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Bensusan Restaurant Corp. v. King

United States District Court for the Southern District of New York · Civil Procedure

Civil ProcedurePersonal JurisdictionInternet ContactsNew York Long-Arm Statutepersonal jurisdictioninternetwebsitelong-arm statute

Facts

Bensusan, a New York corporation, owned the federally registered mark "The Blue Note" for its New York jazz club. King, a Missouri resident, operated a small Missouri club under the same name and created a website on a Missouri server promoting that club, listing general information, events, and a phone number for ticket orders. The site was generally accessible on the Internet, but tickets ordered by phone had to be picked up at the Missouri box office and were not mailed or otherwise transmitted to users. The site at one point included a disclaimer distinguishing the Missouri club from Bensusan's New York club and briefly included a hyperlink to Bensusan's site, later removed.

Issue

Whether a Missouri defendant's generally accessible website, without additional conduct directed at New York, is sufficient to subject him to personal jurisdiction in New York under C.P.L.R. § 302(a)(2) or § 302(a)(3), and whether exercising jurisdiction would satisfy due process.

Rule

Under New York law, C.P.L.R. § 302(a)(2) requires a tortious act within the state, and in trademark cases infringement occurs where the passing off occurs, i.e., where the deceived customer buys the defendant's product believing it to be the plaintiff's. C.P.L.R. § 302(a)(3) requires, among other things, that the defendant expect or reasonably should expect in-state consequences, derive substantial revenue from interstate or international commerce, and that the plaintiff suffer more than indirect financial loss from New York residence. For due process, a defendant must purposefully establish minimum contacts with the forum; creating a website accessible everywhere, without more, is not conduct purposefully directed at the forum state.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Hudson Lantern, a jazz venue in Manhattan, sues Owen Price, who runs a small club in Tulsa under the same name. Price maintains a website on an Oklahoma server listing shows, a phone number for reservations, and a notice that all tickets must be picked up at the Tulsa box office; no tickets are mailed or delivered electronically.

If Hudson Lantern sues in federal court in New York, what is the strongest argument about personal jurisdiction under C.P.L.R. § 302(a)(2)?

Explanation. Under the majority's rule, § 302(a)(2) requires a tortious act within New York. In trademark cases, infringement occurs where the passing off occurs—where the deceived customer buys the defendant's product believing it is the plaintiff's. When the website merely provides information, reservations are made by phone, and tickets must be picked up out of state, any confusing purchase occurs outside New York, not in New York. Mere website accessibility is not enough.