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Connecticut Long-Arm Statute Did Not Reach Canadian Companies That Allegedly ''Scraped'' Data from In-State Company's Website

Wednesday, September 14, 2011

West World Media, LLC v. Ikamobile Ltd., No. 11-CV-00169, 2011 BL 209561 (D. Conn. Aug. 12, 2011) The U.S. District Court for the District of Connecticut held that the Connecticut long-arm statute did not provide a basis for exercising personal jurisdiction over nonresident companies that allegedly misappropriated movie show time data by "scraping" the information from a Connecticut-based company's website.

Plaintiff's Database and Website

Plaintiff West World Media, LLC, a Connecticut company, brought claims against defendants Ikamobile Ltd. and Ikamobile Corp. (collectively, "Ikamobile"), Canadian companies based in British Columbia, Canada. West World alleged that Ikamobile was liable for the tort of "hot news" misappropriation and for violations of the Connecticut Unfair Trade Practices Act. According to West World's complaint, West World collects, organizes into a database, and makes available to paying licensees movie show time data through a direct feed delivered over the Internet. The service enables Internet users to purchase movie tickets from its website, MovieTickets.com. Ikamobile has developed an application for mobile phones that use the Google Android operating system. The application, known as "Movie Finder," provides access to movie show times for theatres throughout the United States and around the world. Ikamobile at 3. Ikamobile does not charge users for use of its application. Instead, it sells advertising to companies whose advertisements are displayed when the application is running. Ikamobile allegedly proposed to West World a business deal in which Ikamobile would re-direct its Movie Finder users to West World's website to purchase tickets, and West World would pay a percentage of its profits to Ikamobile. West World did not accept Ikamobile's offer, but became suspicious that Ikamobile was obtaining its movie listings by "scraping" the data—i.e., extracting the data via an automated process—from MovieTickets.com. Id. at 5. West World allegedly confirmed that its database was the source of Ikamobile's information by "seeding" its database with erroneous listings, which also allegedly appeared in Ikamobile's data. West World brought suit against Ikamobile in Connecticut federal court, and Ikamobile moved to dismiss the action for lack of personal jurisdiction.

Jurisdictional Analysis as a Two-Step Inquiry

The court explained that in order to exercise personal jurisdiction over a nonresident defendant, the defendant's activities must meet the requirements both of the state's long-arm statute and of the due process clause of the federal constitution. Courts consider the applicability of the long-arm statute before determining the constitutional issue. If the long-arm statute does not permit the assertion of jurisdiction, it is unnecessary to consider the due process question; the action must be dismissed. West World argued that the court could exercise jurisdiction over Ikamobile pursuant to a provision of the long-arm statute, Conn. Gen. Stat. § 33-929(f)(2), which provides in part that a Connecticut resident or person with a place of business in the state may maintain an action against a nonresident defendant on any claim that "arises out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the state."

Solicitation of Connecticut Customers as Basis for Long-Arm Jurisdiction

Courts have interpreted Section 33-929 broadly, and "have focused upon whether a defendant's activities are directed at increasing that defendant's general consumer bases." Powder Coating Consultants v. Powder Coating Institute, No. 09-CV-00200, 2010 BL 31215 (D. Conn. Feb. 12, 2010). If a defendant's activities do not specifically target Connecticut consumers, Section 33-929(f)(2) does not allow a court to exercise jurisdiction. Courts have sustained the application of this statute where a nonresident defendant has advertised specifically to Connecticut, see, e.g., Thomason v. Chemical Bank, 234 Conn. 281, 298 (1995), or has sent advertisements through mail and e-mail to Connecticut residents on its mailing list, see, e.g., Powder Coating Consultants, 2010 BL 31215. However, advertisements that may be viewed in Connecticut but that have not been purposefully directed at the state do not satisfy the requirements of Section 33-929(f)(2). See American Wholesalers Underwriting, Ltd. v. American Wholesale Insurance Group, Inc., 312 F. Supp. 2d 247, 256 (D. Conn. 2004). Moreover, the mere advertisement of a defendant's services via a website is an insufficient basis for the exercise of jurisdiction, at least where there is no evidence that the advertisement was directed at Connecticut to a greater degree than to other states. See Milne v. Catuogno Court Reporting Services, Inc., 239 F. Supp. 2d 195, 201 (D. Conn. 2002).

Soliciting In-State Users in Order to Attract Advertisers Is Not Solicitation of Business

In the instant case, the court observed that Ikamobile gathers information about movie listings and show times at theaters in Connecticut, and attempts to make its website attractive to movie customers in the state. However, its "website does not target individuals who patronize theaters in Connecticut as potential customers from whom Ikamobile hopes to get business." Ikamobile at 13. Instead, Ikamobile seeks to reach Connecticut moviegoers "for the purpose of soliciting and continuing to get business from Ikamobile's advertisers, who give or will give business to Ikamobile because of the information Ikamobile puts on its website." Id. The court reasoned that "[t]he fact that Ikamobile places on its website information that would be of interest to Connecticut consumers is presumably used by Ikamobile in soliciting business from its advertisers and potential advertisers on the website, but that is not the same as Ikamobile soliciting business from Connecticut consumers." Id. The court concluded that Ikamobile's actions "do not constitute solicitation of business in Connecticut and it has not purposefully availed itself of the laws of the State of Connecticut as contemplated by § 33-929(f)(2)." Id. Accordingly, the court found that the Connecticut long-arm statute did not permit it to exercise jurisdiction over Ikamobile. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy. ©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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