Beware of the Long Arm of the Law, p.2
A COURT’S LONG-ARM JURISDICTION
“Long-arm jurisdiction” is a vivid way to describe a court’s authority over a person or business—under some circumstances the law can reach its long arm into the state where you generally conduct your business, grab you and pull you into the state where the court sits. There are really two distinct things lawyers mean when they use the word “jurisdiction.” This column focuses on long-arm jurisdiction, which answers the question of when the court has the authority to exercise authority over you or your company. If a court does not have long-arm jurisdiction over a nonresident person or business, it is powerless to decide a case against that person or business. The court must then dismiss the action against any person or business that it does not have jurisdiction over. The other type of jurisdiction answers the question of what subjects a specific type of court can rule on, such as tort cases, murder cases or trademark cases, and will not be addressed here.
Each state is free to make its own laws about when it will use its long-arm jurisdiction to bring out-of-state residents into its courts. But, if you imagine a state that allows its citizens to sue anyone at all and make them travel to defend themselves, then you can imagine abuses. The U.S. Constitution serves as a brake on those abuses, and requires states to give due process to out-of-state defendants. The due process clause of the U.S. Constitution requires that a nonresident defendant must have at least minimum contacts with a state before the state courts or federal courts in that state can have authority to rule on a matter involving that defendant.
If your beauty business has a brick-and-mortar store in California and California employees, you probably would not be surprised to have a court in California exercise personal jurisdiction. Having a physical presence in a state satisfies the constitutional requirement for contact, and gives a state clear authority over any dispute relating to your business. Even without a physical presence, contacts that are substantial, continuous and systematic can approximate a physical presence and justify personal jurisdiction.
Analyzing for minimum contacts in a state where you don’t have a physical presence or enough contacts to approximate a physical presence poses harder questions under the Constitution. Minimum contacts under the Constitution usually require some act on the company’s part to do business in the state and a direct connection between those acts and the litigation. The Constitution also requires that the court’s assertion of authority over you must not violate “traditional notions of fair play and substantial justice.”