Jurisdiction In Online World

Some things are just more complicated than they used to be. Like for instance, “personal jurisdiction.” And a recent case involving a Community Trust Bancorp bank illustrates the point. It used to be that people who lived in one state, couldn’t be sued in another state. Courts in state A didn’t have “personal jurisdiction” over residents of state B. And in the days of horses and buggies, most folks didn’t travel to other states all that much. Of course, with railroads and cars, and interstate highways, that all changed. And the so did the notion of personal jurisdiction. Courts started recognizing that a resident of state B could have a real connection with state A. And so courts adopted a “minimum contacts” test – if a state B resident has minimum contacts with state A, and “purposefully avails himself” of the privilege of acting in state A – state A has jurisdiction. That test was pretty straightforward, until the Worldwide Web came about. So what happens when a business in state B puts up a Web site that is available to the world? Does that mean it’s subject to jurisdiction pretty much anywhere, since people in state A, for example, can so easily access the site? Uh, no. But it’s not all that easy. Courts have established a sliding scale that looks at how much interaction the Web site permits. A “passive” site – one that primarily gives information to someone who pulls up the site – is likely not subject to jurisdiction in other states. An interactive site – where the operator enters contracts with customers through “knowing and repeated transmission of computer files over the Internet” – probably will be subject to jurisdiction in other states. And that brings to Community Trust Bancorp. CTB brought a trademark infringement suit in Kentucky against Community Trust Bank of Texas and Community Trust Bank of Louisiana. Those banks are both owned by Community Trust Financial Corporation. The Texas and Louisiana banks had six Kentucky customers between them. In all but one case, those customers were former residents of Texas or Louisiana who had relocated to Kentucky. That’s not purposeful availment. But the Texas and Louisiana banks offered those folks the opportunity to use their online services, and sent them a password in Kentucky for that purpose. And, for the court, that was enough. That’s a pretty tough standard. I imagine you can bank on an appeal.