Volume II

Issue : 7: April 1, 2004

• Philippines Government to Benefit from Online Gambling
• World Trade Organization Rules that the U.S. Should be Opened to Internet Gambling
• Accountant Sues Search Engines for Libel for "Injurious" Search Results
• Court Finds New York Times Liable for Defamation for Use of Companys Graphic in Article
• Japanese Court Finds No Copyright Exists in Web News Headlines
• European Union Hits Microsoft with Record $613 Million Fine for Antitrust Abuses
• B.C. Supreme Court Finds Potential Liability for Chat Room Owners over Postings
• German Court Rules Pop-Up Ads Require Permission
• The Dutch Supreme Court Rules ISP can Ban Spammers
• Privacy Commissioner of Canada Releases New Decisions
• California Appeals Court Finds Personal Jurisdiction over Two Out-of-State Businesses
• Canadian Federal Court Dismisses Motion to Compel ISP to Disclose Identity of File Sharers

Home > Volume II > Issue 7: April 1, 2004 > California Appeals Court Finds Personal Jurisdiction over Two Out-of-State Businesses

California Appeals Court Finds Personal Jurisdiction over Two Out-of-State Businesses

The California Court of Appeal recently found personal jurisdiction over two U.S. businesses neither of which had offices or employees in California.

In Snowney v. Harrah's , the defendant hotel operator advertised in California and provided an interactive website and toll-free telephone number to California residents for booking reservations. The Appeals Court's analysis of Internet contacts relied heavily on the California Supreme Court opinion in Pavlovich v. Superior Court (the DeCSS case). In the present case, the Court of Appeal wrote that"The California Supreme Court in Pavlovich ... adopted a sliding scale analysis to determine whether Internet use can justify the exercise of personal jurisdiction. The determination turns on the degree of interactivity of the Internet site and the commercial nature and extent of the exchange of information. ... An interactive Internet site through which a nonresident defendant enters into contracts or conducts other business transactions with forum residents can be a means of purposefully directing activities at forum residents and, depending on the circumstances, may support the exercise of personal jurisdiction."(Citations omitted.)

In West Corporation v. Superior Court of San Diego , the California Court of Appeal held that the nationally operating telemarketing company based in Nebraska and operating call centres in Virginia could be sued in California. Affirming a lower court's refusal to quash a summons, the Court of Appeal determined that the defendants had contacts with California such that it would not offend traditional notions of fair play and substantial justice to subject it to suit in California. The Court of Appeal wrote that"Companies, such as [the defendants] that deliberately engage in nationwide or multi-state commercial activities, whether by phone, via the Internet, by mail, or by sending agents into forum states should reasonably expect to be subject to suit in the states where they solicit business."Interestingly both cases arose in class action proceedings.

For a copy of the Harrah's decision, visit:
http://www.courtinfo.ca.gov/opinions/documents/B164118.PDF
For a copy of the West decision, visit:
http://www.courtinfo.ca.gov/opinions/documents/D042633.PDF