Massachusetts Jurisdiction Over Internet
Based Companies
By Michael A. Goldstein
If an individual conducts business over the internet with
a web-based company and the parties enter into an agreement,
and the company either breaches the agreement or commits some
form of fraudulent or deceptive business practice with the
buyer, can the buyer sue the company in his or her home state?
The issue become even more complex or confusing if the defendant's
place of business is unknown, and all of the Defendants business
is conducted through the internet. Even given this complex
and confusing situation, a court would likely allow the buyer
to bring suit in their home state holding that the court can
establish personal jurisdiction over the defendant.
A court may exercise personal jurisdiction over a person
(or corporation), who acts directly or by an agent, as to
a cause of action in law or equity arising from the person's
(a) transacting any business in Massachusetts
(b) contracting to supply services or things in the state
(c) causing tortuous injury by an act or omission in the
state
(d) causing tortuous injury in the state by an act or omission
outside this commonwealth if he regularly does or solicits
business, or engages in any other persistent course of conduct,
or derives substantial revenue from goods used or consumed
or services rendered, in this commonwealth....G.L c. 223A,
§ 3
Pursuant to Section 3(a), the "transacting any business"
clause, permits the court's exercise of jurisdiction "if
the defendant...transacted any business in the Commonwealth,
and if the alleged cause of action arose from such transaction
of business." Good Hope Indus. v. Ryder Scott Co., 378
Mass. 1, 6 (1979). A person transacts business in the Commonwealth
if there are any "purposeful acts by an individual, whether
personal, private, or commercial." Ross v. Ross, 371
Mass. 439, 441 (1976). Actual physical presence of a defendant
in this jurisdiction is not required to acquire personal jurisdiction
under the "transacting business" clause. Good Hope
Indus., Inc. v. Ryder Scott Co., 378 Mass. 1 (1979).
It is also likely that the facts of this case bring it within
Section 3(d) of the long-arm statute as well. The first element
requires the Plaintiff to demonstrate that the Defendants'
acts or omission caused tortious injury inside the Commonwealth.
Cunningham v. Adrox. Inc., 40 Mass. App. Ct. 279, 281 (1996).
The Plaintiff must next show that the Defendant regularly
does or solicits business in this forum, or engages in any
other persistent course of conduct in Massachusetts, or derives
substantial revenue from goods used or consumed or services
rendered in Massachusetts. Noonan v. Winston Co., 135 F.3d
85, 91 (1998). Internet sites have been used as one factor
in ascertaining whether the defendants are regularly soliciting
business for purposes of Section 3 (d). Other courts have
found that personal jurisdiction exists based on Internet
Web sites. Web Site Activities of Nonresident Person on Corporation
as Conferring Personal Personal under Long-Arm Statutes and
Due Process Clause, 81 A.L.R. 5th 41 (2000). A computer consulting
company was found to regularly solicit business in this Commonwealth,
for purposes Section 3 (d) of the long-arm statute, where
it maintained an internet web site that could be continuously
accessed by Massachusetts residents, and a part of its advertising
listed another Massachusetts company as one if its new customers,
who had company name recognition in the Commonwealth. Hasbro
Inc., v. Clue Computing, Inc., 994 F.Supp. 34, 39 (1997).
Even if the literal requirements of the long-arm statute
are satisfied, it also must be established that the exercise
of jurisdiction under State law is consistent with basic due
process requirements mandated by the United States Constitution.
Tatro v. Manor Care Inc., 416 Mass. 767 (1994). Jurisdiction
is proper if the defendants also had minimum contacts with
the forum state at the time of filing the complaint, such
that the assertion of jurisdiction over defendants would not
offend traditional notions of fair play and substantial justice.
Id.
The forgoing article was drafted by the law office of Goldstein
and Clegg, LLC, a Massachusetts
corporate law firm.
Article Source: EzineArticles.com
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