_Internet Law Focus Newsletter_; Legal Information; Tax Deferred Exchanges; Slander; Libel on the Internet; Real Estate Law; Albert Velarde; Buyers Agent

- Volume 1, No. 2

JURISDICTION AND THE INTERNET

Last month's Newsletter discussed Libel on the Internet and mentioned several court cases from around the world where individuals and/or companies sued or were sued for Libel. If someone is Libeled by an Internet newsletter, Chat Room, promotional advertisement, or e-mail; where does he/she file a lawsuit? In other words, which court has jurisdiction over lawsuits filed because of something written or done on the Internet?
This month's topic discusses the issues related to where a Plaintiff could file a lawsuit resulting from damages caused on the Internet.

REQUIREMENTS FOR JURISDICTION
The U.S. Constitution requires that a lawsuit defendant have some "minimum contact" within the court's boundaries (jurisdiction) for the sake of fair play and justice. International Shoe Co. v. Washington, 326 U.S. 310 (1945).
Our U.S. Supreme Court has established one test of "minimum contact" to require proof that the defendant should have reasonably anticipated that someone in the court's jurisdiction would be damaged by the defendant's conduct. World-Wide Volkswagen v. Woodsen, 444 U.S. 286 (1980). For instance, if a VW auto's defective brakes go out resulting in a Maryland man's injury, would it be reasonable for VW to sell cars in Maryland and not to expect to be sued in Maryland if one is defective?
What about plaintiffs from one foreign country suing defendants from one or more different foreign countries? The U.S. Supreme Court requires courts to consider both the policies of the foreign country and U.S. foreign policy before determining if jurisdiction in that court would be fair. Asahi Metal Ind. Co. v. Superior Court, 480 U.S. 102 (1987).

ON-LINE JURISDICTION
The law is still unclear about which courts have jurisdiction on the Internet. Some helpful cases involve speech broadcast from one jurisdiction into another whereby the injured party could sue in his/her jurisdiction because the speech was read or heard there. Calder v. Jones, 465 U.S. 783 (1984). In Canada, one court held that Ontario had jurisdiction to hear a lawsuit filed by a Canadian against an American who allegedly broadcast Libelous statements from the U.S. into Canada. Pindling v. National Broadcasting Corp., 49 O.R.2d 58 (1984).
What about Internet cases? One case out of California involved a BBS (bulletin board system) operator from Nevada whose BBS allegedly libeled someone in California. The court held that there was sufficient "minimum contact" with California because through computers, someone can communicate with several states simultaneously. Software Inc. v. Reliability Research Inc., 631 F. Supp. (C.D. Cal. 1986).
In another case, CompuServe sued a Texan in an Ohio federal court. The District Court judge dismissed the Texas defendant because of lack of jurisdiction. However, that was Reversed on appeal because the Texan had targeted some of his sales activities in Ohio. Therefore, the Texan did have sufficient contact with Ohio. CompuServe v. Patterson (6th Cir., 1996).

LACK OF JURISDICTION
Lack of Jurisdiction has also been found in some cases.
In one case, a Florida company had an airline reservation database and sued a New York user in Florida. The court denied jurisdiction in Florida because the New York user merely accessed the database electronically and had no contact with Florida. Pres-Kap, Inc. v. Sys. One, 636 So.2d 1351 (Fla. App. 1994).
In a more recent case (September, 1996), a New York federal judge ruled that merely placing a "site" on the Web doesn't in itself subject someone to being sued anywhere in the country. U.S. District court judge Sidney Stein dismissed a Trademark-Infringement lawsuit filed in New York by the operator of the Blue Note jazz club against a Missouri club's Web site of the same name. Since the Missouri club's Web site was meant to only attract local customers, its impact in the rest of the United States and the World was minimal. The key question seems to be in this case, what was the Web sites operator's intent? Did he or she intend to promote their similar named business nationwide, and thus, within the customer based jurisdiction of the New York club? If yes, then there might be sufficient jurisdiction to sue in New York. If no, there won't.

CONCLUSION
More cases concerning "On-Line Jurisdiction" will be heard and decided in the near future. Right now, outside of the recent ruling in the federal 6th Circuit (which oversees Michigan, Ohio, Kentucky & Tennessee) there are no "Precedent" setting cases for the rest of the country to follow.
So, what do you do to protect yourself from being sued in a court in a strange land?
1. If you are not looking for national or worldwide customers, make it obvious.
2. If you sell products or services nationally or worldwide, try to contract with the buyer to agree to where jurisdiction will be if a dispute occurs.
3. If you are asked to sign a contract (on-line or otherwise) pay attention to any "Venue or Jurisdiction" clause which states where lawsuits could be filed. If you agree to it, you may be legally bound to that court's jurisdiction.

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Simply click the appropriate link below:

Click HERE to view Mr. Velarde's detailed article on Tax-Deferred Exchanges.
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Real Estate Tax Deferred Exchanges.
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