## Facts

- Colorado residents Karen Dudnikov and Michael Meadors operated a home-based online business selling goods through eBay.
- They listed fabric depicting Betty Boop in a pose resembling well-known works associated with artist Erté.
- Chalk & Vermilion Fine Arts, Inc. (U.S. agent) and SevenArts, Ltd. (copyright owner) believed the listing infringed their copyrights.
- Defendants submitted a notice through eBay’s VeRO program to eBay in California, causing eBay to suspend the plaintiffs’ auction and allegedly harming their business and eBay standing.
- Plaintiffs contacted defendants seeking withdrawal of the notice and offered not to relist the item; defendants refused and stated they intended to file federal litigation within ten days.
- Plaintiffs filed a declaratory judgment action in federal court in Colorado seeking a declaration of noninfringement.
- Defendants moved to dismiss for lack of personal jurisdiction; the district court dismissed under Rule 12(b)(2).

## Issues

1. Whether Colorado courts could exercise specific personal jurisdiction over out-of-state defendants based on a VeRO takedown notice sent to eBay in California and related litigation threats directed at Colorado residents.
2. Whether the defendants’ conduct satisfied purposeful direction under the Calder “effects” test, including “express aiming” at Colorado and knowledge that injury would be felt there.
3. Whether exercising jurisdiction in Colorado would be reasonable under “fair play and substantial justice.”

## Decision

- The Tenth Circuit reversed the dismissal for lack of personal jurisdiction and remanded.
- The court held defendants committed intentional acts by submitting the VeRO notice and sending litigation threats.
- The court found “express aiming” at Colorado because defendants knew plaintiffs operated in Colorado and acted to stop their Colorado-run auction and affect their Colorado business, even though the notice was sent to a third party outside the forum.
- The court concluded defendants knew the principal harm would be suffered in Colorado where plaintiffs lived and conducted their business.
- The claims arose out of the jurisdictionally relevant conduct because the declaratory judgment action was triggered by the takedown notice and threats.
- Exercising jurisdiction was consistent with fair play and substantial justice given defendants’ purposeful direction at Colorado residents and Colorado’s interest in providing a forum for them.

## Legal Principles

- Specific personal jurisdiction requires minimum contacts showing purposeful direction toward the forum and that the claim arises from those contacts, plus a showing that jurisdiction is reasonable.
- Under the Calder effects framework for intentional conduct, purposeful direction may be shown by (1) an intentional act (2) expressly aimed at the forum (3) with knowledge that the brunt of injury will be felt there.
- Internet-mediated enforcement actions aimed at a third-party platform can be “expressly aimed” at the forum when the defendant knows the true target is a forum resident and intends to affect that resident’s forum-based business.
- After minimum contacts are shown, jurisdiction must still comport with traditional notions of fair play and substantial justice, weighing burdens on the defendant against forum and plaintiff interests and efficient resolution.

## Conclusion

The Tenth Circuit held that defendants’ deliberate use of an online takedown mechanism and accompanying litigation threats created specific personal jurisdiction in Colorado because the conduct was intended to disrupt Colorado residents’ business and foreseeably caused injury there, making Colorado a fair forum for the declaratory judgment action.


Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008)