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Where Do You Sue for Online Disputes?

You probably know where the local courthouse is-or you can find it easily-but where do you go to resolve legal disputes involving Internet purchases? This can be a problem if the other party to a lawsuit resides clear across the country. It all boils down to the rules for determining jurisdiction.

Establishing jurisdiction can be a sticky matter even when it involves lawsuits filed under more traditional circumstances. Recent advances in technology and the advent of the Internet as a means of commerce have opened up a whole new can of worms. Let's take a closer look.

There are two overlapping questions that must be answered to determine if a court has proper jurisdiction over a lawsuit. (1) Does the court have the authority to hear that particular type of case? Obviously, a criminal case should not be brought in family court or vice versa. (2) Does the court have authority over the parties to the lawsuit? At least a "minimum contact" is required to establish jurisdiction. This is usually where things get tricky.

A couple of recent cases involving disputes between online providers and their clients provide some insights. In the first case, a Pennsylvania court was found to have jurisdiction over an Internet news service. The company, which was based in California, had thousands of subscribers to its service in Pennsylvania. The court said that the process of accepting the applications for these subscribers and assigning passwords was sufficient to show the minimum contact needed to establish personal jurisdiction.

Similarly, in another case a Texas court was able to claim jurisdiction over an out-of-state company that provided online gambling activities. The company entered into contracts with Texas residents to play its games, sent e-mails to Texas residents and also distributed winnings to them. This was enough to establish the minimum contact needed for jurisdiction.

However, the courts are generally unwilling to make every web site owner subject to personal jurisdiction in each and every state simply because the web site can be viewed from the comfort of someone's home. Therefore, a Massachusetts-based consultant with clients mainly on the Eastern seaboard most likely could not be sued in Arizona simply because the site was accessible there.

In other words, if a company has a mere handful of subscribers in a state, it probably will not be sufficient to establish jurisdiction. On the other hand, you generally will not have to travel halfway across the country if you are sued by an online vendor.

Bottom line: There is no definitive legal guideline to follow in this area. You should contact an experienced attorney concerning Internet-based lawsuits.


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