MacNeil v. Trambert, 2010 WL 2222805 (Ill. App. 2 Dist. June 3, 2010)

Defendant Trambert, a resident of California, listed a Toyota SUV for sale to the highest bidder on eBay in November of 2008. Defendant was later notified that Plaintiff MacNeil, a resident of Illinois, was the winning bidder, and the two made arrangements for payment and delivery. As part of the eBay Terms and Conditions, MacNeil was responsible for pick-up or shipping of the vehicle. In December, Plaintiff’s agent in California inspected the vehicle and accepted title and possession, and delivered Plaintiff’s cashier’s check, which was drawn on an Illinois bank. After personally inspecting the vehicle Plaintiff discovered that there was no satellite radio and no DVD screens in the headdress, as had been indicated in the eBay listing. In February of 2009, Plaintiff filed an Illinois small claims court action for $2,546 and Defendant moved to dismiss for lack of personal jurisdiction. The trial court granted defendant’s motion and the appellate court affirmed.

A plaintiff has the burden of establishing a prima facie case for jurisdiction when seeking jurisdiction over a nonresident defendant. Bolger v. Nautica International, Inc., 269 Ill. App. 3d 947, 949 (2007). Illinois has a long-arm statute that permits jurisdiction over foreign defendants that comports with the due process requirements of the Constitution. To satisfy federal due process, a defendant must have minimum contacts with the forum state such that defending a lawsuit there would not offend “ ‘ “traditional notions of fair play and substantial justice.” ‘ “ Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d 556, 560 (2003), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102, 66 S. Ct. 154, 158 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278. 283, 61 S. Ct. 339, 343 (1940). In deciding the question of jurisdiction a court will determine whether there was purposeful availment of the benefits and protections of the forum state.

Plaintiff’s complaint averred that the had only seen Defendant’s ads for the vehicle on eBay and that was insufficient to establish general jurisdiction. Plaintiff argued, however, that the court had personal jurisdiction over Defendant because, after listing the car on eBay, which is accessible worldwide, Defendant should have anticipated being brought to court in Illinois if the winning bidder was a resident of Illinois. The appellate court rejected this argument and cited the case of Foley v. Yacht Management Group, Inc., No. 08 – -C – - 7254 (N.D. Ill. July 9, 2009), which also dealt with a failed eBay sale. In Foley, the Defendant refused to accept payment from the winning bidder and the Plaintiff brought suit. In determining whether the court had jurisdiction, the court ruled that Defendant had no tied to the forum state other than the fact that the winning bidder lived there. The Foley court held the Defendant, as an eBay seller, had no control over where the buyer of its item would live and therefore there was no purposeful availment.

While Plaintiff argued that the various telephone calls and emails that occurred between the parties was enough to establish minimum contacts, the court disagreed. Plaintiff also sought to establish jurisdiction based on precedent involving the use of “interactive websites.” Not only does Defendant not run the eBay site, nothing in the record indicated that Defendant’s listings or personal eBay pages were interactive enough to trigger jurisdiction. Plaintiff’s final argument for jurisdiction, that Defendant committed tortuous conduct in the forum, was similarly rejected by the appellate court; the so-called “Effects Doctrine” applies only to intentional torts, and not to breach of contract.

Ultimately Defendant’s business contacts with Illinois were nothing more than random and attenuated and therefore the court was unable to assert jurisdiction in this case.

Ruiz v. Gap, Inc. et a., Case Number 09-15971 (9th Cir. April 12, 2010)

Around September of 2007, two laptops were stolen from a Gap office in Chicago, which contained personal information and social security numbers for approximately 750,000 job applicants, including Plaintiff Ruiz who had applied for a job online. Gap sent a letter to the affected individuals 11 days after the breach and offered 12 months of credit monitoring at no cost as well as advice regarding additional precautions to take. Ruiz did not accept Gap’s offer and brought a class action lawsuit against Gap and Vangent, Inc., the company contracted by Gap to process the online applications. The district court granted Gap’s motion to dismiss Ruiz’ claims for negligence, breach of contract, unfair competition, invasion of privacy, and violation of California Civil Code §1798.85 and the appellate court affirmed.

The primary problem with Ruiz’ claims appears to be that his alleged harm from this situation did not rise to the level required under his causes of action and was only sufficient to give him standing.

A claim for negligence in California requires (1) the existence of a duty to exercise due care, (2) breach of that duty, (3) causation, and (4) damages. Both the district court and the court of appeals held that to establish sufficient harm under California law, the damage must not be nominal, speculative, or a mere threat of future harm. Ruiz was unable to establish that his identity had actually been stolen or that he had expended any money on monitoring (or really that the credit monitoring offered by Gap was insufficient to protect him). Monitoring costs may have been sufficient, as they have been in cases dealing with exposure to toxic chemicals, but Ruiz had no such costs.

Similarly, there was no harm required for a claim for breach of contract by Gap’s vendor or unfair competition against Gap. While California has recognized nominal damages for contract actions, damages must still be appreciable and actual rather than Ruiz’ claim for an increased likelihood of damage through identify theft now that his personal information has been exposed.

A plaintiff alleging an invasion of privacy must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy. This conduct must be “sufficiently serious in . . . scope, and actual or potential impact to constitute an egregious breach of the social norms underlying the privacy right.” Hill v. Nat’l Collegiate Athletics Ass’n, 865 P.2d 655, 657 (Cal. 1994). While there is explicit requirement for intentional conduct, the appellate court noted that no California court has yet extended the application of this claim to a situation involving accidental or negligent conduct such as the case in the present matter.

California Civil Code § 1798.85 provides that a person or entity may not “[r]equire an individual to use his or her social security number to access an Internet Web site, unless a password or unique personal identification number of other authentification device is also required to access the Internet Web site.” Ruiz’ attempt to bring a claim under this section ignores the plain language of the code, which is clearly directed at the act of logging onto a website and not the transmission of information through a website for the purpose of applying for a job.

Domain Names Are “Located” Where the Registrar is Located
Office Depo, Inc. v. Zuccarini, 2010 WL 669263, No. 07-16788 (9th Cir. Feb. 26, 2010).

Appellant Zuccarini registered the domain name “officdepo.com” and Office Depot subsequently brought, and won, an action against Zuccarini under the Anticybersquating Consumer Protection Act of 1999 (“ACPA”). Office Depot obtained a judgment against appellant, which it assigned to DSH. DSH sought to levy upon some of the other 248 domains owned by appellant and registered the judgment in the district court for the Northern District of California. The district court denied DSH’s request to compel the domain registrars to transfer Zuccarini’s property, holding that under California Code of Civil Procedure § 699.040, it could not order a third party to turn over property. DSH then moved for the appointment of a receiver who would obtain and sell the domains to satisfy the judgment. The district court granted the motion and Zuccarini appealed.

A district court can obtain quasi in rem jurisdiction over property held within its geographical borders, including intangible property. Under §§ 695.010(a) and 699.710 of the California Code of Civil Procedure, all property of a judgment debtor can be used to satisfy a writ of execution. The applicable state and federal provisions declare that if the domain names are property subject to execution, and if they are located in the Northern District of California, then the district court is an appropriate location to execute judgment on them through the appointment of a receiver.

“[A]ttaching a situs to intangible property is necessarily a legal fiction; therefore, the selection of a situs for intangibles must be context-specific, embodying a ‘common sense appraisal of the requirements of justice and convenience in particular conditions.’” Af-Cap Inc. v. Republic of Congo, 383 F.3d 361 (5th Cir. 2004). While California law does not specifically address the location of domain names, the ACPA states that a trademark owner in a cybersquatting action can proceed in rem against a squatter “in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain is located . . . “ 15 U.S.C. § 1125(d)(2)(A).

The court found the language of the ACPA persuasive and concluded that under California law, domain names are located where the registry is located for the purpose of asserting quasi in rem jurisdiction.