Magistrate judge recommends that ARC obtain default judgment against agency and owner

Airlines Reporting Corporation v. PVO Travel Corp. and Pete Victor Obuljen (E.D. Va. Sept. 27, 2007).  As previously reported, ARC filed a lawsuit against PVO and Obuljen, the agency’s sole owner, for unreported sales and dishonored drafts.  The defendants failed to respond to the complaint, so ARC moved for a default judgment.

The magistrate judge issued a report recommending entry of a default judgment for $296,947, the amount of damages ARC had demanded plus attorneys’ fees, against the defendants.  However, before issuing his recommendation, the magistrate judge engaged in a lengthy analysis as to whether the Virginia court had personal jurisdiction over the defendants, a California corporation and an individual residing in California.

The magistrate judge concluded that the court did have jurisdiction over the defendants under Virginia’s long-arm statute because they transacted business in Virginia by negotiating and entering into the Agent Reporting Agreement in Virginia, and because the ARA called for the defendants to perform certain obligations in Virginia.  The same court had engaged in a similar personal jurisdiction analysis, and had reached the same result, in Airlines Reporting Corporation v. Cisne Corp., Claudio Menicocci and Olga Menicocci (E.D. Va. Mar. 23, 2000).

Note:  On October 22, 2007, the court adopted the magistrate’s report and entered a default judgment against the defendants.

U.S. airline obtains personal jurisdiction over European online travel agent

TravelJungle v. American Airlines, Inc. (Tex. App. Dec. 14, 2006).  TravelJungle is an online travel agent that uses software to automatically harvest information from airline web sites.  TravelJungle’s principal places of business are in Europe and it has no U.S. employees.

American sued TravelJungle in a Texas state court for violating AA.com’s use agreement, which prohibits use of site information for “commercial purposes.”  In response, TravelJungle challenged the court’s personal jurisdiction over the company.

The appeals court held that the courts of Texas had jurisdiction over TravelJungle under the state’s long-arm statute.  The court reasoned that TravelJungle’s software had been purposefully directed to access the airline’s site and its servers, which are in Texas, and that the company should have been aware that it could be subject to suit wherever the site’s servers happen to be located.