EXHIBIT 99.2
NINETEENTH JUDICIAL CIRCUIT OF VIRGINIA
Fairfax County Judicial Center
4110 Chain Bridge Road
Fairfax, Virginia 22030-4009
County of Fairfax City of Fairfax
March 8, 2000
Gregory A. Markel, Esquire
John B. Missing, Esquire
Andrew M. Herskowitz, Esquire
Brobeck, Phleger & Harrison LLP
701 Pennsylvania Avenue, N.W., Suite 220
Washington, D.C. 20004
Jeffrey A. Rosen, Esquire
Thomas A. Clare, Esquire
Andrew M. Clubok, Esquire
M. Todd Henderson, Esquire
Kirkland & Ellis
655 Fifteenth Street, N.W., Twelfth Floor
Washington, D.C. 20005
Re: HOTJOBS.COM.LTD. V. DIGITAL CITY, INC., Chancery No. 164237
--------------------------------------
Dear Counsel:
This case came before the Court on January 31 and February 1, 2000, on
the Plaintiff's Motion for a Preliminary Injunction.
Factual Background
This is a suit for specific performance of an Internet advertising and
information placement contract. Plaintiff HotJobs.com ("HotJobs") is an Internet
employment exchange and recruiting company that offers Internet-based job
offerings and the ability to search aggregated job listings. HotJobs publishes
employment listings on its website. Digital City, Inc. ("DCI") is a provider of
interactive local information on the Internet, in the form of "city guides" for
approximately 60 metropolitan areas, including information about local weather,
sports, entertainment, and classified advertising. DCI publishes this
information on its website. DCI is a subsidiary of America OnLine, Inc. (AOL).
On October 29, 1999, HotJobs and DCI entered into a contract in the
form of an Advertising Agreement, whereby DCI promised to display advertisements
for HotJobs for the period November 15, 1999 to November 14, 2000 for a monthly
payment of $45,000 - $540,000 total for the one year contract. The
advertisements, consisting of job listings,
promotions, and banners, were to be displayed on DCI's "distribution network".
The "distribution network" is comprised of the Internet Service Providers
("ISPs") for which DCI supplies local content webpages: AOL, Compuserve,
Netscape, and MCI Worldcom. The contract, a standard form drafted by DCI,
includes provisions setting forth the conditions under which each party may
terminate the agreement or cancel or modify advertisements.
Due to technical difficulties with the datafeed provided by HotJobs to
DCI1 , HotJobs's advertisements did not begin to be displayed on DCI1 s
distribution network on November 15, 1999. On December 2, 1999, AOL announced
that it had entered into an exclusive agreement with Monster.com, a main
competitor of HotJobs, under which Monster.com would have the exclusive right to
display employment advertising on the websites operated by AOL and its
subsidiaries (including Compuserve, Netscape, and DCI). On the same day, DCI
faxed a letter to HotJobs, providing it with "written notice of DCI's exercise
of its option to have the Agreement expire in thirty (30) days." HotJobs's
counsel responded the next day, asserting that the Agreement did not contain any
provision for unilateral cancellation other than under certain conditions
specified in the Agreement, which were not met. DCI replied on December 6, 1999,
asserting that it could terminate the Agreement under the provision "DCI
reserves the right to cancel and remove at any time any Advertisement for any
reason upon thirty (30) days' advance written notice to Advertiser..." and
further asserting that it would honor its obligations to display HotJobs
advertising until January 2, 2000. However, no HotJobs advertisements were ever
displayed by DCI.2
On December 23, 1999, HotJobs filed this action for specific
performance, alleging that DCI had breached the Agreement by unilaterally
canceling it with 30 days notice and, in so doing, caused HotJobs irreparable
harm for which money damages are not an adequate remedy. HotJobs asserts that
the terms of the Agreement do not permit DCI to cancel the entire agreement --
except under certain conditions which do not exist here - but rather that the
provision cited by DCI refers to DCI's right to cancel any individual
advertisement of the uncounted numbers of individual advertisements subject to
the Agreement, when there is a good faith and reasonable basis for such
cancellation. As a result, HotJobs asserts that DCI's actions constitute a
breach of the Agreement.
HotJobs further contends that DCI's distribution network, which was to
display the subject advertisements, represents a unique market opportunity
because it reaches 78% of all Internet users and that, by breaching the
Agreement, DCI has not only taken access to this unique market opportunity away
from HotJobs, but has given it to HotJobs' competitor, Monster. HotJobs also
alleges bad faith by AOL in entering into an exclusive agreement with Monster
when it knew or should have known that such an agreement was in conflict with
existing DCI contracts. HotJobs contends that money damages are not an
appropriate remedy because of the difficulty in valuing the lost advertising
opportunities. It argues that specific performance is therefore appropriate.
HotJobs argues that the Internet is different from any other medium -
i.e. print, radio, TV - because it is interactive3 and that makes this case
different than traditional advertising cases. It also argues that the Agreement
does not bar specific performance as a remedy but merely limits the amount of
money damages.
In opposing the preliminary injunction, DCI argues that (1) the usual
law of contracts precludes specific performance of advertising contracts; (2)
the explicit terms of the Agreement allow it to cancel the Agreement in its
entirety on 30 days notice for any reason and that it complied with those terms;
(3) the advertising opportunity that is the subject of the Agreement is not
unique enough for the harm to be irreparable and not sufficiently difficult to
value to preclude the adequacy of money damages; (4) courts don't compel
specific performance of advertising agreements; (5) HotJobs's remedies in the
event of a breach of the Agreement are limited by provisions in the agreement;
(6) the First Amendment prohibits compelled speech, including compelled
publication of advertising; and (7) harm would be done to third-parties not
before the Court.
STANDARDS FOR A PRELIMINARY INJUNCTION
Generally, to secure an injunction, a party must show irreparable harm
and lack of an adequate remedy at law. WRIGHT V. CASTLES, 232 Va. 218 (1986).
Although the Virginia Supreme Court has not set forth standards for granting or
denying a preliminary injunction, this Court 4 has adopted the standard set
forth by the United States Court of Appeals for the Fourth Circuit. The Court
must consider the following four factors in a balancing test:
(1) the likelihood of irreparable harm to the plaintiff if the
injunction is denied;
(2) the likelihood of irreparable harm to the defendant if the
injunction is granted;
(3) the likelihood that the plaintiff will succeed on the merits;
and
(4) the public interest.
RUM CREEK COAL SALES INC. V. CAPERTON, 926 F.2d 353 (4th Cir. 1991).
LIKELIHOOD OF SUCCESS ON THE MERITS
Likelihood of success on the merits has two components that must be
examined here: (1) whether HotJobs can prove that DCI breached the contract and
(2) whether specific performance is the appropriate remedy. 5
With respect to DCI's alleged breach of the contract, HotJobs argues
that the Agreement gives DCI the right to terminate the entire Agreement only
under certain conditions, which are not operative here. It further argues that
the provision upon which DCI relies only permits DCI to "cancel and remove" an
INDIVIDUAL ADVERTISEMENT for any reason, not to cancel and remove all of the
thousands of advertisements contemplated under the Agreement. Finally, it argues
that Virginia law prohibits a party from exercising contractual discretion in
bad faith, and therefore DCI cannot cancel and remove each of the individual
thousands of advertisements for the sole purpose of not performing its contract
with HotJobs in order to preserve its parent company's exclusive agreement with
HotJobs's competitor.
DCI argues that the Agreement explicitly gives it the right to cancel
the entire Agreement on 30 days notice for any reason; that the Agreement is
plain and unambiguous in its terms; and that the Court cannot change the words
agreed to by the parties. It further argues that Virginia law does not impose an
implied covenant of good faith and fair dealing on the parties.
While the Agreement does not define the word "Advertisement", it is
very clear from both the context of the provision upon which DCI relied and the
Agreement as a whole that
"DCI reserves the right to cancel and remove at any time any
Advertisement for any reason upon thirty (30) days' advance written
notice to Advertiser (or upon such shorter notice as may be designated
by DCI in the event that DCI believes in good faith that further
display of the Advertisement will expose DCI to liability or other
adverse consequences)"6
gives DCI the right to remove from display on the distribution network any
particular individual banner, advertisement, or listing, not, however, that it
can cancel the entire Agreement. The quoted provision is part of a paragraph
concerning advertisement content7. Provisions for termination of the entire
Agreement are found elsewhere and all use the language "terminate the
Agreement". These provisions, which deal with non-payment, change of control,
insolvency, and material breach, are not applicable here.8
The contract appears unambiguous. Where the parties have used the
phrase "terminate the Agreement" to refer to a complete cessation of the
business relationship, it defies logic to accept the assertion that "cancel and
remove ... any Advertisement" also refers to a complete cessation on the
business relationship. Thus, HotJobs appears very likely to prove that DCI
breached the contract.9
Specific performance is the appropriate remedy for breach of contract
only where money damages are an inadequate remedy. 10 The Court recognizes that
specific performance of contracts involving the provision of services is
generally disfavored in Virginia. Equity will not entertain suits for specific
performance of contracts for acts involving skill, labor, and judgment. SEE
Wampler v. Wampler, 71 Va. (30 Gratt) 454 (1878). While the Virginia Supreme
Court has awarded an injunction PROHIBITING advertising, SEE BLACK & WHITE CARS,
INC. V. GROOME TRANSPORTATION, 247 Va. 426 (1994) (discussed INFRA), no Virginia
court has issued an injunction REQUIRING advertising as a remedy for breach of
an advertising contract. 11
However, at the preliminary injunction stage, a plaintiff need not
prove that it is entitled to the remedy it seeks. HotJobs need only raise a
question "going to the merits so serious, substantial, difficult, and doubtful"
as to be fair ground for litigation. MULTI-CHANNEL TV CABLE CO. V.
CHARLOTTESVILLE QUALITY CABLE Op.Co. 22 F.3d 546, 551-552 (4th Cir. 1994)
(applying Virginia law).
HotJobs argues that it will be difficult if not impossible to quantify
its damages, thus justifying injunctive relief. DCI suggests that perhaps the
appropriate measure is the additional cost (if any) to HotJobs of similar
advertising that reaches the same number of "eyeballs", according to Internet
Media Metrix rankings12. This type of calculation is inappropriate in this case
because HotJobs' revenue is not determined by the number of "eyeballs" that see
their advertisements or job listings, or even the number of people who visit
their own website. HotJobs' revenue is derived primarily from employers who pay
to list job openings on HotJobs' website. The ISPs and their websites that
comprise the distribution network, AOL in particular, have name recognition
among the general public (and hence employers in general) that far outweighs
their "eyeball" percentages in the Media Metrix rankings. Thus, advertising on
other combinations of websites reaching the same number of "eyeballs" is not an
economically interchangeable alternative as would be required to defeat specific
performance. SEE VAN WAGNER ADVERTISING CORP. V. S & M ENTERPRISES 492 N.E. 2d
756 (N.Y. 1986).
Neither party has suggested any way to determine the number of
employers who would have listed job openings with HotJobs if DCI had performed
the contract, giving HotJobs access to its prestigious distribution network, but
now will not because HotJobs' advertisements and job listings cannot appear on
that network in any meaningful capacity13.
Nor has any way to value HotJobs' loss of competitive position to
Monster, which now has exclusive access to that network, or HotJobs' loss of
prestige been offered14. Money damages are inadequate to compensate an aggrieved
party for competitive injuries, such as loss of customers to a competitor. SEE
MULTI-CHANNEL, 22 F.3d at 551-552. HotJobs has met its burden of raising a
serious and substantial question of its entitlement to specific performance.
THE LIKELIHOOD OF IRREPARABLE HARM TO THE PLAINTIFF IF THE INJUNCTION
IS DENIED.
HotJobs relies on three primary factors to support its claim of
irreparable harm. First, it asserts that the 78% Internet market share of DCI's
distribution network makes the opportunity to have its advertisements and job
listings published by DCI under this Agreement a unique opportunity. It is
undisputed that HotJobs cannot otherwise reach the same distribution network
because any substantively similar alternative advertising contract would now be
precluded by AOL's exclusive arrangement with Monster. DCI presented evidence
disputing HotJobs' assertions concerning market share15, and argues that the
opportunity is not sufficiently unique to make the harm irreparable because
HotJobs can display its advertisements and job listings on the Internet through
arrangements with other websites and ISPs that reach even more total
"eyeballs".16 While DCI is correct that the loss of an advertising opportunity
that is economically interchangeable with some other available advertising
opportunity does not constitute irreparable harm even when the lost opportunity
has some unique properties, SEE VAN WAGNER, 67 N.Y.2d at 192, the testimony of
the witnesses - HotJobs' expert, Dr. Peter Sealey, in particular leads the Court
to conclude that there is no other available advertising opportunity that is
economically interchangeable with the HotJobs-DCI agreement, which would place
HotJobs advertisements and job listings on websites SOME PART of which are
visited by 78% of Internet users.
Second, HotJobs argues that an injunction is appropriate because it
will be difficult, if not impossible, to quantify its damages. There is
substantial support in Virginia for the proposition that irreparable harm is
sustained, and injunctive relief appropriate, when it would be very difficult or
impossible to quantify monetary damages with precision. In BLACK & WHITE CARS,
INC. V. GROOME TRANSPORTATION, 247 Va. 426 (1994), taxicab companies sought an
injunction prohibiting a passenger shuttle operator from advertising in the
"taxicabs" section of the Yellow Pages in violation of a local statute
prohibiting any but licensed cab companies from so advertising. The Supreme
Court opined that an injunction was appropriate, in part, because of the
difficulty of ascertaining with precision the monetary damages suffered by the
cab companies. ID. at 432. In SENIORS COALITION, INC. V. SENIORS FOUND., 1996 WL
1065556 (Va. Cir. Ct. (Fairfax, J. Rousch) June 10, 1996), the Court entered an
injunction prohibiting one non-profit entity from using another's mailing list
partially because "the Court [could not] conclude that money damages will be
adequate to make the [plaintiff] whole ... [because] it will be nearly
impossible for the plaintiffs to quantify the amount of donations not made to
the
[plaintiff] by confused or irate donors." Id. at *5. See also, MULTI-CHANNEL, 22
F.3d at 551-552; BLACKWELDER FURNITURE CO. V. SEILIG MFG. CO., 550 F.2d 189, 197
(4th Cir. 1977).
Finally, HotJobs argues that the harm must be remedied immediately, as
opposed to when this case matures for trial, because of the volatile nature of
the Internet industry. While a federal court did hold that, in the Internet
services industry, "enormous changes can occur during extremely short periods;
and exclusion from the industry could destroy [a party's] future in that
industry," SPRINT CORP. V. DEANGELO, 12 F. Supp. 2d 1188, 1195 (D. Kan 1998), it
is clear that exclusion from the industry is not at issue here. However, the
Fourth Circuit, applying Virginia law has found that "when the failure to grant
preliminary relief creates the possibility of permanent loss of customers to a
competitor or the loss of goodwill, the irreparable injury prong is satisfied."
MULTI-CHANNEL TV CABLE CO. V. CHARLOTTESVILLE QUALITY CABLE OP. CO., 22 F. 3d
546, 552 (4th Cir. 1994). SEE ALSO, R.J. REYNOLDS TOBACCO CO. V. PHILIP MORRIS,
INC., 60 F. Supp. 2d 502 (M.D.N.C. 1999) (holding that cigarette-maker Philip
Morris's plan to control 75% of available display space and signage for
cigarettes would cause other cigarette companies irreparable harm in lost
goodwill, lost advertising opportunities, and harm to their competitive
positions in the industry, and issued a preliminary injunction prohibiting
implementation of the plan).17
THE LIKELIHOOD OF IRREPARABLE HARM TO THE DEFENDANT IF THE INJUNCTION
IS GRANTED
DCI presented no argument concerning irreparable harm to it if the
injunction is granted. The testimony of Paul DeBenedictus, President and Chief
Executive Officer of DCI, was that DCI itself would simply collect the $540,000
that the Advertising Agreement calls for HotJobs to pay. It seems evident that
any injury may be suffered by DCI's parent, AOL, which might find itself in
breach of its exclusive agreement with Monster. Yet, such an injury would flow
from DCI's own wrongdoing and therefore DCI can hardly complain that it will
suffer irreparable injury if a preliminary injunction is issued because it
brought the harm on itself. SEE OPTICIANS ASS'N OF AMERICA V. INDEPENDENT
OPTICIANS OF AMERICA, 920 F.2d 187, 197 (3rd Cir. 1990).
THE PUBLIC INTEREST
Courts outside Virginia have held that the First Amendment precludes
compelling newspapers to publish specific advertising. ASSOCIATES & ALDRICH CO.
V. TIMES MIRROR CO., 440 F.2d 133 (9th Cir. 1971); WISCONSIN ASS'N OF NURSING
HOMES, INC. V. JOURNAL CO., 92 Wis.2d 709 (Ct. App. 1979). However, those cases
may be differentiated from this one on two bases. First, by the fact that the
newspapers in question had not contracted to publish the advertiser's material,
and, second, because the newspapers were objecting to specific content of the
advertisements, which DCI is not. The First Amendment does not bar the Court
from ordering specific performance of this contract because the Court would not
be compelling DCI to speak in any manner that it had not already contracted to
speak.
If the injunction is issued, the third parties who might be harmed are
AOL and Monster.com. Any harm to AOL is discussed in the previous section. If
Monster.com is harmed because it does not get the benefit of its bargain with
AOL - exclusive access to the distribution network - it has a contract remedy
against AOL. HotJobs has no contractual relationship with either AOL or Monster.
Conversely, if the injunction is not issued, those employers who placed
ads with HotJobs in reliance on HotJobs being able to advertise on the
distribution network and to place their job listings on the distribution network
may not get the benefit of their bargain.18
Finally, if an injunction is not issued, other Internet advertising
providers may conclude that they may breach contracts with their advertisers
with impunity if a "better deal" presents itself, because their advertisers have
no meaningful remedy given the difficulty of proving money damages with
specificity. It is in the public interest to make it clear that Virginia courts
will not hesitate to enforce contracts freely entered into by the parties
thereto.
CONCLUSION
The Court finds that there is a considerable likelihood that HotJobs
will suffer irreparable harm - because it will be difficult or impossible to
precisely ascertain the amount of its damages and because it is likely to lose
customers to its main competitor - if injunctive relief is not granted, and
because of a complete paucity of evidence that DCI will suffer any irreparable
injury if it is granted. The Court further finds that, although HotJobs may not
be awarded specific performance at trial, at this point there is a substantial
likelihood that it will prevail on the merits. The Court finds no important
public interest to be adversely affected if an injunction issues. Therefore,
this Court will issue a preliminary injunction requiring DCI to perform its
contract with HotJobs while this case is pending. The parties will set the
matter for trial at the earliest date convenient.
The Court recognizes that this mandatory injunction may require it to
supervise the parties' performance under the Agreement. DCI's suggestion in its
post-hearing brief that this obligation would be a particularly onerous one
because it might cancel each and every one of the thousands of individual ads
placed by HotJobs suggests to the Court an intention to proceed in bad faith.
The Court strongly cautions the parties that, under Virginia law, contractual
discretion may not be exercised in bad faith. VIRGINIA VERMICULITE, 156 F.3d at
542. The Court further cautions the parties that sanctions under Va. Code ss.
8.01-270.1 will be awarded against any party that files a motion or opposition
thereto premised upon an argument without basis in law or fact.
An order granting the Preliminary Injunction is enclosed. It will
become effective upon the placement of a bond by HotJobs in the amount of
$100,000.
Very truly yours,
/s/ R. Terrence Ney
R. Terrence Ney
RTN:em
- -------------------------------------------------------------------------------
END NOTES
1 The Court declines to make a finding as to which of the parties was
responsible for the delay as it is not necessary to the decision of the issue
before the Court.
2 DCI alleges that HotJobs never provided them with a usable datafeed.
HotJobs alleges that DCI's technical staff claimed to be too busy with Y2K
testing to resolve the difficulties with the datafeed and told it they would
assist HotJobs after the new year. Again, the Court declines to make a finding
as to which of the parties was responsible for the delay as it is not necessary
to the decision of the issue before the Court.
3 It also tries to characterize the placement of its advertisements on
the distribution network sites as the lease of prime "virtual real estate",
doubtless to recall to the Court the use of special performance in connection
with real estate contracts. The Court finds this analogy unpersuasive.
4 SEE CHRISTIAN DEFENSE FUND V. STEPHEN WINCHELL & ASSOC. 1998 WL
972334 at *1 (Va. Cir. Ct. (Fairfax, J. Thatcher) Sept. 14, 1998); SENIORS
COALITION, INC. V. SENIORS FOUND., 1996 WL 1065556, at *4 (Va. Cir. Ct.
(Fairfax, J. Rousch) June 10, 1996)
5 Although the Bill of Complaint contains only a demand for specific
performance, a court of equity may award money damages. When a bill in chancery
presents a good ground for equitable relief and the court has actual
jurisdiction over the parties, the court is vested with the sound discretion to
give complete relief, including the administration of legal remedies, in the
chancery case. IRON CITY BANK V. ISAACSEN, 158 Va. 609, 624-25 (1932). SEE ALSO,
ADVANCED MARINE ENTERPRISES, INC. V. PRC, INC., 256 Va. 106 (1998). This remains
true even where the proof at trial shows that the complainant is not entitled to
the equitable relief. IRON CITY BANK at 625-626.
6 The testimony concerning industry custom and usage relating to such
clauses is not persuasive as to one conclusion or the other because the
Agreement itself is unambiguous on its face.
7 The right to "cancel and REMOVE" is important because, under the
Agreement, HotJobs' content advertisements, banners and listings which change
with great frequency - was supposed to be uploaded to the distribution network
on a regular schedule without any DCI employee examining the content, unlike
newspaper advertisements, which are seen by the typesetters, etc., who could
omit them from publication if the content were obscene, obviously libelous, or
otherwise problematic to the newspaper.
8 In this litigation DCI belatedly attempts to assert that, on December
2, 1999, HotJobs called certain of its employees and threatened to issue a press
release concerning the DCI-HotJobs Agreement; that issuing such a press release
without DCI's consent would be a breach of the Agreement, and that the 30-day
cancellation letter was sent in response to this "announced repudiation of the
contract". However, the absence of any mention of any alleged breach or
"repudiation" in the contemporaneous correspondence, together with the testimony
of the witnesses, leads the Court to find that the doctrine of anticipatory
breach is inapplicable here and that DCI may not rely upon it.
9 To the extent that DCI argues that it is removing and canceling each
and every one of the thousands of as yet unsubmitted individual advertisements,
that argument is infirm because DCI would be exercising its contractual
discretion in bad faith. The Fourth Circuit, interpreting Virginia contract law,
held that "[a]lthough the duty of good faith does not prevent a party from
exercising its explicit contractual
rights, a party may not exercise contractual discretion in bad faith." VIRGINIA
VERMICULITE, LTD. V. W.R. GRACE & CO., 156 F.3d 535,542 (4th Cir. 1998). The
provision at issue authorizes the use of contractual discretion. Removing all
advertisements not because of a problem with the content of the advertisements
themselves but to take advantage of a more lucrative arrangement with a
competitor would be an egregious example of bad faith.
10 DCI argues that a limitation of liability provision in the agreement
defeats HotJobs's claim. The Agreement contains a limitation of liability
provision stating that "DCI SHALL NOT IN ANY EVENT BE LIABLE TO ADVERTISER UNDER
THIS AGREEMENT FOR MORE THAN THE AMOUNT TO BE PAID BY ADVERTISER DURING THE YEAR
IN WHICH THE LIABILITY ACCRUES." While such provision effectively limits the
amount of money damages HotJobs may seek, SEE AMERICAN CLASSIC LAND DEV, CORP.
V. DREAM HOMES, INC., 1992 WL 884686 (Va. Cir. Ct. 1992), it does not serve to
preclude injunctive relief.
11 Authority from other jurisdictions is instructive, but not
conclusive. In GOLD V. ZIFF COMM. CO., 553 N.E.2d 404 (Ill. App. Ct. 1989), the
Illinois Court of Appeals upheld a preliminary injunction requiring PC Magazine,
which it implied was, at that time, a unique advertising opportunity for sellers
of computerware, to continue to publish advertisements in compliance with its
contract with PC Brand - a computerware supplier - during the pendency of a
breach of contract action.
Other courts have found damages to be an appropriate remedy for a
publisher's breach of an advertising contract. SEE VAN WAGNER ADVERTISING CORP.
V. S & M ENTERPRISES, 492 N.E. 2d 756 (N.Y. 1986); BODY RUSTPROOFING, INC. V.
MICHIGAN BELL TEL. CO., 385 N.W. 2d 797 (Mich. 1985); ALPHA ONE V. NYNEX
INFORMATION RESOURCES CO., 1994 WL 879488 (Mass. Super. May 23, 1994). However,
only in VAN WAGNER was the specific performance a remedy sought by the
plaintiff, or even a remedy available in the specific factual circumstances of
the case. In that case, the New York Court of Appeals held that money damages
rather than specific performance was the appropriate remedy for an advertiser
denied use of unique billboard space in breach of an advertising contract. The
Court held that uniqueness of advertising space did not dictate specific
performance. Rather the pivotal issue is economic interchangeability with other
advertising opportunities. VAN WAGNER, 492 N.E.2d at 758. However it also held
that specific performance would be appropriate if the value of the advertising
space could not be fixed with reasonable certainty. VAN WAGNER, 492 N.E.2d at
758-761.
12 Media Metrix is a service that count the number of unique visits to
websites each month. It is the functional equivalent of television's Nielsen
ratings, although it is more precise because its results are not derived from
sampling.
13 DCI asserts that HotJobs could place ads on DCI's website in areas
other than the "Jobs and Careers" area. Such advertising is in no way equivalent
to that contemplated under the Agreement.
14 DCI argued that HotJobs could not credibly assert that the DCI
contract was important to its prestige because HotJobs did not list the
Agreement as one of its important business alliances in its SEC filing or in
certain other public statements. DCI fails to acknowledge that the Agreement
expressly provided that HotJobs could not make any public statements about the
existence of the Agreement without the approval of DCI. This provision would
not, however, preclude HotJobs from telling a potential client where its ads and
listings would be appearing.
15 DCI places great emphasis on the fact that HotJobs' contract was
with DCI, whose website has only 4.09 million unique visitors per month -
placing it as number 45 among websites (domains) with most unique visits. DCI
ignores the portion of the Agreement that placed HotJobs' listings in
ClassifiedPlus, which may be accessed from AOL, Netscape, Compuserve and MCI
WorldCom's websites and portals.
16 HotJobs devoted considerable time at the hearing to its argument
that it has effectively lost any chance of reaching the 20 million AOL
subscribers - one quarter of all Internet users. While DCI is technically
correct that anyone accessing the Internet via AOL can access the HotJobs
website without technical difficulty, they ignore the fundamental difference
between how those persons are currently able to access the HotJobs website at
present and how they could have accessed it had the contract been performed (or
how the Monster website can currently be accessed). In order to access the
HotJobs website now, the individual must have previous knowledge from some other
source that there is an employment listings website called "hotjobs.com", so the
individual can type in the name of the website. If the contract had been
performed, any person following links to the jobs and careers sections, or the
ClassifiedPlus database, would have been presented with HotJobs information and
links to its website without previously knowing HotJobs' name.
17 See also PHILIP MORRIS, INC. V. PITTSBURGH PENGUINS, INC. ET AL, 589
F. Supp. 912 (W.D. Pa. 1983) aff'd, 738 F. 2d 424 (3d Cir. 1984); ROSS-SIMMS OF
WARWICK, INC. V. BACCARAT, INC., 66 F. Supp. 2d 317 (D.R.I. 1999).
18 No evidence was presented as to any such reliance, however.
VIRGINA:
IN THE CIRCUIT COURT OF FAIRFAX COUNTY
HOTJOBS.COM, LTD. :
:
Complainant :
:
v. : CHANCERY NO.164237
:
DIGITAL CITY, INC. :
:
Defendant :
PRELIMINARY INJUNCTION
THIS case came before the Court on January 31 and February 1, 2000, on
Complainant's Motion for a Preliminary Injunction. For the reasons stated in the
Court's letter opinion of this date, it is hereby
ORDERED that, pending trial of this suit on the merits, the parties
shall perform the Advertising Agreement between them according to its terms; and
it is
FURTHER ORDERED that such performance shall begin immediately upon the
Plaintiff posting a cash or approved corporate surety bond with the Clerk of
this Court in the amount of $100,000.
ENTERED this 8TH day of March, 2000.
/S/ Judge R. Terrence Ney
--------------------------
Judge R. Terrence Ney
Endorsement of this Order by counsel of record for the parties is waived in the
discretion of the Court pursuant to Rule 1:13 of the Rules of the Virginia
Supreme Court.