Ninth Circuit Court Finds Specific Jurisdiction in California Over Ohio-Based Celebrity Gossip Website

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Laura McQuade | Bloomberg Law Mavrix Photo, Inc. v. Brand Technologies, Inc., No. 09-56134, 2011 BL 204489 (9th Cir. Aug. 8, 2011) The U.S. Court of Appeals for the Ninth Circuit reversed the district court's holding that it did not have personal jurisdiction over Brand Technologies, Inc., the operator of an Ohio-based celebrity gossip website. In reversing the district court's decision, the appellate court found that it had specific personal jurisdiction over Brand because of its contacts with California that were sufficiently related to Brand's copyright infringement dispute with the celebrity photography agency, Mavrix Photo, Inc. The court concluded that a nationally-known website with a scope that "appeals to, and profits from" an audience in a particular state, is "expressly aimed" at that state for the purposes of determining whether the exercise of specific personal jurisdiction is appropriate.

Mavrix's Copyright Infringement Claim Against Brand

Mavrix is a Florida-based photography agency, with an office in Los Angeles, which pays photographers for candid celebrity photos and then licenses those images to celebrity magazines. Brand operates a celebrity website out of its offices in Toledo, Ohio. A Mavrix photographer took pictures of Stacy Ferguson, also known as "Fergie" from the musical group the Black Eyed Peas, and her husband, the actor Josh Duhamel, in the Bahamas. According to Mavrix, Brand reposted the photos without its authorization, thus infringing its copyright in the photos. Mavrix sued Brand for copyright infringement in the U.S. District Court for the Central District of California, and Brand moved to dismiss for lack of personal jurisdiction. The district court granted Brand's motion to dismiss and Mavrix appealed.

No General Personal Jurisdiction Over Brand

The appellate court found that Brand's contacts with California did not meet the standard for the court to exercise general personal jurisdiction over Brand. First, the court noted that Brand has no offices or staff in California, is not registered to do business in California, has no registered agent for service of process, and pays no California state taxes. In short, Brand did not "solicit[ ] . . . business in the state," but rather allowed others to solicit business in California. Mavrix at 10344 (quoting Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000)). The court found Brand's "occasional" ticket sales to resident defendants and its relationship with a web design firm that later formed a company in California were also insufficient to establish general jurisdiction, even though that design firm performed website maintenance for Brand, calling it a "fortuitous circumstance." Id. at 10345 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980)). The court distinguished "doing business with California," which did not give rise to general personal jurisdiction over Brand, as opposed to "doing business in California," which could give rise to the exercise of jurisdiction over Brand, stating: "engaging in commerce with residents of the forum state is not in and of itself the kind of activity that approximates physical presence within the state's borders." Id. (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004)). The court found Mavrix's reliance on Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997), which set forth a "sliding scale" for the "nature and quality of commercial activity that an entity conducts over the Internet," was misplaced because Zippo involved a specific jurisdiction inquiry. Id. at 10346 (quoting Zippo, 952 F. Supp. at 1124). The court reasoned that to exercise general jurisdiction over a non-resident interactive website merely because it featured the same attributes as many websites, such as newsletters, polls, and the uploading of content, would subject most media entities to general jurisdiction in every state. The court concluded that Brand's contacts with California, even considered collectively, were insufficient to support the exercise of general jurisdiction over it.

Court May Exercise Specific Personal Jurisdiction Over Brand

The court set forth the three-prong test for exercising specific personal jurisdiction over Brand:
(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
Mavrix at 10347-10348. If Mavrix demonstrated that the first two prongs were met, then Brand would have to show that the exercise of jurisdiction was unreasonable. The court explained that only the first prong, which involves "purposeful availment" and "purposeful direction," was at issue. Id. at 10348. The court first concluded that Brand's posting of the allegedly infringing photos was an intentional act that was "expressly aimed at the forum state." Id. The court acknowledged its prior "struggle" with the issue of whether intentional conduct on a website is aimed at every state in which the site can be viewed. The court explained that a passive website alone would not satisfy the first prong, but that even a passive website may be subject to specific personal jurisdiction if there was "something more," in the form of "conduct directly targeting the forum." Id. at 10350 (quoting Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1020 (9th Cir. 2002)). In concluding that the exercise of specific personal jurisdiction over Brand was appropriate, the court found "most salient the fact that Brand used Mavrix's copyrighted photos as part of its exploitation of the California market for its own commercial gain." Id. The court noted the celebrity focus of Brand's website resulted in a specific focus on California and its entertainment industry. The court concluded that Brand "anticipated, desired, and achieved a substantial California viewer base" that made up a substantial portion of its business. Id. According to the court, "it does not violate due process to hold Brand answerable in a California court for the contents of a website whose economic value turns, in significant measure, on its appeal to Californians." Id. at 10353. The court found Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984), a case in which the U.S. Supreme Court permitted the exercise of personal jurisdiction over Hustler magazine in New Hampshire, was analogous because both Hustler and Brand's website are large publications attracting nationwide audiences, and both "cultivated their nationwide audiences for commercial gain." Id. The court explained, "where, as here, a website with national viewership and scope appeals to, and profits from, an audience in a particular state, the site's operators can be said to have 'expressly aimed' at that state." Id. at 10354. The court found that Mavrix set forth a prima facie case of Brand's purposeful direction of its activities at California. The court concluded that Brand was subject to specific personal jurisdiction in California, and reversed the district court's dismissal of Mavrix's copyright infringement claim. 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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