Traton News, LLC v. Traton Corp.Traton News, LLC v. Traton Corp.
ENTRY AND ORDER: (1) GRANTING DEFENDANTS’ MOTIONS TO DISMISS (DOCS. 25, 26); (2) DENYING AS MOOT ALL OTHER PENDING MOTIONS (DOCS. 23, 27, 28, 36, 38); (3) DISMISSING WITHOUT PREJUDICE PLAINTIFF’S INITIAL AND AMENDED COMPLAINTS; AND (4) TERMINATING THIS CASE
This consent case involves claims under the Lanham Act, 15 U.S.C. § 1051, et seq., and breach of contract claims. It is now before the Court on motions to dismiss filed by Defendants Traton Corp. and Traton Homes, LLC (collectively the “Traton Defendants”) (doc. 25) and by Defendants Flammer Relations, Inc. and mRELEVANCE, LLC (collectively the ‘Wendor Defendants”) (doc. 26). Plaintiff has filed responsive memoranda (docs.32, 33); and Defendants have filed a reply memorandum (doc. 35). The Court heard oral arguments on these motions on May 21, 2012. See doc. 39.
I. Background
To understand this case, it is necessary for the Court to briefly review the parties’ backgrounds and the events leading up to this lawsuit. Traton Corp. was founded in 1971 by two brothers, William Poston and Millburn Poston. Declaration of William C. Poston (doc. 25-1) ¶2. The “Traton” name derives from the names of their children — Millburn’s daughter (Tracy) and William’s son (Clifton). Id. ¶4. Traton Corp. and its affiliated company, Traton Homes, LLC, are engaged in “various activities primarily devoted to residential community developmental and residential
The Traton Defendants have operated a website at www.tratonhomes.com since before 2005. Declaration of Chris Poston (doc. 25-2) ¶ 3. Through their website, the Traton Defendants “have publicly promoted their community development and homebuilding enterprise, and ... specifically have kept realtors, potential customers, and residents of their communities apprised of relevant news and events concerning the operations of the Traton companies.” Id.
Plaintiff Traton News, LLC is an Ohio limited liability company (“Traton News (Ohio)”), which “is engaged in [the] business of publishing news stories and web-logs on the Internet.” Plaintiffs Amended Complaint (doc. 17) ¶ 2. Sam Han is the incorporator and sole member of Traton News, LLC (Ohio). See doc. 43-5. It is also relevant to note that Sam Han is an attorney who represented Christopher Moses (an individual who had purchased a house from Traton Homes in May 2004) in a 2005 trespass lawsuit against Traton Corp. and its employee in Georgia state court.
A. Plaintiffs Website (www.traton.com)
In Spring 2006, the Traton Defendants became aware of a website, www.traton. com, operated anonymously but using the name “Traton News.” Doc. 25-2 ¶ 13. This website contains negative “news articles” and information about the Traton Defendants.
In March 2006, Christopher Moses (the plaintiff in the Georgia lawsuit against Traton Corp.) created a Georgia limited liability company named “Traton News, LLC” (“Traton News (Georgia)”). Doc. 43-3 at PagelD 1145. On April 20, 2006, Traton News (Georgia) submitted an application to the United States Patent and Trademark Office (“USPTO”) for registration of the trademark “TRATON” with respect to “news reporting services.” See doc. 43-2 at PagelD 1139-44. Traton News (Georgia) claimed it owned the TRA-TON mark, and first used it in connection with news reporting services on March 15, 2006. Id. Traton News (Georgia) was granted federal trademark registration for the TRATON mark with respect to “news reporting services” on February 13, 2007. Id. at PagelD 1126. Moses voluntarily dissolved Traton News (Georgia) on January 15, 2008. See doc. 43-3 at PagelD 1152.
Moses subsequently moved from Georgia to Virginia. See doc. 25-3 at PagelD 704. On September 10, 2007, Moses created a new Virginia limited liability company with the same name: Traton News, LLC (“Traton News (Virginia)”). See doc. 43-4 at PagelD 1154-59. This entity was later cancelled in December 2008 due to its failure to pay the required fees. See id.
In 2008, Sam Han moved to Ohio for a teaching position at the University of Dayton School of Law. See Han v. Univ. of Dayton, Nos. 2012 CV 03406, 2011 CV 08966 (C.P.Ct. Montgomery Cnty., Ohio); doc. 43-8 at PagelD 1187-1213.
C. Flammer Relations and mRELEVANCE, LLC
At the end of 2007 and beginning of 2008, Traton Homes consulted with Defendant Flammer Relations, Inc., “an Atlanta-based public relations and social media firm focused on obtaining positive media coverage for clients throughout the Southeast United States,” regarding the negative information being published on www. traton.com. Declaration of Carol Flammer (doc. 26-1) ¶¶ 3-4. Flammer Relations began periodically viewing the website in order to serve its client, Traton Homes. Id. ¶¶ 4-5.
Flammer Relations is a part-owner of a separate and distinct company, Defendant mRELEVANCE, LLC. Id. ¶9. In August 2010, Traton Homes entered into a contract with mRELEVANCE, LLC “to provide certain specific public relations services to assist in the creation and maintenance of an internet blog site that would publicize positive news and events about Traton Homes, provide search engine optimization services for the blog posts, and provide related social media marketing services.” Id. ¶ 8. The contract did not require mRELEVANCE to visit Plaintiffs website. Id. ¶ 9.
II. Allegations in Plaintiffs Amended Complaint
According to Plaintiffs Amended Complaint (doc. 17), the following facts give rise to this lawsuit. Plaintiff claims it is the owner of the mark “TRATON” with respect to “news reporting services”- — a mark that was registered with the USPTO in 2006. Doc. 17 ¶¶ 14-17. Further, Plaintiff claims it operates a website (www. traton.com) where it posts various news articles. Id. ¶ 19. According to Plaintiff,
Additionally, Plaintiff claims that, in 2009, Traton Homes registered two domain names that are “identical or confusingly similar” to its registered TRATON mark for news reporting services: www. tratonnews.com and www.tratonnews.net. Id. ¶¶ 44-53. However, according to Plaintiff, Traton Homes has not used these domain names in any commercial or fair use. Id.
Further, Plaintiff alleges that, on August 26, 2010, Traton Homes started a weblog at www.tratonhomesblog.com, on which appears the word “TRATON” and a link for “News.” Id. ¶¶ 54-57. Plaintiff claims that, during the three weeks leading up to the first blog post, the Traton Defendants accessed Plaintiffs website at least forty times, and Flammer Relations accessed Plaintiffs website at least nine times. Id. ¶¶ 58, 60. Plaintiff does not allege that mRELEVANCE ever visited www.traton.com. See doc. 17.
Plaintiff also alleges that “[sjomeone associated with the Traton Defendants” and other agents or employees of Defendants have used Plaintiffs domain address for email (e.g., elif@traton.com) without permission and with knowledge that they did not have any rights to that domain address. Id. ¶¶ 66-68. As a result, Plaintiff allegedly has received “countless spam and unwanted email messages that occupy valuable storage space, thereby causing harm to Traton News.” Id. ¶ 67.
A. Trademark Claims
Plaintiff brings four claims against Traton Homes under the Lanham Act. First, Plaintiff asserts that Traton Homes, by registering two domain names (www. tratonnews.com and www.tratonnews.net) that are “confusingly similar” to its trademark, committed cyperpiracy in violation of 15 U.S.C. § 1125(d). Id. ¶¶ 69-76. Second, Plaintiff claims Traton Homes’ use of the TRATON mark in commerce has caused confusion and constitutes trademark infringement under 15 U.S.C. § 1114. Id. ¶¶ 78-83. Plaintiff does not further specify how Traton Homes used the mark in commerce. See id. Third, Plaintiff claims Traton Homes’ use of the TRATON mark in reference to a blog containing a “News” link constitutes “false designation of origin” that may cause confusion of being associated with Plaintiff in violation of 15 U.S.C. § 1125(a). Id. ¶¶ 85-88. Fourth, Plaintiff alleges that Traton Homes’ actions have constituted a false description of its trademark in violation of 15 U.S.C. § 1125(a). Id. ¶90. Plaintiff claims that the “News” section on Traton Homes’ website (which reports news and events concerning the operation of Traton companies) misrepresents “the nature, characteristics, quality or a combination thereof’ a news reporting service. Id. ¶ 95.
B. Breach of Contract Claims
Plaintiff also brings three breach of contract claims: one against the Traton Defendants; one against Flammer Relations; and one against mRELEVANCE. According to Plaintiff, the homepage of its website (www.traton.com) prominently displays “Terms and Conditions,” and Defendants agreed to these Terms and Conditions by repeatedly accessing the website. Id. ¶¶ 20, 27, 34, 39, 42, 59, 61. Plaintiff
III. Personal Jurisdiction
As all Defendants raise a lack-of-personal-jurisdiction defense pursuant to Fed.R.Civ.P. 12(b)(2),
In its Amended Complaint, Plaintiff asserts the Court has personal jurisdiction over Defendants because they “conceded to personal jurisdiction in this district,” either directly or through an agent, by agreeing to a forum selection clause in the terms and conditions posted on www.traton.com.
As an initial matter, the Court notes that it has federal question jurisdiction over this case based on Plaintiffs federal Lanham Act claims against Traton Homes only. (Plaintiff does not bring federal claims against Traton Corp. or the Vendor Defendants.) Thus, if the Court decides it lacks jurisdiction over Traton Homes to hear those federal claims (as it does in fact conclude, see infra), it is within the Court’s discretion whether to proceed on the remaining state law claims against the
For the following reasons, the Court finds that it does not have personal jurisdiction over Traton Homes. First, contrary to Plaintiffs assertions, the forum selection clause is unenforceable against Traton Homes. Second, Plaintiff has failed to show that Traton Homes has sufficient contacts with the State of Ohio to meet due process standards. Therefore, because it would be improper to exercise supplemental jurisdiction over the remaining state law claims, the Court dismisses all of Plaintiffs claims.
A. The Forum Selection Clause
The Court first finds that Plaintiffs federal Lanham Act claims fall outside the limited scope of the forum selection clause, which states, ‘You hereby consent to the exclusive jurisdiction and venue of courts in or nearest to the United States District Court for the Southern District of Ohio, Western Division, in all disputes arising out or relating to the use of this Web site.” See doc. 2-5 at PagelD 137, ¶ 16 (emphasis added). Principles of contract interpretation apply in determining the scope of a forum selection clause. In re Delta Am. Re Ins. Co.,
Plaintiffs Lanham Act claims — for “cyberpiracy,” trademark infringement, false designation and false description — arise from alleged activities that are wholly separate and distinct from Traton Homes’ use of Plaintiffs website. These claims do not “arise out of or relate to” Traton Homes accessing www.traton.com. Indeed, in the Amended Complaint, the factual allegations supporting these Counts do not even mention www.traton.com. See doc. 17 at PagelD 550-53. Rather, the alleged unlawful actions in Counts One through Four are: Traton Homes registered domain names similar to www.traton.com; and Traton Homes used the TRATON mark on its (not Plaintiffs) website.
Alternatively, the Court finds that Traton Homes is not bound by the forum selection clause because no contract was formed between Plaintiff and Defendants. The enforceability of this type of internet agreement (a browsewrap agreement) is an issue of first impression in this Court.
However, the Court finds that there is a crucial difference between the above-cited cases and this case. In those cases, the website visitor obtained a benefit from using the website at issue. See Register,
In determining whether a valid agreement was formed, the Court examines traditional contract principles. See Floss v. Ryan’s Family Steak Houses, Inc.,
Therefore, the Court finds that the forum selection is unenforceable against Traton Homes. Plaintiffs assertion — that Traton Homes “conceded to personal jurisdiction in this district” by agreeing to a forum selection clause in the terms and conditions posted on www.traton.com — is unavailing. Doc. 17 ¶¶ 8-10. In order for this case to proceed against Traton Homes, Plaintiff must demonstrate that jurisdiction over Traton Homes is proper under the traditional personal jurisdiction analysis. As discussed below, the Court finds that Plaintiff has failed to do so.
B. Traditional Personal Jurisdiction Analysis
“Where a federal court’s subject matter jurisdiction over a case stems from the existence of a federal question, personal jurisdiction over a defendant exists ‘if the defendant is amenable to service of process under the [forum] state’s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant ] due process.’ ” Bird,
Moreover, the Court finds that specific jurisdiction — which occurs when the lawsuit “ ‘aris[es] out of or relate[s] to the defendant’s contacts with the forum’ ” — has not been established either. See id. at 874 (quoting Helicópteros Nacionales de Colom. v. Hall,
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant’s activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum to make the exercise of jurisdiction over the defendant reasonable.
Bird,
Here, the Court finds that it lacks personal jurisdiction over Traton Homes because it did not purposefully avail itself of doing business in Ohio. Indeed, Plaintiff does not seriously contest this issue. In its memorandum in opposition to Traton Homes’ dismissal motion, Plaintiff summarily states there is personal jurisdiction because “transacting business is ample basis for exercising long-arm jurisdiction” and “[h]ere, the situs of the contract is Ohio.” Doc. 32 at PagelD 814-15. Plaintiff further asserts, “Specific jurisdiction is established, since the very actions which Defendants directed into this forum give rise to the jurisdiction for breach of contract.” Id. Plaintiff does not allege any additional facts indicating that Traton Homes has any contacts with Ohio other than visiting
Moreover, Plaintiff does not cite to any easelaw supporting its proposition— that visiting its Ohio-based website establishes personal jurisdiction. See doc. 32 at PagelD 814-15. To the contrary, the Court finds that the mere act of using Plaintiffs website is insufficient to confer jurisdiction over Traton Homes, regardless of how many times the website was visited. “It is the ‘quality’ of [the] contacts, not their number or their status ... that determines whether they constitute purposeful availment.” Reynolds v. Int’l Amateur Ath. Fed’n,
Therefore, the Court lacks personal jurisdiction over Defendant Traton Homes to hear the trademark and breach of contract claims against it. Without those federal claims pending, the Court lacks original subject matter jurisdiction over this case.
Accordingly, the Court ORDERS as follows:
1. Defendants’ motions to dismiss (docs. 25, 26) are GRANTED;
2. All other pending motions (docs. 23, 27, 28, 36, 38) are DENIED AS MOOT;
3. Plaintiffs initial and amended complaints are DISMISSED WITHOUT PREJUDICE; and
4. This case is TERMINATED upon the docket records of the United States District Court for the Southern District of Ohio, Western Division, at Dayton.
Notes
. In that lawsuit, Moses claimed that Traton Corp. was liable to him for damage done when "construction vehicles drove over a portion of the grass near the curb in front of Moses's house, creating ruts and other damage to the turf and soil.” Moses,
. There does not appear to be a dispute that Plaintiff’s website does, in fact, publish negative information about the Traton Defendants. However, there is disagreement concerning the purpose of the website. The Traton Defendants claim the website "served (and still serves today) the singular purpose of publishing false and defamatory information about [Traton Corp. and related parties.]” Doc. 25 at PagelD 616. On the other hand, Plaintiff denies that the website's purpose is to publish negative articles about the Traton Defendants. See doc. 32 at PagelD 808. Plaintiff states, "The articles posted on the website include various news topics including chess, intellectual property, Traton Homes, other home-builders in Atlanta, a meteor shower, Star Trek, and others.” Id. Further, since 2008, Plaintiff claims, "the majority of articles have not been about Traton Homes.” Id.
.Plaintiff attached a screenshot of the website’s homepage to its original Complaint displaying these headlines. Doc. 2-5.
. Sam Han’s teaching contract was not renewed. Han has a lawsuit against the University of Dayton Law School currently pending in the Montgomery County, Ohio Common Pleas Court. See Han v. Univ. of Dayton, Nos.2012 CV 03406, 2011 CV 08966 (C.P.Ct. Montgomery Cnty., Ohio).
. All Defendants are represented by the same attorney. Therefore, the personal jurisdiction arguments mirror each other in the two respective motions to dismiss. See doc. 25 at PagelD 618-23; doc. 26 at PagelD 737-43.
. Alternatively, the Amended Complaint states that personal jurisdiction is proper over Defendants under Ohio’s long-arm statute, Ohio Revised Code § 2307.382(A)(6). See doc. 17 ¶ 11. However, as discussed infra, Plaintiff has failed to show that Traton Homes has sufficient contacts with Ohio to comport with due process requirements. See infra note 11.
. Plaintiff's attempt to convince the Court otherwise, i.e., its "marketing strategy” argument, is tenuous and unpersuasive. See doc. 32 at PagelD 817-18.
. The Court finds that determining the scope of a forum selection clause is similar to determining the scope of an arbitration clause. The Sixth Circuit has a well-established test for deciding whether a claim falls under an arbitration clause: Could the action could "be maintained without reference to the contract or relationship at issue? If it could, it is likely outside the scope of the arbitration agreement.” Fazio v. Lehman Bros., Inc.,
. Because the forum selection clause does not encompass Plaintiff’s Lanham Act claims, Traton Homes (a Georgia entity that does not conduct business in Ohio) did not consent to being sued in this Court with respect to those claims. Even assuming, arguendo, that the forum selection clause is valid and enforceable and applies to Plaintiff’s breach of contract claim against Traton Homes, it would be inappropriate to exercise pendent personal jurisdiction over Plaintiff’s federal Lanham Act claims given the very early stage of this lawsuit. See United States v. Botefuhr,
. There are two general types of Internet agreements: clickwrap and browsewrap. A clickwrap agreement is formed when the website visitor is required to explicitly manifest assent to the website’s terms and conditions by requiring some affirmative act (e.g., clicking "I agree” or entering one’s initials) before the visitor can proceed further on the website. See Snap-on Bus. Solutions,
. Plaintiff asserts that personal jurisdiction is proper under Ohio's long-arm statute, Ohio Revised Code § 2307.382(A)(6), see doc. 17
. Plaintiff has not alleged diversity jurisdiction. Nor does it appear to apply in this case because while the parties may be diverse, Plaintiff has not alleged damages of $75,000 or more. See 28 U.S.C. § 1332; see also doc. 17.