The Ninth Circuit Court of Appeals has held that L.L. Bean's Internet, catalog, and mail-order retail operations are sufficient to support personal jurisdiction in California, even though the company has no physical presence in the state. The court held that L.L. Bean's marketing and retail activities, combined with the "virtual store" found on its web site, created a "consistent and substantial pattern of business relations" in California, sufficient to confer personal jurisdiction over the Maine-based company. Defendant Gator.com is a software and advertising company whose program monitors Internet users' web surfing and displays pop-up windows when users visit certain web sites. When users visited L.L. Bean's web site, Gator's program displayed a pop-up. In March 2001, L.L. Bean sent Gator a cease-and-desist letter demanding that Gator stop its program from displaying pop-up windows on L.L. Bean's web site offering coupons for Eddie Bauer, an L.L. Bean competitor.
Gator sued for declaratory judgment that its pop-up windows did not infringe or dilute L.L. Bean's trademark rights, nor violate other applicable laws. The District Court granted L.L. Bean's motion to dismiss for lack of personal jurisdiction was granted by the court. The Ninth Circuit reversed and remanded.
The Ninth Circuit found that L.L. Bean had "substantial… [or] continuous and systematic" contacts with California by virtue of its "mak[ing] sales, solicit[ing] business in the state, and serv[ing] the state's markets" through its Internet and catalog businesses. The holding distinguishes L.L. Bean's situation from previous cases by L.L. Bean's "millions of dollars" in sales shipped to California. Additionally, the court noted that L.L. Bean may target some of its Internet advertising at Californians.
While the bulk of the Ninth Circuit's decision considers L.L. Bean's Internet, mail order, and catalog sales businesses together, the court also states that L.L. Bean's Internet operations alone would support personal jurisdiction in California.
Gator.com Corp. v. L.L. Bean, Inc., 2003 U.S. App. LEXIS 18115.