Designer Skin LLC v. S & L Vitamins, Inc., et al.
Minnesota v. Granite Gate Resorts, Inc.
568 N.W. 2d 715, Court File No. c6-95-7227 (State of Minn. Dist. Crt., Ramsey County, Dec. 11, 1996) aff'd 576 N.W. 2d 747, No. C6-97-89 (Minn. Ct. App., Sept. 5, 1997)
In Granite Gate, the court held that placing an advertisement on a web site accessible to Minnesota citizens was sufficient contact with Minnesota to subject a non-resident web master to jurisdiction in Minnesota. Defendants uploaded on a World Wide Web server apparently located outside of Minnesota a web site named "Wagernet". The site advertised and solicited the reader's participation in gambling available in the Caribbean island of Belize. After submitting an application and establishing an account by sending at least $1000 to Belize, the United States resident received hardware which permitted him, via telephone modem, to place wagers on sporting events. Should any dispute arise, the participant agreed that he could be sued, at Wagernet's option, either in his home state, or in Belize. The web site also advertised a second service, which sold its customers tips on betting sporting contests via a telephone number featured in the site's advertisement. The State established that a number of Minnesota residents had accessed the defendants' site, had called the telephone number to obtain touts, and were on Wagernet's mailing list. (Apparently the betting service was not yet operational). The Attorney General commenced an action in Minnesota charging that defendants' solicitation violated a host of Minnesota Consumer Protection statutes, including statutes which prohibited false advertising, deceptive trade practices and consumer fraud. Defendants moved to dismiss for want of personal jurisdiction. The Court rejected defendants' arguments, finding their contact with Minnesota sufficient to permit the assertion of personal jurisdiction over them. In so holding, the court rejected defendants' argument that their placing of advertisements on a web server located outside the state did not create a presence in Minnesota. Rather, defendants' argued, Minnesotans came to defendants' site by accessing it. The court, in rejecting this argument, stated: "Defendants contend that this is not a two-way transaction. The contention of the Defendants is that Wagernet has transmitted nothing over the and that the only person in this case who would transmit anything would be Minnesota residents who contact WagerNet. If that argument is correct, then the Minnesota user would not be able to obtain anything from Wagernet. However, when the Minnesota user plugs in the URL address for Vegas.com, if Vegas.com did not send an electric transmission back to the computer user, the computer user would see nothing. He or she would see a blank screen. The way the pictures and words get to the Minnesota residents is by the server, Vegas.com, automatically transmitting it back to the Minnesota resident. "In reaching this conclusion, the court relied on the decision in Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc. discussed below. The court also held that the placement of such an advertisement on the was akin to placing a advertisement in a publication of national circulation, and hence constituted availing oneself of the Minnesota market.