No Personal Jurisdiction in Cybersquatting Case

An entity alleged to be the alter ego of a plaintiff bringing an action for reverse domain name hijacking is not subject to the personal jurisdiction of the court on a trademark infringement counterclaim.  AIRFX v. AirFX, No. CV 11-01064 (D. Ariz. March 8, 2012).

Facts

Marc Lurie, accused of cybersquatting in a Uniform Domain Name Dispute Resolution Proceeding (UDRP), sued AirFX LLC in Arizona because AirFX had selected Arizona as the forum for the UDRP proceeding.  AirFX’s choice of forum was dictated by the presence in Arizona of the registrar for airfx.com, the disputed domain name.  AirFX brought counterclaims, including a claim of trademark infringement under the Lanham Act, against Lurie and two corporate entities, including Pedal Logic, alleged to be Lurie’s alter ego.  Pedal Logic moved to dismiss the counterclaims, including the trademark infringement claim, for lack of subject matter jurisdiction and lack of personal jurisdiction.

Result

Motion to dismiss was granted.

Reasoning

After concluding that the question of subject matter jurisdiction presented factual issues that could not be resolved on a motion to dismiss, the court turned to the question of personal jurisdiction.  Arizona’s long arm statute allowed “jurisdiction over a party to the extent permitted by the Constitution.”  General jurisdiction could be exercised where a defendant had “substantial or continuous and systematic” contacts with the forum state.  Specific jurisdiction could only be exercised where reasonable; specific jurisdiction required purposeful availment of a contact with the forum state, and for the claim to relate to the contact.

Here, the court held that Pedal Logic was not subject to the court’s specific jurisdiction because, even if Pedal Logic were Lurie’s alter ego, there were no allegations that it or Lurie had committed any of the acts alleged to constitute trademark infringement in Arizona.  Lurie’s filing of a complaint, even if a sufficient minimum contact, was unrelated to AirFX’s claims of trademark infringement.  Further, neither Lurie nor Pedal Logic had had “the substantial or continuous contacts with Arizona required to exercise general jurisdiction.”  Moreover, the court denied AirFX jurisdictional discovery because it had pled no facts on which Pedal Logic could have had contacts with Arizona sufficient to give rise to personal jurisdiction over Pedal Logic for AirFX’s trademark infringement claim.

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