UNITED STATES DISTRICT COURT
THE SERVICEMASTER COMPANY, THE
TABLE OF CONTENTS
Glossary of Abbreviations
VII. DEFENDANT SHOULD BE AWARDED HER ATTORNEY FEES AND SHOULD BE PROTECTED AGAINST FURTHER LITIGATION BY ANY OF THE PLAINTIFFS INVOLVING HER WEB SITE THROUGH AN INJUNCTION BARRING FUTURE NUISANCE LITIGATION.
GLOSSARY OF ABBREVIATIONS
HTML -- Hypertext Markup Language
McCarthy -- McCarthy on Trademarks and Unfair Competition
P. Mem. -- Plaintiffs' Memorandum of Law in Support of Motion for a Preliminary Injunction
SLAPP -- Strategic Lawsuit Against Public Participation
TCPA -- Tennessee Consumer Protection Act
Terminix -- plaintiffs generally (unless specified as meaning Terminix International Company)
URL -- Uniform Resource Locator
This is a free speech case. Since September 1997, the defendant California resident Carla Virga has maintained a site on the world wide web that criticizes Terminix and its affiliated companies. The site is wholly non-commercial it sells no products or services; Virga derives no financial benefits from it; and Virga is unconnected to any of the competitors of the companies she criticizes. In March 1998, Terminix sued Virga in California state court to enjoin her from maintaining the site, claiming that she was using its names as "key words" to draw persons interested in Terminix to her web site, where she was allegedly defaming Terminix. In April 1998, the California court held that Terminix's action was a "SLAPP suit," dismissed it for lack of merit, and awarded Virga her attorney fees.
Now Terminix and its affiliated companies have sued Virga again, this time invoking their trademark rights which, they say, are violated every time their names appear on her web site, especially in the hidden keywords. Virga asks the Court to deny the requested injunction and dismiss the claims on numerous grounds, including the First Amendment, res judicata, lack of personal jurisdiction, lack of merit under the trademark and other laws that plaintiffs have invoked, and other equitable grounds. In addition to awarding defendant her attorney fees, Virga asks the Court to conclude that plaintiffs will not respond to simple economic incentives as a reason to refrain from filing frivolous litigation against her. Accordingly, she asks the Court to enjoin plaintiffs from pursuing similar litigation against her in the future.
Carla Virga is a fifty-year-old woman who lives with her family in Yuba City, a small California town north of Sacramento. She has worked both as a full-time housewife and as a clerical worker; currently, she works as a secretary for a small manufacturing concern in Yuba City. Virga Affidavit ¶¶ 2-3. She and her husband have assets enough to live on, but little more. Id. ¶ 2.
Virga has never been to Tennessee, or even close to Tennessee. Id. ¶ 4. She owns no property there, and what little her family has in the way of investments is not invested in Tennessee companies. Id. ¶ 5. Nor does Virga (or any of her relatives, for that matter) have any financial connection to any of the plaintiffs or to any of their competitors. Id. ¶ 6.
In 1991, the Virga family purchased a new home in Yuba City, and relied on a report in which plaintiff Terminix reported that the dwelling was free of damage. It turned out that the house had suffered severe damage, and the Virgas eventually sued the sellers, the realtors, and Terminix. The sellers were judgment-proof, and Terminix won the litigation when the expert witness whom the Virgas had subpoenaed (who was employed by the California Structural Pest Control Board and was a former Terminix employee) failed to appear at trial and the judge refused either to continue the trial or to compel the witness' appearance. Id. ¶ 7. As a result of this experience, Virga understandably formed adverse opinions about the system of state regulation of pest control companies and of realtors, about the ability of consumers to enforce their rights, and about the operation of the legal system itself. Id. ¶¶ 8-9.
After an experience recounted in her affidavit, at ¶¶ 10-11, and on her web site, http://www.syix.com/emu/html/reflections.html, Exhibit 1,(1) Virga created a web site to inform consumers about her experience and about ways that they could avoid being caught in the same situation. The web site advises readers to be careful about what they sign, not to put too much faith in the promises of companies just because they are well-known, and to be aware of the possibility that state agencies that purportedly protect the consumer may be captives of the very private companies that they are supposed to be regulating. In addition, the web site provides a detailed account of Virga's own experience, as well as a compendium of critical information about Terminix and its corporate affiliates, and about every state's regulation of pest control companies. Virga Affidavit ¶¶ 12-14.
Virga's web site also features a "guestbook," a common web site feature that allows persons who visit a web site to note their comments about the site in a location where future visitors to the site can see them. Except for minor proofreading and the elimination of obscenities, Virga does not "censor" her guestbook, but allows any person who is willing to shed anonymity by including her their e-mail address to place comments on her guestbook, regardless of whether those comments are favorable or unfavorable to herself or to Terminix. Id. ¶¶ 15-19. From time to time, Virga transfers comments about Terminix from the guestbook to the pages of the site itself, so that, by now, the guestbook contains five separate pages filled with comments by other persons about Terminix. Id. ¶ 16; see http://www.syix.com/emu/html/tc.html et seq. Exhibit 2. However, Virga does not include accounts from persons who ask her to keep their comments confidential. This commonly occurs either because the commenter is currently or prospectively in litigation with Terminix, or because the commenter is worried about retaliation by Terminix. Virga Affidavit ¶ 20.
As first placed on the web, Virga's site was devoted primarily to recounting her own experiences with Terminix and various other entities. It then expanded to include the experiences that other persons had with Terminix. When she first published the site, she paid little attention to the fact that ServiceMaster was Terminix's parent. Id. ¶ 29. Eventually, however, she decided that the abuses directed at her by Terminix should be laid at the feet of Terminix's owner, and that other cases of misconduct, not only by ServiceMaster itself, but also by ServiceMaster's other subsidiaries, were related enough to the concerns expressed on her site to warrant inclusion. Accordingly, in June 1998 (after the conclusion of the lawsuit brought by Terminix against her earlier that year, see infra at 10-11), Virga added a page devoted to ServiceMaster and its various other subsidiaries. Virga Affidavit ¶ 30. The page listed ServiceMaster's various affiliates (the plaintiffs here) and contrasted the laudatory comments on its web site with several civil actions and a criminal investigation against ServiceMaster, to which she provided links. Id. and Exhibit C.
As described in the Affidavit of Charlene Cunniffe, a web page consists of various forms of computer code, including Hypertext Markup Language ("HTML"). Most parts of the code affect the way the page is viewed on a web browser (such as the text, graphics and layout). Cunniffe Affidavit ¶ 8. Some of a web page's code, however, is not designed to be seen on the page itself. For example, most web pages are created with a title, contained in the "title tag," which appears on the top of the browser in the title section. Stellin, Can You Trust Your Search Engine, http://www.cnet.com/Content/Features/Dlife/Search/ss03.html (link no longer valid). Exhibit 3. In addition, a web page may contain "meta tags," which are necessary for authors of pages containing only graphics to provide a text summary of the content of the page; however, meta tags have evolved as a method for the designers of text as well as graphical pages to provide a handy summary of the topics of a page. Cunniffe Affidavit ¶ 11. Meta tags are a form of HTML code that permits some (but not all) search engines both to identify web pages in which particular viewers may be interested, and to determine how close to the beginning of the list of web pages to place each particular page selected. Cunniffe Affidavit, ¶ 12. Although some search engines do not give weight to meta tag content when ranking query results (that is, determining how close to the beginning of the list they will appear), Cunniffe Affidavit ¶ 20, the operators of many search engines encourage web site designers to include meta tags in their web pages. Id. ¶ 12; see, e.g., http://www.altavista.com/cgi-bin/query?pg=addurl#meta; http://www.hotbot.com/help/addurl/; http://www.go.com/AddUrl?pg=SubmitTips.html. Exhibits 4-6. Meta tags can be viewed by examining the "page source" feature that is available on the more current versions of browsers. Cunniffe Affidavit ¶ 12.
Search engines are part of the way in which Internet users decide which web pages to visit. See generally http://www.searchenginewatch.com. There are three principal ways in which the owner of a web page can bring the page to the attention of possible viewers. Cunniffe Affidavit ¶ 13. First, a viewer may know the domain name for a particular company, and decide to visit that company's page by entering that name as a web address ("uniform resource locator" or "URL") in the "location" window of the web browser. Id. For example, each of the plaintiffs has a web site with a domain name in the form www.COMPANYNAME.com (for example, www.amerispec.com). Id.; see also Colber Affidavit ¶ 13. Second, when viewing a given web page, a viewer may be attracted to a hypertext link that appears on that page; by clicking the left button of his mouse on the link, the viewer directs his browser to move directly to the page to which the sending page provides a link (that is, the web users "surfs" from one page to another). Cunniffe Affidavit, ¶¶ 9, 13. Third, the viewer may take advantage of one of many "search engines" which search the entire web for pages that contain references to a specific subject in which she is interested. Id.
Every search engine uses its own protocol, often unique or proprietary, to identify pages in response to a user's search. Id. ¶ 14. Some search engines use human beings to look for web pages and enter code into the engine to identify particular pages in response to searches. Other search engines use largely mechanical devices, known as "spiders," which continually prowl the web seeking and recording new pages, by viewing all or a certain number of words at the beginning of each web page (for example, the first 250), or by viewing the title of the web page. Still another method used by search engine spiders is to examine the meta tags of a given page. The meta tags, in turn, consist of several component parts. The basic parts of the meta tags are the description (a sentence summarizing the site), and the keywords (a list of terms describing the topic of the page). Id.; see also http://www.searchenginewatch.com/webmasters/meta.html. Exhibit 7. A variety of other meta tags can also be included. Id.
When a person searching on the web for sites discussing a certain topic enters a relevant term or terms, the search engine will deliver a list of potentially relevant sites. In most cases, the number of sites returned by the search engine may be quite large, numbering in the hundreds if not thousands. Id. ¶¶ 10, 15. The list is typically viewed in segments the first ten or twenty sites are listed by the search engine, then the next grouping, and so forth until the list is exhausted. Some search engines impose a limit on the number of sites that can be viewed in the course of a particular search. Each search engine has its own means of ranking the sites it has found in response to a particular search; for some engines, meta tags play a role in the ranking as well as the listing process. Id. ¶ 15.
The contents of the lists produced by the search engines are also significant. Each list segment includes at least one clickable "link" for each page identified in the search. For each page, there is commonly a title (in which a "link" is embedded that can be followed by clicking a mouse button on the title), a brief description for the page, and the URL. The "page title" will commonly be whatever title the web site designer has specifically given to that particular page; and, in engines using meta tags, the brief description will often be the "description" meta tag for that page. If a viewer follows such a link, but decides that the page is not what she wanted, it is quite simple to return to the list she simply clicks the "back" button on the browser, and decides what link to follow next. Id. ¶ 16.
In summary, then, to take advantage of the way in which search engines work and to bring one's page to the attention of those who might find its contents interesting, a web site designer not only may but should include meta tags that include terms of greatest interest to the designer's target audience.
From the very beginning of her web site, Virga has incorporated meta tags into its structure. As first published on the web, the key words for her page included such terms as pest, pest control, and Terminix. Virga Affidavit ¶ 23 and Exhibit A (including the page source for the main page as originally published in 1997, including meta tags). Similarly, when Virga expanded the focus of her web site to include ServiceMaster and other affiliated companies in 1998, Virga included the meta tags for those companies on the ServiceMaster page as well. Id. ¶ 30 and Exhibit C (including the page source as of June 1998, including meta tags). In sum, the meta tags have been included on her pages continuously from 1997 (in the case of Terminix) and 1998, in the case of ServiceMaster and the other affiliated companies.
In light of plaintiffs' claims that Virga's use of these meta tags is somehow deceptive, it is important to note what meta tags do not do. First, although plaintiffs are asking the Court to bar defendant from using their trademarks in the text of her web site, they also assert at some points, e.g., Plaintiffs' Memorandum ("P. Mem.") at 29, that the trademarks appear only in Virga's meta tags, and not on the page itself. Although this is the heart of their claim of deception, the assertion is patently not the case. The original posted pages and "page source" print-outs provided by Virga with her affidavit show that each of the company names in her meta tags also appears in the page posted under those meta tags. And Virga's ServiceMaster page, over which this suit was brought, and which is attached to the Complaint as Exhibit 1, includes directly under the ServiceMaster banner each and every one of the company names that appears in the meta tags portion of the "page source" printout (which is also included in Exhibit 1).
Nor is there any danger that the existence of meta tags in Virga's web site will draw viewers who mistakenly believe that her site is published by Terminix or one of the other companies that her web site criticizes. Because Plaintiffs' Exhibits 241, 242 and 243 constitute their only concrete evidence of how Internet viewers may reach defendant's web site, they bear particular scrutiny. These search results are discussed in greater detail in the argument section of the brief, infra at pages 39 to 41. For present purposes, it suffices to say that each shows a search conducted on one of the popular search engines for the word "Terminix." In each search, an official Terminix web page showed up several times among the top ten or twenty sites listed, along with Virga's web site. In each search, both the title and the description of Virga's page clearly reveal not only that it is not an official site, but that it is critical of Terminix and indeed that Terminix is opposed to the web site. It is hard to imagine a consumer or investor clicking on any of these links and visiting Virga's site out of confusion that she was an official Terminix representative.
Even more important, one of the searches the one in which Virga's web site is listed the most prominently was conducted on the search engine called Excite. But Excite's own web site specifically states that it does not pay attention to meta tags either in selecting web pages to be included on search lists or in ranking the lists to decide which are shown first. See http://www.excite.com/info/getting_listed/meta_tags. Exhibit 8. Thus, it is only by removing Terminix's name from the body of Virga's web site that plaintiffs can achieve their objective of preventing her web pages from appearing near the top of search engine lists. It is perfectly apparent that the problem here is that Terminix wants to suppress adverse comment, not prevent customer confusion.(2)
Although plaintiffs have offered no evidence of how likely it is that a person searching for "ServiceMaster" on a search engine would reach Virga's ServiceMaster page, there is no danger that a person who followed a search engine link to that page would confuse it with the latter's official page. The current ServiceMaster page is attached to the Virga Affidavit as Exhibit D. Viewers who come to the page see at the top of their browsers the page title, "ServiceMaster -- Consumer and Investor Alert!" (When a web page is printed, the title is reproduced in the upper left hand corner, the location of the file is reproduced in the upper right hand corner, and the date and time of printing is reproduced in the lower right hand corner; none of this matter appears in the copy of the web page that is attached to the complaint). Then, right below the banner with the ServiceMaster name (in plain block letters similar to the banners for the other pages on the web site, but very different from the distinctive combination of fonts that the company uses for its trademark and logo), appears the statement, "I couldn't very well do this web site justice without including information, lawsuits, and complaints about the parent company." As if that weren't enough to bring to the viewer's immediate attention the critical nature of her un-official ServiceMaster page, there is a series of "buttons" down the left-hand side of the page bearing such labels as "Consumer Complaints 1" and "Employee Complaints." Next to some of the names of ServiceMaster's subsidiaries are links to other sites critical of those companies, bearing such labels as "Complaints" and "pending Class Action Suit." Nobody who comes to this page could possibly believe that its source was Terminix or ServiceMaster.
Before Virga published her site on the web, she sent a letter to ServiceMaster describing her plans. Terminix responded by threatening litigation. In a letter from Terminix's general counsel W.B. Mallory, Terminix warned Virga, among other things, that its name was a trademark and that, if she used its name on her web page as planned, Terminix would immediately enforce its trademark rights against her. In addition, Terminix threatened to sue her for defamation. Virga Affidavit ¶ 34 and Exhibit F. Virga nevertheless proceeded to publish her pages on the web in September 1997. Id. Exhibit G ¶ 6.
On March 16, 1998, Terminix brought suit against Virga in California state court, alleging that her web site defamed Terminix. Contrary to Mr. Mallory's warning, the complaint did not expressly invoke any federal or state trademark laws. However, both the theory of the complaint, and the claimed need for an ex parte restraining order requiring Virga to remove her material from the world wide web pending completion of the litigation, were that Virga was successfully using Terminix's name in the "key words" of her web site that is to say, in the meta tags to draw thousands of viewers to her site where they would see the supposedly defamatory material posted there. Virga Affidavit ¶¶ 35, 36 and 41, and Exhibits G, H and M.
Terminix's suit was unsuccessful because California has a statute designed to discourage "Strategic Lawsuits Against Public Participation," known by the acronym "SLAPP." The California SLAPP statute permits the defendant in a SLAPP suit to file a motion to strike the complaint under which the court makes an early "hard look" at the merits, requiring the defendant to demonstrate a probability of success on the merits. California Code of Civil Procedure, Section 425.16(b). Following that procedure, the trial judge found that Terminix's action was, in fact, a SLAPP suit, and he went on to examine the merits of the action and held that none of Virga's supposedly defamatory statements about which Terminix complained constituted a false statement of fact for which she could be held liable. Accordingly, the action was dismissed and Terminix was compelled to pay Virga's attorney fees. Virga Affidavit, Exhibit I.
This action was commenced by the filing of a complaint on October 4, 1999. Late in the afternoon of October 5, Virga (who had not yet learned that the case had been filed), received a letter from Terminix, demanding that she immediately remove the names of ServiceMaster and all of its affiliates from the meta tags, page titles, and body of her web site, and agree to a consent judgment barring such use of company names in the future. Virga Affidavit ¶ 40 and Exhibit L. The letter warned, that unless she did all of this by 3 PM the following day, plaintiffs would file a motion for a preliminary injunction against her. Despite the pretense of seeking a response, the letterhead bore only Terminix's name, but no address or telephone number.
On October 12, Virga received service of the complaint and motion papers. The complaint alleges that Virga violated federal and state trademark laws by using the plaintiffs' company names, not only in her meta tags, Complaint ¶ 29, but also in headings and in the body of the text of her web site. Id. ¶¶ 30, 32. The motion seeks entry of a preliminary injunction barring defendant from using plaintiffs' names in any "links, banners, keywords, titles and/or meta tags," or "otherwise to identify [her] web site and/or home page." Proposed Order Submitted with Plaintiffs' Motion, at 2.
Defendant obtained counsel to represent her and, over plaintiffs' objections, the Court granted an extension of time until December 1, 1999, for defendant to respond both to the Complaint and to the motion for a preliminary injunction. Defendant now moves to dismiss the complaint, and this memorandum both supports that motion and explains why the motion for a preliminary injunction should be denied.
Plaintiffs' claims suffer from several fundamental flaws that prevent them from receiving any relief.
The first is that plaintiffs fail to come to grips with the wholly non-commercial character of Virga's web site and of the speech that the site contains. The web site promotes no goods or services that Virga (or anybody else) offers for sale; it raises no revenue for Virga (or anybody else) by advertisements or other means. Consequently, not only does the web site fall outside the federal and state trademark and other similar laws asserted in the complaint, but Virga's communications must be deemed non-commercial speech under the First Amendment, which bars both the prior restraint that plaintiffs ask the Court to impose and any award of damages. In short, the free speech interests at stake preclude the granting of any relief on plaintiffs' claims.
Second, plaintiffs' arguments all assume that the only reason why members of the public might want to look for web sites using the terms "Terminix," "ServiceMaster," or plaintiffs' other names is that they want to find one of the plaintiffs in order to buy its products or services. In fact, that is but one of many reasons why somebody may search the Internet for web sites using plaintiffs' names. Some people may want news reports about plaintiffs; others may feel aggrieved and hope to find others who share their grievances; some may be doing general research on one of the companies; and some may even be interested in contracting with the plaintiffs, but also be wary and hoping to find objective information about them. If plaintiffs' assumption were correct, perhaps one could speak of web users being "deceived" or "confused," as trademark law uses those terms. But, because their assumption is wrong, their claim of a right to prevent others from using their names in meta tags would have the untoward result of vastly decreasing the utility of the Internet for most users and, indeed, for most web designers. Moreover, users who want no more than to find Terminix or ServiceMaster can very easily do so by the simple device of typing "www.," plus the company's name, plus ".com," as the URL; such viewers do not need to use any search engine at all, not to speak of those that rely on meta tags.
Third, plaintiffs apparently assume that they are entitled to force Virga to defend herself in their own backyard, but there are no allegations in the complaint that support the assertion of personal jurisdiction over Virga in Tennessee. To the contrary, it would violate Virga's due process rights to force her to litigate here, and in any event, venue is proper only in California.
Fourth, plaintiffs' papers completely ignore the fact that Virga has been using some of their names in her meta tags since 1997, and using all of them since 1998. Plaintiffs' failure to sue on their trademark claims until now precludes a preliminary injunction under the doctrine of laches. Similarly, the claim under the Tennessee Consumer Protection Act is barred by the statute of limitations, and plaintiffs' failure to bring these claims the first time Terminix sued Virga over her web site bars their present claims under the doctrine of res judicata.
Fifth, although the motion for a preliminary injunction focuses on the issue of meta tags and allegations of so-called "spamdexing," trying to piggyback on some recent cases and a law review article (which they misrepresent), addressing cases where a company made commercial use of a competitor's trademarks in order to divert traffic to sites promoting its own products or services, the complaint and the proposed preliminary injunction sweep far more broadly. The complaint alleges that any use of plaintiffs' names on Virga's web site is a trademark violation, and the preliminary injunction seeks to prevent Virga from using the plaintiffs' names in any links, banners, key words, titles, meta tags, or "otherwise." What is at stake in this case, therefore, is the freedom of Internet users to publish and/or read criticisms of companies, and is not limited to the use of meta tags to call viewers' attention to those criticisms.
In sum, all of plaintiffs' claims are unsupported, and in most cases for several reasons. Plaintiffs presumably hoped that the burden of defending herself a second time, thousands of miles from home, would force Virga to take down her web site, or at least change it such in a way that fewer consumers would notice it. This is an "exceptional" case warranting an award of attorney fees against plaintiffs (for which Virga will move if she prevails). Moreover, because plaintiffs have brought a second meritless claim over the same web site, Virga asks the Court to issue an injunction forbidding plaintiffs from bringing more nuisance suits against Virga over her web site.
Plaintiffs acknowledge in their memorandum, at 13, that in order to obtain a preliminary injunction, they must meet all four of the preliminary injunction requirements, including likelihood of success on the merits, irreparable injury on their part if the injunction does not issue, lack of irreparable injury on the part of defendant if she is enjoined, and service of the public interest. The movants have the burden of showing their entitlement to preliminary injunctive relief. Garlock v. United Seal, 404 F.2d 256, 257 (6th Cir. 1968). See also Fox Valley Harvestore v. A.O. Smith Harvestore Prod, 545 F.2d 1096, 1097 (7th Cir. 1976), citing Sierra Club v. Hickel, 433 F.2d 24, 33 (9th Cir. 1970), aff'd on other grounds, 405 U.S. 727 (1972). In a case such as this one, where the proposed preliminary injunction seeks to compel Virga to take affirmative action (removing references to plaintiffs that have been on her web site for years, precisely the final relief demanded in the complaint), the burden on movants is particularly high. Dunn v. Retail Clerks, 299 F.2d 873, 874 (6th Cir. 1962). The general rule is that such mandatory injunctions are "warranted only in the most extraordinary circumstances." Taylor v. Freeman, 34 F.3d 266, 270 n.2 (4th Cir. 1994). And, as we argue below, the preliminary injunction would constitute a prior restraint directed against Virga's protected speech, which is another reason requiring extreme caution concerning the relief that plaintiffs request.
Enforcement of any of Terminix's claims would violate the First Amendment.(3) In trademark cases, unlike copyright cases where the fair use defense is generally co-extensive with the First Amendment, e.g., Harper & Row v. Nation Enterprises, 471 U.S. 539, 560 (1985), First Amendment considerations routinely receive separate discussion, although they also inform consideration of statutory interpretation issues. Thus, even if a trademark has been used in a commercial context, courts are required to construe the trademark laws narrowly to avoid undue impingements on First Amendment rights, e.g., Cliffs Notes v. Bantam Doubleday, 886 F.2d 490, 494 (2d Cir. 1989); First Amendment interests are weighed as a factor in deciding whether a trademark violation should be found, e.g., Anheuser-Busch v. Balducci Publications, 28 F.3d 769, 776 (8th Cir. 1994); and injunctions must be narrowly crafted to comply with the general and virtually absolute rule against prior restraints of speech. Id. at 778; Better Business Bureau v. Medical Directors, 681 F.2d 397, 404-405 (5th Cir. 1982). And where, as is true here, the defendant is engaged in non-commercial speech, the mere application of trademark law may violate the First Amendment altogether, L.L. Bean v. Drake Publishers, 811 F.2d 26, 32-33 (1st Cir. 1987). Finally, the rule against prior restraints is at its apogee with respect to non-commercial speech. See Lemley & Volokh, Freedom of Speech and Injunctions in Intellectual Property Cases, 48 Duke L.J. 147, 223-224 (1998). Thus, despite the general principle that requires a court to consider statutory issues first, thus avoiding the need to decide constitutional issues, in this case we begin with the First Amendment.
The First Amendment bars each of plaintiffs' claims. It is beyond peradventure that plaintiffs' action to enforce their trademarks implicates the First Amendment even though plaintiffs are not government actors. An injunction sought by private parties is still government action by a court, Shelley v. Kraemer, 334 U.S. 1, 14-15 (1948), which is therefore subject to scrutiny under the First Amendment. Organization for a Better Austin v. Keefe, 402 U.S. 415, 418 (1971); see also Procter & Gamble Co. v. Bankers Trust Co., 78 F.3d 219, 224-225 (6th Cir. 1996). Similarly, an award of damages or other monetary relief is government action that must comply with the First Amendment. New York Times v. Sullivan, 376 U.S. 254 (1964).
Nor can it be disputed that the contents of Virga's web site are protected by the First Amendment. Numerous cases hold that consumer commentary is core speech protected by the First Amendment. In Bose Corp. v. Consumers Union, 466 U.S. 485 (1984), the Supreme Court applied the New York Times standard to a libel action brought by a manufacturer claiming that a consumer group had maligned its product. Many other cases have similarly treated criticisms of a company's products or business practices as speech protected by the First Amendment. E.g., Semco v. Amcast, 52 F.3d 108, 111-114 (6th Cir. 1995); Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1119-1121 (8th Cir. 1999); U.S. Healthcare v. Blue Cross of Greater Philadelphia, 898 F.2d 914, 927-939 (3d Cir. 1990); Mattel v. MCA Records, 28 F. Supp. 2d 1120, 1144-1145 (C.D. Cal. 1998). Virga's web site has already been held to be a matter of public interest that is fully protected by the First Amendment. Terminix Int'l Co. v. Virga, No. CVCS 98-0647 (Cal. Super. Sutter County, April 23, 1998) (copy attached to Virga Affidavit as Exhibit I).
These principles do not apply any differently when trademarks are used in the course of speech on the Internet, simply because the trademarks appear in HTML code. Virga's use of plaintiffs' names in the HTML code for her web site even if treated as a trademark use, as alleged by plaintiffs is just the sort of consumer commentary that courts fastidiously protect. Indeed, Virga's criticisms would be wholly mysterious -- indeed, they would be pointless -- if she had to omit from her web pages the names of the companies she is criticizing. This is core speech that is be fully protected by the First Amendment.
Furthermore, it is not just the web site generally, but Virga's use of plaintiffs' trademarks in her meta tags, that constitute protected speech. The courts have repeatedly held that the use of trademarks constitutes speech within the protection of the First Amendment. E.g., Bad Frog Brewery v. New York State Liquor Authority, 134 F.3d 87, 94-97 (2d Cir. 1998); ACLU of Georgia v. Miller, 977 F. Supp. 1228, 1233 (N.D. Ga. 1997). When used in a web site's meta tags, courts have considered deployment of a trademark analogous to a sign posted by the road-side, informing drivers that a site in which they are interested is nearby. Brookfield Communications v. West Coast Video, 174 F.3d 1036, 1064 (9th Cir. 1999). Just as the use of a trademark in the title of a creative work deserves First Amendment protection, because it is part of the author's expression, calling attention to the fact that the work in question contains content that may interest them, e.g., Twin Peaks Production v. Publications Int'l, 996 F.2d 1366, 1379 (2d Cir. 1993); Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989), so Virga's use of the ServiceMaster companies' names in her meta tags serves to communicate to web users that hers is a site that contains information about those companies. Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161, 1165 (C.D. Cal. 1998) (upholding use of Bally trademark in meta tags of site criticizing Bally); see also Playboy Enterprises v. Netscape Communications, 55 F. Supp. 2d 1070, 1083 (C.D. Cal. 1999) (citing "First Amendment interests at stake" in case where defendants used plaintiffs' trademarks in machine-readable code to decide which advertisements to show users of search engine who included word "playboy" in their search for sites); Playboy Enterprises v. Welles, 7 F. Supp. 2d 1098, 1103 (S.D. Cal. 1998) (upholding right of former "Playmate" to use Playboy trademarks in meta tags for her self-promotional commercial web site, with no mention of First Amendment).(4)
In many cases, the courts have struggled with the question of whether a particular use of trademarks constituted commercial or non-commercial speech. This question is significant not only because Congress limited the application of the Lanham Act's false advertising cause of action to cases of non-commercial speech, section 43(a)(1)(B), 15 U.S.C. § 1115(a)(1)(B), but also because commercial speech, although protected by the First Amendment, enjoys a lesser status than non-commercial speech, and thus does not benefit from all of the doctrines developed to protect non-commercial speech. Dun & Bradstreet v. Greenmoss Bldrs, 472 U.S. 749, 762-763 (1985). Indeed, recognition that the First Amendment would bar claims for false statements in non-commercial speech underlay Congress' establishment of the "commercial" requirement in section 43(a). Semco v. Amcast, 52 F.3d 108, 111-112 (6th Cir. 1995) (quoting extensively from the legislative history).
Thus, when one company has, in the course of an advertising campaign, made statements about another company's products, the courts in cases like Semco have hammered out a multi-factor test to determine when the statements are non-commercial, and thus entitled to full First Amendment protection, or commercial, and thus entitled only to have their First Amendment interests weighed as part of a fair use or fair commentary defense. Similarly, when a seller of T-shirts or some other commercial product spoofing a trademark or using a trademark to denounce a political position, the courts have had to decide whether the alleged infringer or diluter is predominantly engaged in commentary, thus obtaining greater protection under the First Amendment, or mainly making a use of a trademark to sell its own product. E.g., Cardtoons v. Major League Baseball Players Ass'n, 95 F.3d 959, 968-970 (10th Cir. 1996); Rogers v. Grimaldi, 875 F.2d 994, 997-999 (2d Cir. 1989); Mutual of Omaha Ins. Co. v. Novak, 836 F.2d 397, 402-403 (8th Cir. 1987).
But when an action is brought against a plainly non-commercial use of a trademark for either political or consumer commentary, the courts have not hesitated to afford full First Amendment protection against the trademark holder's claim, either by holding that First Amendment principles bar application of the federal statute, Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 1161, 1167 (C.D. Cal. 1998); Lighthawk v. Robertson, 812 F. Supp. 1095, 1097-1101 (W.D. Wash. 1993); Stop the Olympic Prison v. United States Olympic Comm., 489 F. Supp. 1112, 1124-1125 (S.D.N.Y. 1980); see also Lucasfilm v. High Frontier, 622 F. Supp. 931 (D.D.C. 1985) (ruling on nonconstitutional grounds), or by holding that the state law in question is unconstitutional on its face or as applied to the particular case. L.L. Bean v. Drake Publishers, 811 F.2d 26, 33 (1st Cir. 1987); ACLU of Georgia v. Miller, 977 F. Supp. 1228, 1233 (N.D. Ga. 1997).
A review of Virga's web site, and of the record in this case, plainly demonstrates her site's non-commercial character. The web site is dedicated to the expression of opinions about Terminix, ServiceMaster, and other affiliated companies, along with the other entities and individuals who were involved in Virga's home purchase in 1991. The web site contains no advertisements (which is the main way for web sites to produce revenues for their operators), and is not directed to selling or promoting any goods or services. In short, because it is plainly non-commercial, the speech on the web site is entitled to full constitutional protection.
In addition, as Virga's affidavit shows, she derives no financial benefit from the web site, and she has no financial connection either to the ServiceMaster group of companies that are criticized on her site, or to any competitor of those corporations. Virga Affidavit ¶¶ 6, 14. Accordingly, whatever rule might apply in another case to a commercial entity (such as a competitor of plaintiffs) that published a web site criticizing the ServiceMaster group of companies and using their names in meta tags to draw attention to that web site, this is plainly a case of non-commercial speech, and defendant is entitled to the full measure of protection under the First Amendment.
Given the non-commercial character of Virga's web site, there cannot be any doubt that the motion for a preliminary injunction must be denied on the ground that it is a prior restraint. But the law in the Sixth Circuit is clear and unequivocal prior restraints are not permitted except in the most exceptional of circumstances, involving "such a grave threat to a critical government interest or to a constitutional right." Procter & Gamble Co. v. Bankers Trust Co., 78 F.3d 219, 225 (6th Cir. 1996); Ford Motor Co. v. Lane, No. 99-74205 (E.D. Mich. 1999), published at http://www.mied.uscourts.gov/. Exhbit 11.
Whether the complaint may be dismissed based on the First Amendment might seem to be a closer question, because it is not clear whether plaintiffs in this case are alleging that Virga's speech is commercial. Their complaint and affidavits consistently use phrases such as "web site and/or commercial activities," Complaint ¶ 29; Hanks Affidavit ¶ 7, or "commercial activities and/or services," Complaint ¶¶ 41, 43, when characterizing her web site, an apparent attempt to imply commercial use without actually resting on any such assertion. Plaintiffs also complain that Virga's web site will have an adverse impact on their commercial activities, P. Mem. at 20; but this is not, of course, sufficient to make her speech "commercial speech" for First Amendment purposes.
But regardless of whether the complaint can be understood as alleging that Virga's web site is "commercial" for the purposes of trademark law, the complaint cannot be understood as alleging that the content of Virga's web site constitutes commercial speech in First Amendment terms. The latter turns not on whether the purpose of Virga's web site is to sell goods or services, but on the content of the speech itself. And in light of plaintiffs' attaching a copy of one of Virga's web pages, and their inclusion of the URL for plaintiffs' web site in their complaint, the web site itself must be considered in deciding whether it constitutes non-commercial speech for the purpose of defendant's motion to dismiss under Rule 12(b)(6). Werner v. Klais and Co., 108 F.3d 86, 89 (6th Cir. 1997) (considering documents referenced in complaint); Song v. City of Elyria, 985 F.2d 840, 842 (6th Cir. 1993) (considering documents attached to complaint); Day v. Moscow, 955 F.2d 807, 811 (2d Cir. 1992) (considering documents on the public record, including court files); Fudge v. Penthouse Int'l, 840 F.2d 1012, 1015 (1st Cir. 1988) (considering documents referenced in complaint). Combined with plaintiffs' failure to rest their complaint squarely on any allegation that Virga's web site constitutes a commercial activity under trademark law, the Court should rule that the claims stated in the complaint fail on First Amendment grounds because Virga is engaged in non-commercial speech, without any need to consider Virga's affidavits and thus convert her motion to dismiss into a motion for summary judgment. If, however, plaintiffs argue in their responsive papers that the web site is commercial, and the Court decides that the complaint cannot be dismissed without considering Virga's affidavit, counsel are prepared to present a Statement of Material Facts About Which There Is No Genuine Issue as required by the Local Rules.(5)
In March 1998, Terminix, a member of the ServiceMaster family of companies, filed suit in California state court against Carla Virga for defamation based on statements appearing on her web site. The California court terminated that litigation by striking Terminix's complaint pursuant to California's anti-SLAPP statute. Terminix's suit was subsequently dismissed. In dismissing the suit, the California court determined that the statements on Virga's web site were not defamatory. See April 23, 1998 Ruling on Special Motion to Strike by Virga (attached to Virga Affidavit as Exhibit I). Although plaintiffs have attempted to state claims in this subsequent litigation other than defamation, the doctrine of claim preclusion necessitates that plaintiffs' suit be dismissed.
"Under the doctrine of claim preclusion, '[a] final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.'" Rivet v. Regions Bank, 522 U.S. 470, 476 (1998), quoting Federated Dep't Stores v. Moitie, 452 U.S. 394, 398 (1981) (emphasis added). Although only Terminix was a plaintiff in the initial suit, its parent company, ServiceMaster, and its affiliated companies can be and should be bound by that judgment as privies. See, e.g., EEOC v. Frank's Nursery & Crafts, 177 F.3d 448, 463 (6th Cir. 1999) (nonparty can be bound as privy where there was a legal entitlement to stand in judgment or adequate representation by party with same interests). For example, Terminix's original threat of litigation in response to her web site, Virga Affidavit, Exhibit F, was written in response to a letter from Virga to ServiceMaster. Plaintiffs' Exhibit 3.
In determining what preclusive effect to give a prior state court judgment, the federal court must give the preclusive effect that would be given under the law of the state in which the prior judgment was entered. See Migra v. Warren City Sch. Dist., 465 U.S. 75, 81 (1984). Under California law, claim preclusion "'prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding.'" State Bd. of Equalization v. Superior Court, 703 P.2d 1131, 1136 (Cal. 1985), quoting Brown v. Felsen, 442 U.S. 127, 131 (1979).
It is evident from the materials filed in conjunction with Terminix's prior suit that the causes of action now asserted by plaintiffs could have (and should have) been raised in the California litigation. For example, Terminix alleged in the prior suit that "defendants, Carla Virga, and Does 1 through 25, and each of them, have identified various key words which will take Internet viewers to her site, among them are 'Terminix,' . . .." Complaint ¶ 6, Exhibit G. Clearly, plaintiffs knew then (in March 1998) that Virga was using its marks in her "meta-tags" or "key words" on her site, but Terminix limited its claim to defamation. Even though plaintiffs' claims with regard to trademark infringement based on the use of these "key words" were not actually asserted in the prior litigation, the doctrine of claim preclusion still bars assertion of these claims in subsequent litigation.
Having shopped for their forum, it is plaintiffs' burden to establish the propriety of jurisdiction in the Western District of Tennessee. See Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Terminix must therefore establish: (1) that defendant Virga has performed one of the acts enumerated in the Tennessee long-arm statute, Tenn. Code Ann. § 20-2-214 (1998); and (2) that she has minimum contacts with Tennessee sufficient to comport with due process requirements. See Reynolds v. International Amateur Athletic Fed'n, 23 F.3d 1110, 1115 (6th Cir. 1994). Although the Tennessee long-arm statute permits suit on any basis permitted by due process, Tenn. Code Ann. § 20-2-214(a)(6), it is clear that Virga does not have the requisite minimum contacts with Tennessee supporting personal jurisdiction over her. The complaint should therefore be dismissed under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction.
Terminix has alleged several claims which, if valid, could constitute tortious activity such as trademark infringement, false advertising, deceptive trade practices, and unfair competition. However, a major flaw in Terminix's reasoning is that Virga's allegedly tortious acts were committed in California, not Tennessee. Terminix's complaint is devoid of any allegation that personal jurisdiction in the Western District of Tennessee is proper. Personal jurisdiction under the long-arm statute flowing from a tort "is not assumed as punishment for the commission of a tort . . .. Its assumption is not based on the fault of defendant but on the interest of the state." Southern Mach. Co. v. Mohasco Indus., 401 F.2d 374, 384 (6th Cir. 1968).
To be subject to in personam jurisdiction, Virga must have "certain minimum contacts with [Tennessee] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted); Third Nat'l Bank v. Wedge Group, 882 F.2d 1087, 1089 (6th Cir. 1989). The minimum contacts test requires "in each case that there be some act by which the defendant purposely avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). A defendant's connection with the state must be such that "it should reasonably anticipate being haled into court" in the state in the event of a dispute. Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-96 (1980).
The minimum contacts analysis generally requires assessment of whether the court is exercising "general" or "specific" jurisdiction. See Third Nat'l Bank, 882 F.2d at 1089. Terminix can not sustain its burden of proving either general or specific jurisdiction because the only conduct at issue -- Virga's creation in California of a web site where she can express her unfavorable opinions as to Terminix and seek to inform others as to the hazards of purchasing real estate in California -- occurred outside Tennessee and entailed no contact by Virga with that state. Virga Affidavit ¶¶ 2, 4.
The exercise of general jurisdiction requires that a defendant's contacts with the forum be "continuous and systematic." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984); see also Third Nat'l Bank, 882 F.2d at 1089. Even "continuous activity of some sorts within a state is not enough to support [general jurisdiction]." International Shoe, 326 U.S. at 318. Rather, for Tennessee to assert general jurisdiction over a non-resident defendant, its contacts with Tennessee must be of such a "continuous and systematic" nature that personal jurisdiction over the defendant is proper "even if the action is unrelated to the defendant's contacts with the state." Third Nat'l Bank, 882 F.2d at 1089. Where a defendant is not licensed to do business in the forum state, does not maintain offices or employees there, and owns no property in the forum, "the facts do not support the argument" that there is general jurisdiction. Conti v. Pneumatic Prods. Corp., 977 F.2d 978, 981 (6th Cir. 1992).
Carla Virga does not live in Tennessee; she has never been to Tennessee, or indeed any place close to Tennessee; she owns no property in Tennessee, does not do business in Tennessee, and has, in short, never done anything in Tennessee. Virga Affidavit ¶¶ 2, 4-5. Virga is a salaried employee of a California company that does not compete with Terminix, and in any event her web site is unrelated to her employment. The web site is something she maintains in her spare time, and she gains no monetary benefit from its operation. Virga Affidavit ¶¶ 3, 14. Nor does the complaint allege any facts supporting the exercise of general jurisdiction Clearly, Virga does not have "systematic and continuous" contacts with the State of Tennessee so as to support the exercise of general jurisdiction.
Specific jurisdiction is proper when the defendant's contacts with the forum are related to the controversy underlying the litigation. See Helicopteros, 466 U.S. at 414 n.8; Conti, 977 F.2d at 981. To maintain specific personal jurisdiction, Terminix must show that: (1) Virga has purposely availed herself of the privilege of conducting business or causing consequences in Tennessee; (2) the cause of action arises from her activities in Tennessee; and (3) her conduct has a substantial enough connection with Tennessee to make the exercise of jurisdiction reasonable. See Conti, 977 F.2d at 981.
Because Terminix's complaint does not in any way address the propriety of personal jurisdiction in this matter, it does not specify on what basis minimum contacts to support specific personal jurisdiction could be found. The implication is that specific jurisdiction is available because Tennessee residents can visit Virga's web site. However, courts faced with such claims have consistently ruled that contact limited to viewing a non-resident defendant's non-commercial web site (or a commercial but merely passive web site) in the forum, is simply insufficient to warrant the assertion of personal jurisdiction.(6)
Carla Virga's web site is not only passive, but entirely non-commercial. Virga Affidavit ¶ 14. Virga's message is not in any way targeted at reaching Tennessee residents. See IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 265 (3d Cir. 1998) (affirming dismissal based on lack of personal jurisdiction because tortious conduct was not expressly aimed at the forum). Virga is not selling anything, nor are there any advertisements for the sale of products and services on her web site. Virga Affidavit ¶ 14. Accordingly, there is no basis for personal jurisdiction over Virga in Tennessee.
In Bensusan Rest. Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), aff'd, 126 F.2d 25 (2d Cir. 1997), a St. Louis jazz club published a web site using its name, the Blue Note, which was the same as the world-famous club in New York City. The New York club sued for trademark violations, but the district court refused to exercise jurisdiction, because, as here, defendant had no presence of any kind in the forum "other than the Web site that can be accessed worldwide." 937 F. Supp. at 301. The court found that to permit jurisdiction in New York would have violated due process because the defendant did not actively seek to encourage residents of the forum to access the site and conducted no business in the forum. As the court stated, "[c]reating a [web] site, like placing a product into the stream of commerce, may be felt nationwide -- or even worldwide -- but, without more, it is not an act purposefully directed toward the forum state." Id., citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1992). The basis for asserting personal jurisdiction over Virga is even weaker because her web site conducts no business of any kind whatsoever. Virga Affidavit ¶ 14.
Boiled down to its essence, Terminix's implicit assertion is that jurisdiction over Virga is proper in Tennessee because some of the entities alle