Antitrust Law Daily Wrap Up, ADVERTISING—E.D. La.: RV seller proceeds with unfair trade practices claims against competitor, (Jan 12, 2016)

By Greg Hammond, J.D.

The federal district court in New Orleans had personal jurisdiction over a recreational vehicle (RV) seller that allegedly used online advertising to steer a competitor’s consumers to the seller’s website. The court denied the seller’s motion to dismiss, finding that the company should have reasonably anticipated being haled into court in Louisiana based on its online advertising activity; the action arose out of or resulted from the seller’s forum-related contacts; and exercise of specific personal jurisdiction over the seller would be both fair and reasonable (Dixie Motors, LLC v. Motor Home Specialist, LP, January 11, 2016, Engelhardt, K.).

Dixie Motors, LLC filed suit against Motor Home Specialist, LP and Motor Home Specialist Management, LLC, alleging that Motor Home was deliberately infringing upon the intellectual property rights of Dixie to target Dixie’s customers in Louisiana. In particular, Motor Home allegedly used online advertising service, Google Adwords, and Yahoo to steer potential shoppers of RVs and related products to its website, using the words “Dixie RVs” in its online ads. Dixie claimed violation of the Louisiana Unfair Trade Practices Act, as well as trademark infringement and misappropriation, unfair competition, and civil conspiracy. Motor Home moved to dismiss for lack of personal jurisdiction and for improper venue.

Personal jurisdiction. In determining that it could exercise specific personal jurisdiction over Motor Home, the court first concluded that Dixie Motors made a prima facie showing that Motor Home directed its activities toward the state of Louisiana, such that it should have reasonably anticipated being haled into court there. Dixie Motors alleged that Motor Home sought to increase traffic to its website by rerouting consumers who used the term “Dixie Motors” in their Internet searches and that it continued this practice after repeated warnings to stop, which the court found supported a claim that Motor Home was intentionally targeting a Louisiana business and its customers.

Second, the court found that Dixie Motor’s case arose out of or resulted from Motor Home’s forum-related contacts because Dixie Motor’s claims were the product of Motor Home’s allegedly deliberate targeting of it and its customers.

Lastly, the court concluded that its exercise of specific personal jurisdiction over Motor Home would be both fair and reasonable because (1) Louisiana had a legitimate interest in seeing the dispute litigated within that state, in that it concerned the alleged targeting of a resident business and its customers; and (2) there were no circumstances that would make litigating the action in Louisiana unusually burdensome for Motor Home.

The alternative motion to dismiss for improper venue was also denied because Motor Home was subject to personal jurisdiction in Louisiana.

The case is No. 15-1247.

Attorneys: Russell Weeks Rudolph (Seale & Ross, APLC) for Dixie Motors, LLC. Mark Aaron Cunningham (Jones Walker) for Motor Home Specialist, LP and Motor Home Specialist Management, LLC.

Companies: Dixie Motors, LLC; Motor Home Specialist, LP; Motor Home Specialist Management, LLC

Cases: Advertising StateUnfairTradePractices LouisianaNews