USA-PERSONAL JURISDICTION- INTERNET DEFAMATION
Hy Cite Corporation v BadBusinessBureau.com
United District Court, W.D. Wisconsin
Case No. 03-C-0421-C
8. Jannuary 2004
SUMMARY
The Court found that the degree of interactivity of a website was not the decisive factor for
determining jurisdiction and dismissed the case for lack of jurisdiction.
THE CASE
The plaintiff, Hy Cite, sells tableware and is established in Madison, Wisconsin. The
defendant badbusinessbureau.com operates a website collecting and displaying consumer
complaints against a variety of businesses. The defendant is incorporated and operates from
the West Indies. The plaintiff had brought a claim for unfair competition, false advertising,
disparagement and trademark infringement in its local court in Wisconsin. Consumers have
filed about 61,000 complaints on the defendant's site, of which about 30-40 relate to the
plaintiff's products.
The companies subject to a complaint on the defendant's website may post a rebuttal, against
a fee of US $25 for four rebuttals. The defendant also sells other products to businesses who
have been subject to a complaint, such as a 'Corporate Customer Advocacy Program', which
in this case the defendant offered to the plaintiff for a total cost of US $ 50,000. In addition to
these products, the defendants earn money by selling advertising space on their website and
by selling a book on their website called 'The Rip-Off Revenge Guide'.
The Court found that the only business link with Wisconsin was the sale of one Guide to a
resident in Wisconsin, unrelated to the issues raised in the case before the Court.
The Court stated the constitutional test for personal jurisdiction, which requires a non-resident
defendant to have certain minimum contacts with the forum state such that the maintenance of
the suit does not offend traditional notions of fair play and substantial justice. The Court
repeated the test established in the Zippo case1, where the court had made a distinction
between active and passive websites and concluded that the question of personal jurisdiction
depends on the degree of interactivity of a website. The Court criticised the Zippo test, as it
felt it is not clear why the degree of interactivity rather than the degree of actual contacts
should be decisive for the issue of jurisdiction. Secondly the Court found it inappropriate to
have a separate test for internet cases. The Court argued in favour of a test of targeting or
aiming at the residents of a particular forum and the Court conceded that for that purpose the
question of interactivity may be relevant.
The Court then examined the question of general jurisdiction, which must be 'continuous and
systematic general business contacts'2. A finding of general jurisdiction would give the Court
the power to adjudicate all disputes involving the question of personal jurisdiction over the
1
2
Zippo Mfg Co v Zippo Dot Com Inc 952 F.Supp 1119 (W.D.Pa. 1997)
Helicoptores Nacionales de Colombia SA v Hall 466 US 408 (416) (1984)
defendant in that forum. However in the instant case the Court declined a finding of general
jurisdiction, as one sale did not amount to sufficient contacts in Wisconsin. However the
Court accepted that a substantial number of sales through a website may result in a finding of
general jurisdiction.
Finally, as to specific jurisdiction, the Court found that the defendant must have either (1)
purposefully availed itself of the forum state's laws and protections or (2) caused some
intentional harm which was aimed at the plaintiff in the forum state.
The Court found that the one sale of a book and the communications between the parties
(which had been instigated by the plaintiff) were insufficient to establish minimum contracts.
The Court therefore granted the motion to dismiss for lack of jurisdiction.
COMMENTARY
This case can be contrasted with the earlier case of Euromarket Designs v Crate & Barrel
Ltd3. In that case an Illinois court found jurisdiction over an Irish defendant on the basis that it
was possible to buy the products on the website of the defendant and an Illinois resident had
bought a product from that website. The Court came to this conclusion despite the fact that
this one sale was a bogus sale and the goods were never actually shipped to Illinois but
delivered to a local Irish address.
Here the Court made clear that one unrelated sale was not sufficient to establish jurisdiction
over an out-of- state resident. The Court emphasised the importance of targeting over and
above the interactivity test pronounced in the Zippo case. This case is interesting, as it is a
move away from that doctrine. The Court pointed out that the plaintiff failed to allege any
facts, which would demonstrate that the defendant expressly aimed its activities at Wisconsin.
The Court set out the three classic requirements under the effects doctrine as established in
Calder v Jones4 and found that these were not fulfilled:



The defendant must have committed an intentional tort expressly aimed at the forum state.
These actions of the defendant must have caused harm, the brunt of which was suffered in
the forum state.
The defendant knew that this harm would be suffered in the forum state.
The Court found that it is not sufficient that the defendant has identified the plaintiff's
principal place of business on their website- this does not show that the plaintiff would suffer
the injury in that state.
Thus the Court applied a targeting test, preferring this to the more general sliding scale
approach in Zippo. It will be interesting to see whether other courts will follow this tendency.
Contributed by Julia Hörnle
3
4
96 Fsupp2d 824
465 US 788