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Tradecomet.Com LLC v. Google

July 26, 2011

TRADECOMET.COM LLC, PLAINTIFF-APPELLANT,
v.
GOOGLE, INC., DEFENDANT-APPELLEE.



The opinion of the court was delivered by: Debra Ann Livingston, Circuit Judge:

10-911-cv

TradeComet.com LLC v. Google, Inc.

Argued: January 26, 2011

Before: WINTER, SACK, and LIVINGSTON, Circuit Judges.

Plaintiff-Appellant TradeComet.com LLC ("TradeComet") appeals from a judgment and order of the United States District Court for the Southern District of New York (Sidney H. Stein, District Judge) granting Defendant-Appellee Google, Inc.'s ("Google") motion to dismiss TradeComet's complaint pursuant to Rules 12(b)(1) and 12(b)(3) of the Federal Rules of Civil Procedure. Google's motion was based on a forum selection clause in an agreement that Google alleged bound TradeComet to bring its claims in either a federal or state forum in Santa Clara County, California. TradeComet argues that when a forum selection clause specifies that claims must be brought in a forum other than the one in which they have been brought, yet permits those claims to be brought in a different federal forum, a district court may only enforce the clause by transferring the case pursuant to 28 U.S.C. § 1404. We reject TradeComet's argument and hold, consistent with our precedents, that a defendant may also seek enforcement of a forum selection clause in these circumstances through a Rule 12(b) motion to dismiss. In an accompanying summary order, we affirm the district court's dismissal of TradeComet's complaint.

AFFIRMED.

Plaintiff-Appellant TradeComet.com LLC ("TradeComet") appeals from a judgment entered pursuant to an opinion and order of the United States District Court for the Southern District of New York (Sidney H. Stein, District Judge) dismissing its complaint. TradeComet brought this action against Defendant-Appellee Google, Inc. ("Google") for alleged violations of the Sherman Act, 15 U.S.C. §§ 1, 2, arising out of TradeComet's use of Google's "AdWords" search engine advertising platform ("AdWords"). Google filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(3) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction and improper venue. Google argued that TradeComet had accepted the terms and conditions associated with participation in its AdWords program, which included a forum selection clause requiring TradeComet to file its suit in state or federal court in Santa Clara County, California, not in New York. TradeComet contended, inter alia, that a district court may only enforce a forum selection clause permitting an alternative federal venue pursuant to 28 U.S.C. § 1404, which authorizes transfer of the case to the agreed-upon venue, rather than through Rule 12(b). In an opinion and order dated March 5, 2010, the district court rejected this argument and concluded that Google could seek enforcement of its forum selection clause by moving to dismiss pursuant to Rule 12(b). The court then applied our four-part test for determining whether to dismiss a claim based on a forum selection clause, see Phillips v. Audio Active Ltd., 494 F.3d 378, 383-84 (2d Cir. 2007), and granted Google's motion to dismiss.

Here, TradeComet renews its argument that a § 1404(a) motion to transfer is the only appropriate vehicle for enforcing a forum selection clause when the clause at issue permits an alternative federal forum. We reject TradeComet's argument and hold, consistent with our precedents, that a defendant may seek enforcement of a forum selection clause through a Rule 12(b) motion to dismiss, even when the clause provides for suit in an alternative federal forum. In a contemporaneous summary order filed with this opinion, we conclude that the district court properly applied our test in Phillips to dismiss TradeComet's complaint.

BACKGROUND

Because we are reviewing the district court's dismissal of a complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, we view the facts in the light most favorable to TradeComet. See Phillips, 494 F.3d at 384. Google, a Delaware corporation, operates a well-known Internet search engine website bearing the same name. It has its principal place of business in Mountain View, California, and is authorized to do business in the State of New York. In 2001, Google launched AdWords, an advertising platform that enables advertisers to have their ads appear when Internet users perform searches containing specified search terms on Google's website.*fn1 TradeComet, a Delaware limited liability company with its principal place of business in New York, operates its own search engine website, "SourceTool.com." In contrast to Google's search engine, TradeComet's search engine specifically targets businesses seeking to buy or sell products and services to other businesses.*fn2 Beginning in 2005, TradeComet used AdWords to generate online traffic for SourceTool.com. In response to what it perceived to be anticompetitive conduct on Google's part, however, TradeComet filed suit in the United States District Court for the Southern District of New York on February 17, 2009.

TradeComet's complaint alleges violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, in connection with the prices Google charged TradeComet for its participation in the AdWords program.

Google requires AdWords users to accept certain terms and conditions to activate an AdWords account. Google also requires AdWords users to agree to advertiser's purchase of a particular term causes the advertiser's ad and link to be displayed on the user's screen whenever a searcher launches a Google search based on the purchased search term.

Advertisers pay Google based on the number of times ...


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