Nevada federal court ruling narrows jurisdictional limits

The publication IP Watchdog reports that a Nevada federal district court ruling in a trademark infringement case against an Isle of Man poker news site represents a positive finding for internet businesses at large, narrowing the types of contacts that would confer general jurisdiction against foreign companies.

The case is Best Odds Corp. vs iBus Media Limited, docket number 2:13-cv-020080RCJ-VCF, a matter heard before Judge Robert C. Jones earlier this month.

Nevada-based online poker news site Best Odds Corp. sued the Isle of Man-based iBus Media Holdings for infringement of its MacPoker trademark, claiming that the Nevada courts had general jurisdiction over iBus Media’s poker news sites.

Best Odds pointed to the defendants’ media kit, which claimed a significant U.S. presence, in its pleadings.

However, the court disagreed with the plaintiff’s contention that these promotional statements conferred general jurisdiction over iBus Media.

Judge Jones consequently granted the Isle of Man company’s motion for the case to be dismissed, finding that the plaintiff had failed to make a case that Nevada courts had general jurisdiction over the foreign-based iBus Media, and citing the Supreme Court’s recent Daimler AG v. Bauman decision, which the judge said “clarified that the reach of general jurisdiction is narrower than had been supposed in lower courts for many years.”

The Supreme Court in the Daimler AG vs. Bauman case explained that the development of the law of specific jurisdiction and general jurisdiction has been quite different over the last several generations.

Specific jurisdiction exists where there are sufficient minimum contacts with a forum state such that the exercise of jurisdiction does not offend the “traditional notions of fair play and substantial justice, whilst general jurisdiction exists only when there are continuous and systematic contacts with a state such that the assertion of personal jurisdiction will be considered fair even where the claims brought by the plaintiff do not relate to those contacts with the forum state.

In Daimler, the Supreme Court reiterated that a court “…may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.”

Judge Jones concluded that it’s not enough for plaintiffs to show that a foreign defendant merely conducts business in a forum state. Instead, they must demonstrate that defendant’s “contacts are so pervasive as to render the defendant ‘essentially at home’ in the forum state.”

The plaintiff in the case against iBus Media failed to satisfy that burden, Judge Jones found.

Poker News, the specific iBus Media company named in the case, was a “passive news site” with limited interactivity with site visitors, the Judge found.

He also noted that screenshots of the Poker News website submitted by Best Odds in support of its complaint featured links that were clearly labeled “Not Accepting U.S. Players.”

Gaming lawyer Jeff Ifrah, who acted for the Isle of Man company, said after the judge had ruled:

“This dismissal is one of the first cases we’ve seen where the Supreme Court’s Daimler ruling has begun to set a new precedent. This ruling will make it much more difficult for plaintiffs to sue internet companies based on general jurisdiction.

“Foreign defendants aren’t going to be hauled into U.S. courts so easily. It’s going to be much harder for plaintiffs to prove that a foreign company is ‘essentially at home’ in the U.S.”

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