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If an individual conducts business over the internet with a web-based company and the parties enter into an agreement, and the company either breaches the agreement or commits some form of fraudulent or deceptive business practice with the buyer, can the buyer sue the company in his or her home state? The issue become even more complex or confusing if the defendant’s place of business is unknown, and all of the Defendants business is conducted through the internet. Even given this complex and confusing situation, a court would likely allow the buyer to bring suit in their home state holding that the court can establish personal jurisdiction over the defendant.

A court may exercise personal jurisdiction over a person (or corporation), who acts directly or by an agent, as to a cause of action in law or equity arising from the person’s

(a) transacting any business in Massachusetts

(b) contracting to supply services or things in the state

(c) causing tortuous injury by an act or omission in the state

(d) causing tortuous injury in the state by an act or omission outside this commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth….G.L c. 223A, § 3

Pursuant to Section 3(a), the “transacting any business” clause, permits the court’s exercise of jurisdiction “if the defendant…transacted any business in the Commonwealth, and if the alleged cause of action arose from such transaction of business.” Good Hope Indus. v. Ryder Scott Co., 378 Mass. 1, 6 (1979). A person transacts business in the Commonwealth if there are any “purposeful acts by an individual, whether personal, private, or commercial.” Ross v. Ross, 371 Mass. 439, 441 (1976). Actual physical presence of a defendant in this jurisdiction is not required to acquire personal jurisdiction under the “transacting business” clause. Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1 (1979).

It is also likely that the facts of this case bring it within Section 3(d) of the long-arm statute as well. The first element requires the Plaintiff to demonstrate that the Defendants’ acts or omission caused tortious injury inside the Commonwealth. Cunningham v. Adrox. Inc., 40 Mass. App. Ct. 279, 281 (1996). The Plaintiff must next show that the Defendant regularly does or solicits business in this forum, or engages in any other persistent course of conduct in Massachusetts, or derives substantial revenue from goods used or consumed or services rendered in Massachusetts. Noonan v. Winston Co., 135 F.3d 85, 91 (1998). Internet sites have been used as one factor in ascertaining whether the defendants are regularly soliciting business for purposes of Section 3 (d). Other courts have found that personal jurisdiction exists based on Internet Web sites. Web Site Activities of Nonresident Person on Corporation as Conferring Personal Personal under Long-Arm Statutes and Due Process Clause, 81 A.L.R. 5th 41 (2000). A computer consulting company was found to regularly solicit business in this Commonwealth, for purposes Section 3 (d) of the long-arm statute, where it maintained an internet web site that could be continuously accessed by Massachusetts residents, and a part of its advertising listed another Massachusetts company as one if its new customers, who had company name recognition in the Commonwealth. Hasbro Inc., v. Clue Computing, Inc., 994 F.Supp. 34, 39 (1997).

Even if the literal requirements of the long-arm statute are satisfied, it also must be established that the exercise of jurisdiction under State law is consistent with basic due process requirements mandated by the United States Constitution. Tatro v. Manor Care Inc., 416 Mass. 767 (1994). Jurisdiction is proper if the defendants also had minimum contacts with the forum state at the time of filing the complaint, such that the assertion of jurisdiction over defendants would not offend traditional notions of fair play and substantial justice. Id.

The forgoing article was drafted by the law office of Goldstein and Clegg, LLC, a Massachusetts corporate law firm.