Personal jurisdiction in internet cases

Personal Jurisdiction is a requirement to bring suit in American courts. In cases involving the internet, the court must determine if the site being sued has sufficient contacts with the jurisdiction in which the plaintiff brings suit to allow the case to proceed.

Types of Personal Jurisdiction

There are several kinds of personal jurisdiction, mainly general and specific jurisdiction [http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=9th&navby=docket&no=9617087 FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code ] ] .

General Personal Jurisdiction

A company doing business on the internet may be sued for any reason in any jurisdiction where it is incorporated or has its center of operations. [http://en.wikipedia.org/wiki/Personal_jurisdiction] A court may also have general jurisdiction over a party if it has "systematic and continuous" contacts with the state where the suit is being brought. [ [http://caselaw.lp.findlaw.com/scripts/getcase.pl?navby=search&court=US&case=/us/466/408.html FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code ] ]

pecific Personal Jurisdiction

Many states have long arm statutes which give a state court personal jurisdiction over a party who has committed a tort within the state. This personal jurisdiction is specific to the act, though, and a party cannot be sued for unrelated activity. In many cases a state will allow their personal jurisdiction to go to the extent that United States Constitution allows. In these cases, the court applies a three part test:

(1) The nonresident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections [;] (2) the claim must be one which arises out of or results from the defendant's forum-related activities [; and] (3) exercise of jurisdiction must be reasonable.

Cases Interpreting Personal Jurisdiction Involving the Internet within the United States

While the number of cases interpreting personal jurisdiction in internet cases is growing steadily, there are not many. Most cases follow the lead set out by the cases below.

Cybersell, Inc., an Arizona corporation v. Cybersell, Inc., a Florida corporation

Cybersell v. Cybersell arose out of a claim of trademark infringement.

The plaintiff corporation, in Arizona, sued a Florida corporation who was using the plaintiff's registered trademark on its website. The website created by the defendant was a small company that advertised its website construction services under the name CyberSell. The website had no "active" parts, and simply offered a number for someone who viewed the webpage to call to get more information about the services offered. They had no toll-free number, only a local Florida number. Furthermore, there was no evidence that they ever advertised in Arizona, or had any contacts with Arizona. The court found that there was no evidence that the defendant's passive webpage purposefully availed themselves of Arizona, and that the court could not exercise personal jurisdiction over the defendant.

Zippo Manufacturing Co. v. Zippo Dot Com, Inc.

In Zippo Manufacturing (Manufacturing) v. Zippo Dot Com (Dot Com), the court considered state and federal trademark infringement and trademark dilution claims. [http://people.hofstra.edu/peter_j_spiro/cyberlaw/zippo.htm Zippo Manufacturing v. Zippo Dot Com (W.D. Pa. 1997) ] ]

The plaintiff was Zippo Manufacturing, famous for their lighters. The defendant, Zippo Dot Com, operated a web portal and news service out of California. Dot Com offered three levels of service, the upper two of which required registration with the website a payment of monthly fees. Dot Com had approximately 3,000 subscribers in Pennsylvania at the time the suit was commenced.

The Pennsylvania long arm statute allowed the court to exercise personal jurisdiction for claims arising out of contracts to supply services in the state. The court found that Dot Com had contracts with the 3,000 subscribers and with seven Pennsylvania ISPs. The court also applied the three part test above, finding that the court could also exercise jurisdiction under that test.

Since Dot Coms website, unlike that in Cybersell, was an active website, garnering money from people in the state where they were being sued, the court could properly exercise personal jurisdiction over the defendant.

Jurisdiction over Non-US Defendants in US Courts

Because the world-wide web allows computers to instantly and seamlessly communicate with each other across national boundaries, persistent and insidious cybercrime and fraud in e-commerce abounds on the Internet, because criminals can hide behind a national border. A great deal of cybercrime is targeted at computer users and businesses in the United States. [See the United States Government Accountability Office June 2007 report on cybercrime entitled "CYBERCRIME: Public and Private Entities Face Challenges in Addressing Cyber Threats." Available at: [ http://www.gao.gov/new.items/d07705.pdf] ]

International law has developed several mechanisms whereby the courts of one country (the domestic court) can exercise jurisdiction over a citizen, corporation, or organization of another country (the foreign defendant) to try crimes or civil matters that have affected citizens or businesses within the domestic jurisdiction. Many of these jurisdictional “hooks” can even reach conduct that affected the domestic citizen when the citizen was beyond his or her domestic borders. There are five such doctrines and they are: (1) the territorial principle, (2) the nationality principle, (3) the passive personality principle, (4) the protective principle, and (5) the universality principle. [See Damrosch, Henkin, Pugh, Schachter, and Smit, International Law: Cases and Materials, 3 Ed., West 1993, 1090.]

A brief taxonomy of each doctrine of international jurisdiction follows:
The most important and widely used is the territorial principle."Id".] The territorial principle is the idea that a state may claim jurisdiction over persons and events inside its own territory. So, foreign nationals committing crimes in the US are subject to US courts and US laws.

The nationality principle holds that the government of a citizen can obtain jurisdiction over its citizen even when that citizen is abroad. [See generally Damrosch "et al."] An example is that US citizens are still required to pay federal taxes to the US government when abroad and may be prosecuted for a failure to do so.

The passive personality principle is an interesting offshoot of the nationality principle. [Need a pin-cite for this. Information can be found in Damrosch, supra] The passive personality principle looks to the nationality of the victim to determine jurisdiction: The principle holds that a state may assert jurisdiction over persons and events outside a state’s territory on the basis that its citizen has been harmed. In an unusual set of facts, the victim of a crime of sexual abuse of a minor (who was a U.S. citizen) had a case tried against her aggressor who was a citizen of the Caribbean island of St. Vincent. See United States v. Roberts, 1 F.Supp. 2d 601 (E.D. La. 1998). The crime took place on international waters on board a ship registered in Liberia and owned by a company incorporated in the Republic of Panama. None of the regular methods of jurisdiction, forum non conveniens, or comity would have worked. Id. The defendant was indicted by a federal grand jury in the Eastern District of Louisiana and the defendant’s motion to dismiss for lack of personal jurisdiction was denied by the federal district court which found jurisdiction under the passive personality principle! Id.

The protective principle is one of national security and it holds that a state may have jurisdiction over a defendant accused of acts in pursuance of overthrowing the host state’s government. See United States v. Yousef, 327 F2d 56 (2d Cir. 2003).

The universality principle is closely aligned with the international law doctrine of jus cogens. The universality principle holds that all states have jurisdiction over crimes that are universally recognized to be a crime against humanity. These have historically included piracy, torture, genocide, and perhaps terrorism.

The Effects Doctrine

In the United States, federal courts have recognized an important mechanism for acquiring jurisdiction over foreign defendants known as “the Effects Doctrine.” ["See" Damrosch, "supra", at 1093] The effects doctrine is an off-shoot of the territorial principle. Briefly, the effects doctrine says that if the effects of extra-territorial behavior or crimes adversely effect commerce or harm citizens within the United States, then jurisdiction in a US court is permissible. The first case to establish the effects doctrine was "United States v. Aluminum Company of America", 148 F.2d 416 (2d Cir. 1945) (Learned Hand, J.). The ALCOA case brought charges against a foreign consortium of aluminum traders and producers who had effected the price of raw aluminum and goods manufactured from aluminum in the United States through unfair trade practices of price fixing in violation of section 1 of the Sherman Act (“every contract, combination … or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal”). ["Alcoa", 148 F.2d at 416.] The effects doctrine has also been incorporated into the Restatement Third of (international law?) section 402(1) which states: “a state has jurisdiction to prescribe law with respect to … (c) conduct outside its territory that has or is intended to have substantial effect within its territory. …”

National Jurisdiction and "Graduate Management Admission Council v. Raju"

In "Raju", the decision to allow jurisdiction in a US court over claims of copyright violation and cybersquatting was premised on an effects doctrine theory of jurisdiction.
"Graduate Management Admission Council v. Raju", 241 F.Supp.2d 589 (E.D.Va.,2003).

The defendant in "Raju" was a citizen of India who sold “official” past GRE exams to US customers that were of dubious origin and in violation of the plaintiff-copyright holder, GMAC. These exams were advertised and sold over the internet. The defendant never made an appearance on US territory depriving the plaintiffs of one easy avenue of obtaining "in personam" jurisdiction over the defendant – the simple act of being able to serve process on the defendant while the defendant is visiting and within the territory of the United States (this would be the traditional territorial principle of jurisdiction at work, to use terms of international law). The defendant was not a citizen of a particular state of the US. The court described the jurisdiction it exercised over Raju’s conduct of selling illegal copies of the exams to potential purchasers in several states within the territory of the US as “targeting” the US market for US purchasers. Under these circumstances, the court found that personal jurisdiction was proper under a theory of national jurisdiction: the defendant had targeted the US at large from outside of the territory and intended to avail himself of the opportunity of selling test answers to a US graduate school entrance test to his most likely customers: Americans.

A judgment was issued against the defendant Raju who defaulted by never making an appearance to the district court where he was being sued.

Additional Cases

Intentional defamation of a foreign resident on the internet will sometimes give rise to personal jurisdiction in the foreign forum, as the High Court of Australia found in "Dow Jones & Co. Inc. v Gutnick", [http://www.austlii.edu.au/au/cases/cth/HCA/2002/56.html [2002] HCA 56] (where the court held that the WSJ who defamed Gutnick was subject to jurisdiction in Gutnick's country of Australia, as the WSJ availed themselves to Australian law by defaming a resident there).

In a procedurally complicated case, Yahoo! Inc. v. La Ligue Contre Le Racisme et l'Antisemitisme (LICRA), the 9th Circuit Court of Appeals held that it had personal jurisdiction over two french organizations who sued Yahoo! in French Court. [ [http://bulk.resource.org/courts.gov/c/F3/433/433.F3d.1199.01-17424.html 433 F.3d 1199 ] ] The court found that all of the following acts, in combination, were sufficient contacts to create personal jurisdiction over the French organizations: sending letters to Yahoo!, suing Yahoo! and serving Yahoo! in California, and the suit resulting in orders that Yahoo!'s officers in California comply with French law.

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