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Sprinkler Warehouse, Inc., v. Systematic Rain, Inc., d/b/a GPLAWN.com, et al.. MN garnishment of website and domain name, Minn Stat 571.73
In 2012, the plaintiff obtained a Texas judgment against Systematic Rain. That judgment was subsequently docketed in Scott County, Minnesota.
In 2014, plaintiff served a garnisment summons on James R. Palm, the CEO of Systematic Rain. Palm was also the registered owner of the defendant's website and domain name. On the garnishment disclosure forms, Palm indicated that he did not have any of Stematic Rain's property. Plaintiff alleged that the website and domain name were Systematic Rain's property under Palm's control, and thus subject to garnishment under Minn. Stat. 571.73.
The district court, Scott County, held that the website and domain name were not property subject to garnishment under the statute. The plaintiff appealed to the Minnesota Court of Appeals, which reversed.
The appeals court first held that both the website and domain name were property subject to garnishment, questions of first impression. With respect to the domain name, it first cited earlier cases showing that a domain name had the indicia of property, such as being subject to conversion. It also noted that there were mechanisms in place for involuntary loss of a domain name.
With regard to the website, the court limited its holding somewhat by focusing on the copyright aspects of the site. It held that the copyrightable elements of the site, though perhaps not the entire site, are subject to garnishment.
Since the case was to be remanded, the court then turned to the procedures to be followed on remand. Since a determination must be made of the value of the website and domain name, the appeals court held that the procedure to be followed would be to order the garnishee to transfer the assets to a receiver, who would then sell the website as a whole.
The court also pointed out that some portions of the site might not be subject to garnishment, and that the district court would need to make these determinations on remand.
No. A14-1121 (Minn. Ct. App. Feb. 2, 2015).
Please see the original opinion for the court's exact language.
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Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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