CoStar Realty Information, Inc. v. Field
_ F.Supp.2d __, 2009 WL 841132 (D.Md., 2009).
FACTS
CoStar is a national commercial real estate information services provider, incorporated in Delaware with its principal place of business in Bethesda, Maryland. Lawson is a Florida corporation that performs real property valuations and appraisals. Defendant, Mark Field D/B/A Alliance Valuation Group (“Allianceâ€), who is not a party to the motions at issue, is a California resident doing business in California. Gressett is a Texas resident doing business as TGC Realty Counselors, with a principal place of business in Texas. Alliance entered a contract for CoStar’s services, which stipulated in part that Alliance may not provide third parties access to CoStar’s database. Alliance provided Lawson and Garrett with Alliance’s password. Lawson and Garrett used CoStar’s database without authorization for about four years.
PROCEDURAL HISTORY
Plaintiff Costar brought action against defendants alleging violations of both state and federal law in connection with the alleged impermissible use of CoStar’s website by Defendants Lawson and Gressett. Defendants moved to dismiss for lack of personal jurisdiction and for failure to state a claim, or, in the alternative for a transfer of venue.
HOLDING
The District Court, Alexander Williams, Jr., J., held that the court could exercise personal jurisdiction over the defendants.
ANALYSIS
Challenges to personal jurisdiction may be waived by either expressed or implied consent. Heller Financial Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1290 (7th Cir.1989)
Personal jurisdiction is a waivable right, and as such there are a variety of legal arrangements by which a litigant may give expressed or implied consent to the personal jurisdiction of the court. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).
Expressed or implied consent to the jurisdiction of a court is sufficient to satisfy the requirements of due process for assumption of jurisdiction over a nonresident defendant. U.S.C.A. Const. Amend. 14.
“Clickwrap†agreements, agreements that require a customer to affirmatively click a box on the website acknowledging receipt of and assent to the contract terms before he or she is allowed to proceed using the website . . . have been routinely upheld by circuit and district courts. Burcham, 2009 WL 586513 at *2.
Failure to read an enforceable online agreement, as with any binding contract, will not excuse compliance with its terms. Burcham, 2009 WL 586513 at *2.
REASONING
Defendants consented to the exercise of personal jurisdiction in Maryland because CoStar’s terms of use specifically contained a provision authorizing lawsuits to be brought in federal or state court in Maryland. Additionally the Court found consent because CoStar users were required to accept the terms of use on the first time that the user accessed the database. The user would then have to accept the terms of use periodically.
Furthermore, the court found that exercising personal jurisdiction over the defendants satisfied due process requirements because the defendants could have reasonably expected that they could be subject to suit in Maryland, given their continuous and purposeful use of CoStar’s services for four years. Additional reasons the court articulated for exercising personal jurisdiction were because defendants actively participated in initiating contact with CoStar, because the defendants assented to an implied contract with a forum selection clause, and because the defendants held themselves out to be valid users of a licensee’s account.
_ F.Supp.2d __, 2009 WL 841132 (D.Md., 2009).
FACTS
CoStar is a national commercial real estate information services provider, incorporated in Delaware with its principal place of business in Bethesda, Maryland. Lawson is a Florida corporation that performs real property valuations and appraisals. Defendant, Mark Field D/B/A Alliance Valuation Group (“Allianceâ€), who is not a party to the motions at issue, is a California resident doing business in California. Gressett is a Texas resident doing business as TGC Realty Counselors, with a principal place of business in Texas. Alliance entered a contract for CoStar’s services, which stipulated in part that Alliance may not provide third parties access to CoStar’s database. Alliance provided Lawson and Garrett with Alliance’s password. Lawson and Garrett used CoStar’s database without authorization for about four years.
PROCEDURAL HISTORY
Plaintiff Costar brought action against defendants alleging violations of both state and federal law in connection with the alleged impermissible use of CoStar’s website by Defendants Lawson and Gressett. Defendants moved to dismiss for lack of personal jurisdiction and for failure to state a claim, or, in the alternative for a transfer of venue.
HOLDING
The District Court, Alexander Williams, Jr., J., held that the court could exercise personal jurisdiction over the defendants.
ANALYSIS
Challenges to personal jurisdiction may be waived by either expressed or implied consent. Heller Financial Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1290 (7th Cir.1989)
Personal jurisdiction is a waivable right, and as such there are a variety of legal arrangements by which a litigant may give expressed or implied consent to the personal jurisdiction of the court. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).
Expressed or implied consent to the jurisdiction of a court is sufficient to satisfy the requirements of due process for assumption of jurisdiction over a nonresident defendant. U.S.C.A. Const. Amend. 14.
“Clickwrap†agreements, agreements that require a customer to affirmatively click a box on the website acknowledging receipt of and assent to the contract terms before he or she is allowed to proceed using the website . . . have been routinely upheld by circuit and district courts. Burcham, 2009 WL 586513 at *2.
Failure to read an enforceable online agreement, as with any binding contract, will not excuse compliance with its terms. Burcham, 2009 WL 586513 at *2.
REASONING
Defendants consented to the exercise of personal jurisdiction in Maryland because CoStar’s terms of use specifically contained a provision authorizing lawsuits to be brought in federal or state court in Maryland. Additionally the Court found consent because CoStar users were required to accept the terms of use on the first time that the user accessed the database. The user would then have to accept the terms of use periodically.
Furthermore, the court found that exercising personal jurisdiction over the defendants satisfied due process requirements because the defendants could have reasonably expected that they could be subject to suit in Maryland, given their continuous and purposeful use of CoStar’s services for four years. Additional reasons the court articulated for exercising personal jurisdiction were because defendants actively participated in initiating contact with CoStar, because the defendants assented to an implied contract with a forum selection clause, and because the defendants held themselves out to be valid users of a licensee’s account.