Detailed Louisiana Development
Recently, a Louisiana appeals court held that Louisiana lacked personal jurisdiction over an out-of-state production company and therefore could not be sued in Louisiana courts for non-payment of corporate income and franchise taxes. The company at issue was a game show production company based in California that earned royalty income from licensing the game show Jeopardy’s intellectual property. Jeopardy entered into licensing agreements with third parties that allowed those third parties to negotiate the broadcasting of the show on television stations across the United States, as well as agreements to use the Jeopardy trademark or logo on merchandise. Jeopardy earned royalty income from licensing agreements attributed to Louisiana, but did not file Louisiana corporate income tax returns. After the Department of Revenue filed suit to collect franchise and corporate taxes on the royalty income from agreements with Louisiana entities, Jeopardy filed a declinatory exception raising the objection of lack of personal jurisdiction. In sum, Jeopardy argued that it did not transact any business in Louisiana and that its Louisiana contacts with the unrelated third parties that licensed its intellectual property did not rise to the level of minimum contacts required by due process of law. After a trial court ruled in Jeopardy’s favor, the Department appealed.
On appeal, the court observed that Louisiana’s long-arm statute controls when a court may assert personal jurisdiction over a non-resident defendant and that this statute extends to the fullest limits allowed under the Due Process Clause of the U.S. Constitution. There are two types of jurisdiction- general jurisdiction that applies when the defendant is domiciled in the forum state or its activities in the forum state are substantial, continuous and systematic. Specific jurisdiction is when a lawsuit arises out of or is related to the nonresident defendant' s contacts with the forum state and the defendant purposefully avails itself of the privilege of conducting activities in the forum state. The court concluded that Jeopardy did not have the minimum contacts to satisfy the requirements for specific jurisdiction and likewise did not meet the requirements for general jurisdiction. In the court’s view, Jeopardy had zero contacts with Louisiana aside from the activities of unrelated third parties that contracted to license the shows and the brand name. Jeopardy' s licensing and distribution agreements gave these entities the sole authority to decide in which states to license and/or distribute the Jeopardy game show and trademark/logo and Jeopardy did not have an agency relationship with either entity. The court concluded that the “random, fortuitous, and attenuated contacts with Louisiana, that were initiated by the independent activities of third parties, were simply not sufficient to establish personal jurisdiction over Jeopardy in Louisiana.” Please contact Christie Rao at 504-569-8807 or Nikki Crighton at 212-954-8696 with questions on Robinson v. Jeopardy Productions, Inc.
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