Hudson v. University of Puerto Rico

1. Case Name:

Stephen C. Hudson v. The University of Puerto Rico

2. Case Citation:

2010 WL 1131462; 2010 U.S. Dist. LEXIS 27201

Lexis: 2010 U.S. LEXIS 27201

3. Facts of the Case

Stephen C. Hudson, a resident of Minnesota, sued the University of Puerto Rico in a promissory estoppel action.

Hudson owned Public Enterprise, Inc. (“PEI”), a company which develops various business strategies for educational institutions providing food and beverage services. The University of Puerto Rico (“University”) began contract negotiations with PEI in 1999. Given the distance, the parties primarily communicated through telephone, e-mail, and fax. Eventually, Hudson took several trips to Puerto Rico in an attempt to gain the University’s business. Although the parties negotiated during this period, no agreement was ever reached.

Hudson became officially disenchanted with the University’s negotiation tactics in September of 2009, ten years after negotiations had commenced. Hudson alleged that he had relied in good faith on the University’s verbal and written statements that an official contract would be forthcoming, and as such he had begun work on the project and had thus suffered economic damages.

Hudson filed suit in Minnesota alleging that Minnesota had personal jurisdiction on two grounds: (1) the University participated in a “Practice Based Learning Collaborative” blog with the University of Minnesota (http://blog.lib.umn.edu/gruwell/umurpblc/) that Minnesota residents could view, and (2) the University’s had contacts with Hudson while he was in Minnesota.

Predictably, the University denied that Minnesota had jurisdiction over this action.

4. Procedural Posture:

Hudson filed a promissory estoppel suit in the United States District Court for the District of Minnesota. The University filed a 12(b)(2) motion to dismiss for lack of personal jurisdiction.

5. Holding

The court granted the University’s 12(b)(2) motion and dismissed the case for lack of personal jurisdiction.

6. Reasoning

The court utilized the Zippo test and determined that the PBLC blog fell into the category of a “passive” website, and thus was insufficient to establish personal jurisdiction over the University. The blog mainly just provided information and did not allow its readers to exchange information with the host computer. The court also noted that the plaintiff had not provided them with any evidence about the amount of contact between Minnesota residents and the blog (i.e. no evidence of hit counting).

The court also found that the University of Puerto Rico’s relationship with the University of Minnesota in creating and maintaining the PBLC blog was insufficient to establish jurisdiction, again emphasizing that the parties appeared to be acting separately in sharing their own information, albeit together, on the PBLC website.

The court also found that the University of Puerto Rico’s contracts with the plaintiff, standing alone, were insufficient to satisfy jurisdiction.

7. Critical Analysis

This case serves to re-emphasize the importance of the Zippo Test and website passivity, even when two servers in different jurisdictions cooperate with each other to post a joint (but passive) website.

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