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Posted by Jeff from LTU-207-73-69-80.LTU.EDU ( on Friday, May 17, 2002 at 12:41PM :

What Jurisdiction Controls?

Will on-line publishers find themselves subject to jurisdiction throughout the nation (or the world)? When on-line communications routinely cross state and national borders, whose law will apply?

General Legal Standards for Asserting Jurisdiction
Under the U.S. Constitution, a court cannot assert jurisdiction over a potential defendant unless the defendant has sufficient "minimum contacts" with the forum so as to satisfy traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310 (1945). Minimum contacts can consist of either some type of systematic and continuous contact with the forum ("general jurisdiction"), or isolated or occasional contacts purposefully directed toward the forum ("specific jurisdiction"). Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408 (1984).

The principal test, for due process purposes, is whether or not the defendant, by its actions, could have reasonably anticipated the possibility of defending a suit in the forum. World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980). In cases in which the litigants are from foreign countries, a court must also consider the policies of the foreign countries, as well as U.S. foreign policy, in determining whether exercising jurisdiction would be fair. Asahi Metal Ind. Co. v. Superior Court, 480 U.S. 102 (1987).

It is still too early to determine definitively how most courts will assess jurisdictional questions in the context of entities which have no "real" physical location, but only a "virtual" location on-line. In Calder v. Jones, 465 U.S. 783 (1984), the Supreme Court held that the minimum contacts test could be satisfied by speech directed toward the forum, if the speech has sufficient impact within the forum. A similar result was reached in a Canadian case, Pindling v. National Broadcasting Corp., 49 O.R.2d 58 (1984), in which an Ontario court exercised jurisdiction over an American broadcaster whose allegedly libelous broadcasts from the U.S. were received in Canada. These cases may prove to be very important for providing a jurisdictional framework for lawsuits involving on-line communications.

Courts have dismissed cases for lack of jurisdiction in several cases involving on-line issues. Some of these cases display a healthy concern for the fact that, if jurisdiction is too readily asserted in cyberspace, it may threaten the development of what promises to be the most democratic medium that the world has ever known.

Satterlee Stephens Burke & Burke LLP represented the defendant in a landmark case which established that simply having an on-line presence that can be accessed in a particular forum does not enable the courts in that forum to exercise general jurisdiction. In McDonough v. Fallon McElligott, Inc., et. al., Civil Case No. 95-4037 (S.D. Ca. August 5, 1996), the plaintiff argued that the defendant, a Minnesota advertising agency, was subject to personal jurisdiction in California solely because it maintained a World Wide Web site that was accessible in California. The defendant had no other ties to California. The court stated that "[b]ecause the Web enables easy world-wide access, allowing computer interaction via the web to supply sufficient contacts to establish jurisdiction would eviscerate the personal jurisdiction requirement as it currently exists; the Court is not willing to take this step."

Another recent case which reaffirms the principle that a mere presence on the Internet which passively provides users with information or advertising is an insufficient basis for jurisdiction is Weber v. Jolly Hotels, 977 F. Supp. 327 (D.N.J. 1997). In this case, a personal injury plaintiff attempted to persuade the court to assert jurisdiction over an Italian hotel chain on the basis of the ads placed by the hotel on the World Wide Web. Citing the Hearst case, the court found that since the hotel did not conduct any business over the Internet, it had not established the minimum contacts with New Jersey which would subject it to jurisdiction.

Oddly enough, Weber is not the only case in which a seemingly low-tech hotel operator has been involved in these high-tech issues. A similar result was seen in SF Hotel Company, L.P. v. Energy Investments, Inc. 985 F. Supp. 1032 (D. Kan. 1997). The defendant had no operations in Kansas, but the Kansas-based plaintiff sued in Kansas for alleged infringement of one of its trademarks. The plaintiff sought to base jurisdiction on the defendant's passive web site which provided general information about the defendant's hotel, and was not interactive. Jurisdiction was found to be lacking.

To Shawn:
What I am getting from this is that since I do no business over the internet, and have no entered into a contract with anyone in any way, shape, or form, that Internation Shoe can be easily argued in my favor. I didn't even need to go to Law school...just spend 15 minutes on the internet... and I could have told you that.

I just did.

-- Jeff
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