No Personal Jurisdiction Over Out-of-State Defendant Who Hosted Website and Accepted Dues from Forum State Residents

In Allcarrier Worldwide Servs. v. United Network Equipment Dealer Ass’n, No. AW-11-cv-01714 (U.S. District Court for D. Md., September 22, 2011), the seminal issue was whether the Court had personal jurisdiction over the Defendant, a non-profit organization, that hosted a website and accepted dues from members worldwide, including Plaintiff and thirteen others residing in the forum state.  In holding that there was no personal jurisdiction, the Court granted the Defendants’ Motion to Dismiss.

The Court found that Defendant merely provided its members access to a website in which the members, not Defendant, engaged in business transactions related to buying and selling computer equipment. Although it granted access to members internationally, including in Maryland, its role was only “passive.” The Court declined to hold that because Defendant accepted membership dues from Plaintiff and thirteen (13) other residents of the forum state that it was subject to personal jurisdiction there. To find personal jurisdiction in the forum state would require a finding of personal jurisdiction in all states in which members resided and would eviscerate the personal jurisdiction requirements of the long arm statute and the due process clause. Defendant’s ties with the forum state, i.e., the fact that it had a handful of members from the forum state, who signed membership agreements and paid annual dues, was insufficient to support a finding of either specific or general jurisdiction. Consequently, the case was dismissed.

This case is helpful for Defendants who may do business in a state only by virtue of the web, as it limits the practical effect of such conduct on the issue of personal jurisdiction. 

Submitted by: Marisa A. Trasatti and Colleen K. O’Brien of Semmes, Bowen & Semmes