Personal Jurisdiction established by way of Email transmission
June 2nd, 2009 Filed Under E-discovery, legal news
Most will admit that technology has made business operations a much easier and more streamlined process. However, there are some drawbacks associated with the newfound convenience. Some judges in New York have ruled that even though a litigant has not stepped foot in the state, the state can exercise personal jurisdiction over a defendant where the nonresident defendant sent emails to a resident plaintiff in an effort to ease their business dealings. A New York judge ruled that such electronic transmissions were sufficient to establish personal jurisdiction over the defendant. Other courts in New York have ruled for and against the sufficiency of email, telephone, or facsimiles in establishing personal jurisdiction. However, in Deutsche Bank Sec., Inc. v. Montana Bd. of Inv. , 7 N.Y.3d 65, 71 (2006), the court ruled in favor. See case summary below.
New York
Under New York’s long-arm statute, CPLR § 302(a)(1), a court may exercise jurisdiction over a non-domiciliary who transacts “any business within the state or contracts anywhere to supply goods or services in the state.” Known as the “single act statute,” the Court of Appeals has clarified that “proof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant’s activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted.” Deutsche Bank Sec., Inc. v. Montana Bd. of Inv. , 7 N.Y.3d 65, 71 (2006).
In Deutsche Bank , the Court of Appeals noted that historically New York courts have “recognized CPLR 302(a)(1) long-arm jurisdiction over commercial actors and investors using electronic and telephonic means to project themselves into New York to conduct business transactions.” Id. Consistent with that observation, the court held that the defendant, “a sophisticated institutional trader that entered New York to transact business” via the Bloomberg Messaging System (an instant message service), should reasonably expect to defend its actions in New York. Id. at 71-72. In reaching its decision that there was jurisdiction over the defendant, the court accounted for the fact that the defendant had engaged the plaintiff in a series of trades. “Where a defendant deals directly with the broker’s New York office by phone or mail or e-mail in a number of transactions instead of dealing with the broker at the broker’s local office outside New York, long-arm jurisdiction may be upheld.” Id. at 72.
Outside New York
The Fourth Circuit Court of Appeals recently affirmed a dismissal for lack of personal jurisdiction over two nonresident defendants, on the determination that a handful of emails and telephone communications alone did not satisfy minimum contacts with the state of Virginia. Consulting Engineers Corp. v. Geometric Ltd. , _ F.3d _, 2009 WL 738165 (4th Cir. Mar. 23, 2009). Defendant Structure Works, which is a Colorado corporation, had limited contact with the plaintiff, comprised of four telephone calls and twenty-four emails, only eight of which were sent by Structure Works. Id. at 4. Although the plaintiff argued that Structure Works had “intentionally directed electronic communications into Virginia with the clear intent of transacting business there,” the court rejected that broad application and looked instead at “the quality and nature of the contacts” to evaluate whether they met the standards for minimum contacts. Id. The court held that even had Structure Works “reached out” to plaintiffs via email in Virginia, that fact, coupled only with the emails and telephone calls, was insufficient to establish personal jurisdiction.
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