Lewis & Lin recently won a dismissal of a lawsuit filed against our client, the founder and CEO of a Nevada ticketing company.
Plaintiff, a major online secondary marketplace for entertainment and sporting tickets, sued our client for alleged violation of a ticket data sharing agreement. Plaintiff alleged that the agreement provided defendant’s company access to plaintiff’s online database of tickets offered by ticket brokers, which defendant’s company could access for its customers. In exchange for the access, defendant’s company was to pay plaintiff the amount sought by the broker for any tickets purchased, plus an additional 3% fee. Plaintiff claimed that defendant owed over $2 million for unpaid fees. An arbitration was filed in Connecticut to enforce the terms of the agreement, which contained an arbitration clause and was signed by the defendant. In addition, plaintiff filed an action in Connecticut state court seeking a prejudgment remedy.
Both Plaintiff’s arbitration and court complaints named our client individually, but not the corporate entity. After removing the state court action to federal court, Lewis & Lin immediately filed a motion to dismiss for two reasons: (1) the fiduciary shield doctrine prevented a Connecticut court from exercising personal jurisdiction over the individual defendant for actions he took in Connecticut solely as an agent of the corporate entity, and (2) plaintiff failed to state a claim against the individual defendant because he did not sign the agreement that formed the basis for the parties’ dispute in his individual capacity.
The court agreed with our position, resolving both issues in our favor based on its determination that the defendant signed the contract only as a representative of a corporate entity. Analyzing the case under Connecticut law, the court ruled that in order to avoid personal liability on a contract on another’s behalf, an agent must disclose both the fact that he is acting in a representative capacity, and the identity of the principal. In this case, the legal name of the corporate entity was not disclosed in the contract; listed instead was its trade name (a “dba”), which was registered in New York. The issue thus turned on whether registering a trade name in New York provides constructive notice of that name’s user as a matter of Connecticut law—an issue of first impression.
After reviewing the purposes behind Connecticut’s and New York’s parallel statutes governing the registration of assumed business names, the court concluded that plaintiff had constructive notice that defendant was acting in a representative capacity on behalf of a known principal based in New York. Accordingly, the individual defendant, our client, “cannot be held personally liable on the contract he signed, because he contracted on behalf of a disclosed corporation.”
Shortly after the case was dismissed against our client, the parties resolved their differences amicably. The full decision is available here.
A federal court in Arizona has delivered a victory to Lewis & Lin’s client, denying a motion for a preliminary injunction seeking to transfer a domain name to the plaintiff in a breach of contract dispute.
Plaintiff alleged to have entered into a contract to buy the domain name on Sedo, the online domain name marketplace. Claiming that it did not receive the domain name after tendering the purchase price, plaintiff sued in Arizona, the state of its principal place of business. Lewis & Lin opposed, arguing that its client, a resident of Lebanon, did not have sufficient contacts with Arizona related to the case to support the exercise of jurisdiction over him.
Plaintiff asserted that our client purposely availed himself to the privilege of doing business in Arizona by (1) registering the domain name with GoDaddy, which is based in Arizona; (2) engaging in contract negotiations with plaintiff, who was based in Arizona; and (3) engaging in various post-complaint activities after knowing that plaintiff was based in Arizona.
Lewis & Lin argued that none of these contacts satisfied the inquiry required to assert jurisdiction over the defendant. First, the registration of the domain name with GoDaddy was not a “but for” cause of the lawsuit. Second, the defendant could not be said to have “purposely availed” himself to Arizona by negotiating through Sedo’s double-blind sales platform. And third, the lawsuit did not arise out of the alleged post-complaint activities.
The court agreed with Lewis & Lin on all of our points. In a nine-page opinion, the court ruled that the plaintiff “has not shown a likelihood of success on the merits or the existence of serious questions because Defendant is not subject to personal jurisdiction in this Court.” The case is Inter123 Corporation v. Ghaith, 2014 WL 1343508, No. CV-14-00463 (D. Ariz. Apr. 4, 2014).
Lewis & Lin Obtains $2 Million Arbitration Award in Contract Dispute Regarding Email Marketing Services
In a case heard before the American Arbitration Association, Lewis & Lin obtained for its client Datran Media Corp. (the predecessor to PulsePoint, Inc.) a major victory on Datran’s breach of contract claim.
Under the contract, Datran provided email marketing services to ModernAd Media LLC, with the contract renewing annually unless ModernAd provided notice of termination. ModernAd, however, stopped paying for the services beginning in August 2010, never providing the required notice of termination.
ModernAd asserted various defenses, including unconscionability, violation of New York General Obligations Law § 5-903 (regarding automatically renewing contracts), lack of authority of its Chief Operating Officer, and that an email sent by ModernAd’s CFO served as a termination notice. ModernAd also asserted a counterclaim for over $670,000, claiming that Datran unilaterally changed the pricing on a separate agreement between the parties regarding list management services.
The Arbitrator awarded Datran the full amount of damages sought for the 2010 and 2011 contract years, totaling $1,572,500. The Arbitrator also awarded over $324,000 in attorneys’ fees and expenses, and ordered ModernAd to pay $132,000 in costs associated with the proceedings. With respect to ModernAd’s counterclaim, the Arbitrator denied it in its entirety.
About PulsePoint, Inc.
Datran Media Corp, now known as PulsePoint, Inc. is an award-winning technology and marketing company that leading brands, agencies and publishers depend on to discover, reach and retain their ideal audiences across all digital media channels. PulsePoint’s top-ranked solutions for digital audience measurement, advertising, CRM, commerce and monetization have allowed thousands of companies to execute unparalleled advertising and communications campaigns across social, mobile, the Web and email. PulsePoint is headquartered in New York, with offices across the US and the UK. For more information, please visit www.pulsepoint.com.
About Lewis & Lin, LLC:
Lewis & Lin, LLC is an Internet and Intellectual Property law firm based in Brooklyn, New York. The firm’s highly experienced legal team has helped clients worldwide secure their IP rights, as well as anticipate and resolve a diverse range of Internet and IP issues. Lewis & Lin’s particular expertise lies in Internet transactions and disputes, including domain name licensing and sale agreements, domain name hijacking claims, Uniform Domain Name Dispute Resolution Policy (UDRP) disputes, and Anti-Cybersquatting Consumer Protection Act (ACPA) litigation. The team also expertly handles licensing agreements, website user agreements, service agreements and privacy policies, as well as Internet-related trademark and copyright litigation. For further information, visit www.ilawco.com.