Order Transferring Case

(ECF No. 7)

ANDREW P. GORDON, District Judge.

SMP GmbH & Co. KG seeks to wrest the domain ONU.com from C3 Holding, GmbH, who recently purchased it. SMP owns a German website that allows consumers to rent out their homes. C3 is an Austrian marketing company that offers brand-loyalty consulting services to companies in Europe. Both companies apparently invested hundreds of thousands of dollars developing new products that they plan to sell under the brand "ONU." SMP plans to open a new branch of its house-sharing business at ONU.com; C3 plans to roll out a new consumer-loyalty program hosted at ONU.com.

SMP brought this case alleging that C3 is a cybersquatter under the Anticybersquatting Consumer Protection Act (the "ACPA"), so that SMP should be given ONU.com. The ACPA allows an owner of a trademark to regain possession of a domain that is confusingly similar to its mark.

I need not reach the merits of SMP's claims because I have no jurisdiction over this case. Instead of dismissing this case I will transfer it to the Eastern District of Virginia. The parties agree that the domain name registry is located there so jurisdiction is proper, and SMP has requested this transfer in the event that I have no jurisdiction. This case is therefore transferred.

I. Discussion

SMP admits that C3 has no minimum contacts in Nevada, so I would have jurisdiction, if at all, only under the ACPA's in rem jurisdictional provision, 15 U.S.C. § 1125(d)(2) (the "in rem provision").1 SMP believes that I have jurisdiction under this provision so long as it deposits the domain documents with a court in this district. But both the statute's text and the overwhelming weight of caselaw disagree.

Within the in rem provision (which is subsection (2) of section (d)),2 there are two subsections that matter here: (A) and (C). Subsection (A) sets out the initial requirements for jurisdiction. It says "an in rem civil action" "may [be] filed" "in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located."3 In other words, there is jurisdiction in the district where the company that holds the registry is located — here, the parties agree that the registrar (Verisign) is located in Virginia.

Subsection (C) says that "[i]n an in rem action under this paragraph, a domain name shall be deemed to have its situs in the judicial district in which . . . documents sufficient to establish control" over the domain name are deposited with the court.4 SMP contends that subsection (C) is an independent grant of jurisdiction so that it can sue in any district where it deposits domain control documents. But that reading does not jive with either the statute's text or the authority interpreting it.

First, the text of these provisions cut against SMP's reading. The statute expressly states that "a civil action" can be brought in a district where the registrar is located; there is no similar language in the section discussing the deposited documents. Much the opposite: the document-deposit subsection states that it applies "in an in rem action under this paragraph" — which I can only take to mean an existing in rem action, where there is already jurisdiction under subsection (A).5 Further, subsection (C) says the "situs" of the domain name is in the district once the documents are deposited, it does not say "jurisdiction" is in the district, or more importantly it does not use the language from subsection (A) to say that "a civil action can be filed" in this district.

The canons of construction also militate against reading the in rem provision so that jurisdiction is conferred by merely depositing documents with a court. If subsection (C) means that a plaintiff can sue in any district so long as it deposits documents there, the rest of section (2) is meaningless. Plaintiffs can simply sue wherever they want. That reading would violate the canon of construction prohibiting an interpretation that renders a provision nugatory.6 And to assume that Congress would use different language to grant the same sort of jurisdiction — when subsections (A) and (C) are only a few lines apart — would equally violate the canons that provisions should be interpreted by their ordinary meaning and in light of their surrounding language.7 The clearest reading of the in rem provision is that subsection (A) provides the jurisdictional requirements, and subsection (C) triggers after the action is already properly filed to define the physical location of the domain (for various purposes, such as preventing someone from transferring the domain to another registrar during the case).8

Second, setting aside the statutory construction, the courts that have addressed this issue have held that subsection (C)'s document deposit language is not an independent source of jurisdiction. SMP has not cited a single case that has addressed this issue and held otherwise.9 The Northern District of New York soundly rejected SMP's interpretation in Standing Stone Media, Inc. v. Indiancountrytoday.com: "all courts which have examined the question of whether [subsection (C)] was intended as an alternative for asserting in rem jurisdiction over domain names have rejected the suggestion."10 The court further explained that subsection (C) operates to set the location of the domain "in one of the districts identified in" subsection (A).11 The Second Circuit agrees:

Every other case I have found that addressed this issue holds the same.13

In sum, the text of the statute and the vast weight of authority all suggest that I have no jurisdiction over this case.

II. Transfer to the Eastern District of Virginia is proper.

In the alternative, SMP asks that I exercise my discretion to transfer this case to the Eastern District of Virginia where the registrar, Verisign, is located. I have discretion to decide whether to dismiss or transfer a case when I have no jurisdiction over the defendant (or here, the property).14 The transferee court must have jurisdiction, and it appears there is no dispute the Eastern District of Virginia has jurisdiction under the ACPA.15 This leaves the question whether transfer is in the "interests of justice."16 There is no set list of factors for me to consider, but courts commonly balance considerations such as the potential prejudice from the transfer, the strength of the plaintiff's case, and whether the plaintiff brought the action in good faith.17

I find transfer appropriate here. SMP does not appear to have a strong case.18 On the other hand, its success will likely turn on extensive factual evidence and determinations, so it is hard to accurately gauge its chances at this point. SMP appears to have brought this case in good faith; it provides evidence showing that it invested hundreds of thousands of dollars in the ONU mark and originally owned the domain. And the Eastern District of Virginia appears to be the only district with jurisdiction over this case given that the parties are foreign, and the ACPA would therefore appear to be the only jurisdictional basis for a lawsuit. There is no indication that these foreign companies will be affected by which district they must travel to for trial, and there is no other indication of prejudice. Indeed, dismissing the case and further delaying the parties — when both have stated that quickly resolving this lawsuit is important to them — would be more prejudicial. I therefore transfer this case to the Eastern District of Virginia.

III. Conclusion

IT IS THEREFORE ORDERED that the clerk of the court shall transfer this case to the United Stated District Court for the Eastern District of Virginia.