Our law firm has had several lawsuits over the past couple of years involving challenges to personal jurisdiction. There are three things your business needs to know about modern personal jurisdiction law, which dictates where your business can file a lawsuit and, on a related note, where your business can be sued:
(1) the internet is changing and, in some respects, expanding the circumstances in which your business will be subject to personal jurisdiction in other states;
(2) courts are still reluctant to find personal jurisdiction over businesses with minimal contacts in the forum state; and
(3) at the same time, modern technology (email, telephone, facsimile) and the emergence of virtual offices and virtual assistants have led courts to focus less on traditional personal jurisdiction factors, such as ownership of land in the forum state or a physical presence in the forum state, and rather focus more on “fundamental fairness.”
What does all of this mean? To a business, it means you need to be careful what you say on your website, where you staff your employees (virtual or not), to whom you send or receive calls, where you wire money, and where you send text messages and emails. All of these things can increase the chances your business will be hauled into an out-of-state courthouse. The law is changing as the way we conduct business changes. The fact that you have never been to Iowa, never owned any land in Iowa, and never had any employees stationed in Iowa, for example, does not necessarily mean you can avoid being sued in Iowa. I’m not sure there was ever an overly bright line test for personal jurisdiction, but the line is currently gray and fuzzy.