Litigation: How the Internet affects personal jurisdiction

Conducting business via the Internet can expose a company in unintended ways

For more than 60 years, the hallmark test of personal jurisdiction has been the “minimum contacts” of the defendants. Post-International Shoe, a court could exercise power over an entity so long as there were certain minimum contacts, such that “the maintenance of the suit [did] not offend traditional notions of fair play and substantial justice.” These words are ingrained into the brain of every first-year law student.

The 1980s saw the addition of two elements to the traditional minimum contacts analysis—namely, whether the defendant “purposely established” contact with the forum state (i.e., does the defendant have a presence, or otherwise direct its conduct into the forum state?), and whether the defendant’s conduct and connection with the forum state are such that a defendant “should reasonably expect to be haled into court there.” These additions were complements of two parties whose names are commonplace in American nomenclature: Burger King and Volkswagen.

To date, courts across the U.S. lack a uniform approach when addressing the issue of jurisdiction based on a company’s Internet presence. While at least three distinct lines of cases have developed over the past decade regarding this issue, the borders of Internet-based jurisdictional analysis are fairly well accepted. At one end of the spectrum, the mere presence of a website is not in and of itself sufficient to establish jurisdiction in a non-forum state. At the other end, a website that enables repeat business transactions suffices to establish jurisdiction. In reality, however, most website activities fall somewhere in between.

The first of the three lines of cases relating to Internet-created jurisdiction is the “Zippo” test or “sliding scale” approach, first enunciated by a Pennsylvania court in Zippo Manufacturing Co. v. Zippo Dot Com, Inc. Under this approach—which has lost favor in recent years—a court analyzes a defendant’s website activity, with the likelihood of jurisdiction being exercised directly proportionate to the nature and quality of the Internet-based commercial activity. This test has led to wildly inconsistent results.

Contributing Author

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Steven P. Blonder

Steven P. Blonder is a principal in the Litigation and Dispute Resolution practice group at Chicago-based Much Shelist. His practice is primarily focused in the...

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