Personal jurisdiction and the Internet: applying old principles to a "new" medium.

AuthorYen, Rhoda J.
PositionUS and Florida

The Internet presents a new arena in which to apply old legal standards. Since its inception in the early 1990s, the Internet has allowed lawyers and judges to examine well-established principles in an age of rapidly changing technology. Most businesses with any level of sophistication now have the ability to reach people online in other states, either through e-mail or a website. Even sole proprietorships and small businesses can advertise their services on the Internet to reach a large number of potential customers. Accordingly, it has become increasingly important for attorneys to advise their clients on whether their online activities can subject them to personal jurisdiction in another state. Law firms also need to be concerned with their own online advertising and activities. The Internet has birthed difficult new issues in an old area of law: personal jurisdiction.

The law is well settled that in order for a state court to subject a nonresident defendant to an in personam judgment, due process requires the nonresident defendant to have made sufficient minimum contacts with the forum state, so that maintenance of the suit does not offend traditional notions of fair play and substantial justice. (1) In particular, the nonresident defendant must have purposefully availed itself of the privilege of conducting business in the forum state, so that it could reasonably anticipate being hauled into court there. (2)

The first major case on Internet contacts and personal jurisdiction was heard by the Sixth Circuit Court of Appeals in 1996, and the number of cases since then has increased rapidly. Most of the federal circuits have ruled on this issue, although the 11th Circuit has not yet had the opportunity to hear such a case. Three general categories of Internet contacts have emerged from the case law: passive, interactive, and commercial. These categories represent a sliding scale that is directly proportionate to the nature and quality of the commercial activity that a nonresident defendant conducts over the Internet. See, e.g., Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997).

Categories of Internet Contacts

* Passive. "Passive" contacts exist where the defendant simply posts information on an Internet website that is accessible to users in a foreign jurisdiction. Passive contacts include registering a domain name, publishing a website, and posting a message on an electronic bulletin board. A passive Internet contact "does little more than make information available to those who are interested in it." (3) The courts have almost uniformly agreed that passive contacts are insufficient to establish personal jurisdiction, and that "something more" is necessary. (4) For example, an additional non-Internet contact, such as the listing of a toll-free telephone number on the website, may be sufficient to establish jurisdiction. (5)

* Commercial. On the other end of the spectrum, "commercial" contacts exist when a defendant conducts business transactions over the Internet. The exercise of personal jurisdiction over a nonresident defendant is usually warranted if the defendant conducts a "direct commercial transaction with users in the forum district" (6) Often the commercial contact is accompanied by additional, non-Internet commercial contacts with the forum state. However, some courts have refused to exercise jurisdiction in cases with only commercial Internet contacts. (7)

* Interactive. Between the passive and commercial ends lies a murky area of "interactive" online contacts. Internet contacts are interactive when a user can exchange information with another Internet user through e-mail, online forms, file transfers, and the like. The courts are split as to whether jurisdiction can be exercised in interactive cases. Generally, courts look to the level of interactivity and the commercial nature of the exchange of information that occurs to determine if the interactive contacts are sufficient to establish jurisdiction. (8)

Application of Calder v. Jones

In attempting to anchor themselves to established Supreme Court precedent, many...

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