of action was not related to the
interactive nature of the website); Imageline, Inc. v. Fotolia LLC, 663 F. Supp.
2d 1367, 1376 (N.D. Ga. 2009) (no personal jurisdiction over website operator
where the cause of action was not related to the interactive nature of the
website).
Additionally, Plaintiff argues that the commercial nature of Defendants’
website, through the selling of electronic books and advertisements, satisfies
Georgia’s Long-Arm statute. Mr. Maurer states that the website generates
revenue in two ways: (1) revenue from the selling of electronic books
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containing cautionary information regarding the Dinar; and (2) advertising
revenue. (Maurer Aff. ¶ 21.) With regard to the books, Mr. Maurer explains in
his affidavit that from October 2008 until June 2012 Defendants’ website
offered electronic books for sale through a third-party vendor. (Id. ¶ 26.)7
During this period, a total of 1,427 books were sold, with only fourteen books
being sold to Georgia residents. (Id.) This amounts to less than 1% of all book
sales being sold to Georgia residents. (Id.) Mr. Maurer states that the total
amount of revenue generated for all fourteen books sold to Georgia residents
was less than 1% of the total revenue generated during the period the books
were available for sale. (Id. at 27.) Mr. Maurer affirms that neither he nor
Monetizers had any direct contact with the purchasers of the electronic books
and that the third-party vendor collected payments and delivered the books. (Id.
at 29.) This third-party vendor then sent a percentage of sale proceeds to nonparty James Maurer LLC. (Id.)
Based on this evidence, the Court finds that those individuals who
purchased an electronic book from Defendants’ website have no relation to
Plaintiff’s claims against Defendants for posting bad links. Moreover,
7
The website no longer offers electronic books for sale. (Id.)
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Monetizers has not sold an electronic book to any Georgia resident since May
2011, which is almost an entire year before Sterling alleges that Defendants
began their bad link campaign. (Defs. Brief, Dkt. [11-1] at 21-22; Maurer Aff.
¶ 26.)
With regard to advertisements, Mr. Maurer states that Monetizers obtains
advertisers for the website through Google Adsense, which allows Google to
provide Monetizers with a code that Monetizers inserts into the website.
(Maurer Aff. ¶ 22.) Google is then able to place ads on the website without any
further input from Monetizers. (Id.) Plaintiff has failed to show any relation
between its allegations of a bad link campaign and advertisements on
Defendants’ website.
Fourth, Plaintiff and Defendants rely on the sliding scale test from Zippo
Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997), to argue
their respective positions on jurisdiction. The court in Zippo distinguished
among three categories of websites:
[T]he likelihood that personal jurisdiction can be constitutionally
exercised is directly proportionate to the nature and quality of
commercial activity that an entity conducts over the Internet. This
sliding scale is consistent with well developed personal jurisdiction
principles. At one end of the spectrum are situations where a
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defendant clearly does business over the Internet. If the defendant
enters into contracts with residents of a foreign jurisdiction that
involve the knowing and repeated transmission of computer files
over the Internet, personal jurisdiction is proper. At the opposite
end are situations where a defendant has simply posted information
on an Internet Web site which is accessible to users in foreign
jurisdictions. A passive Web site that does little more than make
information available to those who are interested in it is not
grounds for the exercise of personal jurisdiction. The middle
ground is occupied by interactive Web sites where a user can
exchange information with the host computer. In these cases, the
exercise of jurisdiction is determined by examining the level of
interactivity and commercial nature of the exchange of information
that occurs on the Web site.
952 F. Supp. at 1124.8
Defendants’ website falls into the middle ground: it is an interactive
website where users can exchange information with the host computer, whether
to buy a book, post a comment, or use a calculator. Therefore, the Court will
examine the level of interactivity and commercial nature of Defendants’
website. See Imageline, Inc., 663 F. Supp. 2d at 1377.
8
As the Court has recognized, the “Eleventh Circuit has not stated whether the
Zippo ‘sliding scale’ test applies in determining when specific jurisdiction exists over
nonresident defendants that operate primarily on the Internet.” Imageline, Inc., 663 F.
Supp. 2d at 1376 n.7 (citing Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210,
1220 n.26 (11th Cir. 2009)). Nevertheless, the Court will address the parties’
arguments under this test even though it has not yet been expressly adopted in this
circuit. See Imageline, Inc., 663 F. Supp. 2d at 1376 n.7
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The Court finds that the commercial nature as well as the level of
interactivity are low. As Mr. Maurer states in his affidavit, the purpose of
Defendants’ website is to provide information to the general public about the
risks of purchasing the Iraqi Dinar currency, and therefore, the interactive and
commercial components are not the primary purposes of the website. (Maurer
Aff. ¶¶ 19-20.) The website does not offer Iraqi Dinar for sale. (Id.) The
purpose is not to engage in commercial transactions or share files over the
Internet. (See id.) Additionally, the exchange of information, such as posting
comments and using the calculator, are not commercial but rather informational.
The sharing of information does not make website operators subject to
jurisdiction wherever the public may view such information. See Barrett v.
Catacombs Press, 44 F. Supp. 2d 717, 731 (E.D. Pa. 1999) (noting that “the
exercise of personal jurisdiction over non-commercial on-line speech that does
not purposefully target any forum would result in hindering the wide range of
discussion permissible” on the internet).
Furthermore, the sale of fourteen books represents a low level of
commercial activity with Georgia residents over the span of three and a half
years. Moreover, there is no evidence that Defendants’ website specifically
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targeted or solicited Georgia residents. Thus, under the Zippo sliding scale,
Defendants’ website does not establish personal jurisdiction over Defendants.
Fifth, based on the evidence provided, Defendants’ selling of electronic
books to Georgia residents was not regular, and Defendants did not derive
substantial revenue from this commercial activity. See Sol Melia, SA v. Brown,
301 Ga. App. 760, 767 (2009) (finding 0.1% revenue from Georgia residents to
be insubstantial). In fact, Mr. Maurer states that neither he nor Monetizers ever
received any revenue from the sales of the electronic books or any other goods
or services. (Maurer Aff. ¶ 30.)
Sixth, as for Plaintiff’s advertisements that appear on Defendants’
website, Plaintiff asserts that Defendants did business with Plaintiff by allowing
Sterling’s advertisements to appear on Defendants’ website. (Pl.’s Opp’n, Dkt.
[15] at 16.) Plaintiff contends that Defendants could have blocked these ads but
chose not to do so, and therefore, Defendants knowingly accepted revenue from
Sterling by placing Sterling’s ads on their website. (Id. at 17.) Additionally,
Plaintiff notes that Defendants gained credibility and revenues from increased
traffic by having Plaintiff’s advertisements on Defendants’ website. (Id.)
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Mr. Maurer states in his affidavit that neither he nor Monetizers had any
direct contact with any advertiser, including Plaintiff, and instead placed
advertisements through Google Adsense. (Maurer Aff. ¶¶ 22-23.)
Additionally, neither Mr. Maurer nor Monetizers received any revenue from the
website. (Id. ¶ 23.) Instead, all revenue was received by non-party James
Maurer LLC. (Id.)
The Eleventh Circuit has found that the “fact that a particular website
displays an advertisement that is viewable in Georgia or shows a company that
does business in Georgia does not, by itself, mean that the website owner had
any contact with Georgia.” Henriquez, 500 F. App’x at 829. Therefore, the
Court finds that Defendants’ website’s display of advertisements viewable in
Georgia or featuring companies, such as Plaintiff, who do business in Georgia,
is insufficient to establish personal jurisdiction over Defendants.9
Seventh, Plaintiff contends that the Court has personal jurisdiction over
Defendants because Defendants have a business relationship with Google and
9
The parties dispute whether Defendants had control to block certain
advertisements, such as the ones from Sterling. In light of the Eleventh Circuit’s
finding in Henriquez, whether Defendants could have blocked the advertisements
from appearing on Defendants’ website is irrelevant. 500 F. App’x at 829.
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Google has an office in Georgia. (Pl.’s Opp’n, Dkt. [15] at 16.) “Because
Google has both a large office in Atlanta and one of its six North American data
centers just outside of Atlanta, it is highly likely that Defendants’ exchanges
with Google, the ads that appear on Defendants’ Website and/or the income that
Defendants’ Website generates have regular contact with Google in Georgia.”
(Id. at 16.) Therefore, Plaintiff asserts that Defendants conduct regular business
in Georgia. (Id.)
This argument was rejected in Celorio v. Google Inc., 872 F. Supp. 2d
1327 (N.D. Fla. 2012) report and recommendation adopted, No.
1:11CV79-SPM/GRJ, 2012 WL 1795213 (N.D. Fla. May 17, 2012). In that
case, the plaintiff argued that personal jurisdiction was established over the
defendants because the defendants had a business relationship with Google and
Google did business in Florida. Id. at 1333. The court found that the
defendants and Google had “agreed to an independent contractor relationship,
and to extend jurisdiction in Florida to any company that contracts with Google,
an international corporation, would thwart the due process protections that
underlie the personal jurisdiction analysis.” Id. at 1333-34. This Court agrees.
The Court finds that any contact between Google and Defendants is not
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sufficient to show that Defendants regularly do or solicit business in Georgia or
engage in a persistent course of conduct in Georgia.
Eighth, the only evidence of any contact between Plaintiff and
Defendants is when Plaintiff’s agent made an offer to purchase Defendants’
website in 2009. (Maurer Aff. ¶ 31.) Mr. Maurer explains that Plaintiff’s agent
initiated the communications and telephoned him with the offer, which he then
declined on behalf of Monetizers. (Id.)10 This minimal contact is not sufficient
to establish personal jurisdiction over Defendants.
Finally, Plaintiff has sued Mr. Maurer individually. To be clear, the
discussion above concerns actions Mr. Maurer took on behalf of Monetizers. A
“nonresident individual cannot be subject to personal jurisdiction based solely
upon acts in Georgia taken in his or her corporate capacity.” Hi-Tech
Pharmaceuticals, Inc. v. Demelo, No.1:07-CV-1934-RWS, 2009 WL 901156, at
*3 (N.D. Ga. Mar. 31, 2009) (quotation omitted). Instead, “[c]orporate officers
are only individually subject to jurisdiction if engaging in business transactions
10
Mr. Maurer states that the same individual contacted him again in 2011 about
buying Defendants’ website, but at that time, he informed Mr. Maurer that he was no
longer affiliated with Plaintiff. (Maurer Aff. ¶ 32) Even if he had been still affiliated,
this communication is insufficient to establish personal jurisdiction.
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on their own behalf and for their own ‘substantial financial benefit,’ rather than
engaging in strictly corporate acts on behalf of the corporation.” Id.
Mr. Maurer states that he has never been a resident of Georgia, and he
has never owned property, had an office, kept any financial account, or had a
phone listing in Georgia. (Maurer Aff. ¶¶ 5, 7-9.) In fact, Mr. Maurer has only
visited Georgia once, during a brief layover at the airport.11 (Id. ¶ 10.) He has
never done business in Georgia or transacted business with any Georgia
resident. (Id. ¶¶ 11-12.). Additionally, he states that he has never solicited
business in Georgia or derived any revenue from selling goods or rendering
services in Georgia. (Id. ¶ 13.) Therefore, the Court has no personal
jurisdiction over Mr. Maurer individually. See Hi-Tech Pharmaceuticals, Inc.,
2009 WL 901156, at *3-4.
For all of these reasons, the Court finds that it does not have personal
jurisdiction over Defendants under Georgia’s Long-Arm statute. Therefore, the
Court need not determine whether jurisdiction is proper under the Due Process
Clause. See Henriquez, 500 F. App’x at 829.
11
During this layover, he did not perform any actions related to Iraqidinar.org,
and the trip was not related to transacting any business for himself or Monetizers. (Id.
¶ 10.)
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II.
Plaintiff’s Motion for Permission to Conduct Jurisdictional
Discovery
Throughout Plaintiff’s Response in Opposition to Defendants’ Motion to
Dismiss, Plaintiff requests an opportunity to conduct jurisdictional discovery.
(Dkt. [15] at 5-7, 15-16.) Plaintiff has also made a separate Motion For
Permission to Conduct Jurisdictional Discovery. (Dkt. [14].) In the motion,
Plaintiff requests that if the Court does not deny Defendants’ Motion to Dismiss
(Dkt. [11]), that the Court grant Plaintiff an opportunity to conduct
jurisdictional discovery so that the Court can make a ruling based on all facts
relevant to personal jurisdiction. (Pl.’s Mot. to Conduct Jurisdictional
Discovery (“Pl.’s Disc. Mot.”), Dkt. [14] at 14.)
“The plaintiff should be given the opportunity to discover facts that
would support his allegations of jurisdiction.” Henriquez, 500 F. App’x at 830.
“Nonetheless, a district court may properly refuse or limit jurisdictional
discovery if the plaintiff has not made a sufficient showing that there may be a
basis for exercise of jurisdiction, or if the proposed discovery seems unlikely to
shed light on the jurisdictional question.” Cold Smoke Capital, LLC v. Gross,
No. 1:11-CV-3558-WSD, 2012 WL 3612626, at *8 (N.D. Ga. Aug. 21, 2012)
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(quoting Charles Alan Wright et al., 8 Federal Practice and Procedure § 2008.3
(2010)). Moreover, “a district court does not abuse its discretion in dismissing
the plaintiff’s action for lack of personal jurisdiction, even before jurisdictional
discovery occurs, when the plaintiff has not diligently pursued such discovery
despite the opportunity to do so.” Henriquez, 500 F. App’x at 830. “The
purpose of jurisdictional discovery is to ascertain the truth of the allegations or
facts underlying the assertion of personal jurisdiction. It is not a vehicle for a
fishing expedition in hopes that discovery will sustain the exercise of personal
jurisdiction.” Atlantis Hydroponics, Inc. v. Int’l Growers Supply, Inc., 915 F.
Supp. 2d 1365 (N.D. Ga. 2013) (quotation omitted).
As discussed above, the Court has found that Plaintiff failed to make a
prima facie showing of personal jurisdiction over Defendants based on the
allegations in Plaintiff’s First Amended Complaint. The jurisdictional facts are
not in dispute. Accordingly, Plaintiff does not have a right to conduct
jurisdictional discovery. See Cold Smoke Capital, LLC, 2012 WL 3612626, at
*8 (denying request to conduct jurisdictional discovery where the plaintiff
failed to make a prima facie showing of personal jurisdiction and the
jurisdictional facts were not in dispute).
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Nevertheless, the Court will address the merits of the parties’ arguments.
In both its Opposition to Defendants’ Motion to Dismiss and Reply in Support
of its Motion to Conduct Jurisdictional Discovery, Plaintiff contends that
jurisdictional discovery would show whether Defendants obtained the
information for its website from sources within Georgia. (Pl.’s Opp’n at 5; Pl.’s
Reply in Supp. of Mot. for Jurisdictional Disc., Dkt. [20] at 4-5.) Even if
discovery would show this, Plaintiff has not shown how this information would
establish that Defendants meet O.C.G.A. § 9-10-91(3). Plaintiff also seeks
information about whether the individuals posting comments on Defendants’
website are residents of Georgia. (Pl.’s Opp’n at 6; Pl.’s Reply in Supp. of Mot.
for Jurisdictional Disc., Dkt. [20] at 5.) However, the Court has already found
that the comments section of Defendants’ website has a low level of
interactivity, is not related to Plaintiff’s cause of action, and is informational
rather than commercial. Therefore, the residency of the posters will not lead to
establishing jurisdiction.
Plaintiff also seeks information about the direct impact Google’s data
center in Georgia and Atlanta office had on Defendants and information related
to Defendants’ Google Adsense account for placing advertisements. (Pl.’s
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Opp’n at 7; Pl.’s Reply in Supp. of Mot. for Jurisdictional Disc., Dkt. [20] at 6.)
Again, the Court has found that Defendants’ relationship with Google does not
confer personal jurisdiction over Defendants and the fact that Defendants’
website displays an advertisement that is viewable in Georgia or shows a
company that does business in Georgia is not sufficient to establish the
necessary contacts in Georgia. Therefore, additional discovery on these issues
is unwarranted.
Furthermore, Plaintiff seeks information about the other websites
Defendants operate, these websites’ contacts with Georgia, and whether these
websites regularly conduct business in Georgia. (Pl.’s Opp’n at 7; Pl.’s Reply
in Supp. of Mot. for Jurisdictional Disc., Dkt. [20] at 7.) Mr. Maurer states in
his affidavit that Monetizers owns BadBedBugs.com and Bed-Bugs.org, which
are websites that provide do-it-yourself information to consumers and assist
consumers with locating professional exterminators. (Maurer Aff. ¶ 35.)
Plaintiff has not shown how facts about Defendants’ other, unrelated websites
are likely to shed light on the jurisdictional question here, and instead, the Court
finds that allowing Plaintiff to conduct this discovery would amount to a fishing
expedition.
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Finally, in its original Motion to Conduct Jurisdictional Discovery,
Plaintiff makes conclusory requests for discovery of: (1) Defendants’ contacts
and transactions of business in Georgia; (2) Defendants’ knowledge of Plaintiff
and its location in Georgia; (3) the harm Defendants intended by placing the
bad links; (4) the other contacts Defendants have with Georgia; and (5)
Defendants’ knowledge of Plaintiff’s location prior to undertaking the bad links
campaign. (Pl.’s Disc. Mot., Dkt. [14] at 4.) These requests fail to suggest with
reasonable particularity the possible existence of contacts between Defendants
and Georgia sufficient to justify permitting discovery. See Schutz Container
Sys., Inc., 2010 WL 5087865, at *4. The Court finds that none of these topics
are likely to shed light on the jurisdictional question, and the Court will not
permit Plaintiff to engage in a fishing expedition based on Plaintiff’s hunch
about certain facts. See Atlantis Hydroponics, Inc., 915 F. Supp. 2d at 1365.
Accordingly, the Court denies Plaintiff’s request to conduct jurisdictional
discovery.
III.
Plaintiff’s Motion for Leave to Amend the Complaint
Plaintiff moves for leave to amend its complaint to add James Maurer
LLC as a defendant pursuant to Fed. R. Civ. P. 15(a)(2). (Dkt. [16].) Under
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this Rule, “a party may amend its pleading only with the opposing party’s
written consent or the court’s leave. The court should freely give leave when
justice so requires.” FED. R. CIV. P. 15(a)(2). However, the Court “may deny
leave to amend on numerous grounds, including the futility of the amendment.”
Patel v. Ga. Dep’t BHDD, 485 F. App’x 982, 982 (11th Cir. 2012). “Futility
justifies the denial of leave to amend where the complaint, as amended, would
still be subject to dismissal.” Id.
Plaintiff makes the same arguments for finding personal jurisdiction over
James Maurer LLC as it did for finding jurisdiction over Defendants, and
therefore, Plaintiff seeks jurisdiction over a non-resident pursuant to subsection
3 of Georgia’s Long-Arm statute. (Pl.’s Reply in Supp. of Mot. for Leave to
Amend, Dkt. [21] at 4-5.) The Court has found above that those arguments do
not show personal jurisdiction over Defendants, and the Court’s analysis applies
equally to James Maurer LLC.
The one additional argument Plaintiff makes is that James Maurer LLC
receives the revenue generated by Defendants’ website. (Pl.’s Mot. for Leave
to Amend, Dkt. [16] at 3; Pl.’s Reply in Supp. of Mot. for Leave to Amend,
Dkt. [21] at 3-4.) As the Court has explained above and as Mr. Maurer states in
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his affidavit, Defendants’ website generates revenue in two ways: (1) selling
electronic books; and (2) selling advertisement space. (Maurer Aff. ¶ 21.)
The revenue received by James Maurer LLC for the fourteen books sold
to Georgia residents was less than 1% of total revenue. This is not sufficient to
meet the substantial revenue requirement. See O.C.G.A. § 9-10-91(3).
Plaintiff has not alleged any facts to show that the revenue James Maurer
LLC received from advertisements featuring Georgia companies or targeting
Georgia residents was substantial. As explained above, the fact that
Defendants’ website displayed an ad for Sterling does not, by itself, mean that
the website owner had any contact with Georgia. See Henriquez, 500 F. App’x
at 829. Mr. Maurer states in his affidavit that Google collects payments from
advertisers who choose to place their advertisements on the website, and then
Google sends a percentage of those payments to James Maurer LLC on a
monthly basis. (Maurer Aff. ¶ 23.) Mr. Maurer particularly notes that no
payments by an advertiser, including Plaintiff, are made directly to James
Maurer LLC, and instead, advertisers make payments directly to Google. (Id. ¶
25.) Thus, there does not appear to be a connection specifically between James
Maurer LLC and Plaintiff for advertisements.
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Furthermore, Plaintiff has not shown that James Maurer LLC
purposefully solicits, conducts, or engages in business with Plaintiff or other
advertisers from Georgia. Instead, the evidence shows that Monetizers obtains
advertisers through Google Adsense and then Google places the ads on
Defendants’ website. (Id. ¶ 22.) Even if Defendants and James Maurer LLC
have control over which advertisements they showcase on their website, the
Court does not find that this shows that James Maurer LLC met subsection 3 of
Georgia’s Long-Arm statute and had sufficient contacts with Georgia to be
brought before this Court. Plaintiff’s theory would create a slippery slope of
establishing personal jurisdiction over James Maurer LLC in any court based on
any advertisement Defendants show on their website.
Finally, Georgia residents’ purchases of electronic books from
Defendants’ website and advertisements on Defendant’s website are not related
to Plaintiff’s bad links cause of action. In fact, the fourteen books purchased by
Georgia residents occurred a year and a half before Defendants’ allegedly
wrongful conduct.
In sum, Plaintiff has failed to show sufficient facts to establish personal
jurisdiction over James Maurer LLC. Therefore, granting Plaintiff leave to
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amend its complaint to add James Maurer LLC as a defendant in this case
would be futile. See W.S. McDuffie & Assocs., P.C. v. Owens, 682 F. Supp.
1226, 1230 (N.D. Ga. 1988) (denying leave to amend the complaint because the
plaintiff could not show that the court would have personal jurisdiction over the
proposed defendant and therefore the amendment would be futile).
Conclusion
In accordance with the foregoing, Defendants’ Motion To Dismiss For
Lack of Personal Jurisdiction [11] is GRANTED; Plaintiff’s Motion For
Permission To Conduct Jurisdictional Discovery [14] is DENIED; Plaintiff’s
Motion For Leave To Amend Complaint [16] is DENIED; and Plaintiff’s
complaint is DISMISSED WITHOUT PREJUDICE.
SO ORDERED, this 5th
day of August, 2013.
_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
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