United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 17, 1999 Decided January 11, 2000
No. 99-7097
GTE New Media Services Incorporated,
Appellee
v.
BellSouth Corporation, et al.,
Appellants
Appeal from the United States District Court
for the District of Columbia
(No. 97cv02314)
Charles Rothfeld argued the cause for appellants. With him
on the briefs were Richard J. Favretto, Andrew J. Morris
and Miriam R. Nemetz.
Thomas A. Isaacson argued the cause for appellee. With
him on the brief were Robert F. Ruyak and Alan M. Wise-
man. Kenneth W. Brothers, Mark C. Hansen, Stephen A.
Weisbrod and Glenn B. Manishin entered appearances.
Before: Edwards, Chief Judge, Sentelle and Randolph,
Circuit Judges.
Opinion for the Court filed by Chief Judge Edwards.
Edwards, Chief Judge: The matter at hand involves an
interlocutory appeal brought pursuant to 28 U.S.C. s 1292(b).
The issues presented are whether the District Court may
assert personal jurisdiction over the defendants and whether
venue is proper in the District of Columbia ("District") when
the defendants' sole contact with this forum is the operation
of Internet websites that are accessible to persons in the
District. The District Court tentatively concluded that the
quality and nature of the websites militated in favor of
personal jurisdiction. The trial judge noted, however, that
"[a]ll of the interactive website cases reviewed [by the Dis-
trict Court] involved defendants with at least some physical
contact with the forum," whereas the defendants in this case
have no physical contact with the forum. GTE New Media
Servs., Inc. v. Ameritech Corp., Order Certifying for Interloc-
utory Appeal the Court's Ruling That Personal Jurisdiction
Exists and Staying Proceedings at 3, reprinted in J.A. 218.
Given the unusual circumstances of this case, the District
Court determined that the questions of personal jurisdiction
and venue should be certified for immediate review by this
court.
The underlying action in this case rests on a complaint by
GTE Media Services, Inc. ("GTE") against various defen-
dants, including BellSouth Corp., BellSouth Enterprises, Inc.,
BellSouth Advertising & Publishing Corp., Intelligent Media
Ventures, Inc., SBC Communications Inc., Pacific Telesis
Group, Pacific Bell Interactive Media, US West, Inc., and US
West Media Group, for alleged violations of Sections 1 and 2
of the Sherman Antitrust Act. GTE contends that the defen-
dants engaged in a conspiracy with an illicit purpose to
dominate the Internet business directories' market. The
defendants, in turn, moved to dismiss the complaint for want
of personal jurisdiction. The defendants argue that the mere
ability of District residents to access the defendants' Internet
Yellow Pages from locations within the city is insufficient to
establish personal jurisdiction.
GTE contends that the action, tortious injury, and "persis-
tent course of conduct" required under the District's long-arm
statute are established, because the defendants have entered
into an agreement outside of the District with a purpose of
causing Internet users in the District to use the defendants'
Internet links to pursue business leads in the District. In
other words, GTE asserts that the alleged conspiracy was
designed to cause Internet users who otherwise would have
had access to GTE's links to be diverted to the defendants'
links, which in turn resulted in more advertising revenue for
the defendants. GTE argues, in the alternative, that Section
12 of the Clayton Act provides an independent basis for
personal jurisdiction.
On the record at hand, we hold that the District Court
erred in concluding that there is sufficient evidence here to
support personal jurisdiction. And GTE's tortured interpre-
tation of Section 12 of the Clayton Act cannot save the day.
However, at this juncture of the case, GTE is still free to
supplement the record through jurisdictional discovery. The
case is hereby remanded to the District Court for further
proceedings, including additional discovery and possible
amendments to the complaint, should that be deemed war-
ranted. We decline to pass upon the District Court's theory
of jurisdiction, which is premised on the supposed existence of
certain facts to show substantial effects, when we have no
way of knowing whether there are indeed facts to support the
asserted theory. And we reject GTE's theory of jurisdiction,
which appears to rest on a view that mere accessibility to an
Internet site in the District is enough of a foundation upon
which to base personal jurisdiction.
I. Background
The relevant facts are relatively simple. GTE alleges that
in July 1997, five regional Bell operating companies (Ameri-
tech Corp., Bell Atlantic, BellSouth, SBC Corp., US West)
and their relevant subsidiaries conspired to capture, control,
and dominate the Internet business directories' market. See
GTE New Media Servs. Inc. v. Ameritech Corp., 97-CV-2314,
Mem. Op. at 5-6, reprinted in Joint Appendix ("J.A.") 185-86.
After the alleged conspirators held meetings in California,
Colorado, Georgia, and Michigan, they agreed to provide
jointly a coded map of the United States that would allow
users of their Internet Yellow Pages to access particular
states and particular businesses. Each of the regional Bell
operating companies would provide exclusive service to a
particular region, and the other companies apparently agreed
not to compete with the designated exclusive server in its
given region. The regions designated to each regional Bell
operating company corresponded to the region to which the
company provided telecommunications service. See id. at 5,
reprinted in J.A. 185. The regional Bell operating compa-
nies' next step was to obtain exclusive links for their map on
well-known Internet browser sites run by Netscape Commu-
nications Corp. ("Netscape") and Yahoo, Inc! ("Yahoo"), to
ensure that users of these popular sites would be specifically
directed to the operating companies' Internet Yellow Pages.
Before the alleged conspiracy, GTE had a non-exclusive
contract with Netscape, pursuant to which Netscape offered a
choice of Internet business directories on its site, including
GTE's SuperPages. See id. at 7, reprinted in J.A. 187.
When users accessed the "Yellow Pages" option on Net-
scape's toolbar, they had access to GTE's website. GTE
asserts, however, that Netscape terminated this arrangement
on July 18, 1997, by removing its links to GTE's SuperPages,
including hyperlinks on Yahoo.
On October 6, 1997, GTE filed its complaint against the five
regional Bell operating companies, Netscape, and Yahoo,
claiming, among other things, violations of Sections 1 and 2 of
the Sherman Antitrust Act. Several defendants (i.e., Bell-
South, SBC Corp. and US West, excepting US West Dex,
Inc.) moved to dismiss the complaint for lack of personal
jurisdiction; two (i.e., BellSouth and SBC Corp.) also argued
that venue was improper in the District of Columbia. On
September 28, 1998, the District Court denied both motions
to dismiss, finding that (1) the court had personal jurisdiction
under section 13-423(a)(4) of the D.C. long-arm statute, be-
cause GTE had sufficiently alleged a tortious injury in the
District caused by the defendants' acts outside of the District;
and (2) because venue is proper under 28 U.S.C. s 1391
wherever a party is subject to personal jurisdiction, the
finding of personal jurisdiction also resolved the venue ques-
tion. On March 29, 1999, however, the District Court certi-
fied an order for interlocutory appeal and ordered a stay of
proceedings. The District Court noted that, although it had
found that the defendants operated an interactive website
that supported a finding of personal jurisdiction,
the instant case differs from any other reported case ...
in that it involves an interactive website with no other
contacts with the District of Columbia. All of the inter-
active website cases reviewed by this court involved
defendants with at least some physical contact with the
forum. While this court has concluded that the quality
and nature of the [operating companies'] website favors
the exercise of personal jurisdiction in the District of
Columbia, certainly a substantial ground for difference of
opinion concerning the ruling exists.
GTE New Media Servs. Inc., Order Certifying for Interlocu-
tory Appeal the Court's Ruling That Personal Jurisdiction
Exists and Staying Proceedings at 3, reprinted in J.A. 218
(emphasis added). On April 8, 1999, the defendants filed a
petition for permission to appeal. This court entered an
order granting permission to appeal on May 28, 1999.
II. Discussion
A. The District of Columbia Long-Arm Statute and the
Due Process Clause of the U.S. Constitution
To establish personal jurisdiction over a non-resident, a
court must engage in a two-part inquiry: A court must first
examine whether jurisdiction is applicable under the state's
long-arm statute and then determine whether a finding of
jurisdiction satisfies the constitutional requirements of due
process. See United States v. Ferrara, 54 F.3d 825, 828 (D.C.
Cir. 1995).
The District's long-arm statute provides, in relevant part,
that
[a] District of Columbia court may exercise personal
jurisdiction over a person, who acts directly or by an
agent, as to a claim for relief arising from the person's--
(1) transacting any business in the District of Columbia;
... (4) causing tortious injury in the District of Columbia
by an act or omission outside the District of Columbia if
he [i] regularly does or solicits business, [ii] engages in
any other persistent course of conduct, or [iii] derives
substantial revenue from goods used or consumed, or
services rendered, in the District of Columbia.
D.C. Code Ann. s 13-423(a) (1981). A plaintiff seeking to
establish jurisdiction over a non-resident under the foregoing
provisions of the long-arm statute must demonstrate, pursu-
ant to section (a)(1), that the plaintiff transacted business in
the District, or show, pursuant to section (a)(4), that the
plaintiff caused a tortious injury in the District, the injury
was caused by the defendant's act or omission outside of the
District, and the defendant had one of the three enumerated
contacts with the District. Section (a)(1)'s "transacting any
business" clause generally has been interpreted to be coex-
tensive with the Constitution's due process requirements and
thus to merge into a single inquiry. See Ferrara, 54 F.3d at
828. Section (a)(4) has been construed more narrowly, how-
ever. See Crane v. Carr, 814 F.2d 758, 762 (D.C. Cir. 1987)
("The drafters of this provision apparently intended that the
(a)(4) subsection would not occupy all of the constitutionally
available space.... This court has explicitly noted, more-
over, that (a)(4) of the D.C. long-arm statute may indeed stop
short of the outer limit of the constitutional space.").
Even when the literal terms of the long-arm statute have
been satisfied, a plaintiff must still show that the exercise of
personal jurisdiction is within the permissible bounds of the
Due Process Clause. In other words, a plaintiff must show
"minimum contacts" between the defendant and the forum
establishing that "the maintenance of the suit does not offend
traditional notions of fair play and substantial justice." Inter-
national Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(internal quotation marks omitted). Under the "minimum
contracts" standard, courts must insure that "the defendant's
conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there."
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297
(1980).
Cases applying the familiar personal jurisdiction analysis to
the Internet are thus far relatively scarce; only the Second,
Fifth, Sixth, and Ninth Circuits have ventured into this
domain. Three decisions among the five issued by these four
appellate courts have dismissed complaints for want of per-
sonal jurisdiction.
In Bensusan Restaurant Corp. v. King, 126 F.3d 25, 29 (2d
Cir. 1997), for example, the Second Circuit found that the
operator of a Missouri jazz club named "The Blue Note" did
not commit tortious acts in New York within the meaning of
New York's long-arm statute when he established an Internet
website for his club that contained a hyperlink to a New York
club of the same name. The court held that, because the
Missouri club operator should not have reasonably expected
his allegedly tortious acts to have consequences in New York
and because he did not significantly engage in interstate
commerce, it would not extend long-arm jurisdiction under
another subsection of the long-arm statute.
Similarly, in Mink v. AAAA Development LLC, 190 F.3d
333, 336-37 (5th Cir. 1999), the Fifth Circuit declined to find
personal jurisdiction in a case in which the developer of a
computer software program brought an action against pur-
ported competitors and sought to rest personal jurisdiction on
a finding that the defendant operated an Internet website
that was accessible by residents in the forum state. The
court reasoned that "[t]here was no evidence that [the defen-
dant] conducted business over the Internet by engaging in
business transactions with forum residents or by entering
into contracts over the Internet." Id. at 337. Thus, although
the defendant's website had an e-mail address that allowed
consumers to interact with the company, the court noted that
"[t]here is no evidence ... that the website allows [the
defendant] to do anything but reply to e-mail initiated by
website visitors." Id. The court also noted that the website
was not interactive enough to support a finding of jurisdic-
tion, because customers could not purchase anything on-line.
See id.
Finally, in Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414,
419-20 (9th Cir. 1997), the Ninth Circuit declined to find
personal jurisdiction in an infringement action in Arizona
against a Florida corporation that provided consulting ser-
vices for strategic management on the web and used the same
name as the plaintiff's corporation. The court found that the
challenged web page was essentially passive. The court
found that there was "no question that anyone, anywhere
could access that home page and thereby learn about the
services offered," but it failed to "see how from that fact alone
it can be inferred that [the defendant] deliberately directed
its merchandising efforts toward Arizona residents." Id. at
419. In addition, the court noted that because the defendant
did not encourage people in Arizona to access its sites and
there was no evidence that any part of the defendant's
business was sought or achieved in Arizona--in fact, no
Arizona resident other than the plaintiff had ever "hit" the
defendant's site--there was no purposeful availment and thus
no personal jurisdiction. See id.
The two decisions in which appellate courts have found
personal jurisdiction in cases involving Internet-related dis-
putes present facts that are quite different from those in the
instant case. In CompuServe, Inc. v. Patterson, 89 F.3d
1257, 1264 (6th Cir. 1996), for example, the Sixth Circuit
found personal jurisdiction over a defendant in Ohio, because
the defendant had entered into a contract that allowed him to
market his software in other states with Ohio-based Compu-
Serve acting as his distributor. The court concluded that it
was reasonable to subject the defendant to suit in Ohio,
because it was home to the computer network service that he
himself had chosen to employ. The court also determined
that the defendant was on notice that he had created a
connection with Ohio, because (1) he had entered into con-
tracts that would be governed by Ohio law with an Ohio-
based company; and (2) he sent his software, via electronic
links, to Ohio and advertised his products on CompuServe.
The court highlighted that "it is Patterson's relationship with
CompuServe as a software provider and marketer that is
crucial to this case." Id. at 1264. In this case, however, GTE
has yet to offer evidence of either a contractual relationship
or a comparable marker of activity directed uniquely toward
the District.
Likewise, in Panavision International, L.P. v. Toeppen,
141 F.3d 1316 (9th Cir. 1998), the Ninth Circuit upheld
personal jurisdiction in a case involving a "cyber-pirate" (i.e.,
someone who steals valuable trademarks, establishes domain
names on the Internet using the trademarks, and then offers
to sell the domain names back to the rightful trademark
owners), see id. at 1318, by employing the "effects doctrine,"
which holds that "jurisdiction may attach if the defendant's
conduct is aimed at or has an effect in the forum state." Id.
at 1321. The court concluded that "[t]he brunt of the harm to
Panavision was felt in California," given that Panavision's
principal place of business was in California and "the heart of
the theatrical motion picture and television industry is located
there." Id. In the instant case, unlike Panavision, there is
nothing as yet to indicate that the defendants engaged in
unabashedly malignant actions directed at or felt in this
forum.
The District Court in this case asserted personal jurisdic-
tion, pursuant to D.C. Code Ann. s 13-423(a)(4), on the
ground that the defendants allegedly caused tortious injury in
the District by an act outside the District followed by a
persistent course of conduct in the District. Under this
theory of jurisdiction, it does not matter that the defendants
have no demonstrated physical contacts in the District.
Rather, it is enough, according to the District Court, that the
defendants entered into an agreement outside of the District
with an eye toward attracting Internet users in the District to
their websites (instead of to GTE's SuperPages) and thereby
draw advertisers away from GTE. The District Court found
that, on these asserted facts alone, the defendants foreseeably
caused tortious injury to GTE's business in this forum. See
Ameritech Corp., Mem. Op. at 10, reprinted in J.A. 190. The
defendants' course of conduct was seen to be "persistent" by
the District Court, because their websites are "highly interac-
tive" with District users and significantly commercial in both
quality and nature. Id. at 11-12, reprinted at J.A. 191-92.
We disagree with this line of reasoning.
There is no evidence in this record to support the claim
that the defendants "secured advertising revenue by increas-
ing the user traffic on their websites." Id. at 13, reprinted at
J.A. 193. At best, GTE has provided only conclusory state-
ments and intimations to buttress its assertion that it lost
advertising revenues as a result of the defendants' actions.
These are not enough. Cf. First Chicago Int'l v. United
Exchange Co., 836 F.2d 1375, 1378-79 (D.C. Cir. 1988) ("Con-
clusory statements ... '[do] not constitute the prima facie
showing necessary to carry the burden of establishing person-
al jurisdiction.' ... [T]he 'bare allegation' of conspiracy or
agency is insufficient to establish personal jurisdiction." (cita-
tion omitted)). We will neither assume nor infer that the
alleged conspiracy had substantial effects of the sort alleged
by GTE, because to do so would be to assume or infer the
answer to the very question that is before us.
Furthermore, it is difficult to understand, at least on the
present record, what tortious injury has been suffered by
GTE in the District. GTE claims that it has lost advertising
revenues by virtue of the defendants' allegedly unlawful
conspiracy. However, nothing has been offered to indicate
that these advertising revenues were lost in the District,
either by lost sales or lost revenue collections.
Additionally, personal jurisdiction surely cannot be based
solely on the ability of District residents to access the defen-
dants' websites, for this does not by itself show any persistent
course of conduct by the defendants in the District. Access
to a website reflects nothing more than a telephone call by a
District resident to the defendants' computer servers, all of
which apparently are operated outside of the District. And,
as this court has held, mere receipt of telephone calls outside
the District does not constitute persistent conduct "in the
District" within the meaning of the long-arm statute. See
Tavoulareas v. Comnas, 720 F.2d 192, 194 (D.C. Cir. 1983).
Finally, GTE appears to suggest that, when a District
resident accesses the defendants' Yellow Pages websites, the
defendants are somehow "transacting business" in the Dis-
trict. This is a far-fetched claim on this record. Access to an
Internet Yellow Page site is akin to searching a telephone
book--the consumer pays nothing to use the search tool, and
any resulting business transaction is between the consumer
and a business found in the Yellow Pages, not between the
consumer and the provider of the Yellow Pages. In short,
there is nothing here to indicate that District residents actu-
ally engage in any business transactions with the defendants.
When stripped to its core, GTE's theory of jurisdiction
rests on the claim that, because the defendants have acted to
maximize usage of their websites in the District, mere acces-
sibility of the defendants' websites establishes the necessary
"minimum contacts" with this forum. See Br. for Appellee at
16. This theory simply cannot hold water. Indeed, under
this view, personal jurisdiction in Internet-related cases
would almost always be found in any forum in the country.
We do not believe that the advent of advanced technology,
say, as with the Internet, should vitiate long-held and invio-
late principles of federal court jurisdiction. The Due Process
Clause exists, in part, to give "a degree of predictability to
the legal system that allows potential defendants to structure
their primary conduct with some minimum assurance as to
where that conduct will and will not render them liable to
suit." World-Wide Volkswagen Corp., 444 U.S. at 297. In
the context of the Internet, GTE's expansive theory of per-
sonal jurisdiction would shred these constitutional assurances
out of practical existence. Our sister circuits have not accept-
ed such an approach, and neither shall we.
B. The Clayton Act
GTE asserts an alternative basis for personal jurisdiction,
resting on Section 12 of the Clayton Act, 15 U.S.C. s 22
(1994). Section 12 provides:
Any suit, action, or proceeding under the antitrust
laws against a corporation may be brought not only in
the judicial district whereof it is an inhabitant, but also in
any district wherein it may be found or transacts busi-
ness; and all process in such cases may be served in the
district of which it is an inhabitant, or wherever it may
be found.
15 U.S.C. s 22 (emphasis added). The language of the
statute is plain, and its meaning seems clear: The clause
before the semi-colon relates to a supplemental basis for
venue in actions under the Clayton Act; the clause after the
semi-colon relates to nationwide service of process in anti-
trust cases; and invocation of the nationwide service clause
rests on satisfying the venue provision.
Although both parties agree that the clause regarding
nationwide service also confers nationwide jurisdiction, they
disagree over whether the venue clause must be satisfied for
there to be nationwide personal jurisdiction over defendants
in antitrust cases. The defendants argue that "[p]roper
venue under Section 12 is ... a prerequisite for nationwide
service (and jurisdiction): [I]f venue does not lie under the
provision, nationwide service is impermissible." See Reply
Br. of Appellants at 22. GTE contends that compliance with
Section 12's venue provision is not a prerequisite for use of its
national jurisdiction provision. More specifically, GTE ar-
gues that venue may be obtained under either Section 12 or
under the general federal venue provision of 28 U.S.C.
s 1391, and that use of either route allows resort to Section
12's national jurisdiction provision.
GTE relies on Go-Video, Inc. v. Akai Electric Co., 885 F.2d
1406 (9th Cir. 1989), to buttress its position. In Go-Video, the
Ninth Circuit rejected the argument that Section 12 must be
read as an "integrated whole," even though the reference to
serving process "in such cases" clearly seems to require that
the preceding clause's venue requirements be established
before nationwide service can be authorized. The court rea-
soned that "as a general matter, courts have interpreted
special venue provisions to supplement, rather than preempt,
general venue statutes." Id. at 1409. Under this analysis, an
interpretation of Section 12 that viewed the first clause as
restricting the second clause would contradict the general
view of Section 12 as expanding the bounds of venue. We
disagree with the reasoning of the Ninth Circuit.
The desire to view Section 12's venue provision as expan-
sive does not justify the Ninth Circuit's total disregard of the
first clause, particularly given the literal convolutions re-
quired to jettison the first clause. Indeed, it seems quite
unreasonable to presume that Congress would intentionally
craft a two-pronged provision with a superfluous first clause,
ostensibly link the two provisions with the "in such cases"
language, but nonetheless fail to indicate clearly anywhere
that it intended the first clause to be disposable. Even the
Ninth Circuit seems to recognize that its sweeping interpreta-
tion of Section 12 tends to make the venue provision "wholly
redundant." Id. at 1413.
On the question of the meaning of Section 12, we align
ourselves with the position taken by the Second Circuit. See
Goldlawr, Inc. v. Heiman, 288 F.2d 579, 581 (2d Cir. 1961),
rev'd on other grounds, 369 U.S. 463 (1962). The court in
Goldlawr reasoned that Section 12
specifies where suit against a corporation under the
antitrust laws may be brought, namely, in a district
where it is an inhabitant and also where 'it may be found
or transacts business.' Conversely, it should follow that
if a corporation is not an inhabitant of, is not found in,
and does not transact business in, the district, suit may
not be so brought. By statutory grant if suit is brought
as prescribed in this section 'all process in such cases
may be served in the district of which it [the corporation]
is an inhabitant, or wherever it may be found.' Thus, 'in
such cases,' Congress has seen fit to enlarge the limits of
the otherwise restricted territorial areas of process. In
other words, the extraterritorial service privilege is given
only when the other requirements are satisfied.
Id.
In our view, the Second Circuit's unadorned interpretation
of Section 12 is clearly correct. See also Herbert Hoven-
kamp, Personal Jurisdiction and Venue in Private Antitrust
Actions in the Federal Courts, 67 Iowa L. Rev. 485, 509 (1982)
("A better approach is to interpret section 12 the way it is
written. Worldwide service is proper only when the action is
brought in the district where the defendant resides, is found,
or transacts business."). A party seeking to take advantage
of Section 12's liberalized service provisions must follow the
dictates of both of its clauses. To read the statute otherwise
would be to ignore its plain meaning. Thus, because GTE
has not shown that the defendants were inhabitants of, may
be found in, or transacted business in the District, as required
by Section 12's first clause, it cannot avail itself of Section
12's second clause.
C. Jurisdictional Discovery
Finally, GTE contends that if, on the existing record, there
are insufficient grounds to support personal jurisdiction, it is
still entitled to jurisdictional discovery. We agree. This
court has previously held that if a party demonstrates that it
can supplement its jurisdictional allegations through discov-
ery, then jurisdictional discovery is justified. See Crane, 814
F.2d at 760 (vacating, in part, the District Court's judgment,
because "Crane's case was dismissed with no opportunity for
discovery on the issue of personal jurisdiction").
Such is the case here. The record now before this court is
plainly inadequate. We do not even know for certain which
defendants own and operate which websites. Even the par-
ties at oral argument agreed that the jurisdictional questions
at issue are quite different for some defendants as opposed to
others. And, as the record now stands, there is absolutely no
merit to GTE's bold claim that the parent companies and
subsidiaries involved in this lawsuit should be treated identi-
cally. Jurisdictional discovery will help to sort out these
matters. GTE also claims that it may be able to present new
facts to bolster the District Court's theory of "substantial
effects" within the District. We cannot tell whether jurisdic-
tional discovery will assist GTE on this score, but it is entitled
to pursue precisely focused discovery aimed at addressing
matters relating to personal jurisdiction.
III. Conclusion
For the foregoing reasons, the case is hereby remanded to
the District Court for further proceedings.