JURISDICTION IN A SHRINKING WORLD
by Elliott Joffe, Fall 2002
In today’s world, almost anything can be accomplished without leaving home or office. Overnight delivery services, the telephone, the fax machine and the mail have all facilitated doing business with little or no travel. And now, widespread usage of the internet has made remote business easier than ever before.
While business can be transacted from the comfort of home, lawsuits still involve travel, employing attorneys in the state the lawsuit was filed and considerable additional inconveniences which technology cannot eliminate. The disparity between the convenience of doing business anywhere in the world and the burden of defending a lawsuit halfway around the globe is actually widening with each technological advance. While a New Jersey resident can do business more easily in California, he is also more susceptible to suit in California’s courts.
“In personam jurisdiction” is the legal term for any court’s power over an individual or business entity. While jurisdictional law can vary from state to state, most states’ courts exercise the broadest jurisdictional powers permitted by the United State Constitution. The Constitution requires that a court exercise jurisdiction only over a defendant with sufficient contacts within a state that he should reasonably expect to appear in court in that state.
Those contacts deemed sufficient to confer jurisdiction over a defendant, called “minimum contacts,” can be divided into two categories. Contacts related directly to the facts of a given lawsuit confer “specific jurisdiction.” For example, when a defendant has allegedly breached a written contract that required him to perform significant work in the forum state, that fact will usually confer specific jurisdiction. Contacts not related to the case at hand confer “general jurisdiction,” i.e. jurisdiction for any lawsuit. To establish general jurisdiction, the defendant’s contacts must amount to a regular presence in the forum state.
Significant factors in determining whether or not the courts of a given forum state will exercise specific jurisdiction include the following: Did the defendant solicit the relationship with the plaintiff in the forum state? Did the defendant travel to the forum state to meet with the plaintiff? Did the defendant know that the relationship with the plaintiff would have a significant impact in the forum state? In accident cases, the state in which the accident occurred will usually have jurisdiction. In products liability cases, specific jurisdiction is usually applied very broadly, because one who markets a dangerous product is usually subject to jurisdiction wherever it is sold.
Significant factors in determining whether or not the courts of a given state will exercise general jurisdiction include: Does the defendant do business with residents of the state? Does the defendant own property located in the state? Does the defendant regularly travel to the state? If a defendant has an office or home in the state, then there is always general jurisdiction.
Internet business creates special problems which the courts are only beginning to address. For example, if a buyer and seller meet online, where is the meeting geographically? If the user of a website defames another individual through a posted message, where is the libelous statement disseminated? Because the internet is accessible everywhere on the globe, normal jurisdictional questions become extremely complicated.
For now, and until a generally accepted law of internet jurisdiction is established, it is best to assume that when you do business online you do it globally. This means that you could find yourself traveling long distances to defend your actions, so beware and be careful!
This publication is intended for general information purposes only and does not constitute legal advice. The reader should consult legal counsel to determine how the law may apply to specific situations.
In today’s world, almost anything can be accomplished without leaving home or office. Overnight delivery services, the telephone, the fax machine and the mail have all facilitated doing business with little or no travel. And now, widespread usage of the internet has made remote business easier than ever before.
While business can be transacted from the comfort of home, lawsuits still involve travel, employing attorneys in the state the lawsuit was filed and considerable additional inconveniences which technology cannot eliminate. The disparity between the convenience of doing business anywhere in the world and the burden of defending a lawsuit halfway around the globe is actually widening with each technological advance. While a New Jersey resident can do business more easily in California, he is also more susceptible to suit in California’s courts.
“In personam jurisdiction” is the legal term for any court’s power over an individual or business entity. While jurisdictional law can vary from state to state, most states’ courts exercise the broadest jurisdictional powers permitted by the United State Constitution. The Constitution requires that a court exercise jurisdiction only over a defendant with sufficient contacts within a state that he should reasonably expect to appear in court in that state.
Those contacts deemed sufficient to confer jurisdiction over a defendant, called “minimum contacts,” can be divided into two categories. Contacts related directly to the facts of a given lawsuit confer “specific jurisdiction.” For example, when a defendant has allegedly breached a written contract that required him to perform significant work in the forum state, that fact will usually confer specific jurisdiction. Contacts not related to the case at hand confer “general jurisdiction,” i.e. jurisdiction for any lawsuit. To establish general jurisdiction, the defendant’s contacts must amount to a regular presence in the forum state.
Significant factors in determining whether or not the courts of a given forum state will exercise specific jurisdiction include the following: Did the defendant solicit the relationship with the plaintiff in the forum state? Did the defendant travel to the forum state to meet with the plaintiff? Did the defendant know that the relationship with the plaintiff would have a significant impact in the forum state? In accident cases, the state in which the accident occurred will usually have jurisdiction. In products liability cases, specific jurisdiction is usually applied very broadly, because one who markets a dangerous product is usually subject to jurisdiction wherever it is sold.
Significant factors in determining whether or not the courts of a given state will exercise general jurisdiction include: Does the defendant do business with residents of the state? Does the defendant own property located in the state? Does the defendant regularly travel to the state? If a defendant has an office or home in the state, then there is always general jurisdiction.
Internet business creates special problems which the courts are only beginning to address. For example, if a buyer and seller meet online, where is the meeting geographically? If the user of a website defames another individual through a posted message, where is the libelous statement disseminated? Because the internet is accessible everywhere on the globe, normal jurisdictional questions become extremely complicated.
For now, and until a generally accepted law of internet jurisdiction is established, it is best to assume that when you do business online you do it globally. This means that you could find yourself traveling long distances to defend your actions, so beware and be careful!
This publication is intended for general information purposes only and does not constitute legal advice. The reader should consult legal counsel to determine how the law may apply to specific situations.
