Facts
- Flipboard, Inc., a California-based company, operated an online service that displayed and shared online content, including images, in magazine-style layouts, sometimes using third-party sources and APIs.
- Kalliope Amorphous, a Rhode Island visual artist, posted photographs on platforms including Flickr, Tumblr, and Bored Panda and later found her works accessible through Flipboard’s service.
- Amorphous’s New York counsel sent Flipboard a copyright demand letter addressed to Flipboard’s Palo Alto office, alleging infringement and demanding $3 million in damages, followed by negotiations.
- To access and use Flipboard’s service, Amorphous accepted Flipboard’s online Terms of Use, which included a forum-selection clause designating Santa Clara County, California courts and a California choice-of-law provision.
- Amorphous asserted she accepted the Terms of Use only to access the service and gather evidence of infringement.
- After settlement talks failed, Flipboard filed a declaratory-judgment action in the Northern District of California seeking a declaration of non-infringement.
- Amorphous moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2) and also filed a separate infringement and DMCA action in the Southern District of New York.
Issues
- Whether accepting Flipboard’s online Terms of Use with a forum-selection clause constituted consent to personal jurisdiction in California federal court.
- Whether, apart from consent, Amorphous had sufficient suit-related contacts with California to support specific personal jurisdiction consistent with due process.
- Whether enforcing jurisdiction in California would be unreasonable under “traditional notions of fair play and substantial justice.”
Decision
- The court denied Amorphous’s Rule 12(b)(2) motion to dismiss.
- The court held Amorphous consented to California jurisdiction by assenting to the Terms of Use containing a forum-selection clause.
- The court concluded enforcement of the clause was not unreasonable or unjust, rejecting the argument that assent was coerced by the need to gather evidence.
- The court found jurisdiction was also supported, in the alternative, by Amorphous’s suit-related contacts with California, including directing a demand letter and negotiations toward a California company.
- The court determined exercising jurisdiction did not offend fair play and substantial justice.
Legal Principles
- A valid forum-selection clause can operate as consent to personal jurisdiction in the selected forum.
- Online terms are enforceable where the forum-selection clause is reasonably communicated and the user affirmatively assents; a party’s subjective motive for assent generally does not negate contractual consent.
- A forum-selection clause will be enforced absent a strong showing of unreasonableness, such as fraud, overreaching, or inconvenience so severe that it effectively denies a party a meaningful opportunity to be heard.
- Specific jurisdiction may exist when a nonresident intentionally directs a legal threat or related conduct at a forum resident, knowing the principal impact will be felt in the forum, and the dispute arises out of that conduct.
- Due process reasonableness considers burdens on the defendant, the forum’s interest, the plaintiff’s interest in effective relief, efficiency, and shared substantive policies; modern communications and litigation conduct may reduce claimed burdens.
Conclusion
The court held that accepting an online terms-of-use agreement with a California forum-selection clause constituted consent to personal jurisdiction in California and, in any event, the defendant’s demand letter and negotiations directed at a California company supported specific jurisdiction; exercising jurisdiction was consistent with fair play and substantial justice.