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28 Oct 09

SSRN-Why General Personal Jurisdiction Over 'Virtual Stores' is a Bad Idea by James Pielemeier

Courts in the United States today address the constitutional permissibility of personal jurisdiction by discussing two sub-types, “specific jurisdiction” and “general jurisdiction.” “Specific jurisdiction” may exist “in a suit arising out of or related to the defendant’s contacts with the forum.” “General jurisdiction” may exist “in a suit not arising out of or related to the defendant’s contacts with the forum.”Over the past few years, courts have begun to address whether maintenance of a business oriented web site that is accessible to and used by residents of a state can be a sufficient anchor for the constitutional assertion of general jurisdiction in that state. At the level of the United States Courts of Appeal, a split of authority is developing. The D.C. Circuit in Gorman v. Ameritrade Holding Corp and the Ninth Circuit in Gator.com Corp. v. L.L. Bean, Inc., have held that the answer is yes, with Gator.com labeling L.L. Bean’s web site a “virtual store.” The Fourth, Fifth, Sixth, Tenth, and Federal Circuits, all after relatively short discussions, have held that the answer is no, at least on the facts before them.
This article argues that the Gorman and Gator.com were improvident and wrongly decided, that general jurisdiction over virtual stores is inconsistent with any principled development of the law of general jurisdiction.
The article will conclude with a call for the courts of appeals to abandon the concept of general jurisdiction over virtual stores or for the Supreme Court to take up the issue and provide some much-needed guidance on the constitutional limitations of general jurisdiction.

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