Reference no: EM131917255

Problem: Part Two-Jurisdiction to Adjudicate

Business in the cyberworld raises puzzling new legal problems. The Internet, after all, is borderless. We can and do communicate and engage in transactions around the world. When a dispute arises from one of those billions of communications and transactions, where will that dispute be litigated? If an American website provides child pornography viewed by a resident of Germany, which nation will have the authority to prosecute the offense?12 If a Massachusetts resident posts an arguably libelous article on an Internet bulletin board sited in New York, may the Texas resident who claims harm from the libel sue the author and the bulletin board host in a Texas court?13 These are jurisdictional questions. The party filing suit must take its claim to a court that has both subject-matter jurisdiction (the authority to address the particular kind of legal problem raised) and personal jurisdiction (the power to compel the defendant to respond). (For a general discussion of jurisdiction, see Chapter 4.) In the United States, where the plaintiff and defendant are both residents of the forum state, personal jurisdiction ordinarily is not an issue. However, personal jurisdiction over nonresidents depends on the constitutional requirement of due process. In practice, the test is one of minimum contacts: Did the defendant have sufficient contact with the forum state that being sued there would be fair and just?

Put another way, was the defendant's contact with the forum state of such a nature that it should expect to be subject to the state's courts? Thus, the more business a defendant does in a state, the more likely personal jurisdiction will be found. Internet business raises special problems because the "contacts" are often electronic and fleeting. Several cases have arisen in the United States that begin to answer these personal jurisdiction questions. In one the Fifth Circuit held in a case of alleged copyright violation that Texas did not have personal jurisdiction over a Vermont corporation merely because the corporation's website was accessible from Texas.14 It reached this conclusion, in part, because there was no specific connection between the existence of the corporation's website and the harm complained of by the plaintiff. Thus, the Vermont corporation could be sued in Texas only if it had contacts with Texas that were sufficiently "continuous and systematic" as to subject the corporation to suit in Texas generally. A passive website was insufficient to do this. When the defendant has more contact with the forum state than the existence of a passive website reachable by forum state computer users, the due process analysis becomes more complex and hinges on an evaluation of the defendant's specific additional contacts with the state. The existing decisions are often hard to reconcile and many cases have been reversed on appeal, indicating that judgments as to personal jurisdiction are challenging and uncertain.15

Question

The operator of the dating service be2.com sued the CEO of the competing dating service be2.net for trademark infringement. The suit was brought in a federal district court in Illinois. Defendant was a New Jersey resident. The only evidence of his contact with Illinois was a list of 20 Illinois members of be2.net. After the court granted a default judgment when the defendant did not respond to the complaint, defendant moved to vacate the judgment for lack of personal jurisdiction.16 Should Illinois courts have jurisdiction? Explain.