Prime Loyalty LLC v. GoDaddy Incorporated
2:24-cv-03359
D. Ariz.Jul 1, 2025Background
- Plaintiffs (Prime Loyalty LLC, Crisby Studio AB, and Niklas Thorin) purchased two expired domain names at auction on GoDaddy’s platform, where 123-Reg Limited was the registrar.
- After domain names became unrecoverable to the previous registrants, GoDaddy Inc. reached out to Plaintiffs to buy them back; Plaintiffs refused to sell.
- Subsequently, GoDaddy revoked Plaintiffs' domain names, refunded their money, and issued store credit, which Plaintiffs allege caused them harm as they were actively using the domains.
- Plaintiffs brought multiple claims including breach of contract, tortious interference, trespass to chattels, and claims in tort against GoDaddy Inc., GoDaddy LLC, and 123-Reg.
- Defendants filed a motion to dismiss on grounds of lack of subject matter and personal jurisdiction, as well as failure to state a claim.
- The Court held oral argument, then ruled to partially grant and partially deny the motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject Matter Jurisdiction | Jurisdiction proper under 28 U.S.C. § 1332(a)(3) and clarified diversity in a Jurisdictional Supplement | Plaintiffs failed to properly allege citizenship of Crisby Studio and 123-Reg, so diversity not met | Jurisdictional Supplement sufficient; Court has subject matter jurisdiction |
| Personal Jurisdiction over 123-Reg | 123-Reg is subject to general or specific jurisdiction via alter ego/agency with GoDaddy | No sufficient contacts or control by 123-Reg; not alter ego; no substantial control for agency | No general or specific jurisdiction over 123-Reg; 123-Reg dismissed |
| Validity of Contracts (UTOS, AMA, DNRA) | Contracts are unconscionable and not fully enforceable | Agreements are valid, sufficiently disclosed, not unconscionable | Contracts are not void for unconscionability; individual unconscionable terms are severable |
| Contract Breach | Defendants breached by revoking domain names post-auction | Contracts allowed GoDaddy to undo sales for error; Plaintiffs failed to specify breach | Plaintiffs sufficiently alleged breach; questions of fact preclude dismissal |
| Economic Loss Doctrine & Tort Claims | Can pursue tort claims alongside contract | Doctrine doesn’t apply; Plaintiffs lack contractual relationship with Inc.; tort claims fail otherwise | Tort claims against GoDaddy LLC barred by economic loss doctrine; not as to GoDaddy Inc. |
| Injunctive Relief | Seeks injunction as separate claim | Not a cause of action | Dismissed injunction claim, but remedy available under remaining claims |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (limits general personal jurisdiction for foreign subsidiaries; confirms agency principles more suitable for specific jurisdiction)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (landmark minimum contacts test for personal jurisdiction)
- Mallory v. Norfolk S. Ry. Co., 143 S. Ct. 2028 (confirms personal jurisdiction exists with consent)
- Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267 (application of long-arm statute and due process in specific jurisdiction)
- Ballard v. Savage, 65 F.3d 1495 (plaintiff’s burden for prima facie case on personal jurisdiction at 12(b)(2) stage)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard—plausibility and factual specificity)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleadings must state a plausible claim to relief)
- Flagstaff Affordable Hous. Ltd. P’ship v. Design All., Inc., 223 Ariz. 320 (Arizona economic loss doctrine limits tort claims in contract situations)
- Jones v. Chiado Corp., 137 Ariz. 298 (contract formation principles—duty to read and understand contracts)