"You've Got Mail!" Can Sending An Email Be Enough To Establish Personal Jurisdiction?

In our e-commerce society, companies routinely exploit the ease of technology, with parties on opposite sides of the country - and even the world - conducting business without leaving the office. Agreements are sometimes executed via cyberspace that ultimately may result in litigation. Even without ever setting foot in a plaintiff's state, a defendant may find itself a party to litigation in a foreign forum based on the plaintiff's assertion that electronic communications, which previously had made their dealings that much easier, are now sufficient to confer personal jurisdiction. Recently, judges in New York, New Jersey, Maryland and Virginia have exercised jurisdiction over nonresident defendants based at least in part on the fact that their contacts with the forum included email communications. On the other hand, other recent decisions out of New York, Virginia, Missouri and Texas, have reached the opposite conclusion, holding that email communication alone - sometimes even coupled with letters, telephone calls, or facsimiles - was insufficient to establish specific jurisdiction. This article will survey this legal landscape and discuss the most recent state of the law relating to the use of email communication to establish personal jurisdiction.

New York State

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. In the wake of Deutsche Bank , courts throughout New York have considered the jurisdictional effect of transmitting electronic communications.

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Source: metrocorpcounsel.com
By: Norman C. Simon and Samantha V. Ettari Kramer