Does Your Website Subject Your Business to Foreign Jurisdiction?
Individuals and businesses can be brought to court in states where they live or operate in commerce (personal jurisdiction). Additionally, both can agree to submit to jurisdiction in a forum state as part of a valid contract. What effect then does a website have? Is a page that can be accessed over the internet a “presence” in every state? Or is launching such a site some implicit agreement to litigate a dispute wherever a plaintiff may reside?
A foreign state can exercise personal jurisdiction over a non-resident for non-forum related activities when the individual or business has engaged in “systematic and continuous” activities in the forum state. This type of jurisdiction is known as general jurisdiction and can be exercised when a company does targeted business in a state, such as by opening a store or sending employees to make sales or perform services. A foreign state can exercise specific jurisdiction, however, when an entity’s activity within the state create sufficient “minimum contacts” with the state. Specific jurisdiction is what is invoked when a state exercises jurisdcition based on a website.
To satisfy the “minimum contacts” requirement, websites are divided into 3 categories:
- Commercial Websites – which do a substantial volume of business over the internet, and through which customers in any location can immediately engage in business with the business owner;
- Interactive Websites – which merely provide information, will almost never provide sufficient minimum contacts for jurisdiction. Such a website will only provide a basis for jurisdiction if there is an intentional tort such as defamation on the website, and if it is directed at the jurisdiction in question
- Passive Websites – which permit the exchange of information between the website owner and visitors, may be subject to jurisdiction, depending on the website’s level of interactivity and commerciality, and the amount of contacts which the website owner has developed with the forum due to the availability of the website within the jurisdiction.
If you’re not sure which category your website falls into it may be time to consult with a local internet and e-commerce attorney.. For a quick and easy answer, the Minnesota District Court poses this question, is your website more of “less sophisticated than a typical teenager’s Facebook page”? If it is less sophisticated then chances are you are not subjecting yourself, or your company, to foreign jurisdiction.
Tags: E-Commerce, Internet, Jurisdiction, Website
