Seventh Circuit Reverses Personal Jurisdiction Win for GoDaddy
uBID, Inc., a Chicago-based company, sued The GoDaddy Group, Inc. in Illinois alleging that GoDaddy violated the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. Section 1125(d), by registering domain names that are confusingly similar to uBID's trademarks and domain names and profiting from that action by selling advertisements for the websites.
GoDaddy, which is headquartered in Arizona, moved to dismiss uBID's complaint for lack of personal jurisdiction and the District Court granted the motion. The District Court found that GoDaddy's contacts with Illinois included only two Illinois-registered domain names alleged in uBID's complaint, which contacts the court concluded were "created at the initiative of Illinois residents" and therefore could not be attributed to GoDaddy. And given that GoDaddy enters into thousands of contracts across the country, the court concluded that GoDaddy should not reasonably expect to be subject to personal jurisdiction in each of its customers' states.
The Seventh Circuit agreed with the District Court that GoDaddy was not subject to general jurisdiction in Illinois but disagreed with the court as to specific jurisdiction. The Seventh Circuit concluded that "GoDaddy has thoroughly, deliberately, and successfully exploited the Illinois market," citing GoDaddy's extensive national advertising, which reached Illinois customers, and significant national sales including many millions of dollars annually from Illinois customers. The court also concluded that GoDaddy's Illinois contacts and uBID's claims were sufficiently related to make it reasonable for GoDaddy to be sued in Illinois and found "no unfairness in requiring GoDaddy to defend that lawsuit in the courts of the state where, through the very activity giving rise to the suit, it continues to gain so much."
Circuit Judge Manion filed a concurring opinion agreeing with the ultimate conclusion that personal jurisdiction in Illinois was proper but arguing for "a more limited formula for connecting GoDaddy's contacts in Illinois with uBID's claim."
The case cite is uBID, Inc. v. The GoDaddy Group, Inc., No. 09-3927 (7th Cir. Sept. 29, 2010).
