Derogatory comments posted on the Internet cause real harm. Anonymous imposters, cyber-posers, scam artists, and spoofers can impugn reputations, discourage sales, or siphon Internet traffic and business. Even when perpetrators are identified, they may be in distant locales and can appear to be untouchable and invulnerable to legal process. Indeed, rules limiting personal jurisdiction can make it difficult to sue Internet wrongdoers, who type on a keyboard and post to a server thousands of miles beyond the victim’s judicial borders. But, courts are increasingly employing new approaches that establish personal jurisdiction over these remote defendants.
In Kauffman Racing Equipment, LLC v. Roberts, 126 Ohio St.3d 81, 2010-Ohio-2551, the Ohio Supreme Court emphasized that jurisdictional analysis must evolve to address technological developments. In this case, a Virginia resident became dissatisfied with an engine block purchased online from an Ohio plaintiff, but the plaintiff determined the product had been modified after the sale and refused to buy it back. Thereafter, the defendant repeatedly posted rancorous criticism of the plaintiff on websites for automobile racing equipment enthusiasts. At least five Ohio residents subsequently mentioned the negative postings in inquiries to the plaintiff. The plaintiff sued for defamation and intentional interference with contract and business relationships. The Court of Appeal reversed the trial court’s dismissal of the case for lack of personal jurisdiction. The Ohio Supreme Court granted an appeal.
The Supreme Court concluded that the defendant’s right to due process of law was satisfied under the14th Amendment to the United States Constitution even though the contact between the parties was virtual rather than physical. Ohio's long arm statute – which establishes personal jurisdiction over nonresident defendants – enumerates specific acts that give rise to personal jurisdiction. The statute extends jurisdiction over a person “causing tortious injury by an act or omission in Ohio,” or who causes “tortious injury in Ohio to any person by an act outside the state committed with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in Ohio.” The defendant posted the statements on the Internet for the entire world to see. Since at least five Ohio residents saw the statements, the Supreme Court deemed them published in Ohio, thereby rendering the alleged defamation a tort committed in Ohio. Alternately, the Court reasoned that even if the alleged tortious conduct did not take place within the territorial boundaries of the state, the statements were made with the purpose of injuring an Ohio plaintiff. The Court further observed that the defendant's commentary manifested a blatant intent to harm an Ohio company and impugned the activities that the company undertakes in the state; if there were to be fallout from the Internet posts, the brunt of the harm would be suffered in Ohio.
The Kauffman Racing analysis is an alternative approach to an often cited Internet jurisdiction analysis employed in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Penn. 1997). The Zippo court established a sliding-scale approach that examines the level of interactivity of a website to determine whether the exercise of personal jurisdiction over the site’s author is proper. Since the Supreme Court referenced Zippo with approval – but declined to employ its approach to the non-commercial Internet activity in Kauffman Racing – it appears that the Court is expanding the jurisdictional analytical options that can be used to secure jurisdiction in Internet cases.
Other courts are also interpreting jurisdictional statutes to increase the likelihood of hailing into court foreign defendants who target local plaintiffs. In Nuance Communications, Inc. v. Abbyy Software House, No. 2010-1100, 2010 U.S. App. LEXIS 23419, the defendants were accused of importing software that infringed the plaintiff's patents. Defendants – two foreign corporations – were dismissed by the trial court for lack of personal jurisdiction. The Ninth Circuit Court of Appeals reversed, and quoted extensively from a magazine article that attributed statements to defendants’ CEO suggesting that their importation of software into the US market was intended to retaliate against the plaintiff’s enforcement of intellectual property rights. Although the facts in Nuance Communications are superficially different from those in Kauffman Racing, the court focused on a similar salient element to confer jurisdiction – that the defendants purposefully directed their activities at residents of the forum jurisdiction.
These cases are among those reflecting a welcome and necessary development in jurisdictional law. The Internet is a largely unregulated frontier where irresponsible and injurious behavior has frequently remained beyond the reach of legal remedy. Individuals and businesses victimized by Internet defamation, smear campaigns, cyber-posing, and other Internet- related activities should enjoy increasing access to local courts to enforce their rights and protect their reputations.
To discuss these issues or to obtain a copy of the cases, contact a member of the Intellectual Property, Internet and Technology Practice Group.