St Andrews Links Limited v. Source and Design International Ltd

Background

St Andrews Links Limited sued Source and Design International (UK) Ltd and John Charles Morton under the federal Lanham Act, California’s unfair-competition statute, and California common law. The claims included trademark infringement, counterfeiting, cybersquatting, false designation of origin, and unfair competition. St Andrews alleged that the defendants promoted and sold apparel bearing the “St Andrews” mark through media sites and online accounts.

The complaint alleged that the defendants made at least one delivery to a customer with a California address and two sales to a customer with a Florida address. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(2), arguing that the court lacked personal jurisdiction over them.

Personal jurisdiction in California

The court explained that St Andrews had to make an initial showing that jurisdiction was proper. For specific personal jurisdiction, the plaintiff had to show that the defendants deliberately directed activities toward California, that the claims arose from or related to those activities, and that exercising jurisdiction would be reasonable.

The court found that selling and shipping apparel online qualified as intentional acts, but it concluded that St Andrews had not shown the required “express aiming” at California. The accessibility and interactivity of the defendants’ websites were not enough by themselves. The court also found that one shirt delivered to Burlingame was insufficient, particularly because St Andrews appeared to concede that it initiated the California sale. Even assuming the defendants initiated the sale, the court held that a single transaction was insufficient.

The court rejected St Andrews’s argument that the defendants targeted California by using Facebook, Instagram, Twitter, and PayPal because those companies were headquartered in the judicial district. The court stated that accepting that theory could subject people around the world to jurisdiction in California.

Nationwide jurisdiction under Rule 4(k)(2)

St Andrews alternatively relied on Federal Rule of Civil Procedure 4(k)(2), which can permit jurisdiction in a federal case based on a defendant’s contacts with the United States as a whole. The court stated that the parties did not dispute two requirements of that rule: the action arose under federal law, and the defendants were not subject to general jurisdiction in any state. The remaining question was whether exercising jurisdiction would satisfy due process.

The court considered the two Florida sales, the California sale, the number of United States website users, a previously denied trademark application, and the use of President Obama’s image in a Facebook advertisement. It found these facts insufficient. The three sales were random, isolated, or accidental contacts; website traffic did not show that the defendants had tailored their website to attract United States users or knew about that user base in a way that demonstrated direct targeting; the trademark application did not establish the necessary contacts; and the advertisement did not show that the defendants expressly aimed their conduct at the United States.

Ruling

The court concluded that St Andrews had not established personal jurisdiction in California or under Rule 4(k)(2). Judge Jon Tigar granted the defendants’ motion to dismiss for lack of personal jurisdiction. Because St Andrews had had an opportunity to conduct jurisdictional discovery and still had not established jurisdiction, the court found that amendment would be futile and dismissed the case with prejudice. The clerk was ordered to enter judgment and close the file.