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The Long Arm of the Law Stretches from CA to Maine

The procedural rules behind jurisdiction over foreign companies is one of the first year courses law students study in law school. No surprise, then, that the Ninth Circuit felt compelled to give us another lesson.

L.L. Bean does six percent of its business in California, and it asked a California company, Gator, Inc. to stop triggering pop-up ads that featured discount coupons for L.L. Bean customers. So far, I was voting for L.L. Bean. But that's not really the issue in the case.

Gator provides a "digital wallet" service that assists customers in making online purchases. As part of its "service," advertisers (read competitors of L.L. Bean) bought "ad space" that created a pop-up ad whenever a Gator customer visited the L.L. Bean website. Not happy with that creativity, L.L. Bean asked Gator to stop.

Also not one to shy away from a fight, Gator sued, asking the court to declare the pop-up ads legal. In Califorinia. Gator wanted the home-court advantage, so to say.

L.L. Bean contested jurisdiction, and the District Court agreed. The Ninth Circuit, in what is becoming part of a rapidly growing web of decisions on internet issues, reversed. Now, L.L. Bean has to answer Gator's action in California over the validity of the competitor's pop-up ads.

Sounds like another commerce-clause, free-speech case to me. My money's on Gator now.

Posted by J. Craig Williams on Wednesday, September 03, 2003

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