Jurisdiction in the Internet

Many of us have bought something over the Internet; indeed many of us have even listed items to sell on sites such as E-Bay or Craig's List.  When a dispute arises as a result of a transaction that occurs over the Internet, where is that dispute resolved?   The answer is "in a court that has 'jurisdiction.'"  When thinking about jurisdiction there are two things to consider: First, the court's power over persons, or personal jurisdiction; and, second, its power to hear and decide particular kinds of cases, or subject matter jurisdiction.  Personal or in personam jurisdiction relates to the power of a court to bring a person before it and adjudicate his or her rights. Personal jurisdiction is largely territorial.  Subject matter jurisdiction, on the other hand, relates to a court's power to decide a particular type of case.  Whether a matter belongs in small claims court, the court of common pleas (state courts) or federal court, is largely a question of which court has subject matter jurisdiction.

 Before the days of the Internet the rules for personal jurisdiction had been pretty well established and required that significant aspects of the disputed transaction occur within or relate to the forum State.  In the Internet age, however, a substantial amount of commerce is transacted by electronic communications across state lines and even international boundaries, thus obviating the need for physical presence within a state in which business is conducted.  To deal with this situation, and situations like it, the courts in Pennsylvania have broken personal jurisdiction into two categories: specific jurisdiction and general jurisdiction.  Specific jurisdiction is founded upon the relationship of the defendant, the forum, and the particular dispute in question. General jurisdiction on the other hand, may be asserted over a defendant whose general activities in the forum state (unrelated to the particular dispute) have been continuous and systematic.

In most Internet transactions there will be no general jurisdiction because the defendant likely will not have "continuous or systematic" contacts in the forum state.  To establish specific jurisdiction, a plaintiff must show that the defendant targeted users of the forum state and that he or she engaged the plaintiff in such a way that the underlying Internet transaction gave rise to the claim.   A mere presence on the Internet is not enough.  For example, if an automobile is purchased in a different state over the Internet, and it does not work to the buyer's satisfaction, the courts in the buyer's state would likely not have jurisdiction.  Jurisdiction in this action would lie in the state where the seller resides.  If,  however, a car seller in New Jersey posted a website that made special offers to residents of Pennsylvania or specifically targeted Pennsylvania residents, there would be grounds to find that jurisdiction is proper in Pennsylvania.

The illustrations above are examples of contract claims for a moveable piece of personal property.  There are many variations on what the case might involve.  If a dispute arose involving a New Jersey seller attempting to sell a piece of real property located in Pennsylvania, there would very likely be jurisdiction in Pennsylvania for a Pennsylvania buyer.  Moreover, in non-contract claims that arise from Internet use, such as defamation or for invasion of a person's privacy, personal jurisdiction may also be found to lie in the state where the plaintiff lives and the damage is done. 

If you have a dispute involving a transaction that occurred over the Internet and you do not know where it should be resolved, contact our office to find out if we can help.

--  J. Kenneth Butera