Beware of the Long Arm of the Law, p.3

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HOW YOU MAY BE SUED FAR AWAY

If you have customers in a state—Iowa for example—who can order products through your interactive website, then courts will usually conclude that you are conducting business in Iowa. A plaintiff could sue you in Iowa and force you to come defend yourself on the theory that the interactive website is targeting commercial activity toward state residents. Many courts will require actual sales into the state where the court is located because without that you would not have any expectation that you could be sued there.

But merely having a website is not enough to require you to defend a case in another state. As in the Jell-e-Bath case, a passive website that has only advertising and product or company information will not be enough to confer jurisdiction over your business in a state where you are not otherwise actively conducting business. The court in the Jell-e-Bath case said that merely selling products in your home state does not mean that you intend that product to be used in every state. A website would have to be interactive before it supports personal jurisdiction.

There is a range of activities between the two extremes of a fully interactive website and a completely passive one, and courts will analyze the totality of the circumstances to determine if there are sufficient state contacts. Other factors can be viewed together with the nature of the website to support a conclusion that the company targeted business to a distant state. In one case, an Oregon court concluded that a Virginia headhunting company was subject to personal jurisdiction in Oregon because its website actively encouraged viewers throughout the country to submit résumés; one Oregon resident had done that, and the company advertised in national newspapers and had a toll-free telephone number. The combination of those factors showed that the Virginia company was targeting Oregon customers.

Courts throughout the country differ in how they analyze websites that are not fully interactive but do have some interactive features. Different states may reach different conclusions based on the same facts. Adding to the uncertainty, many websites have a combination of features and so each feature can’t be analyzed in a vacuum, but instead must be viewed as contributing to an overall sense of whether the defendant has minimum contacts with a particular state. Still, having a link to an email address to write to the company is not usually enough to meet minimum contact requirements; although having an email correspondence with someone in the state may supply those minimum contacts. Courts in different states have reached divergent conclusions when a website has a form for requesting a catalog. While a toll-free number is one factor that courts look at to support personal jurisdiction, it might not be enough if no other factors supporting jurisdiction are present.

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