Excerpt from
Litigation in Cyberspace: Jurisdiction and Choice of Law
A United States Perspective
James P. Donohue
Miller, Nash, Wiener, Hager & Carlsen LLP, Seattle
© 1997 James P.Donohue


Jurisdiction is defined as the "power of the court to decide a matter in controversy and presupposes the existence of a duly constituted court with control over the subject matter and the parties." Black's Law Dictionary 853 (6th ed. 1990).

Initially, personal jurisdiction principally required the physical presence of a defendant within the boundaries of the jurisdiction. As the economy became more and more dependent on interstate contacts, substitute tests were developed to permit the exercise of jurisdiction in light of the "virtual" presence of a defendant within a state. In International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), the Court expanded the due process considerations relating to personal jurisdiction over nonresident defendants:

[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it, such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."

Personal jurisdiction must comport with principles of due process, and unless a federal statute provides for nationwide service of process, it must also comply with the appropriate "long arm" statute of the state in which the district court sits. Most state long arm statutes permit jurisdiction to be exercised to the full extent permitted by the due process clause of the United States Constitution. See, e.g., ORCP 4; State ex rel Circus Circus Reno, Inc. v. Pope, 317 Or. 151, 156 (1993); RCW 4.28.185; Werner v. Werner, 84 Wn.2d 360, 364 (1974).

"There are two types of personal jurisdiction: general and specific." Fields v. Sedwick Associated Risks, Ltd., 796 F.2d 299, 301 (9th Cir. 1986).

A. Principles Of General Jurisdiction.

General jurisdiction involves an attempt to assert jurisdiction over a nonresident defendant when the defendant's contacts are unrelated to the dispute. An assertion of general jurisdiction over the individual is proper only if the defendant's contacts with the forum are systematic and continuous enough that the defendant might anticipate defending any type of claim there. International Shoe, 326 U.S. at 318.

General personal jurisdiction, which enables a court to hear cases unrelated to the defendant's forum activities, exists if the defendant has "substantial" or "continuous and systematic" contacts with the forum state. . . . This is a fairly high standard in practice.

Fields v. Sedwick, 796 F.2d at 301; See also Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 414, n.9 (1984) (no general jurisdiction in wrongful death action in Texas against a Colombian corporation for crash in Peru killing Texas residents, a case in which contacts consisted of sending defendant's CEO to Texas for contract negotiation session, accepting into its New York account checks drawn on a Texas Bank, purchasing helicopters, equipment, and training services from a Texas manufacturer and sending its personnel to the manufacturer's facilities for training.)

The standard for general jurisdiction is very difficult. As noted in Amoco Egypt Oil Co. v. Leonis Nav. Co., 1 F.3d 848, 851 n.3 (9th Cir. 1993), the Supreme Court has upheld general jurisdiction only once. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952).

No court has found general jurisdiction to exist merely because of advertising on the Internet. See, e.g., McDonough v. Fallon McElliogott, Inc., 40 U.S.P.Q. 2d 1826 (S.D. Cal. 1996); IDS Life Insurance Co. v. Sun America, Inc., 1997 W.L. 7286 (N.D. Ill. 1997).

B.Principles Of Specific Jurisdiction.

In Core-Vent v. Nobel Industries AB, 11 F.3d 1482 (9th Cir. 1993), the court held:

Where the defendant has not had continuous and systematic contacts with the state sufficient to subject him or her to general jurisdiction, the following three­part test is applied to determine whether the defendant has "minimum contacts" with the forum:

(1) The nonresident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable.

Id. at 1485, citing Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987).

1.Purposeful direction.
When a defendant targets a particular forum, a defendant may be called to answer for his or her actions in that forum. For example, in Calder v. Jones, 465 U.S. 783 (1984), a California resident claimed that she had been libeled by an article written in Florida and published in the National Enquirer, which had a large circulation in California. The Supreme Court concluded that the defendant's actions were expressly aimed at California because California was the focal point both of the story and of the harm suffered. Thus, the defendant, who had published a story concerning a forum resident, could reasonably foresee being haled into court in the forum. See also Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).

2.Purposeful availment.
A principal theory advanced to justify that a nonresident defendant has had sufficient minimum contacts with a forum relates to whether or not the defendant has purposefully availed himself or herself of the benefits of doing business in the jurisdiction. Parties who reach out beyond one state and "create continuing relationships and obligations with citizens of another state" are subject to regulations and sanctions in the other state for consequences of their activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985); McGee v. International Life Ins. Co., 355 U.S. 220 (1957). In Burger King, the Court stated that an individual's contract with an out­of­state party alone could not establish the minimum contacts to support jurisdiction. The Court identified telephone calls and mail into the forum state in addition to other factors, such as choice of law provisions in a contract as a basis for exercising jurisdiction over the nonresident.

Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted.

Id. at 476.

3.Stream of commerce.
In a related theme, in World­Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), the Court held that

                     [t]he forum State does not exceed its powers under the Due Process
                     Clause if it asserts personal jurisdiction over a corporation that delivers its
                     products into the stream of commerce with the expectation that they will
                     be purchased by consumers in the forum State.

Id. at 297-98. World-Wide Volkswagen involved the issue of jurisdiction over a nonresident auto retailer in a product liability action in Oklahoma when its only connection to the forum was the fact that it had sold the auto in New York to New York residents who were later involved in an accident in Oklahoma. The court adopted a foreseeability analysis. The foreseeability is not that the product might find its way to the forum, but that the defendant's conduct and connection with the forum are such that the defendant "should reasonably anticipate being haled into court there." Id. at 297. If the contacts with the forum state were only fortuitous, random, or attenuated, the exercise of jurisdiction would be improper, because the defendant would not be able to structure his or her activities so as to avoid being brought into certain jurisdictions.

The Court stated that there were two reasons for the need for minimum contacts to satisfy due process concerns:

                     The concept of minimum contacts . . . can be seen to perform two related,
                     but distinguishable, functions. It protects the defendant against the burdens
                     of litigating in a distant or inconvenient forum. And it acts to ensure that
                     the States, through their courts, do not reach out beyond the limits imposed
                     on them by their status as coequal sovereigns in a federal system.

Id. at 291-292.

4.Consent to jurisdiction.
Because personal jurisdiction is a waivable right, parties can agree to submit to the jurisdiction of a particular court. See Burger King, supra, 471 U.S. 472, n.14.

5.Fundamental fairness issues.
Once it is determined that the nonresident defendant has either purposefully directed his or her activities to the forum state or has purposefully availed himself or herself of the privilege of conducting activities in the forum, the Court must consider fairness issues. In Burger King, supra, the Court set forth five jurisdictional "fairness factors" that may require separate assessment to determine whether or not due process is satisfied. These factors are:

(1) The inconvenience to the defendant of defending in the forum;

(2) The forum state's interest in adjudicating the dispute;

(3) The plaintiff's interest in obtaining convenient and effective relief;

(4) The interstate judicial system's interest in efficient resolution of interstate conflicts; and

(5) The shared interest of the states in furthering substantive social policies.

Id. at 477.

In Paccar Intern., Inc. v. Commercial Bank of Kuwait, 757 F.2d 1058 (9th Cir. 1985), the Ninth Circuit cited three other factors relevant to Internet jurisdiction issues: (1) the extent of the defendant's purposeful interjection into the forum state's affairs; (2) the existence of an alternate forum; and (3) the extent of conflict with the sovereignty of the defendant's state.

The fairness factor has become an even more important consideration than ever relating to exercise of jurisdiction over nonresident defendants. In Core­Vent, supra, 11 F.3d at 1488, the court held that even if a defendant's activities were sufficient to meet the purposeful availment test, they might not be sufficient to satisfy the fairness question.