TechLaw

A decade ago, back when the commercial Internet was young, cases about jurisdiction were all over the map. Predicting which sorts of online activities would subject a person or a business to the jurisdiction of a foreign court was a hazardous occupation.

Leading pre-2000 cases tended to take a broad view of what the Due Process Clause permitted in the way of "haling" an out-of-state miscreant into court to answer a local resident's complaint. Cases like Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998), which held that the assertion of jurisdiction over an out-of-state cybersquatter comported with federal due process, and Inset Systems Inc. v. Instruction Set Inc., 937 F. Supp. 161 (D. Conn. 1996), which held that merely operating a Web site accessible to forum residents and having a toll-free telephone number (Imagine that. A telephone number has jurisdictional significance.), drew skeptical reviews from cyberlaw specialists. If these cases were correct, a Web site operator could be sued any place that had Internet connectivity.

Things look different today. Courts have become more sophisticated when deciding jurisdiction challenges. Rarely will the mere accessibility of a Web site in the forum be enough to support jurisdiction. Nor will a blog post or two be sufficient to force the poster to defend a libel action in the post subject's home state. And nearly all courts analyzing e-commerce transactions have ruled the a single sale or two into the forum does not amount to "doing business in" or "purposeful availment of" the forum state.

Courts tend to make a determined effort to assess the quality and nature of a Web site's contacts, frequently borrowing from the "interactivity" test created in Zippo Mfg. Co. v. Zippo Dot Com Inc., 952 F. Supp. 1119 (W.D. Pa. 1997). Broad language used by the U.S. Supreme Court in Calder v. Jones, 465 U.S. 783 (1984), cited by many online plaintiffs for the proposition that jurisdiction is proper wherever the "effects" of the alleged libel are felt, has been whittled down to size by repeated judicial insistence that the defamatory online publication must have been "expressly aimed" at the forum state. Not aimed at the plaintiff. Aimed at the forum. The Fourth Circuit's opinion in Young v. New Haven Advocate, 293 F.3d 707, 711 (4th Cir. 2002), is a good example. In Young, the court held that the Due Process Clause did not permit a Virginia court to exercise jurisdiction over a state resident's libel claim against two newspapers based in Connecticut. The "effects" of the alleged libel may have been felt in Virginia where the plaintiff resided, the court said, but the defendants' Web sites were not targeted and focused on Virginia readers.

I doubt that the Ninth Circuit would decide Toeppen the same way today, even though the court has passed up several opportunities to repudiate that case. I can't remember the last time a court even mentioned let alone followed Inset Systems.

Here are several other examples of what seem to me to be correct, defensible outcomes in jurisdiction disputes:

In Malone v. Berry, No. 07ap128 (Ohio Ct.App. Dec. 6, 2007), the court held that a single eBay sale of a motor vehicle could not constitutionally support the assertion of jurisdiction by a court in the state where the plaintiff resided.

In Marschke v. Wratislaw, No. 07SD125 (S.D., Dec. 5, 2007), the South Dakota Supreme Court reached the same conclusion: a single eBay sale to a forum resident was not a constitutionally permissible basis for a state court to assert jurisdiction over the out-of-state seller.

Other cases make the same point: Shamsuddin v. Vitamin Research Prods., 346 F. Supp.2d 804 (D. Md. 2004), Machulsky v. Hall, 210 F. Supp.2d 531 (D. N.J. 2002). But see Crummey v. Morgan, No. 2007 CW 0087 (La. Ct.App., Aug. 8, 2007), in which the court cited the interactivity of the eBay Web site to conclude that the defendants had purposely availed themselves of the forum where the plaintiff resided.

Similarly, in the defamation area, blog postings and other online comments are rarely found to support jurisdiction in the forum where the allegedly defamed plaintiff resides.

In Ajax Enter. Inc. v. Szymonak Law Firm, No. 05-5903 (D. N.J., April 10, 2008), the court rejected an argument based on the Calder "effects test," ruling that because the defendants did not expressly aim their Web-published remarks at New Jersey, New Jersey courts could not constitutionally assert jurisdiction over them.

Another recent case, Internet Solutions Corp. v. Marshall, No. 07-cv-1740 (M.D. Fla., April 8, 2008), the court found no purposeful availment of the forum where the defendant authored several unflattering blog posts about the forum-based defendant. Here again, the court rejected an argument based on the Calder "effects test." All that the plaintiff had demonstrated was that the blog posts were accessible everywhere, the court said. That fact "does not amount to purposeful availment" of the forum.

Which leads me to Kauffman Racing Equipment v. Roberts, No. 07-CA-14 (Ohio Ct. App., April 18, 2008). In Kauffman, the defendant, a Virginia resident, believed that the plaintiff had sold him a defective engine block. He made four disparaging comments on Internet Web sites about the plaintiff, and the plaintiff responded by suing for defamation and intentional interference with business relationships. The trial court dismissed the case for lack of jurisdiction, but the court of appeals reversed in what was the weakest attempt at getting a jurisdiction issue right that I have witnessed in many years. The court, motivated by a poorly disguised dislike of the defendant, ignored a decade's worth of judicial effort in this area, misused the mostly irrelevant cases it did cite, and in the process sowed uncertainty in an area of the law that has been developing nicely.

The court's opening notes are sour: "The development of the law concerning the permissible scope of personal jurisdiction based on Internet use is in its infant stages. The cases are scant." The court is just plain wrong here. Cases on Internet jurisdiction are legion. BNA's Electronic Commerce & Law Report, which I edit, has summarized nearly 100 online jurisdiction cases since January 2007. Looking all the way back to 1997, I count over 400 online jurisdiction cases. In terms of cases decided, online jurisdiction is the richest source of judicial lawmaking in the entire field of cyberlaw. No other cyberlaw topic has received as much judicial attention.

In any event, the Kauffman court apparently believed that the caselaw was scant. It cited barely a speck of it, and what was cited was either misused or treated in a superficial, impressionistic manner. Surprisingly, the court fails to mention a single online defamation case. Calder is mentioned but not discussed; no mention is made of the dozens of cases that have attempted to apply Calder to online communications. Instead, the court lifted fragments from a handful of older cases involving interstate commercial activity. Young? Never heard of it.

The U.S. Supreme Court's decision in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), a case involving one of world's largest restaurant chains, with over 3,000 outlets in all 50 states at the time, is cited by Kauffman for the proposition that "when an entity intentionally reaches beyond its boundaries to conduct business with foreign residents, the exercise of specific jurisdiction is proper." The Burger King quote is followed by this non sequitur from Zippo: "Different results should not be reached simply because business is conducted over the Internet."

Mind you, Kauffman has nothing to do with conducting business over the Internet. No matter. This court isn't going to reason from these cases anyhow. It is done with case analysis and is ready to rule:

The Internet knows no state boundaries. The Internet has also become accessible at virtually every coffee shop in the world. A non-resident who avails himself of the expansive reach of the Internet should not be able to use his non-residency as a shield against defending tortious activity against a plaintiff harmed in a different state. ... ... Ohio is the focal point both of the defamation and of the harm suffered. Jurisdiction over Roberts is, therefore, proper in Ohio based upon the "effects" of his Virginia conduct in Ohio. ... Today, thanks to the accessibility of the Internet, the barriers to generating publicity are slight, and the ethical standards regarding the acceptability of certain discourse have been lowered. As the ability to do harm has grown, so must the law's ability to protect the innocent.

You almost never see an unadorned "effects" test anymore. An "effects" analysis always leads to the conclusion that jurisdiction is proper wherever the plaintiff resides. Which means that, for all intents and purposes, it is an argument for jurisdiction in every forum that has an Internet connection. We're back to Inset Systems, and almost nobody believes that that was the right outcome.

Clearly, the Kauffman court's motivation was to bring justice to lawless cyberspace. But decisions like this also bring needless uncertainty to the Internet. Attorneys ought to be able to say with confidence that a couple blog postings or a single eBay sale will not subject the speaker or seller to jurisdiction in any forum where the plaintiff resides. Courts and attorneys ought to have a workable analysis for deciding jurisdiction issues for online communications and online business transactions. Sure, an Ohio court will not be able to mete out justice to the defendant in Kauffman. But a whole lot of other online speakers will suffer too, because they will have to deal with desperate arguments for jurisdiction bootstrapped by this decision.

Strike the possibility of being haled into a far-flung jurisdiction from the list of reasons why attorneys should not promote their practices with adware. An odd decision from North Carolina held recently that attorneys who advertised their practices with adware were not subject to the court's jurisdiction merely because the advertisements were displayed on the computer screen of an irate North Carolina resident.

The plaintiff contended that the defendants hired "some Internet firm" to plant "a bug or virus or worm" on his computer, thus damaging the computer and invading his privacy. The plaintiff took down the names of the attorneys displayed on his computer, and he sued them.

None of the numerous attorney defendants admitted to marketing their services in such a crass fashion, but all of them declared that they were not licensed to practice law in North Carolina and they were not attempting to market their services there.

"It makes absolutely no sense that [the defendants], all of whom operate law or dental practices in states far removed from North Carolina, would have any interest in soliciting [the plaintiff], or any other North Carolina resident," the court said. The court held that jurisdiction over the attorneys was not proper under the state long-arm statute, because they were not soliciting or providing services in the state. Even if jurisdiction was proper under the long-arm, it added, the attorneys did not purposefully direct their activities toward North Carolina, so federal due process would not permit North Carolina courts to assert jurisdiction over them.

The case is Burgess v. Vitola, No. 07 CVS 4679 (N.C. Super.Ct., Buncombe Cty., Feb. 26, 2008)