ARTICLE: PERSONAL JURISDICTION AND THE INTERNET
Michael MacClary
I. Introduction
As the twenty-first century approaches, legal scholars must anticipate how technological and societal changes will affect our current legal doctrine. The scope of the law needs to encompass the expanding growth of technology along with the changing needs of society. Perhaps one of the most significant technological advancements of our time is the Internet. n2 Unfortunately, legislatures have adopted few laws regulating Internet communications. n3
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n2 See Richard S. Zembek, Jurisdiction and the Internet: Fundamental Fairness in the Networked World of Cyberspace, 6 Alb. L.J. Sci. & Tech. 339, 341-42 (1996) (discussing how the Internet's rapid growth will affect today's legal doctrine); William S. Byassee, Jurisdiction of Cyberspace: Applying Real World Precedent to the Virtual Community, 30 Wake Forest L. Rev. 197, 199-200 (1995) (predicting new computer-related relationships will strain current legal principles); see infra notes 8-15 (explaining the Internet).
n3 See Byassee, supra note 2, at 199-200 (calling for recognition of and sensitivity to the differences between new technology and the law); Zembek, supra note 2, at 341 (citing public demands to know the legal boundaries of cyberspace).
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While expanding the speed and ease of communication, the Internet and accompanying technology have created a myriad of situations in which litigation might arise. n4 Libel, copyright, and trademark infringement over the Internet have been and will continue to be popular areas for litigation. n5 This increase in litigation directly relates to the lack of regulations which Internet users encounter. n6 For example, pornography over the Internet, or [*94] "cyberporn," has also been a topic of intense debate. n7 The Communications Decency Act of 1996, n8 and the litigation that followed, have given descriptions and definitions to new terminology. n9 This terminology is critical to analyzing how these new areas will affect our laws.
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n4 See Zembek, supra note 2, at 341. See also supra note 3 and accompanying text (commenting on the relationship of technology and the legal doctrine).
n5 Id.
n6 Id. at 342-43.
n7 See Byassee, supra note 2, at 203-11 (discussing pornography on the Internet).
n8 47 U.S.C. <sect> 223 (West 1997).
n9 See generally Shea v. Reno, 930 F. Supp. 916 (1996) (interpreting new restraints on Internet communication and defining vital terms). See also MTV Networks v. Curry, 867 F. Supp. 202, 204-05 (S.D.N.Y. 1994) (defining the Internet, host computers, e-mail, and computer bulletin boards); Philip Elmer-Dewitt, Battle for the Soul of the Internet, Time Magazine, July 25, 1994, at 50.
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The Internet is a world-wide network of interlinked computers. n10 This vast network consists of millions of host computers that provide information and services to consumers. n11 Host computers that provide Internet services, also called web sites, n12 each have a unique Internet address just as each home has a unique mailing address. n13 These web sites allow users to exchange digital information such as electronic mail (e-mail), computer programs, images, or music. n14 The collection of web sites available over the Internet is known as the World Wide Web, n15 and each site is accessed by an individual user with the help of a computer, a modem, and some type of Internet access software. n16
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n10 MTV Networks, 867 F. Supp. at 204 & n.1.
n11 Id.
n12 Id. at 204 & n.2.
n13 Id.
n14 Id.
n15 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 296 (S.D.N.Y. 1996) (quoting Shea v. Reno, 930 F. Supp. 916, 929 (1996)).
n16 See generally Zembek, supra note 2 (explaining Internet access).
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Given the accessibility of the Internet by people all over the world, it is not difficult to forsee the potential jurisdictional issues that might arise in the event of litigation. The most fundamental area to be explored is the issue of personal jurisdiction. n17 Personal jurisdiction, as it relates to Internet communications, is a particular area of law that is currently under scrutiny by the courts. n18 New technological advances via the Internet have [*95] created legal uncertainty. n19 Current legal precedent and accompanying doctrine may well address some of the potential problems, but many other sources of litigation remain unclear. n20
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n17 See Byassee, supra note 2, at 199 (describing jurisdictional questions as the most difficult to reconcile through modern legal doctrine); Zembek, supra note 2, at 341 (stating that the "most fundamental issue of personal jurisdiction is being ignored").
n18 See generally Byassee, supra note 2 (discussing personal jurisdiction over the Internet); Zembek, supra note 2 (stating that jurisdictional issues in cyberspace need to be further explored).
n19 See Elmer-Dewitt, supra note 9, at 50 (detailing new issues and conflicts that have arisen with the growth of the Internet).
n20 See Byassee, supra note 2, at 199-200 (calling for recognition of the differences, not arguing the inadequacies). But see Zembek, supra note 2, at 345 (stating that many "cyber-actions" cannot be categorized under current law).
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II. History of Personal Jurisdiction
A court may exercise power over a particular defendant if the the defendant is subject to personal jurisdiction. n21 Limits on a court's ability to exercise personal jurisdiction arise from two sources, the United States Constitution and state long-arm statutes. n22 The Due Process Clause of the Fourteenth Amendment of the United States Constitution permits state courts to exercise personal jurisdiction over an out-of-state defendant only if sufficient "minimum contacts" exist with the forum state. n23 The party seeking personal jurisdiction over the out-of-state defendant must first show that the out-of-state defendant's actions fell within the parameters of the state's long-arm statute and meet the requirements of the Fourteenth Amendment. n24
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n21 See generally Joseph Glannon, Civil Procedure: Examples and Explanations, 23-28 (3d ed. 1997) (explaining jurisdiction).
n22 U.S. Const. amend. XIV. See, e.g. Mass. Ann. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996); Cal. Civ. Proc. Code <sect> 410.10 (West 1996); N.Y. C.P.L.R. 302 (Consol. 1996).
n23 Glannon, supra note 21, at 4. See Int'l Shoe v. Washington, 326 U.S. 310, 319 (1945) (ruling that the maintenance of suit does not offend the notions of fair play and substantial justice).
n24 U.S. Const. amend. XIV. See, e.g., Mass. Gen. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996); Cal. Civ. Proc. Code <sect> 410.10 (West 1996); N.Y. C.P.L.R. 302 (Consol. 1996).
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States' long-arm statutes vary, n25 some states have long-arm statutes which allow their courts to exercise jurisdictional power to the full extent allowed under the Due Process Clause of the Constitution. n26 Other states have statutory restrictions that specify enumerated situations when courts may exercise personal jurisdiction over an out-of-state defendant. n27 Some [*96] limits are placed on the particular cause of action, while other limits are based on the activities of the defendant. n28
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n25 See Glannon, supra note 21, at 23-28 (discussing state long-arm statutes).
n26 See Cal. Civ. Proc. Code <sect> 410.10 (West 1996).
n27 See, e.g., Mass. Gen. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996); N.Y. C.P.L.R. 302 (Consol. 1996); 110 Ill. Rev. Stat. 2-209 (1996).
n28 Mass. Gen. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996).
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The Supreme Court expounded upon state court's jurisdiction with the landmark decision in International Shoe v. Washington. n29 This case overruled the "presence" standard and allowed jurisdiction over any party with sufficient "minimum contacts" with the forum state. n30 The decision explained that the maintenance of the suit in the forum state shall be allowed only "according to our traditional conceptions of fair play and substantial justice." n31 In this case, the Supreme Court adopted the current two-prong approach to personal jurisdiction: minimum contacts and reasonableness. n32
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n29 326 U.S. 310 (1945).
n30 See International Shoe, 326 U.S. 310, 319 (1945) (ruling that a state may not make binding judgments on an individual lacking contacts with that state). But see Pennoyer v. Neff, 95 U.S. 714, 734-35 (1877) (deciding that personal service and notice are key elements of personal jurisdiction).
n31 International Shoe, 326 U.S. at 320.
n32 See id. at 319-20 (requiring minimum contacts and reasonableness).
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In order for the out-of-state defendant to be subject to suit, minimum contacts must be found between the defendant and the forum state. n33 If these contacts to the forum state are found to be continuous and systematic, the state courts would have "general jurisdiction" over the defendant. n34 When general jurisdiction exists, the court will have a sufficient basis for exercising jurisdiction for any cause of action against the defendant. n35 If the court decides contacts are less than continuous and systematic, a court may only exercise jurisdiction if the action arose against the out-of-state defendant from the particular contact of that defendant with the state. n36 Courts refer to this concept as "specific jurisdiction" and grant it in cases involving such isolated acts as a breach of contract n37 or the settlement of a life insurance policy. n38
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n33 See id. at 310 (elaborating on the notion of minimum contacts). See also infra note 87 (expaining the doctrine of minimum contacts).
n34 See generally Helecopteros Nacionales de Columbia v. Hall, 461 U.S. 955 (1984) (holding that casual contacts are not enough to find general jurisdiction). See Glannon supra note 20, at 12 (defining continuous and systematic contact).
n35 See Perkins v. Benguet, 342 U.S. 437, 448 (1952) (deciding that when activities are sufficiently continuous, due process allows the exercise of jurisdiction).
n36 See Perkins, 342 U.S. at 448-49 (ruling that, if general jurisdiction is found, then the issue need not arise from the contacts). See generally Helecopteros, 461 U.S. 955.
n37 See generally Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (finding jurisdiction over the defendant based on the purposeful making of a contract).
n38 See generally McGee v. International Life Ins. Co., 385 U.S. 220
(1957) (finding specific jurisdiction based on a life insurance policy
entered into in the forum state).
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In order for a court to subject a non-resident defendant to a lawsuit, in addition to minimum contacts, the court must find that the defendant purposely availed himself of the benefits and protection of the laws of the state. n39 This doctrine dictates that a party is subject to personal jurisdiction if he could reasonably anticipate being haled into court in that state. n40 The Supreme Court has held that a nationally published magazine could reasonably foresee being haled into court for libel actions in any state where the magazine is sold. n41 The Court, however, did not find jurisdiction over an automobile dealer for selling a car involved in an accident in another state. n42
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n39 See Hanson v. Denckla, 357 U.S. 235, 253-54 (1958) (quoting International Shoe, 326 U.S. at 319) (stating that the defendant must "purposely avail itself of the privilege of acting within the state").
n40 See Hanson, 357 U.S. at 253-54 (requiring purposeful availment before granting jurisdiction). See also Calder v. Jones, 465 U.S. 783, 792 (1984) (determining that jurisdiction is proper when intentional tortious acts are directed into the forum state); Keeton v. Hustler Magazine, 465 U.S. 770, 775 (1984) (holding that circulating magazines in the forum state constitutes adequate minimum contacts). But see World Side Volkswagen v. Woodson, 444 U.S. 286, 292 (1980) (citing knowledge that a car driven into the forum state is not purposeful availment).
n41 See Calder, 465 U.S. at 790 (ruling that actions intentionally directed to the forum state satisfy minimum contacts); Keeton, 465 U.S. at 781 (finding jurisdiction over the defendant who "continuously and deliberately exploited" the market of the forum state).
n42 See World Wide Volkswagen, 444 U.S. at 286 (deciding that mere foreseeability does not satisfy the requirement of purposeful availment).
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Even when a court finds minimum contacts, a defendant may still defeat a finding of personal jurisdiction if he can prove that it would be unfair for the court to exercise jurisdiction. n43 The court will base this test on the interests of the defendant, the plaintiff, and the forum state. n44 For example, in 1985, the Supreme Court ruled that in a business relationship the burden is on the defendant to prove that it is unreasonable for him to defend himself in the forum state. n45 The Supreme Court, however, is split on [*98] the personal jurisdiction of a defendant who sells goods that are not directed to the forum state but may wind up there through a "stream of commerce." n46
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n43 See generally Glannon, supra note 21, at 5-8 (discussing the reasonableness requirement).
n44 See generally Burger King v. Rudzewicz, 471 U.S. 462, 473-74 (1985) (ruling that the defendant should reasonably anticipate being sued in Florida based on a contractual relationship).
n45 Id. at 473-74.
n46 Compare Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 105-16 (1987) (finding no substantial connection between the defendant's actions and the forum state), with Asahi Metal, 480 U.S. at 116-21 (Brennan, J., concurring) (concluding that the defendant did purposely avail itself of California laws).
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III. Internet and Personal Jurisdiction: Case Law
In recent years, courts have dealt with issues of personal jurisdiction in cases involving the Internet. Although the facts of these cases have varied, they have all had one characteristic in common: the judges have employed restraint in expanding the concept of personal jurisdiction. n47
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n47 See infra notes 49-127.
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In Pres-Kap, Inc. v. System One, Direct Access, Inc., n48 the Florida Court of Appeal grappled with the issue of jurisdiction involving a computerized airline reservation system. n49 The issue raised was whether the non-resident defendant travel agent had sufficient minimum contacts to be subject to personal jurisdiction in Florida. n50 After plaintiff failed to repair the reservation system, the defendant stopped payment under the contract for the use of the system. n51 The plaintiff sued for breach of contract in Florida and the defendant moved to dismiss the case for lack of personal jurisdiction. n52 The trial court denied the defendant's motion. n53
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n48 636 So. 2d 1351 (Fla. Ct. App. 1994).
n49 Id. at 1351-52.
n50 Id. See generally International Shoe v. Washington, 326 U.S. 310 (1945) (setting the "minimum contacts" standard).
n51 Pres-Kap, Inc., 636 So.2d at 1352. The defendant complained to the plaintiff's New York office, but the defendant claimed that nothing was repaired. Id. In March 1991, the defendant ceased payments on the leased computer terminals and in July the terminals were removed by the plaintiff. Id.
n52 Id. Plaintiff sued for breach of the lease agreement. Id.
n53 Pres-Kap, Inc. v. System One, Direct Access, Inc, 636 So. 2d 1351, 1352 (Fla. Ct. App. 1994).
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On appeal, the court decided that the appropriate test for determining whether personal jurisdiction exists was whether the defendant could "reasonably anticipate being hailed into a Florida court." n54 They determined the only contacts between the defendant and Florida were rental payments made to the plaintiff in Miami and right of entry to a computer [*99] database owned by the defendant accessed via computer terminals. n55 The court dismissed the plaintiff's argument that the existence of a contract with a Florida citizen was sufficient to satisfy the minimum contacts standard. n56 The court found no evidence that the defendant had any knowledge as to the location of the computer database, and, even if the defendant had such knowledge, it would not create a reasonable expectation of suit in Florida. n57 The court took issue with the source of the defendant's financial gain which arose "from a New York, not a Florida based transaction." n58 For these reasons, the appeals court overturned the trial court's denial of the defendant's motion to dismiss. n59
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n54 Id. (citing World Wide Volkswagen, 444 U.S. 286).
n55 Id. at 1353.
n56 Id. The court stated that the contract cannot convert this "obviously New York-based transaction into a Florida transaction" in order to show that the defendant could have reasonably anticipated defending a suit in Florida. Id.
n57 Id.
n58 Pres-Kap, Inc. v. System One, Direct Access, Inc, 636 So. 2d 1351, 1353 (Fla. Ct. App. 1994).
n59 Id.
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The appeals court's decision focused on the possible implications of a contrary decision. n60 The court stated that to uphold the trial court's decision would result in subjecting the user of any on-line service to suit in the state where the "supplier's billing office or database happened to be located." n61 The court went on to hold that the exercise of jurisdiction goes far beyond any consumer's reasonable expectations and would certainly violate the "traditional notions of fair play and substantial justice." n62
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n60 Id. See also Michael J. Santisi, Pres-Kap, Inc. v. System One, Direct Access, Inc.: Extending the Reach of the Long-Arm Statute Through the Internet?, 13 J. Marshall J. Computer & Info. L. 433, 441-51 (1995) (arguing against the rationale used in the Pres-Kap case).
n61 Pres-Kap, 636 So. 2d at 1353.
n62 Id. See generally Burger King v. Rudzewicz, 471 U.S. 462 (1985) (explaining the "fairness" test for minimum contacts); International Shoe v. Washington, 326 U.S. 310 (1945) (deciding the minimum contacts test); Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Fla. 1989) (applying minimum contacts test).
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In a dissenting opinion, Judge Barkdull argued that, by accessing the computer database in Florida, the defendant purposefully availed itself of the information contained therein. n63 This situation dictates that the defen [*100] dant could reasonably expect to be haled into a Florida court. n64 The dissenting judge felt that the court should exercise jurisdiction over the defendant since the information in Florida contributed to the financial gain of his New York company. n65
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n63 See Pres-Kap, Inc. v. System One, Direct Access, Inc, 636 So. 2d 1351, 1354 (Fla. Ct. App. 1994) (Barkdull, J., dissenting) (maintaining that the defendant's actions constituted purposeful availment).
n64 Id.
n65 Id. See also Santisi, supra note 59, at 441 (discussing the Pres-Kap dissent).
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Perhaps the first case to deal with contacts to the forum state via the internet was CompuServe v. Patterson. n66 This Sixth Circuit case involved a dispute between an Internet access provider and one of its software distributors. n67 The plaintiff sought to prove that the defendant's conduct with the forum state was substantial enough for the court to exercise personal jurisdiction over the defendant. n68
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n66 89 F.3d 1257 (6th Cir. 1996).
n67 Id. at 1258-59 (detailing appeal of granted motion to dismiss for lack of personal jurisdiction).
n68 See id. at 1259 (determining if minimum contacts exist enough to exercise personal jurisdiction of a non-resident defendant); see generally International Shoe v. Washington, 326 U.S. 310 (1945) (deciding the minimum contacts test).
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CompuServe is a computer information service with headquarters in Columbus, Ohio. n69 Although all of CompuServe's facilities are located in Ohio, subscribers may access its services from any computer terminal in the world. n70 Consumers pay a monthly fee to gain access to computing and information services via the Internet, as well as software that CompuServe or third parties have provided. n71 Parties who choose to distribute "shareware" must enter into a contract to do business with CompuServe. n72 This basic contract, called a "Shareware Registration Agreement," n73 allows CompuServe to furnish its subscribers with the software that the shareware providers create. n74 The agreement, which a subscriber enters into electronically, stipulates that the parties formed the contract in Ohio and that it shall "be governed by and construed in accordance with" Ohio law. n75
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n69 CompuServe v. Patterson, 89 F.3d 1257, 1258 (6th Cir. 1996).
n70 Id.
n71 Id. at 1258-59.
n72 Id. at 1259.
n73 Id. at 1260. This Shareware Registration Agreement incorporates the CompuServe Service Agreement and the Rules of Operation. Id.
n74 CompuServe v. Patterson, 89 F.3d 1257, 1259 (6th Cir. 1996).
n75 Id. at 1261.
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The defendant Patterson began to electronically submit software files to CompuServe in 1991. n76 Patterson created software to aid in the navigation of the Internet. n77 Soon after Patterson began to market his product, CompuServe developed a similar product. n78 Patterson notified CompuServe that its marketing of its products infringed on his company's common law copyrights and that CompuServe's actions constituted deceptive trade practices. n79 CompuServe then filed a declaratory judgment action in the federal district court in the Southern District of Ohio denying any wrongdoing. n80 Patterson responded with a motion to dismiss for lack of personal jurisdiction. n81
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n76 Id.
n77 Id. at 1261-62.
n78 Id. at 1262.
n79 CompuServe v. Patterson, 89 F.3d 1257, 1258 (6th Cir. 1996). Patterson claimed that the terms "WinNAV," "Windows Navigator," and "FlashPoint Windows Navigator" were all trademarks that CompuServe was using without permission. Id. CompuServe changed the name of its program, but Patterson continued to demand $ 100,000 to settle his potential claims. Id.
n80 Id. at 1261 (asserting that CompuServe neither infringed on any copyrights nor engaged in any deceptive acts).
n81 Id.
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Patterson argued that the Ohio court had no jurisdiction over him because he had never entered Ohio. n82 Patterson stated that his contacts were merely via a computer hookup and were not sufficient to warrant a finding of personal jurisdiction. n83 The district court agreed with Patterson's arguments and dismissed the case. n84 CompuServe appealed this ruling to the Court of Appeals for the Sixth Circuit. n85
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n82 Id. at 1261-63.
n83 Id. at 1262.
n84 CompuServe v. Patterson, 89 F.3d 1257, 1261 (6th Cir. 1996) (explaining how the district court dismissed the claims made by CompuServe).
n85 Id.
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Noting that this was a case of first impression, the appeals court thoroughly examined the history of personal jurisdiction in this matter. n86 The court sought to answer the question: "Did CompuServe make a prima facie showing that Patterson's contacts with Ohio, which have been almost entirely electronic in nature, are sufficient under the Due Process Clause, to support the district court's exercise of personal jurisdiction over him?" n87 [*102] The court responded by analyzing the different constitutional aspects of personal jurisdiction. n88 The court found that CompuServe had succeeded in proving the first two prongs of the jurisdiction test. First, the court found that Patterson had availed himself of the privilege of acting in the forum state. n89 Second, his contacts with Ohio were related to the facts of the controversy and, therefore, the burden shifted to the defendant to disprove jurisdiction. n90
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n86 Id. at 1265-69.
n87 Id. at 1262.
n88 Id. at 1263-68. The court analyzed three aspects necessary to satisfy constitutional requirements for a finding of minimum contacts in order to exercise personal jurisdiction: the "purposeful availment" requirement; the requirement that the cause of action arises from Patterson's activities in Ohio; and the "reasonableness" requirement. Id.
n89 CompuServe v. Patterson, 89 F.3d 1257, 1263 (6th Cir. 1996) (holding that Patterson was the "purchaser" of services and no doubt purposefully transacted business in Ohio).
n90 Id. at 1267-68. The court stated that Patterson could have marketed and sold his products elsewhere with similar results, yet he only sold his software to CompuServe in Ohio. Id. at 1284. Any kind of copyright infringement must have occurred in Ohio. Id. at 1285. The court also stated that Patterson's threats to seek an injunction against CompuServe, which gave rise to the present case, were indeed contacts made in Ohio. Id.
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The appeals court gave a lengthy discussion of the fairness test. n91 The court considered a number of factors: 1) the burden on the defendant; 2) the interest of the plaintiff in obtaining relief; 3) the interest of the forum state; and 4) the interests of other states in resolving such disputes. n92 The appeals court reversed the trial court's ruling based on the issue of fairness. n93 The appeals court determined that although it may be burdensome for Patterson to defend the suit in Ohio, he was put on notice that he was "making a connection with Ohio" when he entered into the agreement with CompuServe. n94 The court acknowledged Ohio's interest in resolving this dispute involving an Ohio company and Ohio copyright law. n95 The appeals court found a sufficient connection between Patterson and CompuServe for Ohio to assert jurisdiction over the defendant. n96 The appeals court stated that someone "who employs a computer network service like [*103] CompuServe to market a product can reasonably expect disputes with that service to yield lawsuits in the service's home state." n97
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n91 Id. at 1268 (discussing the reasonableness requirement).
n92 Id. (citing American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169-70 (6th Cir. 1988)); see also supra notes 30-33 (discussing reasonableness requirement).
n93 Id. at 1268.
n94 CompuServe v. Patterson, 89 F.3d 1257, 1268 (6th Cir. 1996).
n95 Id. at 1268.
n96 Id.
n97 Id.
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As important as the holding of the case is to the future of personal jurisdiction, the dicta contained within the court's decision is equally engaging. The court enumerated certain aspects of this area of law that the decision did not cover. n98 It made no decision as to whether Patterson could be subject to personal jurisdiction in any state where his software was purchased or used. n99 The opinion also did not discuss whether CompuServe would have jurisdiction to sue any subscriber to its service for non-payment in Ohio. n100
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n98 Id. at 1268.
n99 See CompuServe v. Patterson, 89 F.3d 1257, 1268 (6th Cir. 1996). See also World Wide Volkswagen v. Woodson, 444 U.S. 286, 296 (discussing reasonableness requirement of subjecting an out-of-state defendant to personal jurisdiction).
n100 Id. at 1289.
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Like the Sixth Circuit, the Third Circuit in Bensusan Restaurant Corporation v. King n101 has also addressed and answered specific questions that deal with personal jurisdiction via the internet. n102 The parties, both of whom engaged in the entertainment business, each operated a nightclub under the name, "The Blue Note." n103 The defendant posted a web site to advertise his club in Columbia, Missouri. n104 To prevent confusion, this web site mentioned the plaintiff's club in New York. n105 The plaintiff brought suit in the United States District Court for the Southern District of New York claiming trademark infringement, unfair competition, and trademark dilution. n106 The defendant answered with a motion to dismiss for lack of personal jurisdiction. n107 In deciding the motion to dismiss, the [*104] court relied on the factual allegations made in the plaintiff's complaint and the two applicable prongs of New York long-arm statute. n108 The court analyzed each prong separately. n109
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n101 937 F. Supp. 295 (1996).
n102 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 299 (S.D.N.Y. 1996) (affirming a motion to dismiss for lack of personal jurisdiction by the defendant).
n103 Id. at 297.
n104 Id.
n105 Id. at 297-98. King's web site contained a disclaimer that his club is "not to be confused" with The Blue Note of New York City. Id. The disclaimer also had a "hyperlink" that allowed the Internet user to directly connect to the plaintiff's web site. Id.
n106 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 298 (S.D.N.Y. 1996). The plaintiff brought the action only after notifying King. Id. King altered his web site but the changes were not satisfactory for Bensusan. Id.
n107 Id. at 298; see also Fed. R. Civ. P. 12(b)(2) (defining motion to dismiss for lack of personal jurisdiction).
n108 Bensusan, 937 F. Supp. at 298-99. If a plaintiff makes a prima facie showing of jurisdiction, they will defeat a motion to dismiss for lack of personal jurisdiction. Id.
n109 Id.
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In analyzing the first prong, the court focused on the idea that a New York court may exercise personal jurisdiction over a non-resident defendant "who commits a tortious act within the state" as long as the cause of the action asserted arises from the tortious act. n110 Courts have interpreted this statute as stating that the act of offering to sell a product can support the exercise of jurisdiction. n111 The issue remained, however, as to whether the creation of a web site is an offer to sell a product in New York. n112 The district court found that it could not properly exercise jurisdiction under this statute over the Missouri resident because it takes "several affirmative steps by the New York resident . . . to obtain access to the web site." n113 The court further acknowledged that the mere fact that a person can illicit information on a product does not amount to advertising in New York. n114 The decision stated that no court could exercise jurisdiction in the absence of an activity directed at the people of New York, per C.P.L.R. <sect> 302(a)(2). n115
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n110 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 298-99 (S.D.N.Y. 1996). See Pilates Inc. v. Pilates Inst. Inc., 891 F. Supp. 175, 179 (S.D.N.Y. 1996) (interpreting C.P.L.R. <sect>302(a)(1), part of New York's long-arm statute).
n111 See Bensusan, 937 F. Supp. at 299. See, e.g., Editorial Musical Latino Americana, S.A. v. Mar Int'l Records, Inc., 829 F. Supp. 62, 64-65 (S.D.N.Y. 1993) (holding that a single sale may support jurisdiction); German Educ. Television Network, Ltd. v. Oregon Pub. Broad. Co., 569 F. Supp. 1529 (S.D.N.Y. 1983) (finding that the act of selling products could subject defendant to personal jurisdiction); Hertz Sys., Inc. v. Hervis Corp., 549 F. Supp. 796, 797-98 (S.D.N.Y. 1982) (interpreting statute to find jurisdiction over defendant based on an offer to sell).
n112 Bensusan, 937 F. Supp. at 299.
n113 Id. The court stated that a New York resident must access the Internet using their computer, then telephone the box office in Missouri to order tickets, and finally pick up the tickets in Missouri since King will not send the tickets to the buyer. Id. This, the court adds, should clear up any confusion about where the club is located, however even if the buyer is still confused, any type of infringement would have to occur in Missouri. Id.
n114 Id. at 299.
n115 See generally Bensusan Restaurant Corp. v. King, 937 F. Supp. 295
(S.D.N.Y. 1996).
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Next, the court interpreted the second prong of the long-arm statute to allow the court to exercise jurisdiction over any non resident who "expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce." n116 The plaintiff sought to show that the defendant participated in interstate commerce; however, the statute explicitly states that substantial revenue must be obtained from interstate commerce. n117 The plaintiff argued that it was foreseeable to the defendant that he may be sued in New York because the plaintiff's club is located there. n118 The court felt that this argument did not sufficiently satisfy an expectation of consequences in New York; specifically, no discernible effort was made to serve a market in New York. n119 The court's two pronged analysis and the insufficiency of the plaintiff's argument led the court to conclude that it could not exercise personal jurisdiction over the defendant. n120
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n116 Id. at 300.
n117 Id.
n118 Id.
n119 Id. (finding that King's knowledge that Bensusan's club was located in New York is insufficient).
n120 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 300 (S.D.N.Y. 1996).
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The court then addressed a constitutional Due Process issue when it sought to determine whether an assertion of jurisdiction over the defendant would offend the "traditional notions of fair play and substantial justice." n121 The court decided that by creating a web site, the defendant had not purposely availed himself of benefits in New York. n122 As a result, the plaintiff's argument that the defendant should have foreseen that users could access the site in New York was insufficient to satisfy Due Process. n123
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n121 See id. at 300-01 (analyzing the Due Process aspect of personal jurisdiction); see generally Darby v. Compagnie Nationale Air France, 769 F. Supp. 1255 (S.D.N.Y. 1991) (quoting International Shoe, 326 U.S. at 316).
n122 Bensusan, 937 F. Supp. at 301. This is equivalent to placing a product into the stream of commerce, which the United States Supreme Court has interpreted to be not purposely directed toward the forum state. Id. at 301. See generally Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 112 (1987).
n123 Id. See also generally Fox v. Boucher, 794 F.2d 34, 37 (2d Cir. 1986); Beckett v. Prudential Ins. Co. of Am., 893 F. Supp. 234, 239 (S.D.N.Y. 1995).
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The Bensusan decision also distinguished its facts from the CompuServe case. n124 In CompuServe, the defendant specifically targeted the forum [*106] state by subscribing to the service and entering into a contract with the plaintiff. n125 The defendant also advertised his software over the Internet via CompuServe. n126 The court concluded that the defendant "reached out" into the forum state. n127 In the present case, the court recognized that the defendant could not have directed any contact into New York. n128
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n124 See Bensusan, 937 F. Supp. at 301 (discussing CompuServe case).
n125 Bensusan Restaurant Corp. v. King, 937 F. Supp. 295, 300 (S.D.N.Y. 1996); see also supra notes 76-82 and accompanying text (analyzing the Compuserve case).
n126 Id. at 301. See also supra notes 76-82 and accompanying text (discussing the rationale used in Compuserve).
n127 Bensusan, 937 F. Supp. at 301. See also supra notes 93-104 and accompanying text (detailing Compuserve).
n128 Bensusan, 937 F. Supp. at 301.
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IV. Massachusetts
The United States District Court for the District of Massachusetts decided an Internet trademark infringment case when it found a California corporation subject to personal jurisdiction in the Massachusetts courts. n129 In Digital Equipment Corporation v. AltaVista Technology, Inc., n130 the plaintiff, Digital Equipment Corporation, ("Digital") purchased the right to the name "AltaVista" from the defendant, AltaVista Technology, Inc. ("ATI"). n131 Digital then licensed back to ATI the right to use "AltaVista" in certain enumerated ways. n132 In the court action, Digital sought a preliminary injunction claiming that ATI breached the licensing agreement by improperly using "AltaVista" on their web site. n133
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n129 See generally Digital Equip. Corp. v. AltaVista Tech., Inc., 960 F. Supp. 456 (D. Mass. 1997) (asserting jurisdiction based on contacts via the Internet).
n130 960 F. Supp. 456 (D. Mass. 1997).
n131 Id. at 459.
n132 Id.
n133 Id.
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Discussion of this case should begin with insight on Massachusetts' long-arm statute. n134 The First Circuit has consistently held that it must [*107] first look to state law when deciding whether jurisdiction is appropriate. n135 Even though the Massachusetts Supreme Judicial Court has interpreted the statute to allow the exercise of jurisdiction to the full extent of the United States Constitution, this constitutional analysis will reach only "when some basis for jurisdiction enumerated in the statute has been established." n136 The plaintiff has the burden of establishing facts to support a finding of jurisdiction under the statute and to establish minimum contacts sufficient to satisfy Due Process analysis. n137
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n134 See Mass. Gen. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996). The exercise of personal jurisdiction over a non-resident is governed by the Massachusetts long-arm statute and its corresponding precedent. Id. The Massachusetts long-arm statute says in relevant part: "A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transaction any business in the commonwealth . . . (d) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly . . . derives substantial revenue from the . . . services rendered, in this commonwealth. Id.
n135 See generally Caso v. LaFayette, 370 F.2d. 707 (1st. Cir. 1966) (quoting Pulson v. American Rolling Mill Co., 170 F.2d 193 (1st Cir. 1948)). See also Gray v. O'Brien, 777 F.2d 864 (1st Cir. 1985) (quoting Hahn v. Vermont Law School, 698 F.2d 48, 49-50 (1st Cir. 1983)). But see Caso 370 F.2d at 709 (quoting Byrd v. Blue Ridge Elec. Coop., 356 U.S. 525 (1958) and Hanna v. Plumer, 380 U.S. 460 (1965)) (resolving choice of law issues).
n136 Gray, 777 F.2d at 866. See also Morrill v. Tong, 390 Mass. 120, 128, 453 N.E.2d 1221, 1227 (1983); Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 4-7, 389 N.E.2d 76, 79-80 (1980).
n137 Morrill, 390 Mass. at 129, 453 N.E.2d at 1227 (quoting Good Hope, 378 Mass. at 6, 389 N.E.2d at 79-80). Mass. Gen. Laws ch. 223A, <sect> 3 (Law. Co-op. 1996). See generally World Wide Volkswagen, 444 U.S. 286.
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ATI argued that the court in Massachusetts had no personal jurisdiction over it as a California corporation. n138 Although ATI admitted that the litigation arose from a contract with a Massachusetts corporation, the company felt that a contract alone should not satisfy minimum contacts. n139 The court concluded that (1) ATI entered into a contract interpreted "under and accordance" with the laws of Massachusetts, (2) breach of this contract gave rise to the litigation, (3) ATI operated a web site accessable to users in Massachusetts, (4) ATI solicited its software products on the web site, (5) the company sold its software products to at least three Massachusetts residents, and (6) the trademark infringement has "caused considerable confusion in Massachusetts." n140
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n138 Digital Equip. Corp. v. AltaVista Tech., Inc., 960 F. Supp. 456, 460-62 (D. Mass. 1997).
n139 Id. at 462.
n140 Id. at 462-64.
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The court analyzed these factual findings in conjunction with three sections of the Massachusetts long-arm statute: ATI's transacting business in Massachusetts, ATI's allegedly causing tortious injury in Massachusetts via its web-site, and ATI's engaging in a persistent course of conduct in [*108] Massachusetts by maintaining a web-site outside of Masaschusetts. n141 ATI's actions coupled with the presence of a contract with Digital prompted the court to find that the "contract with the plaintiff was one part of a broader range of activities that, literally, amounted to the transaction of business in Massachusetts," satisfying Section 3(a) of the long-arm statute. n142 By making misrepresentations in Massachusetts via the Internet, the court found Section 3(c) of the statute to be satisfied because the lawsuit "arises from" ATI's allegedly tortious acts. n143 The court also determined that a web-site that can be accessed by Massachusetts residents is persistent enough course of action to meet the requirements of Section 3(d). n144 In determining that ATI's activities, which gave rise to the underlying claims, occurred in Massachusetts, the court held that ATI's activities satisfied the Due Process analysis of personal jurisdiction. n145
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n141 See Digital, 960 F. Supp. 456, 464-68 (comparing M.G.L. 223A, <sect> 3 (a, c-d) to the facts of the case). The court found facts which satisfy the respective parts of the Massachusetts long-arm statute. Id. at 464.
n142 Id. at 465-66 (quoting Tatro v. Manor Care, Inc., 416 Mass. 763, 769, 625 N.E.2d 549, 552-53 (1994)) (commenting on Mass. Gen. Laws. ch. 223A, <sect> 3(a)).
n143 Id. at 466-67 (discussing <sect> 3(c) of the Massachusetts Long-arm statute).
n144 Id. at 467 (explaining <sect> 3(d) of the Massachusetts Long-arm statute).
n145 Id. at 468 (summarizing the first prong of the personal jurisdiction test).
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The court found that the second and third prong of the personal jurisdiction test were satisfied. n146 The court found that ATI knew Digital was located in Massachusetts and therefore any act that would have a harmful effect on Digital and the citizens of Massachusetts satisfied the purposful availment prong. n147 Next, the court analyzed the reasonableness of exercising jurisdiction over the out-of-state defendant. n148 The court applied the test to the facts of the present case and found that all factors point to "the Court's assertion of jurisdiction over ATI." n149 This decision seems to [*109] agree with most of the jursidictions that have adjudicated this very same issue. n150
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n146 Digital Equip. Corp. v. AltaVista Tech., Inc., 960 F. Supp. 456, 470-71 (D. Mass. 1997).
n147 Id. at 470.
n148 See id. at 470-72 (focusing on the reasonalbleness of exercising personal jurisdiction).
n149 Id. at 471. The court used a five factor test to determine reasonableness and fairness in asserting jurisdiction. Id. at 470. These factors being: the burden of appearance of the defendant; the interest in the forum state in ajudicating the claim; the convenience of the particular venue; the administration of justice; and relevant policy arguments. Id. at 470-71.
n150 Digital Equip. Corp. v. AltaVista Tech., Inc., 960 F. Supp. 456, 472 (D. Mass. 1997). See also Panavision Int'l, L.P. v. Toeppen, 938 F. Supp. 616, 622-23 (C.D. Cal. 1996) (finding reasonableness enough to satisfy the Burger King standard); EDIAS Software Int'l v. BASIS Int'l Ltd., 947 F. Supp. 413, 419-20 (D. Ariz. 1996) (holding facts lead to appropriate exercise of jurisdiction by the court).
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V. Conclusion
The United States Supreme Court's handling of the issue of personal jurisdiction of non-resident defendants has changed and evolved throughout the last century. This evolution has been a result of changes in technology and the modernization of legal thought. The four cases detailed in this article represent only the infancy of the doctrine of personal jurisdiction via the Internet. As the Supreme Court has altered its stance on personal jurisdiction throughout the years, one can only assume that the same will be true with respect to cases involving the Internet. This article is in no way exhaustive as the legal tides seem to change daily. It is only an effort to demonstrate how the state and federal courts will try to take Supreme Court precedent and adapt it to new modern areas of law.