Vol. 14, No. 4, Pg. 20. Jurisdiction in cyberspace.

• Author: By Manton M. Grier

South Carolina Lawyer

2003.

Vol. 14, No. 4, Pg. 20.

Jurisdiction in cyberspace

20Jurisdiction in cyberspaceBy Manton M. GrierRobert Bork once said that it is the habit of the law to reason by analogy. Thus, when the law is faced with a new technology, such as the Internet, it typically does not seek to reinvent itself to accommodate what was previously unknown. Rather, lawyers and judges look for analogs in what is familiar and attempt to use existing rules and doctrines to resolve disputes involving the new technology. For example, if it is accepted that the parties may enter into a contract by exchanging correspondence, it is but a small step to conclude that the parties may contract by exchanging e-mails.

The same reasoning holds for determining questions of personal jurisdiction. The Internet, is after all, another channel by which a defendant may purposely avail itself of the privilege of conducting activities within a state thereby invoking the protection of its laws and submitting its person to the jurisdiction of its courts.

21 Jurisdictional doctrine

Personal jurisdiction is either general or specific. With specific jurisdiction, the plaintiff's cause of action arises directly from the defendant's activity purposely directed toward the forum state. With general jurisdiction, by contrast, the plaintiff's cause of action need not arise out of the defendant's activities with the forum. General jurisdiction may be asserted over a defendant domiciled in the forum or whose activities in the forum have been substantial, continuous and systematic.

South Carolina's Long Arm Statute, S.C. Code Ann. § 36-2-803, specifies categories of conduct giving rise to specific jurisdiction: e.g., entering into a contract to be performed in whole or in part by either party in this state. The jurisdictional analysis under § 36-2-803 is the same as that used by the Supreme Court under the Due Process Clause. Southern Plastics Co. v. Southern Commerce Bank, 310 S.C. 256, 260, 423 S.E.2d 128, 130 (1992); Stover v. O'Connell Assocs., 84 F.3d 132, 135-36 (4th Cir. 1996).

The Supreme Court's decision in International Shoe Co. v. Washington, 326 U.S. 310 (1945), establishes a two part test for establishing personal jurisdiction. The defendant must have (1) minimum contacts with the forum state such that (2) maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Id. at 316. Lesnick v. Hollingsworth & [pose Co., 35 F.3d 939, 942 (4th Cir. 1994).

The Doctrine of Minimum Contacts has developed as a surrogate for the defendant's physical presence in the state. Lesnick, 35 F.3d at 941-42. "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 254 (1958). The defendant's activities may not involve physical presencewithin the state but must be "purposefully directed toward the forum state." Lesnick, 35 F.3d at 945.

Even if the minimum contacts test is met, the court must still determine that its exercise of jurisdiction over the defendant is consistent with traditional concepts of fair play and substantial justice. Lesnick, 35 F.3d at 945.

Jurisdictional contacts

via the Internet

Early in the history of the Internet some thought that simply maintaining a Web site accessible in the forum was sufficient to subject a defendant to essentially nationwide jurisdiction. Superguide Corp. v. Kegan, 987 F.Supp. 481 (W.D. N.C. 1997); Inset Sys. v. Instruction Set, 937 F.Supp. 161 (D. Conn. 1996). That view is no longer generally accepted. "Rather, the critical issue for the court is to analyze the nature and quality of commercial activity actually conducted by an entity over the Internet in the forum state." ESAB Group, Inc. v. Centricut, LLC, 34 F.Supp. 2d 323, 330-31 (D.S.C. 1999) (ESAB II). See also Brown v. Geha-Werke GmbH, 69 F. Supp. 2d 770 (D.S.C. 1999) (passive Web site not sufficient "additional conduct" beyond merely placing product in stream of commerce to permit court to exercise personal jurisdiction over German manufacturer of allegedly defective document shredder that caused injury in South Carolina).

Of course, general jurisdiction requires a significantly higher level of contacts with the forum state than specific jurisdiction. ESAB Group v. Centricut, Inc., 126 F.3d 617, 623-25 (4th Cir. 1997) (ESAB I). See Soma Medical Int'l v. Standard Chartered Bank, 196 F.3d 1292 (10th Cir. 1999) (defendant's passive Web site and limited contacts with forum were not sufficiently systematic and continuing to support an exercise of general jurisdiction); Mieczkowski v....