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A commerce court judge has dismissed a lawsuit brought by a Philadelphia-based Internet service provider against a Texas-based telecommunications company, saying that Pennsylvania courts lack general personal jurisdiction over the Texas corporation because the corporation didn’t do business here. In GoInternet.Net Inc. v. SBC Communications Inc., GoInternet.Net, which provided Internet service to telephone customers of SBC Communications and its subsidiaries, alleged that SBC tortiously interfered with its business relations with customers when it stopped billing its customers for the ISP’s services, according to the opinion. GoInternet.Net, formerly Mercury Technologies of Delaware, also alleged in the lawsuit that SBC unfairly competed with the ISP by advertising SBC’s own Internet services to the ISPs customers who were also customers of SBC’s subsidiaries. The case was in the Commerce Case Management Program. In filing preliminary objections to the suit, SBC’s attorney, Albert H. Manwaring IV of Pepper Hamilton in Wilmington, said SBC didn’t get into disputing the ISP’s allegations and instead focused on the jurisdiction issue. SBC suspended service for its customers and refused to bill them for GoInternet.Net’s services because many complained they had never signed up for the services in the first place, Manwaring explained. Counsel for GoInternet.Net, Steven Angstreich of Levy Angstreich Finney Baldante Rubenstein & Coren, did not return calls for comment. In June 2000, the Federal Trade Commission filed suit in federal court alleging that telemarketers for GoInternet.Net cold-called small businesses (under its Mercury title) offering to create a Web page or advertisement on the Internet and then billed them without their authorization, according to the FTC’s Web site. Almost a year later, the agency and GoInternet.Net agreed to a settlement that prohibited the company from “misleading consumers” and required it to reveal details of all sales transactions before charging customers. In August, the FTC brought contempt charges against GoInternet.Net in federal court for in violating terms of the settlement by continuing to bill consumers for Internet-related services without their authorization. The agency has asked the court for a hearing and for a temporary order to stop the company’s alleged illegal billing practices until the court rules on the contempt charges, according to court documents. In his December opinion, Common Pleas Judge Albert W. Sheppard Jr. rejected GoInternet.Net’s theory that SBC Telecom, as a subsidiary of its parent company SBC Communications, was essentially an “alter ego” of the SBC parent company. GoInternet.Net had argued that because the subsidiary engaged in “continuous and systematic business” in Pennsylvania — the legal standard for triggering state court jurisdiction — and was an alter ego of SBC, the state court my exercise general jurisdiction over the parent corporation. Sheppard explained that the companies’ having a close relationship or coordinating is insufficient contact for the purposes of triggering personal jurisdiction in Pennsylvania. GoInternet.Net had argued that Pennsylvania jurisdiction should apply because the parent company owns the similarly named subsidiary’s stock, lists information about it on its Web site and annual report, and sells some of its products through a subsidiary in Pennsylvania, according to the opinion. These factors are not enough, Sheppard said. SBC’s Web site is not targeted to Pennsylvania residents and so it does not subject the company to jurisdiction in Pennsylvania, he explained. There is also no evidence that SBC’s advertising was purposefully directed at Pennsylvania — even if some state residents responded to its ads — and so its advertising does not subject it to general jurisdiction in Pennsylvania either, Sheppard said. Under the tort provisions of Pennsylvania’s long-arm statute, GoInternet.Net must show that SBC caused it harm or tortious injury in the state by an act or omission that occurred outside the state, in order to establish the court’s specific personal jurisdiction over SBC, the judge explained. Sheppard found that GoInternet.Net did not provide this evidence. GoInternet.Net also alleged that SBC tortiously interfered with the ISP’s third-party contracts with customers and that in refusing to bill its customers for its services interfered with their business relations, according to the opinion. But “the business relationships with which the defendant allegedly interfered existed outside of Pennsylvania, although the harm caused by the interference was felt by plaintiffs in part in Pennsylvania” because that is where GoInternet.Net is located, Sheppard wrote. “Thus, SBC’s alleged interference with contracts that were to be performed outside of Pennsylvania does not subject it to specific jurisdiction in Pennsylvania with respect to plaintiffs’ tortious interference claims.” As for GoInternet.Net’s allegations that SBC competed unfairly with it by advertising SBC or SBC subsidiaries’ Internet services to its customers — “all of such competing activities took place outside of Pennsylvania,” Sheppard said, and jurisdiction does not follow. Sheppard also rejected GoInternet.Net’s breach of contract claim, which alleged that it was a third-party beneficiary of SBC’s contract with its subsidiaries, which billed customers for GoInternet.Net’s services. Because the subsidiaries’ contracts with SBC did not expressly state that GoInternet.Net was an intended third-party beneficiary of the contracts, GoInternet.Net could not be a third-party beneficiary of the contracts under Texas and Pennsylvania law, Sheppard wrote. Therefore, GoInternet.Net lacked standing to bring the breach of contract claim, Sheppard said, dismissing the claim.

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