Personal Jurisdiction and the Internet: Traditional Jurisprudence for a New Medium

Business Lawyer

Volumn 56, Issue 1, 2000, Pages 395-421

  Gilman, Jeremy ^a  

^a Benesch Friedlander Coplan and Aronoff LLP   (United States)

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EID: 0034556347     PISSN: 00076899     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (179)

1. 357 U.S. 235 (1958).
2. Id. at 250-51 (citations omitted).
3. "The Internet has no territorial boundaries. To paraphrase Gertrude Stein, as far as the Internet is concerned, not only is there perhaps 'no there there,' the 'there' is everywhere where there is Internet access." Digital Equip. Corp. v. Altavista Tech., Inc., 960 F. Supp. 456, 462 (D. Mass. 1997). See also Blumenthal v. Drudge, where the district court determined that: It is probably safe to say that more ideas and information are shared on the Internet than in any other medium. But when we try to pin down the location of this exchange, we realize how slippery our notion of the Internet really is. Perhaps this is because "cyberspace" is not a "space" at all. At least not in the way we understand space. It's not located anywhere; it has no boundaries; you can't "go" there. At the bottom, the Internet is really more idea than entity. It is an agreement we have made to hook our computers together and communicate by way of binary impulses and digitized signals sent over telephone wires. 992 F. Supp. 44, 48 n.7 (D.D.C. 1998).
4. See Sally Jo Bowling, Federal Trade Commission Public Workshop: Competition Policy in the World of B2B Electronic Marketplaces, Thursday, July 29, 2000, Volume 1, 18-19 (visited Aug. 14, 2000) 〈http://www.ftc.gov/bc/b2b/b2btrans000629.pdf〉.
5. See Jupiter Research Shows Online-Direct and Online-Influenced New Auto Sales to Exceed $ 128 Billion in 2004 (visited Aug. 14, 2000) 〈http://www.jupiterresearch.com/company/pressrelease.jsp?doc= pr000807〉.
6. See The World's Online Populations (visited Aug. 14, 2000) (noting article which states that "by the year 2002, 490 million people around the world will have Internet access, that is 79.4 per 1,000 people worldwide, and 118 people per 1,000 by the year-end 2005.") 〈http:// www.cyberatlas.internet.com/big_picture/geographics/article/0,5911_151151,00. html〉.
7. 326 U.S. 310 (1945).
8. Id. at 316 (citing Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
9. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
10. Hanson v. Denckla, 357 U.S. 235, 253 (1958) (citation omitted).
11. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).
12. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984).
13. International Shoe, 326 U.S. at 320.
14. See World-Wide Volkswagen, 444 U.S. at 292 (citations omitted).
15. See Helicopteros, 466 U.S. at 414 n.9.
16. Id. at 416.
17. See id. at 414 n.8.
18. Burger King Corp., 471 U.S. at 472-73 (1985) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984) and Helicopteros, 466 U.S. at 414).
19. Burger King Corp., 471 U.S. at 472-73 (1985) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984) and Helicopteros, 466 U.S. at 414).
20. ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 623-24 (4th Cir. 1997) (citing 4 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1067, at 295-98 (2d ed. 1987)).
21. 952 E Supp. 1119 (W.D. Pa. 1997).
22. Id. at 1125-26.
23. Id. at 1126.
24. Id. at 1124 (citations omitted).
25. 141 F.3d 1316 (9th Cir. 1998).
26. Id. at 1319.
27. Id.
28. Id. at 1327.
29. Id. at 1321.
30. Id.
31. See id. at 1322.
32. Id.
33. 444 U.S. 286 (1980).
34. 471 U.S. 462 (1985).
35. No. 3:99-GV-2339-L, 2000 U.S. Dist. LEXIS 10444 (N.D. Tex. July 25, 2000).
36. Under the federal venue statute, "a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c) (1994). Thus, venue challenges by corporate entities in federal cases typically require courts to determine whether they can validly exercise personal jurisdiction over them.
37. See Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir. 1985).
38. 190 F.3d 333 (5th Cir. 1999).
39. 2000 U.S. Dist. LEXIS 10444 at *9-*10 (quoting Mink, 190 F.3d at 336 (5th Cir. 1999) and Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa, 1997)).
40. See id. at*13.
41. Id. at *11.
42. Id. at *12.
43. Id. at *11.
44. Id. at *12.
45. See Burger King Corp., 471 U.S. at 475 (1985) (citations omitted) ("[The] 'purposeful availment' requirement [implied in the Due Process Clause] ensures that a defendant will not be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another party or a third person.'").
46. See People Solutions, 2000 U.S. Dist. LEXIS 10444 at *13.
47. 106 F. Supp. 2d 895 (N.D. Tex. 2000).
48. Id. at 898.
49. See id. at 901.
50. See id.
51. Id.
52. American Eyewear, Inc., 106 F. Supp. 2d at 902-03.
53. Id. at 903.
54. Id.
55. See id. at 904. The court defined a "clickwrap agreement" as one that "allows a consumer to assent to the terms of a contract by selecting an 'accept' button on the web site. If the consumer does not accept the terms of the agreement, the web site will not complete the transaction." Id. at 904 n. 15 (citations omitted); see also Groff v. America Online, Inc., No. PC 97-0331, 1998 WL 307001 (R.I. Super. May 27, 1998) (enforcing forum selection clause contained in America Online's clickwrap agreement).
56. See id. at 901 (citing analogous situation in Stomp v. NeatO, LLC, 61 F. Supp. 2d 1074, 1078 n.7 (C.D. Cal. 1999)).
57. 97 F. Supp. 2d 806 (E.D. Mich. 2000).
58. See id. at 812 (citing Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) ("[E]vidence of mere placement of advertisements in nationally distributed papers or journals does not give rise to the level of purposeful contact with a forum required by the Constitution in order to exercise personal jurisdiction over the advertiser.") and Witbeck v. Bill Cody's Ranch Inn, 411 N.W.2d 439 (Mich. 1987) (a Wyoming dude ranch was not subject to personal jurisdiction in Michigan in a personal injury case simply because it had placed an ad in the American Automobile Association's regional Tour Guide)).
59. See Sports Auth., 97 F. Supp. 2d at 812.
60. Id.
61. See id.
62. Id. at 814.
63. Id.
64. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1322 (9th Cir. 1998) (citation omitted).
65. See Sports Auth., 97 F. Supp. 2d at 814-15. A similar holding was reached in Stomp, Inc. v. NeatO, LLC, 61 F. Supp. 2d 1074 (C.D. Cal. 1999). In that case, the plaintiff sued NeatO seeking to invalidate NeatO's patent for a self-adhesive CD labeling system and barring NeatO from suing it for infringement. NeatO, based in Connecticut, moved to dismiss for lack of personal jurisdiction. The plaintiff asserted that jurisdiction was proper because of NeatO's web site, through which it sold merchandise (including allegedly infringing merchandise) to California residents, constituted the purposeful availment of the privilege of doing business in that state, and the court agreed. Aside from being informative, a substantial portion of the web site permitted users to purchase NeatO's products online. In noting that it would not be unreasonable to force NeatO to defend itself in a California court, the court noted that NeatO "is not being haled into a court in some unexpected location where the Internet is not commonly available, but into a court in California, where a large portion of the world's Internet users presumably reside." Id. at 1079.
66. Sports Auth., 97 F. Supp. 2d at 814 n.6 (citing GTE New Media Serv., Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. 2000)).
67. See GTE, 199 F.3d at 1345. This case was decided on January 11, 2000.
68. D.C. CODE ANN. § 13-423(a) (1981).
69. See GTE, 199 F.3d at 1346.
70. Id. at 1347. 28 U.S.C. section 1292(b) allows for limited interlocutory appeals in civil actions if the district judge believes that the order at issue "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation" and states so in his order. 28 U.S.C. § 1292(b) (1994). Courts of appeal have the discretion, but not the obligation, to consider the appeal. See id.
71. See GTE, 199 F.3d at 1352.
72. 126 F.3d 25, 29 (2d Cir. 1997).
73. Mink v. AAAA Dev., LLC, 190 F.3d 333, 336 (5th Cir. 1999).
74. 130 F.3d 414, 419-20 (9th Cir. 1997).
75. 89 F.3d 1257, 1264 (6th Cir. 1996).
76. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1321 (9th Cir. 1998).
77. GTE, 199 F.3d at 1347.
78. See id. at 1349.
79. Id. at 1349-50.
80. Id. at 1350.
81. Id. (citation omitted).
82. See id. at 1352.
83. 205 F.3d 1244 (10th Cir. 2000). This case was decided on March 9, 2000.
84. Id. at 1246.
85. See id.
86. See id. at 1249.
87. See id. at 1247.
88. Id. at 1248.
89. Id.
90. See id. In reaching its ruling, the Tenth Circuit cited the Sixth Circuit's decision in CompuServe as an example of a case where the court found jurisdiction over a non-resident in plaintiff's forum state (Ohio) where he had entered into contracts with the plaintiff to distribute his software through the plaintiff's Internet server and had repeatedly transmitted software files to the plaintiffs server by e-mail. See id.
91. For example, GartnerGroup predicts that Asian B2B e-commerce will exceed U.S. $272 billion by 2003. See Paul E. Greenberg, Asian B2B E-Commerce to Top $272B by 2003, E-COMMERCE TIMES (visited Aug. 17, 2000) 〈http://www.ecommercetimes.com/news/ articles2000/000114-6.html〉.
92. No. 99 C 5532, 2000 U.S. Dist. LEXIS 383 (N.D. Ill. Jan. 14, 2000).
93. 735 ILL. COMP. STAT. ANN. 5/2-209 (1993) (West).
94. See Ty, 2000 U.S. Dist. LEXIS 383 at *13.
95. Id. at *9-*10.
96. Id. at *10 (citation omitted).
97. See id.
98. See id. at *11 n.2. In Mink, decided September 17, 1999, a Texas resident who had developed a sales tracking software program brought an action against a Vermont corporation principally located in Vermont claiming that it had conspired with others to copy his program. The defendant moved to dismiss for lack of personal jurisdiction. The district court granted its motion and the court of appeals affirmed. Citing Zippo and adopting it as the law of the Fifth Circuit, the court noted that the defendant's web site contained its toll-free number, an e-mail link to the company, and product information, and that it permitted users to print out order forms, but did not allow them to order products directly from the site. See Mink, 190 F.3d at 336-37. The court deemed this a passive web site on the Zippo scale (contrary to the Northern District of Illinois's determination in Ty that placed a virtually identical web site in the middle range of the Zippo spectrum) and consequently, found jurisdiction lacking: "[T]he presence of an electronic mail access, a printable order form, and a toll-free phone number on a web site, without more, is insufficient to establish personal jurisdiction." Id. at 337.
99. 196 F.3d 1292 (10th Cir. 1999).
100. See id. at 1295.
101. See id. at 1300.
102. Id. at 1297 (quoting Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. at 1119, 1124 (W.D. Pa. 1997).
103. Id.
104. Id. at 1299.
105. Id.
106. No. 98-713-B, 2000 U.S. Dist. LEXIS 1073 (D.N.H. Jan. 5, 2000).
107. See id. at *38.
108. See id. at*17.
109. See id. at *18.
110. 94 F.3d 708 (1st Cir. 1996), cert. denied, 520 U.S. 1155 (1997).
111. Id. at 715. In Nowak, the plaintiffs wife drowned in a swimming pool at a Hong Kong hotel and the plaintiff brought a wrongful death action in Massachusetts against the hotel's owner, a Hong Kong corporation. The court found that personal jurisdiction over the foreign corporation existed based on the "extensive series of communications between the defendant corporation and the plaintiffs employer" which established a "meaningful link between [the defendant's] contact and the harm suffered." Id. at 716.
112. Degasse, 2000 U.S. Dist. LEXIS 1073 at *20-*21.
113. 59 F. Supp. 2d 562, 570 n.6 (E.D. Va. 1999).
114. Degasse, 2000 U.S. Dist. LEXIS 1073 at *24 (quoting Coastal Video, 59 F. Supp. at 570 n.6).
115. Id. at *27 (citations omitted).
116. Id. at *28.
117. Id. at *30.
118. Id.
119. Id. at *31.
120. 34 F. Supp. 2d 323 (D.S.C. 1999).
121. Degasse, 2000 U.S. Dist. LEXIS 1073 at *31 (quoting ESAB Group, 34 F. Supp. 2d at 330-331) (emphasis added).
122. Id. at *35.
123. 115 F.3d 81, 85 (1st Cir. 1997).
124. 49 F. Supp. 2d 743 (D.N.J. 1999).
125. Id. at 748; see also Degasse, 2000 U.S. Dist. LEXIS 1073 at *36 n. 14. Notwithstanding this sweeping pronouncement, the Decker court declined to exercise jurisdiction over defendant, a Las Vegas-based hotel, because the hotel's web site contained a Nevada forum selection clause applicable to customers who made reservations over the Internet, and the court enforced it.
126. 2000 U.S. Dist. LEXIS 1073 at *36 (quoting Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 112 (1987)).
127. 79 F. Supp. 2d 537 (E.D. Pa. 1999).
128. See id. at 539-40.
129. Id. at 539.
130. 937 F. Supp. 161 (D. Conn. 1996). Inset was a trademark infringement action brought by a Connecticut corporation against a Massachusetts corporation based in Natick, Massachusetts. The defendant did not conduct business in Connecticut on a regular basis. Its primary transgression was its use of the domain name "inset.com" as its web address. The defendant moved to dismiss for lack of personal jurisdiction, but the court denied its motion. See id. at 166. It determined that the defendant had been advertising continuously over the Internet "which includes at least 10,000 access sites in Connecticut," and because these ads appeared electronically, they could, the court reasoned, "be accessed again and again by many more potential consumers." Id. at 164. The defendant's Internet ads, combined with its toll-free phone numbers, "are designed to communicate with people and their businesses in every state." Id. at 165. Thus, the court effectively concluded that a web site and a toll-free number subject its sponsor to nationwide, if not global, personal jurisdiction. Inset is notable for the number of courts that have declined to follow it.
131. 958 F. Supp. 1 (D.D.C. 1996). In Heroes, a charitable foundation based in Washington, D.C. sued another charitable foundation based in New York in an action alleging trademark infringement. The defendant moved to dismiss for lack of personal jurisdiction. The plaintiff contended that jurisdiction was proper in the District of Columbia because the defendant had placed an ad soliciting donations in the local edition of The Washington Post and maintained a web site using the allegedly infringing mark. The court, citing Inset, found jurisdiction to exist, even though no evidence was presented that the defendant's web site was targeted to the District of Columbia, because the defendant's "home page is certainly a sustained contact with the District; it has been possible for a District resident to gain access to it at any time since it was first posted." Id. at 5. As with Inset, the Heroes rationale has largely been rejected by other courts as Internet use has proliferated.
132. Morantz, 79 F. Supp. 2d at 540 n.3.
133. Id. at 540.
134. See id.
135. Id.
136. Id. at 541.
137. Id. at 541 n.5.
138. See id. (citing Blackburn v. Walker Oriental Rug Galleries, Inc., 999 F. Supp. 636, 639 (E.D. Pa. 1998), where the court noted that e-mail links alone are insufficient to establish personal jurisdiction and do not, by themselves, raise a web site's interactivity quotient above the passive level).
139. See Morantz, 79 F. Supp. 2d at 541.
140. See id. at 541 n.6.
141. See id. at 542.
142. See id. at 542-43.
143. 106 F. Supp. 2d 848 (E.D. Va. 2000).
144. Id. at 850.
145. See id. at 860.
146. Id. at 853. Top Level Domains refer to the "otherwise nameless 'root[s],'" such as ".com," ".org," ".net," and ".edu," to which Second Level Domains are attached to create unique Internet files identified by their Uniform Resource Locators (URLs). Id. at 852 n.7.
147. VA. CODE ANN. § 8.01-328.1(A)(1) (Mitchie Supp. 2000).
148. AOL, 106 F. Supp. 2d at 855.
149. Id. at 850.
150. Id. at 855 n.21.
151. Id. at 856-57.
152. Id. at 857.
153. Id.
154. Id.
155. Id. at 858 (quoting Network Solutions, Inc. v. Umbro Int'l, Inc., 529 S.E. 2d 80, 85 (Va. 2000)).
156. Id.; but see Lucent Tech., Inc. v. Lucentsucks.com, 95 F. Supp. 2d 528, 531 n.5 (E.D. Va. 2000) and Caesar's World, Inc. v. CaesarsPalace.com, [2000 Transfer Binder] 54 U.S.P.Q. 2d (BNA) 1121, 1123 (E.D. Va. 2000) which were in rem, not in personam proceedings.
157. No. CIV. A. 99-3717, 2000 WL 973665 (E.D. La. July 12, 2000).
158. Id. at *4.
159. Id. at *4-*5.
160. 105 F. Supp. 2d 746 (E.D. Mich. 2000). The case was decided on July 24, 2000.
161. See id. at 751.
162. Id.
163. 885 F.2d 1293 (6th Cir. 1989) (holding that an Indiana partnership was not subject to jurisdiction in Michigan in an action involving a contract to sell Florida real property where the defendant's contacts with Michigan were attenuated and the contract at issue bore no relationship to that state).
164. See Winfield, 105 F. Supp. 2d at 751.
165. See id. at 749.
166. Id.
167. Id. at 749.
168. Id. at 750.
169. Id.
170. See text accompanying notes 24-30.
171. Winfield, 105 F. Supp. 2d at 751.
172. See id.
173. 105 F. Supp. 2d 1142 (D. Or. 2000).
174. See id. at 1144.
175. Id. at 1147.
176. Id. at 1150.
177. Id. (quoting Stomp, Inc. v. NeatO, LLC, 61 F. Supp. 2d 1074, 1078 (C.D. Cal. 1999)); see also CompuServe v. Patterson, 89 F.3d 1257, 1265 (6th Cir. 1996).
178. See Tech Heads, 105 F. Supp. 2d at 1150.
179. See id. at 1151.