Present: Carrico, C.J., Lacy, Hassell, Keenan, Koontz,
and Kinser, JJ., and Compton, Senior Justice
NETWORK SOLUTIONS, INC.
v. Record No. 991168
OPINION BY JUSTICE CYNTHIA D. KINSER
April 21, 2000
UMBRO INTERNATIONAL, INC., ET AL.
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
M. Langhorne Keith, Judge
In this case of first impression, we address the issue
whether a contractual right to use an Internet domain name
can be garnished.
In doing so, we “apply traditional legal
principles to [a] new avenue of commerce,” Intermatic Inc.
v. Toeppen, 947 F. Supp. 1227, 1229 (N.D. Ill. 1996), and
conclude that such a contractual right is “the product of a
contract for services,” Dorer v. Arel, 60 F. Supp.2d 558, 561
(E.D. Va. 1999), and hence is not subject to garnishment.
Accordingly, we will reverse the judgment of the circuit
court holding that the domain name registrations at issue in
this appeal are garnishable.
FACTS AND PROCEEDINGS
In 1997, appellee Umbro International, Inc. (Umbro),
obtained a default judgment and permanent injunction in the
United States District Court for the District of South
Carolina against 3263851 Canada, Inc., a Canadian corporation
(the judgment debtor), and also against a Canadian citizen
who owns the judgment debtor.
Umbro Int’l, Inc. v. 3263851
Canada, Inc., No. 6:97-2779-20, slip op. at 5, 8 (D.S.C. Dec.
That proceeding involved the judgment debtor’s
registration of the Internet domain name 1 “umbro.com.”
order, the district court permanently enjoined the judgment
debtor from further use of the domain name “umbro.com” and
awarded judgment to Umbro in the amount of $23,489.98 for
attorneys’ fees and expenses.
Id. at 8.
Umbro subsequently obtained a Certification of Judgment
for Registration in Another District from the district court
in South Carolina.
Umbro then filed that document in the
United States District Court for the Eastern District of
Virginia, which, in turn, issued an Exemplification
See 28 U.S.C. § 1963.
Using that Certificate
and a copy of the district court’s judgment, Umbro obtained a
writ of fieri facias from the Circuit Court of Fairfax County
and instituted a garnishment proceeding that is the subject
of this appeal.
In the garnishment summons, Umbro named Network
Solutions, Inc. (NSI), as the garnishee and sought to garnish
38 Internet domain names that the judgment debtor had
An explanation and discussion of an “Internet domain
name,” as well as related terms, appears infra at pages ____.
registered with NSI.
Accordingly, Umbro asked NSI to place
those domain names on hold and to deposit control of them
into the registry of the circuit court so that the domain
names could be advertised and sold to the highest bidder.
NSI answered the garnishment summons, stating that it
held no money or other garnishable property belonging to the
Instead, NSI characterized what Umbro
sought to garnish as “standardized, executory service
contracts” or “domain name registration agreements.”
also asserted that 8 of the 38 domain names listed in the
garnishment summons either were not then, or never had been,
subject to a domain name registration agreement between NSI
and the judgment debtor. 2
Umbro subsequently filed a motion for NSI to show cause
why it had not deposited control of the judgment debtor’s
domain names into the registry of the circuit court.
opposed that motion and the garnishment on the grounds that
the writ of fieri facias does not attach to the judgment
debtor’s contractual rights that are dependent on unperformed
conditions, that the judgment debtor’s domain name
registration agreements with NSI are contracts for services
and thus not subject to garnishment, that domain name
services do not have a readily ascertainable value, and that
the domain name services are not similar to patents and other
forms of intellectual property.
In opposing the garnishment, NSI submitted an affidavit
from its director of business affairs, who stated that domain
names cannot function on the Internet in the absence of
certain services being provided by a domain name registrar
such as NSI.
He further stated that NSI performs these
domain name registration services pursuant to a standard
domain name registration agreement.
After a hearing on Umbro’s show cause motion, the
circuit court determined that the judgment debtor’s Internet
domain name registrations are “valuable intangible property
subject to garnishment.”
In a letter opinion, the court
concluded that the judgment debtor has a possessory interest
in the domain names registered with NSI.
The court further
found that there are no unperformed conditions with regard to
the judgment debtor’s contractual rights to use the domain
names, that NSI is not being forced to perform services for
entities with whom it does not desire to do business, and
that the domain names are a “new form of intellectual
Umbro now seeks to garnish 29 domain name registrations
by the judgment debtor with NSI.
Accordingly, the court ordered NSI to deposit control
“over all of the [j]udgment [d]ebtor’s Internet domain name
registrations into the [r]egistry” of the court for sale by
the sheriff’s office.
Because of the intangible nature of
the domain names, the court directed the sheriff’s office to
sell the domain names in whatever manner it “deem[ed]
appropriate” after consultation with Umbro, and to notify NSI
as to the name of the successful bidder for each domain name.
According to the court’s order, NSI then had to “transfer the
domain name registration” to the successful bidder “as soon
as commercially practicable following NSI’s receipt of a
properly completed registration application for the domain
name from the winning bidder.”
This appeal followed.
Before analyzing NSI’s assignments of error, we will
discuss the Internet, the nature of domain names, and our
statutory garnishment proceedings.
THE INTERNET AND DOMAIN NAMES
The Internet, which began as a United States military
computer network called ARPANET, is now a “vast and
expanding,” Intermatic, 947 F. Supp. at 1230, worldwide
network of interconnected computers, Reno v. American Civil
Liberties Union, 521 U.S. 844, 849-50 (1997).
connected to the Internet can access an exponentially
expanding wealth of information through an array of
communication methods such as electronic mail, electronic
mailing list services known as listservs, chat rooms,
newsgroups, and the World Wide Web (the Web).
Id. at 851.
The Web is probably the most widely known and utilized method
of communication on the Internet.
Id. at 852.
terms, the Web consists of information or documents presented
on “pages” 3 of graphics, text and/or sound.
Corp. v. Network Solutions, Inc., 985 F. Supp. 949, 951 (C.D.
Cal. 1997), aff’d, 194 F.3d 980 (9th Cir. 1999); Intermatic,
947 F. Supp. at 1231.
Pages may “contain ‘links’[ 4 ] to other
pages either within the same set of data files (‘Web site’)
or within data files located on other computer networks.”
Lockheed Martin, 985 F. Supp. at 951.
See also Robert L.
Tucker, Information Superhighway Robbery: The Tortious Misuse
of Links, Frames, Metatags, and Domain Names, 4 Va. J.L. &
Tech. 8, ¶ 6 (Fall 1999)
Each method of communicating on the Internet depends on
the use of a unique domain name, also known as a “fully
“Pages” are computer data files.
Supp. at 1231.
Intermatic, 947 F.
A “link” is a graphic, text or combination of the two
that an Internet user may select, generally with a computer’s
mouse, and that provides an “avenue to other documents” on
qualified domain name,” Intermatic, 947 F. Supp. at 1230, to
locate a specific computer or network, Lockheed Martin, 985
F. Supp. at 951.
Domain names have been compared to
trademarks, addresses, or telephone numbers, but domain
names, addresses, and telephone numbers, unlike some
trademarks, are unique.
MTV Networks, A Division of Viacom
Int’l, Inc. v. Curry, 867 F. Supp. 202, 204 n.2 (S.D.N.Y.
1994); Adam Chase, A Primer on Recent Domain Name Disputes, 3
Va. J.L. & Tech. 3, ¶ 2 (Spring 1998)
Each “host” computer that is “more-or-less permanently”
connected to the Internet is assigned its own “Internet
Protocol” (IP) number or address, which specifies the
location of the computer.
Tucker, supra, ¶ 12.
Intermatic, 947 F. Supp. at 1230.
The IP number is comprised
of four groups of numbers, with each group separated by a
decimal point called a “dot.”
Tucker, supra, ¶¶ 12-13.
also Lockheed Martin, 985 F. Supp. at 952; Panavision Int’l,
L.P. v. Toeppen, 945 F. Supp. 1296, 1299 (C.D. Cal. 1996),
aff’d, 141 F.3d 1316 (9th Cir. 1998).
For example, the IP
number for this Court is 184.108.40.206.
the Internet. Reno, 521 U.S. at 852.
947 F. Supp. at 1232.
See also Intermatic,
Because Internet users can more readily remember a name
as opposed to a lengthy sequence of numbers composing an IP
number, each individual computer or network also has an
alphanumeric name called a “domain name.”
985 F. Supp. at 952; Panavision, 945 F. Supp. at 1299; Chase,
supra, ¶ 2; Tucker, supra, ¶ 12.
Reading from right to left,
each portion of a domain name identifies a more specific area
on the Internet, and as with IP numbers, is separated by a
For example, in this Court’s domain name,
courts.state.va.us, “us” is the top-level domain, 5 and is a
country code or identifier which signifies that the domain
name is registered in the United States.
See Sally M. Abel,
Trademark Issues in Cyberspace: The Brave New Frontier, 5
Mich. Telecomm. & Tech. L. Rev. 91, 93 n.4 (1999); Kenneth
Sutherlin Dueker, Trademark Law Lost in Cyberspace: Trademark
Protection for Internet Addresses, 9 Harv. J.L. & Tech. 483,
492 n.50, 494-95 n.59 (1996); Stuart D. Levi, The Domain Name
System & Trademarks, 563 PLI/Pat 449, 453 (1999). “[V]a,” the
Top-level domains indicate a broad class to which the
domain name belongs. For example, “edu” represents
educational institutions, “gov” is reserved for federal
government entities, and “net” is reserved to networks. The
top-level domain “com,” short for “commercial,” is a catchall domain, and is generally available to registrants who
have no special attributes which would qualify them to use
another top-level domain. Tucker, supra, ¶ 13. Top-level
domains are assigned by a domain name registrar, such as NSI.
Sally M. Abel, Trademark Issues in Cyberspace: The Brave New
Frontier, 5 Mich. Telecomm. & Tech. L. Rev. 91, 93 (1999).
second-level domain, 6 indicates a sub-network used in the
Commonwealth of Virginia; “state,” the third-level domain,
describes a sub-network used by the state government of
Virginia; and “courts” further indicates a computer used by
See Lockheed Martin, 985 F. Supp. at
952; Dueker, supra, at 492-93.
If an Internet user knows the domain name for a
particular Web site, such as this Court, the user can type
the name into a Web browser, 7 and access that site directly
without having to conduct what may be a time-consuming
Panavision, 945 F. Supp. at 1299.
See also MTV, 867
F. Supp. at 204 n.2 (noting absence of “satisfactory Internet
equivalent of telephone company white pages or directory
Even when a user does not know the specific
domain name for a Web site, the user can often deduce the
name and still find the site without performing a search.
Most businesses on the Internet use the “com” top-level
See Lockheed Martin, 985 F. Supp. at 952.
All second-level domains are unique, and frequently
contain the corporate or trade name of the domain name
holder. Lockheed Martin, 985 F. Supp. at 952. Second-level
domains are selected and requested by the domain name
registrant. Abel, supra, at 93.
A Web browser is a computer program that allows a user
of an Internet-connected computer to access content on the
Web. See Reno, 521 U.S. at 852; Jason R. Berne, Court
Intervention but not in a Classic Form: A Survey of Remedies
user could intuitively find a company’s Web site by typing
into a Web browser the corporate or trade name, such as
Because the second-level domain name, i.e.,
“umbro” in the example, must be exclusive, a company would
obviously want to use its recognized name in the second level
of its Internet domain name.
See also Panavision,
945 F. Supp. at 1299 (“businesses frequently register their
names and trademarks as domain names”); supra note 6.
advantage of having such a domain name thus explains the
value that is attached to some domain names and the reason
why litigation has occurred between trademark owners and
domain name holders. 9
See also Intermatic, 947 F. Supp.
NSI’s role in the Internet domain name system is to
manage certain domain name registrations.
985 F. Supp. at 953.
At one time, NSI held the exclusive
in Internet Trademark Cases, 43 St. Louis U. L.J. 1157, 1167
& n.71 (1999).
When an Internet user enters a domain name in his or
her browser, the browser sends the request through the
Internet in a process administered by a computer termed a
“top-level server.” Top-level servers maintain a registry of
each domain name active in a given top-level domain and match
requests for domain names to IP numbers in their registries.
Intermatic, 947 F. Supp. at 1231; Berne, supra, at 1167.
Much of the litigation regarding domain names has
focused on trademark infringements. We cite to several of
those cases and related law review articles in this opinion,
but none of those cases squarely addresses the question
right, pursuant to a contract with the National Science
Foundation, to assign Internet domain names using the toplevel domains “gov,” “com,” “org,” “net,” and “edu,” see id.,
but it now shares that right with other domain name
registrars, Jason R. Berne, Court Intervention but not in a
Classic Form: A Survey of Remedies in Internet Trademark
Cases, 43 St. Louis U. L.J. 1157, 1168 (1999); Levi, supra,
at 456; Register.com - Domain Name Registration Services
(visited Apr. 12, 2000) .
charges an initial registration fee of $70 for each new
The registration is valid for two years and may
be renewed on a yearly basis for a fee of $35 per year. 10
In assigning the second-level domain names, NSI performs
basically two services.
NSI first compares applications with
a database of existing domain names to prevent the
registration of identical second-level domain names.
then matches the domain name to the corresponding IP number
for the desired Web site.
Lockheed Martin, 985 F. Supp. at
Domain names are available essentially on a first-come,
MTV, 867 F. Supp. at 204 n.2; Chase,
supra, ¶ 5.
NSI has recently begun to register domain names for up
to ten years. NSI – Catalog -- Web Address Registration
NSI performs these services pursuant to domain name
NSI does not independently verify a
registrant’s right to use a domain name, but does require a
registrant to make certain representations and warranties,
such as certifying that the registrant has the right to use
the domain name and that such use does not interfere with the
rights of another party.
Panavision, 945 F. Supp. at 1299.
A registrant also agrees to be bound by NSI’s “Domain
Name Dispute Policy.”
In accordance with that policy, when
litigation arises with regard to the registration and use of
a domain name, NSI deposits control over the domain name into
the registry of a court by furnishing the plaintiff in such
litigation with a “registry certificate.” 11
instances, NSI agrees to be bound by the provisions of any
temporary or final court orders regarding the disposition of
a domain name without being named a party to the litigation,
provided the domain name registrant is named as a party.
terms of the “Domain Name Dispute Policy” also authorize NSI,
in its sole discretion, “to revoke, suspend, transfer or
otherwise modify a domain name registration upon thirty (30)
(visited Apr. 12, 2000)
The record in this case does not contain any “registry
certificate” that was filed in the litigation in the federal
district court in South Carolina, but it does contain a
“Declaration” by NSI’s “Internet Business Manager,” which was
calendar days prior written notice, or at such time as [NSI]
receives a properly authenticated order from a court . . .
requiring the revocation, suspension, transfer or
modification of the domain name registration.”
NSI has also developed a procedure that allows a new
domain name registrant to acquire a previously registered
domain name with the consent of the former registrant of that
The old registrant relinquishes its domain name
registration, and the new registrant agrees to be bound by
the terms of NSI’s current “Domain Name Registration
Agreement” and “Domain Name Dispute Policy.”
the old and new registrants to execute a form agreement
titled “Registrant Name Change Agreement[,] Version 3.0 —
Transfers” in order to effect this change.
Under Virginia law, a judgment creditor can enforce a
judgment for money by requesting the clerk of the court where
the judgment was rendered to issue a writ of fieri facias and
then by delivering that writ to a “proper person” of the
court for execution.
Code § 8.01-466.
See also Code § 8.01-
465.2 (foreign judgment properly filed with clerk is subject
to same procedures as judgments rendered by circuit court).
The writ commands the officer “to make the money therein
filed in that litigation.
The “Declaration” contains
mentioned out of the goods and chattels of the person against
whom the judgment is.”
Code § 8.01-474.
See also Code
§ 8.01-478 (“writ of fieri facias may be levied on the goods
and chattels of the judgment debtor”).
When property of a
judgment debtor is not capable of being levied on, as in the
case of intangible personal property, such property is
nevertheless subject to the execution lien upon delivery of
the writ to a sheriff or other officer.
Code § 8.01-501;
Virginia Nat’l Bank v. Blofeld, 234 Va. 395, 399, 362 S.E.2d
692, 694 (1987).
Garnishment, like other lien enforcement remedies
authorizing seizure of property, is a creature of statute
unknown to the common law, and hence the provisions of the
statute must be strictly satisfied.
See Long v. Ryan, 71 Va.
(30 Gratt.) 718, 724 (1878); Mantz v. Hendley, 12 Va. (2 Hen.
& M.) 308, 315 (1808).
As pertinent here, a judgment
creditor can institute garnishment proceedings if “there is a
liability” on a third person to the judgment debtor.
Accord Blofeld, 234 Va. at 399, 362 S.E.2d at
“Liability” in this context means a “legal
obligat[ion]”, “enforceable by civil remedy,” “a financial or
pecuniary obligation,” or a “debt.”
925 (7th ed. 1999).
Black’s Law Dictionary
Accord Webster’s Third New International
essentially all the elements of a “registry certificate.”
Dictionary 1302 (1993)(an “amount that is owed . . . [;]
pecuniary obligations . . .[;] debts”).
“[A] proceeding in garnishment is substantially an
action at law by the judgment debtor in the name of the
judgment creditor against the garnishee, and therefore the
judgment creditor stands upon no higher ground than the
judgment debtor and can acquire no greater right than such
debtor . . . possesses.”
Lynch v. Johnson, 196 Va. 516, 521,
84 S.E.2d 419, 422 (1954).
A garnishment summons does not
create a lien itself, but, instead, is “a means of enforcing
the lien of an execution placed in the hands of an officer to
Knight v. The Peoples Nat’l Bank of Lynchburg,
182 Va. 380, 392, 29 S.E.2d 364, 370 (1944).
In its first assignment of error, NSI asserts that the
circuit court erroneously concluded “that Internet domain
names are a new form of intellectual property, separate and
apart from the domain name services provided by NSI, in which
the judgment debtor has a possessory interest.”
that the registration services agreement is the only source
of rights acquired by a registrant and that a “registrant
receives only the conditional contractual right to the
exclusive association of the registered domain name with a
given IP number for a given period of time.”
In NSI’s words,
a domain name is “simply a reference point in a computer
database . . . [or a] vernacular shorthand for the
registration services that enable the Internet addressing
system to recognize a particular domain name as a valid
Thus, NSI contends that such services are not
subject to the execution lien of a writ of fieri facias.
In response, Umbro contends that, when NSI processes a
registrant’s application and assigns a specific domain name
to the registrant under NSI’s first-come, first-serve policy,
that registrant acquires the right to use the domain name for
an initial period of two years, to exclude others from using
the name, and to effect a transfer of the name by using NSI’s
“Registrant Name Change Agreement.”
Thus, Umbro posits that
NSI not only agrees to associate a particular domain name
with an IP number, thus making the domain name an operational
Internet address, but also grants to the registrant the
exclusive right to use a unique domain name for a specified
period of time.
That contractual right, according to Umbro,
is the intangible property in which the judgment debtor has a
possessory interest and that is subject to garnishment.
Initially, we must point out that NSI acknowledged
during oral argument before this Court that the right to use
a domain name is a form of intangible personal property. 12
That position is consistent with the one NSI took in Network
Solutions, Inc. v. Clue Computing, Inc., 946 F. Supp. 858 (D.
There, in order to “assign registration and
use” of a domain name “as determined by the [c]ourt,” NSI
initiated a statutory interpleader action pursuant to 28
U.S.C. § 1335.
Id. at 860.
That statute requires that a
plaintiff have possession or custody of money or property in
which adverse parties claim conflicting interests.
However, NSI’s acknowledgement is not dispositive of this
Likewise, we do not believe that it is essential to
the outcome of this case to decide whether the circuit court
Congress recently passed the “Anticybersquatting
Consumer Protection Act.” This amendment to Section 43 of
the Trademark Act of 1946, 15 U.S.C. § 1125, et. seq.,
authorizes an in rem civil action against a domain name in
the judicial district in which the domain name registrar is
located. The amendment also states that the remedies in such
an action are limited to an order “for the forfeiture or
cancellation of the domain name or the transfer of the domain
name to the owner of the mark.” Id. at § 1125(d)(2)(A) and
(D)(i). Finally, the amendment requires the registrar of the
domain name to deposit with the court “documents sufficient
to establish the court’s control and authority regarding the
disposition of the registration and use of the domain name.”
Id. at § 1125(d)(2)(D)(i)(I). While it could be argued that
this legislation supports the position that Internet domain
names are intangible property since the amendment provides
for an in rem proceeding, the language of the amendment does
not address the relationship between an operational Internet
domain name and its attendant services provided by a
registrar such as NSI.
correctly characterized a domain name as a “form of
intellectual property.” 13
Irrespective of how a domain name is classified, we
agree with Umbro that a domain name registrant acquires the
contractual right to use a unique domain name for a specified
period of time.
However, that contractual right is
inextricably bound to the domain name services that NSI
In other words, whatever contractual rights the
judgment debtor has in the domain names at issue in this
appeal, those rights do not exist separate and apart from
NSI’s services that make the domain names operational
Therefore, we conclude that “a domain
name registration is the product of a contract for services
between the registrar and registrant.”
Dorer, 60 F. Supp.2d
A contract for services is not “a liability” as that
term is used in § 8.01-511 and hence is not subject to
See Sykes v. Beal, 392 F. Supp. 1089, 1094-95
Historically, certain types of intangible,
intellectual property have not been subject to levy and sale
under execution. See Ager v. Murray, 105 U.S. 126, 131
(1881) (“debtor’s interest in the patent-rights . . . cannot
be taken on execution at law”); Stephens v. Cady, 55 U.S.
528, 531 (1852) (copyright “is not the subject of seizure or
sale by means of” an execution, but it “may be reached by a
creditor’s bill”); Stutzman v. C.A. Nash & Son, Inc., 189 Va.
438, 446, 53 S.E.2d 45, 49 (1949) (“there is no property in a
trade-mark” aside from its use in a trade or business). But
see McClaskey v. Harbison-Walker Refractories Co., 138 F.2d
493, 500 (3rd Cir. 1943) (allowing judgment creditor to reach
judgment debtor’s patent by using writ of fieri facias).
(D. Conn. 1975) (analyzing garnishment of services and
concluding that automobile insurer’s duty to defend is not
garnishable); cf. J. Maury Dove Co., Inc. v. New River Coal
Co., 150 Va. 796, 827, 143 S.E. 317, 327 (1928) (where
“contract contains mutual obligations and liabilities, or
involve[s] a relation of personal confidence,” one party
cannot assign it without consent of other party); McGuire v.
Brown, Guardian, 114 Va. 235, 242, 76 S.E. 295, 297 (1912)
(holding contract for personal services is not assignable).
If we allow the garnishment of NSI’s services in this
case because those services create a contractual right to use
a domain name, we believe that practically any service would
For example, if a satellite television
customer prepaid the fee for a particular channel
subscription, Umbro’s position would allow garnishment of the
We also are concerned that a decision
to uphold the garnishment at issue would be opening the door
to garnishment of corporate names by serving a garnishment
summons on the State Corporation Commission since the
Commission registers corporate names and, in doing so, does
not allow the use of indistinguishable corporate names.
Code §§ 13.1-630 and –631.
Cf. Gue v. The Tide Water Canal
Co., 65 U.S. 257, 263 (1860) (a “franchise being an
incorporeal hereditament, cannot . . . be seized under a
Without statutory changes, we are not
willing to allow such results in Virginia simply because in
today’s case we are dealing with “a unique and wholly new
medium of worldwide human communication” known as the
Reno, 521 U.S. at 850 (quoting American Civil
Liberties Union v. Reno, 929 F. Supp. 824, 844 (E.D. Pa.
Nevertheless, Umbro attempts to draw a distinction
between the judgment debtor’s contractual right to use the
domain names, which came into existence after NSI screened
its database to guard against registering identical names and
matched the judgment debtor’s domain names to the
corresponding IP numbers, and NSI’s services that continue to
make those domain names operational Internet addresses.
are not persuaded by Umbro’s argument, although at least two
jurisdictions have made a similar distinction with regard to
The court in Georgia Power Co. v. Security Inv.
Properties, Inc., 559 F.2d 1321 (5th Cir. 1977), found such a
In discussing the principle that a bankruptcy
court cannot exercise summary jurisdiction over property
unless the debtor or trustee has actual or constructive
possession of the property in question, the court observed
that “for a business, . . . telephone numbers constitute a
unique property interest, the value of which increases as the
number becomes widely known through publication in
guidebooks, posting on billboards, and imprinting on
Id. at 1324.
The court then distinguished
the property interest in such numbers “from a subscriber’s
rights to the telephone utility’s service.”
Darman v. Metropolitan Alarm Corp., 528 F.2d 908, 910 n.1
(1st Cir. 1976) (approving sale of telephone numbers in order
to increase value of bankruptcy estate and noting distinction
between “a subscriber’s rights derived from a contract for
telephone service and a subscriber’s possible claim to a
possessory interest in the telephone number”).
other courts have reached different results.
Sys. of Berkeley, Inc. v. Pacific Tel. & Telegraph Co., 286
F.2d 488, 490 (2nd Cir. 1961) (finding that telephone numbers
were neither property of, nor in possession of, bankrupt
subscribers); Rothman v. Pacific Tel. & Telegraph Co., 453
F.2d 848, 849-50 (9th Cir. 1971)(following decision in
Slenderella), cert. denied, 406 U.S. 919 (1972).
We are cognizant of the similarities between a telephone
number and an Internet domain name and consider both to be
products of contracts for services.
See Dorer, 60 F. Supp.2d
In our opinion, neither one exists separate from its
respective service that created it and that maintains its
Our view is not changed by the fact that NSI has
developed a policy whereby control of Internet domain names
is deposited with a court when the domain names are the
subject of litigation and, as a part of that policy, agrees
to abide by the terms of any court order regarding the domain
That NSI routinely follows that procedure, in which
the end result requires practically the same actions by NSI
as those which would be required of it under the terms of the
circuit court’s order in this case, does not mean that NSI’s
Internet domain name services should be subject to
By our decision today, we do not suggest that
contractual rights can never be garnished.
otherwise in Lynch.
There, a judgment creditor attempted to
garnish a sum due and payable under the terms of a fire
The judgment creditor claimed that only
the judgment debtor was to be indemnified by the insurance
policy, that there was a present liability on the part of the
insurance company to pay the judgment debtor for the insured
loss, and that the funds held by the insurance company were
Lynch, 196 Va. at 521, 84 S.E.2d at 422.
Court determined that the judgment creditor’s position would
be correct if the judgment debtor had the right to demand
payment from the insurance company for his sole benefit.
However, the Court concluded that because of an agreement
between certain parties, which was made contemporaneously
with a deed of conveyance, the insurance proceeds stood “in
the place of the destroyed property,” and that none of the
several persons whose interests in the property were insured,
including the judgment debtor, was individually entitled to
Id. at 525, 84 S.E.2d at 424.
any of the insurance proceeds.
Similarly, while applying Virginia law, the United
States Court of Appeals for the Fourth Circuit allowed a
judgment creditor to garnish money that a builder owed to a
judgment debtor under the builder’s contract with the
United States v. Harkins Builders, Inc., 45
F.3d 830, 835 (4th Cir. 1995).
In its discussion of
garnishment proceedings under Virginia law, the court stated,
and we agree, that “where the property is in the form of a
contract right, the judgment creditor does not ‘step into the
shoes’ of the judgment debtor and become a party to the
contract, but merely has the right to hold the garnishee
liable for the value of that contract right.”
Id. at 833.
Notably, in Lynch and Harkins, the property that each
judgment creditor sought to garnish was a sum of money due
under a contract, not the performance of services by a
Under Code § 8.01-511, a garnishment summons may be
issued with respect to “a liability on any person other than
the judgment debtor.”
In a garnishment proceeding,
“[o]rdinarily, the only adjudicable issue is whether the
garnishee is liable to the judgmentdebtor, and if so, the
Butler v. Butler, 219 Va. 164, 166, 247 S.E.2d
353, 354 (1978).
In the present case, the only “liability”
due on the part of NSI is the provision of its Internet
domain name services to the judgment debtor.
Code § 8.01-
Although, as Umbro points out, domain names are being
bought and sold in today’s marketplace, we are not willing to
sanction the garnishment of NSI’s services under the terms of
our present garnishment statutes.
To do so would allow Umbro
to “step into the shoes” of the judgment debtor.
F.3d at 833.
Even though the Internet is a “new avenue of
commerce,” Intermatic, 947 F. Supp. at 1229, we cannot extend
established legal principles beyond their statutory
See Bickle v. Chrisman’s Adm’x, 76 Va. 678, 691
(1882) (garnishment “cannot be enforced beyond [its]
For these reasons, we will reverse the judgment of the
circuit court, dismiss the garnishment summons, and enter
final judgment in favor of NSI. 14
Reversed and final judgment.
SENIOR JUSTICE COMPTON, with whom CHIEF JUSTICE CARRICO
Relying heavily on decisions of federal trial courts,
the majority concludes that a domain name registration is the
product of a contract for services between the registrar and
The majority goes on to decide that such a
contract is not subject to garnishment because it is not "a
liability," as the term is used in Code § 8.01-511 ("On a
suggestion by the judgment creditor that, by reason of the
lien of his writ of fieri facias, there is a liability on any
person other than the judgment debtor," garnishment
proceedings may be instituted).
I disagree that the
registration is a contract for services not subject to
NSI, the garnishee, correctly acknowledges that the
right to use a domain name is a form of intangible personal
Code § 8.01-501 clearly provides for an execution
lien on intangible personal property, that is, property not
capable of being levied upon.
Virginia Nat'l Bank v.
We do not need to address NSI’s remaining assignment
Blofeld, 234 Va. 395, 399, 362 S.E.2d 692, 694 (1987).
lien attaches to the extent the judgment debtor has a
possessory interest in the intangible property subject to the
International Fidelity Ins. Co. v. Ashland Lumber Co.,
250 Va. 507, 511, 463 S.E.2d 664, 666-67 (1995).
Therefore, the question becomes whether the judgment
debtor has a possessory interest in the domain names it
registered with NSI.
In my opinion, the trial court
correctly ruled that the judgment debtor, by virtue of the
domain name registration agreements with NSI, has a current
possessory interest in the use of the domain names, that is,
a contractual right to the exclusive use of the names it has
registered with NSI.
However, NSI contends that the judgment debtor's
contractual rights are not subject to garnishment because
they allegedly are contingent, dependent on unperformed
conditions, or are like personal services.
erroneously has bought into this idea.
NSI's contractual obligation to the judgment debtor
already is presently due, not contingent or akin to a
personal service agreement.
The judgment debtor has
submitted its registration forms and paid the registration
NSI has completed the registration of the judgment
debtor's Internet domain names under NSI's "first come, first
served" policy, and the judgment debtor acquired the right to
the exclusive use of the domain name for an initial period of
Because NSI has received everything required to give the
judgment debtor the exclusive right to use the domain names
it registered, the contractual right, a valuable asset, is
the intangible personal property in which the judgment debtor
has a possessory interest.
This right is a "liability"
within the meaning of Code § 8.01-511 and is subject to
In my view, contrary to the majority's conclusion, this
right exists separate and apart from NSI's various services
that make the domain names operational Internet addresses.
These services, as the trial court correctly ruled, are mere
conditions subsequent that do not affect the garnishment
Consequently, I would affirm the judgment of the trial