## Facts

- CAT Internet Services (CAT) was a Pennsylvania corporation with its principal place of business in Pennsylvania.
- CAT owned the internet domain name **www.magazine.com**.
- Magazines.com, Inc. (Magazines.com) owned the internet domain name **www.magazines.com**.
- Magazines.com was a Delaware corporation with its principal place of business in Tennessee.
- Magazines.com sued CAT in Tennessee state court in a dispute connected to the parties’ competing domain names and related business activity.
- After being sued in Tennessee, CAT filed suit against Magazines.com in Pennsylvania, asserting **tortious interference with prospective contractual relations** and alleging Magazines.com’s conduct caused **pecuniary harm** to CAT’s business.
- Magazines.com moved to dismiss CAT’s Pennsylvania action for **failure to state a claim**, arguing that **Tennessee law** governed and that Tennessee did not recognize CAT’s pleaded cause of action in the form asserted.

## Issues

1. Under Pennsylvania choice-of-law rules applicable in a federal diversity case, did **Tennessee** or **Pennsylvania** substantive law govern CAT’s tort claim?
2. If Tennessee law governed, did CAT state a claim for **tortious interference with prospective contractual relations**, given Tennessee’s treatment of that cause of action?

## Decision

- The court applied Pennsylvania’s choice-of-law methodology for tort claims and concluded that **Tennessee law** governed CAT’s claim.
- Applying Tennessee substantive law, the court determined CAT’s pleaded claim for **tortious interference with prospective contractual relations** was not recognized as a cognizable cause of action on the alleged facts in the manner CAT asserted.
- The court **granted** Magazines.com’s motion to dismiss for **failure to state a claim**.

## Legal Principles

- In a federal diversity action, the forum state’s **choice-of-law** rules determine which state’s substantive law applies.
- Pennsylvania applies a flexible, contacts-and-policies choice-of-law approach in tort cases to select the law of the state with the stronger connection to the dispute and the stronger governmental concerns implicated by the litigation.
- A complaint is subject to dismissal under **Rule 12(b)(6)** when, taking the pleaded facts as true, the governing substantive law does not provide the cause of action the plaintiff asserts.
- When choice-of-law analysis selects another state’s law, a plaintiff cannot avoid dismissal by relying on a broader tort theory available in the forum state if that theory is not available under the governing state’s law.

## Conclusion

Applying Pennsylvania’s choice-of-law rules, the court selected Tennessee law to govern CAT’s tort claim arising from Magazines.com’s conduct connected to the Tennessee litigation, and it dismissed CAT’s action because the claim for tortious interference with prospective contractual relations was not recognized under Tennessee law as pleaded.


CAT Internet Services v. Magazines.com, Inc., 2001 WL 8858 (2001)