Court Adopts Kramer Levin’s View of Discovery in "in rem" Actions Against Cybersquatters

In a memorandum opinion dated August 25, 2000, Judge Leonie M. Brinkema, U.S. District Court Judge in Alexandria, VA, adopted the view of discovery in in rem actions under the Anticybersquatting Consumer Protection Act of 1999 advanced by the firm on behalf of its client, Caesars World, Inc. This is believed to be the first decision that addresses this basic — and important — issue under the Act. 

The nominal defendant in an in rem proceeding under the Act is the domain name of the alleged cybersquatter. Cybersquatters, as a result, have tried to assert denials and raise affirmative defenses in such actions solely in the name of the defendant domain name. From this, they have argued that the defendant domain name knows and owns nothing and, hence, can provide virtually no discovery. They have then further argued that because the registrant of the domain name is not a party (a prerequisite of proceeding in rem) and typically overseas, no discovery should be available from the registrant absent resort to the Hague Convention, which provides limited, slow, and expensive overseas third party discovery. Thus, cybersquatters have been trying to have it both ways: on the one hand, being able to defend in rem actions brought against their domain names under the Act while, on the other hand, being able to resist discovery addressed to the domain name registrant. 

Judge Brinkema’s decision makes clear that this "heads I win, tails you lose" approach will not be allowed. Any claims to a domain name in an in rem Act case must be asserted by the claimant to the defendant domain name — i.e., by the alleged cybersquatter. Correspondingly, discovery may be obtained from that claimant even though the court does not have personal jurisdiction over the claimant. 

Kramer Levin team members on the case include John Daniel, Peter Abruzzese, and Nicholas Coch.