Federal District Court Opinions

SOUTHERN v. ALL POINTS DELIVERY SYSTEMS, INC., (N.D.Okla.
2006) JOHN S. SOUTHERN, Plaintiff, v. ALL POINTS DELIVERY
SYSTEMS, INC., an Oklahoma corporation; KEITH AUSTIN, an
individual; TULSA CELEBRATIONS, LLP, an Oklahoma limited
liability partnership; JEFFREY ALAN LEICHNITZ, an
individual also know as JEFF LEICHNITZ; VERONICA M.
LEICHNITZ, an individual also known as VERONICA LEICHNITZ;
RUSSELL CHRONISTER, an individual; and WEBRING,) INC., an
Oregon corporation, Defendants. Case No. 04-CV-590-JHP.
United States District Court, N.D. Oklahoma. March 2, 2006

ORDER AND OPINION

JAMES PAYNE, District Judge

Before the Court is Defendant WebRing, Inc.’s Motion to
Dismiss for lack of personal jurisdiction and improper
venue, Plaintiff John S. Southern’s Response in opposition,
and WebRing’s Reply thereto. A hearing on the briefs was
held February 23, 2006. Upon consideration of the briefs
and the oral arguments on this matter, and for reasons
stated herein, WebRing’s Motion is DENIED in its entirety.

Background

Plaintiff John S. Southern is a professional photographer
residing in Tulsa, Oklahoma. WebRing is an Oregon
corporation operating an Internet-based information locator
service. Southern alleges infringement of certain of his
copyrighted photographs and claims damages under 17 U.S.C.
§§ 504 and 505. As relates to this Motion,
Plaintiff specifically alleges that Page 2 Defendant
Russell Chronister unlawfully posted Southern’s photograph
titled “City Lights” on his website titled “Oklahoma
Skyscrapers” and that Defendant WebRing induced and
materially contributed to the unlawful display and
distribution of said image to a broader audience by
including Chronister’s website as a WebRing member
site.[fn1] Plaintiff further alleges that WebRing profits
from the content of member sites such as “Oklahoma
Skyscrapers” and that its unlawful use of Plaintiff’s
intellectual property has deprived Plaintiff of any license
fees and devalued Plaintiff’s exclusive right to exploit
his work and profit therefrom. For its part, WebRing, as an
Oregon corporation with its principal place of business in
Oregon, claims that personal jurisdiction and venue are
improper in this Court. These are the issues currently
before the Court.

Discussion

The purpose of allowing a jurisdictional challenge such as
the one raised here is to protect a defendant who has no
meaningful contact with a state from being forced to
litigate in an unfamiliar and potentially unfair forum. OMI
Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086,
1090 (10th Cir. 1998). If the Court determines that an
evidentiary hearing is not Page 3 necessary, the plaintiff
must only make a prima facie showing that jurisdiction is
appropriate in order to overcome such challenge. Id. at
1091. The defendant must then present a compelling case
that the exercise of jurisdiction would somehow be
unreasonable. Id. At this early stage of litigation, the
plaintiff’s burden is light, and all doubts must be resolved
in plaintiff’s favor. Intercon, Inc. v. Bell Atlantic
Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir.
2000).

To establish personal jurisdiction over the defendant, the
plaintiff must show that jurisdiction is proper under the
laws of the forum state and that the exercise of
jurisdiction would not offend due process. Id. Because
Oklahoma’s long-arm statute permits any exercise of
jurisdiction consistent with the U.S. Constitution, the
personal jurisdiction inquiry conflates into a single due
process inquiry. Id. Due process requires “only that in
order to subject a defendant to a judgment in personam, if
he be not present within the territory of the forum, he
have certain minimum contacts with it such that the
maintenance of the suit does not offend `traditional
notions of fair play and substantial justice.'” Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

A defendant’s “minimum contacts” with the forum may be
sufficient to support general or specific jurisdiction. In
order to be subject to general jurisdiction, the defendant
must have “continuous and systematic contacts” with the
forum. Heliocopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 415-16 & n. 9 (1984). In order to be subject
to specific jurisdiction, the defendant must purposefully
direct its activities toward the forum, thereby giving rise
to plaintiff’s cause of action, so that the defendant may
“reasonably anticipate being haled into court there,”
World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297
(1980).

Here, Plaintiff alleges that jurisdiction and venue in
this Court are proper because Page 4 WebRing does
business, and has continuous and systematic contact by
means including advertising, recruiting members, and
distributing material in the state of Oklahoma. Plaintiff
also states that WebRing acts through and is comprised of
its ringmasters and member sites, including ringmasters and
member sites located in Oklahoma. Most, if not all, of
WebRing’s activity in the state is conducted via the
Internet. Therefore, the issue before the Court is whether
the “nature and quality” of WebRing’s Internet activity
within Oklahoma is sufficient to justify the Court’s
exercise of personal jurisdiction over this Defendant. See
Lively v. IJAM, Inc., 114 P.3d 487, 497 (Okla.Civ.App.
2005).

I. WebRing’s Contacts with Oklahoma

When examining a defendant’s “minimum contacts,” the Court
must determine whether such contacts would support the
exercise of general or specific jurisdiction, if at all.
General jurisdiction permits the Court to exercise
jurisdiction over the defendant without regard to the
subject matter of the suit. Soma Med. Int’l v. Standard
Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999). As
stated above, a defendant must have “continuous and
systematic contacts” with the forum in order to be subject
to general jurisdiction. See Heliocopteros, 466 U.S. at
415-16. The Tenth Circuit has further mandated that the
defendant must be conducting substantial and continuous
local activity with the forum. Soma Med. Int’l, 196 F.3d at
1295. In making this determination, the Court may consider
whether the defendant (1) engages in business in this
state; (2) is licensed to do business in this state; (3)
owns, leases, or controls any real or personal property or
assets in this state; (4) has employees, offices, agents,
or bank accounts in this state; (5) has shareholders
resident in this state; (6) maintains telephone or fax
listings within this state; (7) advertises or solicits
business in this state; (8) travels to this state by way of
salespersons, Page 5 etc.; (9) pays taxes in this state;
(10) visits potential customers in this state; (11)
recruits employees in this state; or (12) generates a
substantial percentage of its national sales through
revenue generated from customers in this state. Id. at
1295-96; Smith v. Basin Park Hotel, Inc., 178 F. Supp. 2d
1225, 1231 (N.D. Okla. 2001). Further, to rely solely upon
Internet presence to establish general jurisdiction
requires the defendant to “actually and deliberately use[]
its website to conduct commercial transactions on a
sustained basis with a substantial number of residents of
the forum.” Smith, 178 F. Supp. 2d at 1235.

Here, it is undisputed that WebRing is not licensed to do
business in Oklahoma, does not own any property or have any
“corporeal” business assets in Oklahoma, and does not pay
taxes in Oklahoma. Instead, all of WebRing’s business
dealings in the forum are conducted via the Internet.
WebRing’s business in the state consists of advertising and
soliciting members here, including “supporting” members who
pay WebRing monthly fees for enhanced services. WebRing
communicates directly with its members via e-mail when
setting up their accounts. WebRing also has “ringmasters”
resident in the state, who control the membership and
content of various “rings” and otherwise act as agents of
WebRing.[fn2] There are “rings” devoted to topics of
particular interest to Oklahoma citizens, including 38 rings
with “Oklahoma” in the title, which are comprised of more
than 350 member sites. Most, if not all, of these
individual member sites carry a link to WebRing’s homepage,
which theoretically allows WebRing to solicit additional
business from each and every visitor to its member sites.

WebRing’s business activities are “continuous,” insofar as
information about WebRing is Page 6 available to anyone
with Internet access, anywhere in the world, at any time.
Admittedly, the nature of WebRing’s business does not
appear to include “purposeful availment” of any particular
geographic market other than the “Internet community.”[fn3]
Arguably, it could be said that WebRing, because it
operates solely via the Internet, does not actively recruit
members, so much as potential members look for and avail
themselves of WebRing. Based in part on this interpretation
of its business operations as more “passive” than not,
WebRing argues that it would be “ridiculous” for its
Internet contacts to count toward personal jurisdiction,
because it would then be subject to jurisdiction
“everywhere.” Equally ridiculous, however, is the converse
argument that, if its Internet contacts do not count, then
WebRing is not subject to jurisdiction anywhere.

Indeed, case law suggests a bright line between “doing
business on the Internet” and merely “operating a website.”
See, e.g., Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.
Supp. 1119, 1126 (W.D. Pa. 1997) (finding that Dot Com,
which “sold passwords to approximately 3000 subscribers in
Pennsylvania and entered into seven contracts with Internet
access providers to furnish its services to their customers
in Pennsylvania” did more than just operate a website). The
nature and quality of such operations are judged according
to a “sliding scale.”

At one end of the spectrum are situations where a
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 Page 7 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
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.

Id. at 1124. According to this scale, WebRing is clearly
more than just a passive website. WebRing provides a
service to its members, the exact quality of which depends
on whether the account holder has a free membership or a
paid membership. By linking to these members, WebRing can
increase traffic to its own site and thus, expand its
membership base. WebRing also provides a forum for
third-party advertisers. All of these activities generate
revenue and contribute, directly or indirectly, to
WebRing’s commercial success.

Still, the Court must impose a stringent minimum contacts
test to justify the exercise of general jurisdiction. See
OMI Holdings, Inc., 149 F.3d at 1090-91 (citing
Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d
560, 567 (2d Cir. 1996)). Here, although WebRing’s
potential for pervasive and substantial commercial activity
in the state of Oklahoma is unlimited, its actual
operations are not provably so. Thus, the exercise of
general jurisdiction over WebRing would likely be too broad
to comport with “traditional notions of fair play and
substantial justice.”

The Court does find, however, that WebRing has sufficient
contacts with Oklahoma to support specific jurisdiction.
Specific jurisdiction can be maintained where the defendant
purposefully directs activities at the forum state and
those purposefully directed activities give rise to the
litigation before the court. See id. at 1090. Here, WebRing
entered into a membership agreement with Defendant
Chronister, an Oklahoma resident, and accepted his
website, Page 8 “Oklahoma Skyscrapers,” as a WebRing
member site. This act, in addition to WebRing’s operations
detailed above, obviously constitutes “purposeful
availment.”[fn4]

Yet, WebRing asserts that, even if it has purposefully
directed its activities toward Oklahoma, Plaintiff’s injury
arises not from WebRing’s acts, but from Chronister’s.
Litigation arises out of the defendant’s purposeful
activities toward the forum state when there is a nexus
“between Defendant’s forum-related contacts and the
Plaintiff’s cause of action.” Id. at 1095. Here,
Plaintiff’s injury stems from the unauthorized display of
his copyrighted photograph on a WebRing member website. The
Court therefore finds that the relationship between WebRing
and Chronister and this Plaintiff’s cause of action was
such that WebRing could reasonably expect to be haled into
court in Oklahoma.[fn5] Simply put, WebRing’s promise to
increase traffic to its members’ websites resulted, in this
case, in a wider distribution of illegal material. Thus, a
direct corollary exists between WebRing’s purposeful
activities in the state and Plaintiff’s cause Page 9 of
action.

II. Traditional Notions of Fair Play and Substantial
Justice

Even though the Court finds there are sufficient minimum
contacts between WebRing and the State of Oklahoma, the Due
Process Clause requires the Court to ensure that the
exercise of personal jurisdiction over WebRing would not
“offend traditional notions of fair play and substantial
justice.” Id. at 1091. This inquiry requires the defendant
to prove that litigation in the chosen forum would be “`so
gravely difficult and inconvenient’ that [the] party
unfairly is at a `severe disadvantage’ in comparison to his
opponent.” Burger King Corp. v. Rudzewicz, 471 U.S. 462,
478 (1985) (quoting Bremen v. Zapata Off-Shore Co., 407
U.S. 1, 18 (1972)). To determine whether the exercise of
jurisdiction would be so unreasonable, the Court must
consider (1) the burden on the defendant, (2) the forum
state’s interest in resolving the dispute, (3) the
plaintiff’s interest in receiving convenient and effective
relief, (4) the interstate judicial system’s interest in
obtaining the most efficient resolution of controversies,
and (5) the shared interest of the several states in
furthering fundamental substantive social policies. OMI
Holdings, Inc., 149 F.3d at 1095 (quoting Asahi Metal
Indus. Co. v. Sup. Ct. of Cal., 480 U.S. 102, 113 (1987)).

A. Burden on the Defendant

“Certainly, `in this age of instant communication,’ and
modern transportation, the burdens of litigating in a
distant forum have lessened.” Peay v. BellSouth Med.
Assistance Plan, 205 F.3d 1206, 1212-13 (10th Cir. 2000)
(quoting Republic of Pan. v. BCCI Holdings (LUXEMBOURG)
S.A., 119 F.3d, 935, 947-48. n. 6 (11th Cir. 1997)). The
Court does not find that defending litigation in Oklahoma
would be so inconvenient for WebRing that it would Page 10
preclude the exercise of personal jurisdiction. Indeed, the
Court notes that WebRing obtained local counsel to handle
the instant Motion. It is not unreasonable to require
WebRing to continue to defend itself in the forum state.

B. Forum’s State Interest

The Court also notes that “[s]tates have an important
interest in providing a forum in which their residents can
seek redress for injuries caused by out-of-state actors.”
OMI Holdings, Inc., 149 F.3d at 1096 (quoting Burger King,
471 U.S. at 483). WebRing, an out-of-state actor, has the
requisite minimum contacts with Oklahoma, and Oklahoma
therefore has a great interest in resolving this dispute as
it relates to the alleged infringement of a copyright held
by its citizen. Moreover, the remaining co-defendants in
this case are residents of Oklahoma as well.

C. Convenience and Efficiency

Plaintiff’s interest in receiving convenient and effective
relief generally depends on whether the Plaintiff may
receive convenient and effective relief in another forum.
This factor may weigh heavily in cases where a Plaintiff’s
chances of recovery will be greatly diminished by forcing
him to litigate in another forum because of that forum’s
laws or because the burden may be so overwhelming as to
practically foreclose pursuit of the lawsuit. Id. at 1097.
Here, federal law applies, so this concern is somewhat
diminished. However, all parties to this lawsuit, except
WebRing, are residents of Oklahoma. The Court therefore
deems Oklahoma to be the most convenient forum, and the
most efficient place to litigate the dispute, in accordance
with the third and fourth prongs listed above.

D. Furtherance of Social Policy

The final prong “focuses on whether the exercise of
personal jurisdiction by [the forum Page 11 state]
affects the substantive social policy interests of other
states or foreign nations.” Id. Here again, because federal
law applies, the exercise of jurisdiction by this Court
would not seriously interfere with the interests of another
sovereign. Moreover, the shared interest of the Internet
community, which is arguably more at stake here than any
specific state’s social policy, transcends jurisdictional
boundaries.

Having found that all five of the above factors weigh in
Plaintiff’s favor, the Court holds that the exercise of
personal jurisdiction over WebRing would not “offend
traditional notions of fair play and substantial justice”
and is therefore proper.

Conclusion

For the foregoing reasons, the Court finds that its
exercise of personal jurisdiction over Defendant WebRing in
this litigation is proper. Further, because 28 U.S.C.
§ 1400(a) permits copyright infringement suits to be
instituted in any district where the defendant “resides or
may be found,” and a defendant “may be found” anywhere he
is subject to personal jurisdiction, the Court finds that
venue is also proper. Accordingly, Defendant’s Motion to
Dismiss is DENIED in its entirety.

[fn1] Plaintiff also charges Chronister and Webring with
infringement of a second copyrighted photograph of the city
of Bartlesville, including the Price Tower, at night, and
charges WebRing alone with the unlawful display and
distribution of a third copyrighted work, “Oklahoma City,”
which is part of the “GH Photography” website. In his
Response to the instant Motion, Southern states that he has
sued Chronister for infringement of two (2) copyrighted
photographs. Southern does not, however, comment in his
Response upon the third image, “Oklahoma City,” although
his Amended Complaint includes reference thereto. In the
Amended Complaint, Southern charges WebRing with
infringement of “Oklahoma City,” but does not include
information about the “GH Photography” website’s owner, as
he did with the other two photographs. For purposes of this
Order, which deals exclusively with jurisdictional matters,
the Court will refer generally to Southern’s “copyrighted
works.” However, because each alleged infringement forms a
separate claim, the Court requests more precision from the
parties in future pleadings.

[fn2] Ringmasters are WebRing members who volunteer to
manage “rings” based on their interests and expertise,
irrespective of their geographic location. Thus, WebRing
members in Oklahoma do not necessarily have Oklahoma-based
ringmasters, and vice versa.

[fn3] See Millennium Enters., Inc. v. Millennium Music, LP,
33 F. Supp. 2d 907, 914 (D. Or. 1999) (“Unlike newspaper,
mailing, radio, television and other media containing
advertisements and solicitations, most Internet
advertisements and solicitations are not directed at a
specific geographic areas or markets [sic]; to the
contrary, advertising on the Internet targets no one in
particular and everyone in particular in any given
geographic location.”) (emphasis added).

[fn4] Of course, even a single contact may be sufficient to
create a connection with the forum. See, e.g., McGee v.
Int’l Life Ins. Co., 335 U.S. 220, 223 (1957). However,
because “the common thread in cases involving jurisdiction
via an Internet website . . . is that the 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,” the Court considers the totality of the
circumstances here. See Soma Med. Int’l, 196 F.3d at 1296
(internal quotations and citation omitted).

[fn5] To a certain extent, the Court finds more generally
that, if WebRing could anticipate being sued by a “member”
in Oklahoma, WebRing should also be able to foresee being
sued by a third party who has a quarrel with that member’s
Internet activity, such as Plaintiff’s quarrel with
Defendant Chronister here. Indeed, this would seem to the
Court to be the reasoning behind WebRing’s requirement that
members submit to certain “terms of service,” subject to
having their services unilaterally terminated by WebRing
should they violate those terms. Of course, “foreseeability
alone has never been a sufficient benchmark for personal
jurisdiction under the Due Process Clause,” but neither is
it wholly irrelevant World-Wide Volkswagon, 444 U.S. at
295, 297. Here, WebRing’s connection with Chronister in
Oklahoma raised the “foreseeability” critical to the due
process analysis, namely, the very real possibility of
litigation. Page 1