2009-10-09 Transcript re Defendant's Motion to Dismiss or Transfer Venue


UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION AOL LLC and PLATFORM-A, INC., . . Plaintiffs, . . vs. . . ADVERTISE.COM, INC. f/k/a . INTERNEXT MEDIA CORP., . . Defendant. . . . . . . . . . . . . . Civil Action No. 1:09cv910

Alexandria, Virginia October 9, 2009 10:20 a.m.

TRANSCRIPT OF MOTION HEARING BEFORE THE HONORABLE LEONIE M. BRINKEMA UNITED STATES DISTRICT JUDGE APPEARANCES: FOR THE PLAINTIFFS: LEE J. EULGEN, ESQ. Neal, Gerber & Eisenberg LLP 2 N. LaSalle Street, Suite 1700 Chicago, IL 60602-3801 and ROBERT M. TYLER, ESQ. McGuireWoods LLP One James Center 901 East Cary Street Richmond, VA 23219-4030 and JODIE HERRMANN, ESQ. McGuireWoods LLP 1750 Tysons Blvd., Suite 1800 McLean, VA 22102




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(Cont'd.) TODD H. STITT, ESQ. Michelman & Robinson, LLP 4 Hutton Centre, Suite 300 Santa Ana, CA 92707 and RAJESH C. NORONHA, ESQ. S. LLOYD SMITH, ESQ. Buchanan Ingersoll & Rooney, PC 1737 King Street, Suite 500 Alexandria, VA 22314-2727 ANNELIESE J. THOMSON, RDR, CRR U.S. District Court, Fifth Floor 401 Courthouse Square Alexandria, VA 22314 (703)299-8595


OFFICIAL COURT REPORTER: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 counsel. here. THE COURT: counsel here? MR. SMITH: THE CLERK: Advertise.com, Inc. for the record. MR. SMITH:

P R O C E E D I N G S Civil Action 09-910, AOL LLC, et al. v. Would counsel please note their appearances

Your Honor, I'm Lloyd Smith, here for

Advertise.com, and I have with me my colleagues, Todd Stitt and Rajesh Noronha. THE COURT: MR. EULGEN: Good morning. Your Honor, Lee Eulgen for plaintiff AOL With me are Rob Tyler and

LLC and plaintiff Platform-A, Inc.

Jodie Herrmann, also for the same parties. THE COURT: California counsel? MR. SMITH: All right. Do we have -No, Your Honor. I'm located on King Street And, Mr. Smith, are you

All right.

So we don't have California

Yes, Your Honor, we do have California

Mr. Stitt is from California. THE COURT: You're the person we've been speaking to on

the phone at these hearings, or is that one of your partners? MR. STITT: THE COURT: Probably one of my partners, Your Honor. All right, thank you.

All right, what's before the Court this morning in this case is the defendant's motion to dismiss for lack of personal


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jurisdiction, improper venue, failure to state a claim, and/or to transfer to the Central District of California. As you know, I allowed limited discovery in this case on the issue of personal jurisdiction, and that discovery has been completed, and you have briefed the issue, and it's a very, very close case. I mean, there is no question that the defendant has

conducted a small -- an extremely small amount of business in Virginia. The nature of e-commerce in this day and age is probably any business that has e-commerce is probably going to touch on every jurisdiction, and so it's a very difficult issue in terms of what really makes a proper basis for a court extending personal jurisdiction. The total amount, as I understand it, of revenue -- and this is not a sealed fact -- which the defendant has received from activities in this commonwealth over a 19-month period is approximately $44,000, if I understand this record, and that is a minuscule amount of the total revenue for the defendant in this time period. I'm going to out of an abundance of caution for the record make a finding that there probably is enough given how Virginia's long-arm statute works, probably is enough even with that minuscule amount to find that there is at least specific personal jurisdiction. However, because of that qualifier that

I've put on this and because of the other factors that the


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defendant has raised in their motion, this is a case in my view in which it is appropriate to transfer, because the venue is not appropriate in this jurisdiction. AOL, although it certainly has a large name presence in this jurisdiction and we've had many cases with AOL, given the nature of what's at issue in this case and the structure of how the plaintiffs are set up in this case, AOL's involvement in this jurisdiction is not so overwhelming or strong that the Court needs to give it special consideration in terms of choice of forum. This defendant is a significantly smaller company than AOL. This company in its Internet and e-commerce requires that

all of its customers, as I understand it, when they sign on for their product have to choose to have any litigation governed by the laws of California. The defendant has all of its offices and

businesspeople in California, and all of its witnesses would be California-based witnesses. AOL is a large corporation that has the ability and resources to litigate throughout the country. Its chief counsel They're not

in this case, as I understand it, are Chicago based. even a local law firm. this jurisdiction.

So they've already got concerns outside of

The witnesses, many of them are not from Virginia. They'll be from other offices of AOL, and I simply don't find in this case that it would be fair or appropriate to require this much smaller defendant to have to come all the way across country


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and litigate.

There would be inconvenience for the witnesses.

There would be in my view significant issues about fairness and justice. So I'm granting the motion, and I'm transferring this case to the Central District of California, and the court there can address the other motions, such as the motion to dismiss. Thank you. MR. SMITH: Thank you, Your Honor. (Which were all the proceedings had at this time.)

CERTIFICATE OF THE REPORTER I certify that the foregoing is a correct transcript of the record of proceedings in the above-entitled matter.

/s/ Anneliese J. Thomson

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