RENAISSANCE LEARNING, INC. v. METIRI GROUP, LLC

Case Name: RENAISSANCE LEARNING, INC. v. METIRI GROUP, LLC
(2008 U.S. Dist. LEXIS 5766)
Court: UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI, WESTERN DIVISION

Overview: Plaintiff Renaissance Learning, Inc. ("RLI"), a Wisconsin corporation, filed a complaint against defendant Metiri Group, LLC ("Metiri"), a Delaware corporation, alleging that Metiri’s website contained false information about RLI’s services. Specifically, RLI’s two counts were: injurious falsehood/commercial disparagement and false advertising and product disparagement under section 43(a) of the Lanham Act.

Facts of the Case: RLI is the leading provider of technology for personalized practice and continuous progress monitoring of reading, math, and writing in pre-K-12 schools and districts. Adopted by more than 70,000 North American schools, RLI's tools provide the practice component essential to any core reading, math, and writing curriculum. An extensive body of research confirms the effectiveness of Accelerated Reader best classroom practices in helping educators improve student reading skills.
Metiri sells a product called the Technology Solutions that Work database ("TSW"), with its primary place of business in Culver City, California. Metiri's TSW product provides a database of research studies on educational software. Metiri promotes its TSW product on its website www.metiri.com. The Metiri website can be accessed from any computer in the world that is linked to the Internet. Metiri’s website has advertised and promoted its TSW product by negatively referring to RLI's Accelerated Reader product. In 2005, Metiri sold a TSW subscription to the Missouri Department of Secondary and Elementary Education, exposing Missouri School administrators to the false statements concerning RLI’s Accelerated Reader program.
Procedural Posture: Defendant has moved to dismiss the action on the basis that the Court lacks personal jurisdiction, venue in this district is improper, and that service of process was insufficient. Alternatively, defendant seeks a transfer of venue.
Holding: Court denied Defendant’s Motion to dismiss for Lack of Personal Jurisdiction, Motion to dismiss for improper venue, Motion to dismiss for insufficient service of process, and Motion to transfer venue.
Because the defendant is not incorporated in nor has substantial business in Missouri, this court does not have general jurisdiction over defendant. However, personal jurisdiction can still be satisfied if defendant has minimum contacts within the forum state, purposefully availed itself in the forum state, and if jurisdiction is reasonable. This court relied on Zippo Manufacturing Co. v. Zippo Dot Com, Inc., to determine jurisdiction as it relates to the internet. In Zippo, the court found that "the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet." The court identified a sliding scale to be used in determining the permissible scope of personal jurisdiction based on Internet use. At one end of the spectrum are situations where a defendant clearly does business over the Internet. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site, which is what this court had to do.
Defendant likens itself to a passive web site which merely makes information available to those who are interested in it. However, defendant "deliberately and systematically availed itself of the benefit of doing business in Missouri." In 2005, the Missouri DESE paid defendant for one year's subscription to defendant's Web site. A year later, defendant actively solicited another's years subscription from the Missouri DESE and received payment from the DESE for another year of access to the web site. Through the department's subscription, all school administrators throughout the state of Missouri had access to the information on defendant's Web site and the TSW database. And because this cause of action is directly related to those contacts, personal jurisdiction is established.
For purposes of venue, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced (28 U.S.C. § 1391) Applying this rule to this case, venue is proper because this court has determined that defendant is subject to personal jurisdiction.
Federal courts generally give "considerable deference to a plaintiff's choice of forum, and thus the party seeking a transfer under § 1404(a) typically bears the burden of proving that a transfer is warranted." Even though defendant contends it would be burdensome for the corporation’s individuals to travel to Missouri for the trial, it would be more burdensome to the plaintiff because third party witnesses from Missouri would not be within the subpoena power of the California court. Such facts indicate that transfer of the case to California is inappropriate.
In its motion, defendant requests the case be dismissed pursuant to Rules 12(b)(4) and 12(b)(5) for insufficiency of service of process. Following the filing of the motion, plaintiff served a second summons on defendant, rectifying any alleged problems with the original service. Therefore, this motion is denied as moot.