Personal Jurisdiction and the Internet – Localizing Actions from Cyberspace

Posted by Cyberbear on December 6, 2013 in Internet, Litigation |

Posted By:  Chris Fong

 

10349418The advent of the internet created an area where the traditional lines of jurisdiction are nearly entirely erased. The Supreme Court foresaw the how the advances in technology could affect the notion of jurisdiction and noted in Hanson v. Denckla that “[a]s [technological] progress has increased the flow of commerce between states, the need for jurisdiction has undergone a similar increase.” Though, the Hanson decision was published in 1958, before the internet, the reasoning applies to the internet.

The internet has created an area for people to interact, in real time, regardless of where they are in the world. Firstly, in order to understand the complex interaction of the internet and jurisdiction, I will explain the traditional form of personal jurisdiction.

Jurisdiction begins with “[r]ule 4(e) of the Federal Rules of Civil Procedure [which] authorizes a district court to assert personal jurisdiction over a non-resident to the extent permissible under the law of the state where the district court sits.” The extent of this authority is governed by the Due Process Clause of the Fourteenth Amendment of the Constitution. Though, the Constitution, to protect its citizens, places a limitation on the exercise of personal jurisdiction; the limitations depend on whether the court is seeking general or specific jurisdiction.

General jurisdiction allows a court to obtain personal jurisdiction over a non-resident defendant for activities not related to the forum when the defendant engages in continuous and systematic activities within the state. On the other hand, specific jurisdiction provides a court to gain personal jurisdiction over a non-resident defendant for only forum-related activities when the defendant satisfies the minimum contacts test with the state and it is reasonable to exercise jurisdiction. The specific jurisdiction analysis requires:

  • the claim to directly arise out of, or relate to, the defendants contacts in the forum state;
  • the defendant to have purposefully availed themselves to the forum state to the extent the courts may foresee the defendant’s presence in the state; and
  • the exercise of jurisdiction must be reasonable.

The minimum contacts test may also be satisfied through the “effects test” found in Calder v. Jones. The “effects test” considers whether the alleged wrongdoer had intended for the effects of their alleged wrongdoing to be felt in the forum state.

Jurisdiction and the Internet

Currently, courts have relied upon a state’s long arm jurisdiction statute in cases involving the internet and non-resident defendants. For example, Pennsylvania’s long arm jurisdiction statute authorizes the court to exercise jurisdiction over non-residents when the defendant is contracting to supply services or things in the Pennsylvania Commonwealth. Pennsylvania courts have used this statute to gain jurisdiction over some internet interactions.

In Zippo Manufacturing Co. v. Zippo Dot Com, Inc., the court is able to exercise jurisdiction over a non-resident webhost. The court established a sliding scale test to determine whether the minimum contacts test has been met in internet related actions. The scale ranged from (listed from insufficient to sufficient characteristics):

The court in Zippo reasoned that personal jurisdiction is proper based on the fact that Zippo Dot Com had contracted with approximately 3,000 individuals and seven internet access providers in Pennsylvania.

The court in Revell v. Lidov found a lack of personal jurisdiction against two non-resident defendants, the website host and the original author of the online article. Plaintiff Revell initiated a defamation action against Defendant Lidov in Texas. Revell resides in Texas and Lidov resides in Massachusetts. Lidov’s alleged defamatory act was writing an allegedly defamatory article targeted at Revell and posting in Columbia University’s online message board. The court first applied the Zippo sliding scale, as discussed above. The court reasoned that because the article contains no reference to Texas, does not refer to any activities occurring in Texas, nor is the article directed at Texas readers. The court then looked at whether the Calder “effects test” may satisfy the minimum contacts analysis. However, the court found that the Calder “effects test” could not be based solely on the facts that the plaintiff resides in the state and had suffered harm in that state. Additionally, Defendant had no knowledge, at the time of writing the article, the plaintiff resided in Texas. Thus, the court dismissed the action based on a lack of jurisdiction over the defendant.

These cases are examples of how courts have used long arm jurisdiction’s three part test when the non-resident resides within the same country. The courts have begun to establish jurisprudence on domestic jurisdiction issues. The issue of jurisdiction, however, is complicated when analyzed in the international realm.

Proper Venue

An issue of proper venue may arise for a defendant whose only connection to the venue’s judicial district is over the internet. Venue is governed by 28 U.S.C. §1391(b):

(b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated, or (3) a judicial district in which the defendant may be found if there is no district in which the action may otherwise be brought.

A natural person, including an alien lawfully admitted for permanent residence, is considered a resident in the district where they are domiciled.

In addition, 28 U.S.C. §1391(b) provides that a defendant is “deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” Therefore, if the non-resident defendant is a corporation and personal jurisdiction is validly exercised upon the defendant, then the proper venue would be in the judicial district where personal jurisdiction was properly exercised.

Though, the internet has created a problem in analyzing proper venue. Residency may be indeterminate because parties outside the United States may not be a resident in the United States and therefore does not fit either subsection (1) or subsection (2). In these cases, the defendant may be sued in any judicial district where personal jurisdiction can be exercised. Therefore a discussion on venue will cycle back to the discussion on jurisdiction.

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