An appellate court reviews a district court's denial of a Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction de novo. When a federal court has federal question jurisdiction, personal jurisdiction over a defendant exists if the defendant is amenable to service of process under the forum state's long-arm statute and if the exercise of personal jurisdiction would not deny the defendant due process.
Appellee corporation filed a trademark infringement under the Lanham Act against appellants, two Louisiana corporations and a Texas corporation. Appellee also requested an order canceling appellants' service mark registration. In the proceeding before the district court, appellant moved to dismiss the complaint for lack of personal jurisdiction but the motion was denied. Appellant contended that they did not purposefully avail themselves of the benefits of doing business in Kentucky when they granted passwords and online banking access to preexisting customers residing in Kentucky. The district court's judgment finding personal jurisdiction over appellants was reversed.
Did the district court err in dismissing the action for lack of personal jurisdiction over appellants?
The court held that personal jurisdiction over appellants was improper because the Kentucky corporation was unable to meet the requirement of personal jurisdiction that the cause of action arose from appellants' activities in the forum state. There was no substantial connection between three or four Kentucky residents accessing their online banking and the underlying trademark infringement claim. Even assuming that the grant of passwords for online banking constituted in-state activity, appellants' only activity in Kentucky was permitting a handful of Kentucky residents to access their online banking website. This activity was, at best, tangentially related to the allegation that appellants' use of the Kentucky corporation's trademark was confusing and might lead Kentucky residents to the inaccurate conclusion that the banks were affiliated.