Personal Jurisdiction and eBay

The Tenth Circuit has issued an interesting opinion on personal jurisdiction, Dudnikov v. Chalk & Vermillion Fine Arts, Inc. (No. 06-1458).

Plaintiffs were Power Sellers on eBay. Among the things they sold were two prints that were a parody of images by the (I think kitschy) artist Erte. Using eBay’s verified rights owner program, licensees of Erte got the plaintiffs’ auction for the goods terminated. Plaintiffs sent a notice trying to get the action reversed, but defendants refused. Plaintiffs filed a DJ action in Colorado, where they live, claiming that not only did defendant’s termination cause them economic loss, but that it took its actions well aware that plaintiffs’ use was a fair use. Defendant is a Delaware corporation with its principal place of business in Connecticut.

Defendant moved to dismiss for lack of personal jurisdiction. The district court granted the motion, the 10th circuit reversed in the attached 36 page opinion. The court of appeals held that by sending eBay a letter invoking the verified rights owner provision, defendant intentionally took action to cause harm to plaintiffs in Colorado under the Supreme Court’s Calder decision. The court held that defendant’s sending the termination notice to eBay in California could fairly be considered the proximate cause of plaintiff’s claim, distinguishing cases involving cease and desist letters. Defendants’ letter as deemed to have been “expressly aimed” at Colorado even though it was sent to California, the court writing that defendants “‘express aim’ … can be said to have reached into Colorado in much the same way that a basketball player’s express aim in shooting off of the backboard is not simply to hit the backboard, but to make a basket.” The court must have been thinking of the Denver Nuggets rather than the NY Knicks.

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