The concept of internet jurisdiction can be complicated and unclear. What happens when a dispute arises over an item or service purchased from your business via the internet? If the dispute turns into a lawsuit, it can happen with someone who lives across the country from your business. Then what happen? If you live in California, can your business really be dragged to a state court in Maine?
Any business with a presence on the Internet must understand how the court has the authority to hear claims made against businesses outside the country. The point is that setting Internet jurisdiction over your business has the potential to be very expensive!
Establish Internet Jurisdiction for Your Business
Whatever the topic of the dispute, the court must have what is known as "personal jurisdiction" of all parties involved. This applies to all courts, including state and federal district courts. Establishing personal jurisdiction means that the court has the legal power to make binding decisions on the plaintiff and the defendant in the dispute given. State and federal courts always have personal jurisdiction over the citizens of the state. However, when the main residence or place of business of the accused is not in the state where the claim was filed (often called a "forum state"), the problem is far more complex. This often happens with suits involving e-commerce.
(Note: The company is treated as a citizen where it is incorporated and the country where its main business is located. A partnership or a company with limited liability is considered to have citizenship from every jurisdiction of its partners / If you understand the nature of a court to obtain jurisdiction listening to claims made against your business, you can avoid certain practices that can make you exposed to claims outside the country.)
The Minimum Contact Concept
One way foreign courts can claim personal jurisdiction over your business is to establish that there is some meaningful relationship with the country at issue and your business. Countries can use jurisdiction over your business through "long-term laws" (which I discussed separately). However, the Process Process Clause of the U.S. Constitution. mandated that certain "minimum contacts" must be between the forum state and the defendant so that a country declared jurisdiction over the defendant. This basically means that activities that are considered to have substantial contact with certain country occupants or businesses can be used by the court to establish jurisdiction over your business. For example, you are not subject to the court's personal jurisdiction outside the state simply because you are involved in a car accident with the residents of the state where you live. All events needed to cause a claim occur outside the state of the other occupants.
Activities to establish minimum contact with other states are not always clear, but usually a substantial presence in the state will justify personal jurisdiction. Regularly asking for business in that state, earning large revenues from goods or services sold in the state, or engaging in ongoing and ongoing other business activities in the state are all examples of activities that will establish minimum contact with that state.
Minimum Contact Specifies Internet Jurisdiction
As stated, the concept of minimum contact becomes more complicated when involving the Internet. The court has acknowledged that exposing website owners to personal jurisdiction only because the website can be viewed nationally is not enough to establish minimum contact in certain states. Personal jurisdiction "is directly proportional to the nature and quality of commercial activities carried out by businesses through the Internet." Businesses that enter into contracts or subscriptions with other state residents who involve "knowing and retransmitting computer files over the Internet will be subject to court jurisdiction outside the state. However, websites that only post information without making it active are impossible to make personal jurisdiction in a foreign country (except in countries where the owner lives or runs another business).