What the heck is Jurisdiction anyways?
Wikipedia defines jurisdiction (from the Latin ius, iuris meaning "law" and dicere meaning "to speak") as the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility.
The Second Circuit is the highest court to rule on this issue so far. It held in Best Van Lines v. Walker that New York’s long-arm statute did not permit New York courts to exercise jurisdiction over a defendant who published his opinions in Iowa.
Most courts have rejected the expansive view of Internet jurisdiction as inconsistent with the federal Constitution’s due process protections. In a decision issued June 17, 2008, the North Carolina Court of Appeals adopted the stricter test, one first articulated by the United States Court of Appeals for the Fourth Circuit, a federal court that is based in Richmond, Virginia and includes Maryland, West Virginia, Virginia, North Carolina and South Carolina. This recent case involved a Georgia resident who posted messages on an Internet bulletin board about a North Carolina resident and businessman. The North Carolina Court of Appeals ruled that this alone was insufficient to subject the out-of-state poster to the jurisdiction of North Carolina’s courts. The posts, which the plaintiff contended were false and defamatory, were made by a Georgia resident while in Georgia. The source of this information was the NewsRoom Law Blog.
In reaching this decision, the North Carolina court applied the following test: did the defendant, through the Internet posts at issue, “manifest intent to target and focus on North Carolina readers?” The court therefore rejected the plaintiff’s theory that the Georgia resident was subject to jurisdiction in North Carolina simply because he engaged in electronic activity accessible in North Carolina about a North Carolina resident that would affect the plaintiff’s reputation in North Carolina. Instead, something more than an Internet posting and accessibility in North Carolina is required—the plaintiff must show that the speaker targeted or focused upon a North Carolina audience. Because the plaintiff had not met this standard, the Court of Appeals affirmed the dismissal of the complaint.
The following is excerpts of Public Citizen's Townsend Dismissal Memo:
Courts addressing claims of personal jurisdiction based on a website consistently rule that personal jurisdiction is lacking where the defendant’s sole contact with the forum state is that people in the state can view the defendant’s noncommercial website (or even passive commercial website). The Fourth Circuit, like many other courts, has held that “the likelihood that personal jurisdiction and be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.” ALS Scan v. Digital Serv. Consultants, 293 F.3d 707, 713 (4th Cir. 2002) (emphasis added) (quoting Zippo Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119, 1124 (W.D. Pa. 1997)). Therefore, the Fourth Circuit has adopted the “sliding scale” standard of assessing contacts pioneered by Zippo Manufacturing Co: At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Website which is accessible to users in foreign jurisdictions. A passive Website that does little more than make information available to those who are interested in it is NOT grounds for the exercise of personal jurisdiction.
In a recent, instructive case, the Fourth Circuit rejected jurisdiction in the state of Virginia over two Connecticut newspapers that published, on the Internet, allegedly defamatory statements targeting a particular prison warden in Virginia. Young v. New Haven Advocate, 315 F.3d 256 (4th Cir. 2002). Both newspapers ran commercially interactive websites that carried advertising and sold advertising. Plaintiff alleged that (1) “the newspapers, knowing that Young was a Virginia resident, intentionally discussed and defamed him in their articles,” (2) “the newspapers posted the articles on their websites, which were accessible in Virginia,” and (3) “the primary effects of the defamatory statements . . . were felt in Virginia.” Id. At 61-62. Despite these allegations, the Fourth Circuit held that jurisdiction would be unconstitutional because the newspapers did not “manifest intent to direct their website content which included certain articles discussing conditions in a Virginia prison to a Virginia audience.” Id. at 263. It explained: The fact that the newspapers’ websites could be accessed anywhere, including Virginia, does not by itself demonstrate that the newspapers were intentionally directing their website content to a Virginia audience. Something more than posting and accessibility is needed to indicate that the newspapers purposefully (albeit electronically) directed their activity in a substantial way to the forum state. The newspapers must, through the Internet postings, manifest intent to target and focus on Virginia readers. Thus, even though the newspapers allegedly defamed a Virginia resident, and even though they had reason to believe Virginians would be particularly interested in the statements, the Virginia courts lacked jurisdiction because the papers did not specifically target Virginia readers. The court in Falwell v. Cohn, 2003 WL 751130 (W.D. Va. Mar. 4, 2003), applied the reasoning of Young in a case highly analogous to this one. There, Virginia resident Jerry Falwell sued Illinois resident Gary Cohn over a website that used Falwell’s name as its domain name and allegedly defamed Falwell by comparing him to other “false prophets.” The district judge dismissed for lack of personal jurisdiction because the website was not commercially interactive and, although it was directed to a national audience, it was not directed to a Virginia audience in particular.
Courts have repeatedly employed the Zippo analysis to reject personal jurisdiction in trademark cases. For example, in Bensusan Rest. Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), aff’d, 126 F.2d 25 (2d Cir. 1997), a St. Louis jazz club published a website using its name, the Blue Note, which was the same as the world-famous club in New York City. The New York club sued for trademark infringement violations, but the district court refused to exercise jurisdiction, because, defendant had no presence of any kind in the forum “other than the Website that can be accessed worldwide.” 937 F. Supp. at 301. The court found that to permit jurisdiction in New York would have violated due process because the defendant did not actively seek to encourage residents of the forum to access the site and conducted no business in the forum. As the court stated, “creating a website, like placing a product into the stream of commerce, may be felt nationwide or even worldwide but, without more, it is not an act purposefully directed toward the forum state.” Id.(citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1992)). See also Neogen Corp. v. Neo Gen Screening, 282 F.3d 883 (6th Cir. 2002) (finding personal jurisdiction in Michigan based on a website a “close question” and relying instead on other contacts, even where defendant provided passwords to Michigan consumers with which they could download test results they had purchased).