Jones Waldo NewsI sell products over the internet

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In the early days of the internet, the answer was probably yes. Many courts adopted the approach first used in 1997 by the court in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997). In Zippo, the court held that the operation of a “passive” web site that does little more than provide information is not enough to subject the operator to jurisdiction in all 50 dates, but the operation of an “active” web site through which products are sold is enough to subject the operator to jurisdiction in all 50 states. Based on that approach, an e-commerce company based in California could be sued in Florida, even if it had never actually made any sales into Florida.

The District of Utah recently rejected the Zippo approach. In Kindig It Design, Inc. v. Creative Controls, Inc., 157 F.Supp.3d 1167 (D. Utah 2016), the plaintiff sued a Michigan company in Utah for copyright infringement. The defendant moved to dismiss the case for lack of personal jurisdiction based on the fact that it was a Michigan company with no contacts with Utah. The plaintiff responded that the defendant operated a web site that allowed users, including Utah residents, to place orders for products, and was therefore an “active” web site. Had the court used the Zippo approach, the defendant would have been subject to jurisdiction in Utah and every other state. But the Kindig court rejected the Zippo approach because it “effectively remove[d] geographical limitations on personal jurisdiction over entities that have interactive websites.” Thus, the Michigan defendant’s mere operation of an e-commerce web site, without any sales into Utah, was not enough to subject it to personal jurisdiction in Utah.

Based on the holding of the Kindig court, it seems safe to say that, in Utah at least, selling products over the internet is not enough by itself to support personal jurisdiction. There must be some actual geographical contact with the forum state.

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