Personal Jurisdiction and the Internet

By Steven P. Means

Over the last few years, the Internet has revolutionized the way the world does business. The Internet - described as "an international network of interconnected computers, currently used by approximately 40 million people worldwide"¹ now allows businesses to transcend traditional geographical boundaries and market themselves worldwide via cyberspace. As one writer states:

"The Internet has been heralded ... as the ultimate marketing tool of the computer age. Now all a company has to do is set up an electronic 'page' on the Internet and potential customers in the millions may come... The cost of an Internet site can be a fraction of other advertising channels."²

This article summarizes current legal standards concerning due process limits on a court's ability to assert personal jurisdiction over a nonresident defendant, briefly describes the World Wide Web and its use by businesses, and discusses recent caselaw addressing the impact that posting a World Wide Web page on the Internet can have on issues of personal jurisdiction.

Personal jurisdiction standards

Personal jurisdiction refers to the ability of a given court to render a valid and binding personal judgment against a particular party. Before a court may assert personal jurisdiction over the defendant in a civil action, a two-step inquiry is required. First, the state in which the court sits must authorize the exercise of personal jurisdiction pursuant to a "long-arm" statute, which describes in detail the grounds upon which courts of that state may assert personal jurisdiction over a nonresident defendant.³ The second step in this inquiry asks whether the exercise of personal jurisdiction satisfies due process requirements of the U.S. Constitution.⁴

Traditionally, due process allowed a court to assert personal jurisdiction only over those defendants that were physically present in the state when they were served with process.⁵ However, in International Shoe v. Washington the U.S. Supreme Court held that due process did not require physical presence at the time of service, provided that the defendant had established "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."⁶ Over time, the "minimum contacts" standard has been interpreted to allow personal jurisdiction wherever a defendant might reasonably anticipate being sued.⁷

As technology has changed the nature of interstate commerce, the concepts of "minimum contacts" and personal jurisdiction have likewise continued to expand. For example, in the 1957 U.S. Supreme Court case McGee v. International Life Ins. Co., the "minimum contacts" required by due process were satisfied where a defendant's only contacts with the forum state were by mail.⁸ In 1985 the U.S. Supreme Court in Burger King v. Rudzewicz stated, "it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are 'purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there."⁹

In 1996 the Sixth Circuit, in CompuServe v. Patterson,¹⁰ upheld a finding of personal jurisdiction in a case where the defendant's only contacts with the forum state were by computer and over the Internet. In that case, Patterson had subscribed to the online service of CompuServe, an Ohio-based company. In addition to using the online service as a subscriber, Patterson also transmitted various computer files to CompuServe and marketed original software to other CompuServe subscribers through a shareware service.

After Patterson accused CompuServe of trademark infringement related to some of his software products, CompuServe commenced a declaratory judgment action in Ohio. In rejecting the claim that Ohio lacked personal jurisdiction, the Sixth Circuit held that, by engaging in such computer-related activities, Patterson had established sufficient minimum contacts by "purposefully avail[ing] himself of the privilege of doing business in Ohio," thereby satisfying the minimum contacts requirement of due process.¹¹

The World Wide Web

A number of recent decisions have addressed the question of whether the availability of a World Wide Web site within a particular jurisdiction can, by itself, satisfy the minimum contacts requirement.

The World Wide Web "consists of a vast number of documents stored in different computers all over the world" that can be accessed over the Internet.¹² The more elaborate documents on the World Wide Web are referred to as Web pages or sites. Most businesses that market their services on the Internet do so with a Web page that can be accessed by other Internet users worldwide.

Web pages allow businesses to market their goods and services to a much larger clientele. However, having a Web page also creates a presence of sorts in every location where the Internet can be accessed. This presence has, in turn, opened the door to arguments for personal jurisdiction in states where the Web page has been accessed. Recently, courts have begun to struggle with applying the law of personal jurisdiction in the context of cutting-edge technological developments.

As might be expected, the few cases to address these issues have not always been consistent. However, a number of general rules appear to be emerging. First, most courts agree that merely having a Web page will not subject a defendant to personal jurisdiction wherever the page may be accessed. Although a Web page can be considered as one of several factors that comprise a minimum contacts analysis, there must be something more.

Second, the "something more" may consist of the particular content and features of the Web page at issue, including whether the Web page includes any express solicitation and has interactive features that allow direct communication with those accessing the Web page.

Finally, courts appear to consider a Web page's popularity and success in deciding whether minimum contacts have been established. For example, courts often consider how many hits a Web page has received from the forum state, and how many contracts have been established with residents of the forum state due to the Web page advertisement.

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