Yinnv Liu sued several e-commerce vendors for trademark infringement, counterfeiting, and false designation of origin under the Lanham Act. The defendants, who operated stores on platforms like Walmart and eBay, never appeared in the district court. Consequently, the district court entered a default judgment in August 2024, finding it had personal jurisdiction because the vendors targeted Illinois residents by offering shipping to the state. In January 2025, the defendants finally appeared and moved to vacate the judgment under Federal Rule of Civil Procedure 60(b), arguing they were never properly served and that the court lacked personal jurisdiction. Although the district court initially indicated it might grant the motion if the plaintiff did not respond, it ultimately denied the motion, stating the defendants offered no factual basis to revisit its prior findings. The defendants appealed, while the plaintiff, Liu, failed to appear on appeal.
The Seventh Circuit noted that while denials of Rule 60(b) motions are typically reviewed for abuse of discretion, the standard is less deferential when a defendant asserts the judgment is void due to a lack of jurisdiction. The court reviewed the existence of personal jurisdiction de novo. Under Illinois law, which governs here because the Lanham Act does not provide a specific federal rule, specific personal jurisdiction requires that the defendant purposefully availed itself of the forum, the injury arose from forum-related activities, and the exercise of jurisdiction comports with fair play. The court emphasized that while operating an online store accessible in a forum can support jurisdiction, it is not sufficient on its own; there must be evidence of actual sales or transactions in that state. The district court had relied on screenshots showing a Chicago shipping address and an estimated total on a checkout page, but the record contained no evidence of completed purchases by Illinois residents. The appellate court found this to be clear error, stating that a defendant cannot be haled into court simply because they operate a website accessible in the forum state. Because the basis for personal jurisdiction was legally insufficient, the court did not need to address the defendants' arguments regarding service of process.
The default judgment is vacated, and the case is remanded to the district court with instructions to dismiss the action against the defendants for want of jurisdiction. This decision limits the ability of Lanham Act plaintiffs to secure default judgments against absent e-commerce vendors based solely on the accessibility of their websites, requiring concrete evidence of actual sales or transactions within the specific forum state to establish personal jurisdiction.
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