Bensusan Restaurant Corp. v. King
126 F.3d 25 (1997)
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Rule of Law:
Creating a passive website in another state, which is accessible in New York, does not constitute a 'tortious act within the state' under New York's long-arm statute, CPLR § 302(a)(2). Furthermore, such an act does not confer jurisdiction under § 302(a)(3) if the defendant's business is of a purely local character and does not derive substantial revenue from interstate commerce.
Facts:
- Since 1980, Richard B. King has operated a small cabaret in Columbia, Missouri, under the name 'The Blue Note.'
- Bensusan Restaurant Corporation runs a successful jazz club in New York City called 'The Blue Note,' and it registered the name as a federal trademark in 1985.
- In 1993, a representative for Bensusan sent a cease and desist letter to King, to which King’s attorney replied that Bensusan had no legal right to make the demand.
- In April 1996, at King's direction, a Missouri company created a website for his Missouri club.
- The website provided information about King's club, including its Missouri location, phone number for its box office, and a calendar of events.
- All actions related to the authorization, creation, and maintenance of the website were performed by persons physically present in Missouri.
- Initially, the website included a disclaimer stating it should not be confused with the New York club and provided a hyperlink to Bensusan's website, though this was later replaced with a stronger disclaimer and the hyperlink was removed.
- King's business is a local Missouri operation, and he does not transact business in New York State.
Procedural Posture:
- Bensusan Restaurant Corporation filed a lawsuit against Richard B. King in the United States District Court for the Southern District of New York, alleging trademark infringement and dilution.
- King filed a motion to dismiss the complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2).
- The district court granted King's motion and dismissed the complaint.
- Bensusan Restaurant Corporation, as appellant, appealed the district court's dismissal to the United States Court of Appeals for the Second Circuit; King is the appellee.
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Issue:
Does a New York court have personal jurisdiction over a non-resident defendant whose only contact with New York is the creation and maintenance of a website in his home state that is accessible in New York and allegedly infringes on a New York resident's trademark?
Opinions:
Majority - Van Graafeiland, Circuit Judge
No. A New York court does not have personal jurisdiction over the non-resident defendant because his actions do not satisfy the requirements of New York's long-arm statute. The court first analyzed jurisdiction under CPLR § 302(a)(2), which covers tortious acts committed 'within the state.' Citing longstanding New York precedent, the court held that this provision requires the defendant to be physically present in New York when the tortious act occurs. Because all acts related to the website's creation and maintenance happened in Missouri, jurisdiction under this section is improper, even if the alleged injury was felt in New York. The court then analyzed CPLR § 302(a)(3), which allows jurisdiction for an out-of-state tort causing in-state injury. This provision requires that the defendant not only reasonably foresee consequences in the state but also 'derive substantial revenue from interstate commerce.' The court concluded that King's club was 'unquestionably a local operation,' and that hiring national bands or serving out-of-state students did not constitute deriving substantial revenue from interstate commerce as intended by the statute. Because jurisdiction was not proper under the New York statute, the court did not reach the federal due process question.
Analysis:
This is a foundational case in the area of internet personal jurisdiction, illustrating how traditional jurisdictional rules were first applied to online activities. The court's reliance on the 'physical presence' requirement for a tortious act under New York law established a high bar for asserting jurisdiction based on a passive, informational website. This decision set an early precedent that the mere accessibility of a website in a forum state is insufficient to subject its operator to that state's jurisdiction, influencing the development of the 'sliding scale' test in later cases like Zippo. It underscores the principle that foreseeability of in-state harm alone is not enough; there must be a more direct connection or purposeful availment targeted at the forum state, or substantial commercial activity as required by the specific long-arm statute.
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