“Sued In Timbuk Tu: How Your Website Can Take You To A Place Far, Far Away Against Your Will” by J. Craig Preston
In today’s day and age, many businesses find it a must to have a widely visited and prosperous website. Generally, companies focus on how to get their website listed first on the various search engines, or at the very least, install a counter that indirectly boasts of the popularity of their site. With the low overhead and transactional costs, the sky’s the limit…or is it?
Before the Internet boom, if your company found itself in the unfortunate position of being named as the defendant in the lawsuit, you could at least expect the suit to be filed in your home court. This is because of the legal term known as personal jurisdiction. Under most laws, companies can only be sued in states where they have a presence, location, or purposefully seek business. For example, say your company has one physical location in Springfield, Missouri with no website, and a disgruntled California resident visits your store and purchases your product. Generally, if the California resident wants to file a lawsuit, he must do so in Springfield, Missouri.
But, instead of personally visiting your store, say the California resident purchases your product through your website. Can he sue in California? The answer to this question has been the topic of a recent explosion of cases throughout United States. The general approach is to categorize a website into one of three categories: active, passive, or interactive.
Active: These are the websites that offer their products over the Internet. Their visitors can purchase their products from any state, or even nation. The general consensus among courts is to subject these companies to personal jurisdiction in any state. This means that companies with active sites can be forced to defend lawsuits in any of the 50 states, or worse yet, possibly anywhere in the world.
Passive: These websites generally only offer information, with no opportunity to purchase products and with little to no means of the visitor posting information on the site. Courts have, for the most part, refused to find personal jurisdiction in this instance, meaning that a customer must still file suit in your home court.
Interactive: These websites fall somewhere in between active and passive sites. They generally provide information, but also allow the visitor to solicit help, post messages, or even establish a relationship
with the host provider to later enter into a business relationship. Courts generally look at the various factors of the site and weigh those factors on an individual basis to determine if the business will be subject to personal
jurisdiction in the state where the lawsuit is initiated.
Therefore, if your company has an active, or even interactive website, don’t be surprised when you receive a summons for a lawsuit filed in a distant state. And remember, juries and judges tend to be biased in favor of a hometown plaintiff over an outof-state company, so you are already fighting an uphill battle. There are various measures a business can take to attempt to limit this far away jurisdiction which include warnings, provisions in the agreement, and pop-up boxes, each of which should be tailored to the specific business and website.