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S. MORANTZ, INC. v. HANG & SHINE ULTRASONICS

December 20, 1999

S. MORANTZ, INC. PLAINTIFF,
v.
HANG & SHINE ULTRASONICS, INC., DEFENDANT.



The opinion of the court was delivered by: Lowell A. Reed, Jr., Senior Judge.

MEMORANDUM

Defendant Hang & Shine Ultrasonics, Inc., has filed a motion to dismiss this trademark infringement action for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) and for improper venue pursuant to Fed.R.Civ.P. 12(b)(3). Upon consideration of defendant's motion (Document No. 5), plaintiff's response (Document No. 19), and the pleadings and affidavits submitted therewith, defendant's motion will be granted and the case will be transferred to the United States District Court for the Western District of New York.

I. BACKGROUND

Plaintiff S. Morantz, Inc. ("Morantz"), is a Pennsylvania corporation that manufactures and sells Ultrasonic cleaning machines. The Ultrasonic machines use sound waves and cleaning agents to remove dirt and residue from household items such as window blinds. Morantz's only place of business is in Philadelphia, within the Eastern District of Pennsylvania, though it apparently makes sales nationwide. In 1991, Morantz sold one of its machines to defendant Hang & Shine Ultrasonics, Inc. ("Hang & Shine"), a New York corporation with its principal place of business in Alden, New York, within the Western District of New York. Hang & Shine is in the business of cleaning window blinds, and it maintains a presence on the World Wide Web and a toll-free, 1-800 number.

Morantz alleges that Hang & Shine infringed upon Morantz's registered trademark by using, on its web site and elsewhere, a logo depicting a woman scrubbing blinds over a tub of water.*fn1 Morantz has asserted claims under the Lanham Act, 15 U.S.C. § 1114 and 15 U.S.C. § 1125, under Pennsylvania statute, 54 Pa.C.S.A. § 1124 and 73 Pa. Stat. § 201-2, et seq., and at common law.

Hang & Shine has moved to dismiss the present action on the grounds that jurisdiction is lacking and venue is improper. Hang & Shine claims that its contacts with Pennsylvania are minimal and that "the substantial part of the events or omissions giving rise to the claim occurred" outside the Eastern District of Pennsylvania. Morantz counters that Hang & Shine's contacts with Pennsylvania through its web site and toll-free number were substantial and that Morantz's choice of forum should be respected.

II.     ANALYSIS

Once defendant has raised a jurisdictional issue, the plaintiff bears the burden of establishing with reasonable particularity sufficient contacts to support jurisdiction. See Provident National Bank v. California Federal Savings & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). Plaintiff may establish either specific jurisdiction, when the cause of action arises out of the defendant's contacts with the forum, or general jurisdiction, when the plaintiff's claim does not arise out of defendant's contacts with the forum, but defendant's contacts with the forum are "continuous and systematic." See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 1873 (1984). Both parties agree that Hang & Shine's contacts with Pennsylvania were not "continuous and systematic" in a manner sufficient to establish general jurisdiction, and therefore my analysis will focus on specific jurisdiction.

Plaintiff must satisfy a three-part test to establish specific jurisdiction. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1123-24 (E.D.Pa. 1997). "First, the plaintiff must show that defendant has constitutionally sufficient `minimum contacts' with the forum," Imo Industries, Inc. v. Keirker AG, 155 F.3d 254, 260 (3d Cir. 1998); that is, defendant must have purposefully availed itself of jurisdiction through contacts that were more than merely "random," "fortuitous," or "attenuated." See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183 (1985). Second, plaintiff's claims must arise out of those contacts. See Zippo, 952 F. Supp. at 1122-23. Third, the court must determine that the exercise of jurisdiction would be reasonable; in other words, the exercise of jurisdiction must comport with "traditional notions of fair play and substantial justice." See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343 (1940)).

Plaintiff's argument on the first and most critical element rests almost exclusively on Hang & Shine's web site. The exponential growth of the Internet, the arrival of the World Wide Web as a business medium, and the jurisdiction-confounding nature of cyberspace have spawned new strains of jurisdictional analysis.*fn2 A few common themes have emerged in courts' approaches to personal jurisdiction and minimum contacts on the information superhighway.

First, a mere presence on the World Wide Web does not establish the minimum contacts necessary to subject a corporation to personal jurisdiction on a worldwide basis. See Harbuck v. Aramco, No. 99-1971, 1999 U.S. Dist. LEXIS 16892, at *21 ("[T]he web site amounts to `passive' advertising at best; and subjecting ADAMS to this court's jurisdiction because of the web site would be unreasonable."); Molnlycke Health Care AB v. Dumex Medical Surgical Products Ltd., No. 99-1725, 1999 U.S. Dist. LEXIS 13678, at *9 (E.D.Pa. Sept. 8, 1999) ("[T]he establishment of a web site through which customers can order products does not, on its own, suffice to establish general jurisdiction."); Hurley v. Cancun Playa Oasis Int'l Hotels, No. 99-574, 1999 U.S. Dist. LEXIS 13716, at *9 (E.D.Pa. Aug. 31, 1999) (a hotel's Internet presence alone did not subject it to personal jurisdiction in Pennsylvania); Zippo, 952 F. Supp. at 1124 ("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."); Edberg v. Neogen Corporation, 17 F. Supp.2d 104, 115 (D.Conn. 1998) ("[T]he minimum contacts requirements of the Due Process Clause are not met by virtue of defendant's maintenance of a Web site on the Internet."); Cybersell, Inc., AZ v. Cybersell, Inc., FL, 130 F.3d 414, 418 (9th Cir. 1997) ("[S]o far as we are aware, no court has ever held that an Internet advertisement alone is sufficient to subject the advertiser to jurisdiction in the plaintiff's home state . . . ."); but see Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D.Conn. 1996) (maintaining a web site and telephone number is sufficient to establish personal jurisdiction in every state); Heroes, Inc. v. Heroes Foundation, 958 F. Supp. 1 (D.D.C. 1996) (web site that explicitly solicited donations and provided toll-free number subject to jurisdiction).*fn3

Second, the minimum contacts analysis in cases involving the Internet is conducted on a "sliding scale," on which the constitutionality of the exercise of personal jurisdiction is directly proportional to the level of commercial interactivity on a corporation's web site. See Zippo, 952 F. Supp. at 1124. At one end of the continuum are passive sites that merely post information that is available to anyone with access to the Internet; on the other end are highly interactive sites through which a corporation conducts business over the Internet. See id. The latter sites typically involve a high volume of deliberate exchanges of information through the site, including the formation of contracts. See id. In the middle are "interactive Web sites where a user can exchange information with the host computer." Id. The exercise of personal jurisdiction in cases involving sites in this middle category hinges on the level of commercial information exchange that takes place on the web site. See id.

Third, a web site targeted at a particular jurisdiction is likely to give rise to personal jurisdiction. See Molnlycke Health Care, 1999 U.S. Dist. LEXIS 13678, at * 11 ("Plaintiff has made no showing that defendant's websites targeted Pennsylvania.").*fn4 While the posting of a generalized advertisement on the Internet is insufficient to subject the advertiser to jurisdiction in the plaintiff's home state, minimum contacts may be found when there is "`something more' to indicate that the defendant ...


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