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“Minimum Contacts” in the Yottabyte Age1

By Hedda Litwin, NAAG Cyberspace Law Counsel

Hedda Litwin, NAAG Cybercrime Counsel

In International Shoe v. Washington, 326 U.S. 310 (1945), the U.S. Supreme Court established the constitutional requirement that before a court can exercise personal jurisdiction over a party, that party must have certain minimum contacts with the forum in which the court sits. However, the test for personal jurisdiction becomes more difficult to define when the minimum contacts were established online. The plethora of websites and the ease of “friending” people across the country and across the ocean through Facebook, MySpace and other social media have produced a quandary for the courts, and decisions vary widely from jurisdiction to jurisdiction.

One premise that seems to be constant across the jurisdictions is that merely maintaining a social media presence will not subject a party to personal jurisdiction. However, when social media are used to target a particular forum, some courts have found such use qualifies as minimum contacts.

It is hard to believe in this age of fast-moving technology, but one of the seminal decisions on this issue took place 15 years ago. In Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997), Zippo, the Pennsylvania company making the well-known lighter, sued California-based Zippo Dot Com, a website and news service and rights holder for, and, for trademark infringement. Zippo Dot Com moved to dismiss for lack of personal jurisdiction, which the district court denied. The court determined that the likelihood that personal jurisdiction can be exercised is directly proportional to the nature and quality of the commercial activity that an entity conducts over the Internet – the later-called Zippo test. The premise is that the more interactive the website, the more likely it is that it is doing business in the jurisdiction. In this case, the court found that Zippo Dot Com had contracted with approximately 3,000 individuals and seven Internet access providers in Pennsylvania, thus constituting its purposeful availment of doing business in the state.

While the proportional Zippo test has been the basis for many jurisdictional decisions, some courts have abandoned its use because it provides no basis for determining how much interactivity is necessary to support a finding of personal jurisdiction. Instead, some courts have employed the “effects” test from the U.S. Supreme Court’s decision in Calder v. Jones, 465 U.S. 783 (1984) which looks at the consequences of a site’s activity on the jurisdiction. That test for “purposeful direction” is three-prong, requiring 1) an intentional action; 2) expressly aimed at the forum state; and 3) with knowledge that the brunt of the action would be felt in the forum state.

As an example, the Seventh Circuit used the Calder test in Tamburo v. Dworkin, 601 F. 3d 693 (2010). In that case, John Tamburo, an Illinois resident, developed a dog breeding software program by lifting data from the websites of five proprietors: 1) a Canadian resident who had never visited or done business in Illinois, 2) three residents of Colorado, Michigan and Ohio, respectively, with only sporadic contacts in Illinois; and 3) an Australian resident with insignificant sales in Illinois. Tamburo alleged that the Canadian and American defendants defamed him online, generated a boycott against him and urged readers to harass him, and that they also sent their postings to the Australian defendant, who reposted them. Defendants moved to dismiss for lack of personal jurisdiction, and the U.S. District Court for the Northern District of Illinois granted the motion. On appeal, the Seventh Circuit noted that general personal jurisdiction under the Illinois long-arm statute was lacking because none of the defendants had continuous and systematic contacts with Illinois. The court then applied the Calder test, concluding that the district court could exercise personal jurisdiction over the Canadian and American defendants. Those defendants allegedly intentionally used their websites and emails to defame Tamburo, even listing his Illinois address and urging readers to harass him, knowing that he would be injured in the state. Under Calder’s “purposeful direction” test, that was enough for personal jurisdiction. The Australian defendant, however, only reposted the messages on a private listserve, and there was no allegation that he disseminated the messages broadly or even knew Tamburo lived in Illinois, so his actions were insufficient to establish personal jurisdiction.

Whether a court applies the Zippo test, or uses the Calder effects test, or develops a variation thereof, it is clear that the Internet has changed the basis for jurisdictional decisions in many cases. What has emerged in these cases, however, is that the resulting decisions are very fact-specific. Courts are looking into details such as whether the defendant website contains an address or phone number or whether it specifies a forum to resolve disputes. Courts are also looking into the level of interactivity of a website with its audience, such as whether it provides online purchasing capability, furnishes online surveys or lists contact information. As our e-society becomes even more sophisticated, we can expect jurisdictional decisions and tests to evolve concomitantly.

[1]1The yottabyte is a unit of information or computer storage equal to one septillion (one long scale quadrillion or 1024) bytes. No storage system or network has achieved even one thousandth of a yottabyte of information. The term is often used as a metaphor for the era of rapidly expanding advances in computer software and hardware.

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