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Practice Pointers

Personal Jurisdiction NJ

Personal jurisdiction refers to the power of a state’s court to adjudicate a suit involving a particular company or person.  Most companies and individuals don’t think about it at all, but if they do they probably believe that only a court in the state in which they live or work has that power.  That’s a mistake.

To be sure, a court in the state where one lives certainly does have that power.  If someone wants to sue you, they can sue you there.

But suppose you have a business relationship with another company outside your home state and get into a dispute: and the “suppose,” worse yet, results in the other party commencing a lawsuit in their home court.  Can they really do that?  Can they do that even if you’ve never set foot in that other state?

The simple answer is that the other state often can assert authority over you.  Courts have long recognized that by conducting interstate business, a person may subject themselves to the jurisdiction of courts in another state even if they don’t physically travel to that state.  Correspondence into the other state can often be enough so you could be found to have “minimum contacts” with the other state for it to be fair to be sued there.

More recently, e-mail has supplanted the fax, the letter and the phone as a parties’ means of communication in a business relationship. The ease of electronic communications has important implications for personal jurisdiction because e-mails can add up very quickly:  in a case that I’m handling, the parties exchanged about 1000 of them over several months.  That’s a lot of contact – well in excess of the “minimum contacts” needed for  a court to adjudicate a contract claim involving an out-of-state defendant – even if the defendant never set foot there.  Because electronic communications can add up so quickly, the chances of being sued in another state and that court having personal jurisdiction over you is greater than in the past – when the volume of communications in business relationships was simply not as great.

 

 

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