It is virtually impossible to download an app, browse the web, or read a magazine without being invited to Like, Friend, Follow, Pin, post, link, contact, comment, or otherwise engage with companies via social media. Companies increasingly use social media advertising to attract the attention of existing and new customers. According to McKinsey & Co., by 2016 nearly half of companies expect to use social media as their “primary digital tool” to reach customers.1 And yet social media also is an increasingly important way that companies may attract the attention of courts.

In an interesting new development, courts have begun to include a company’s social media-based outreach—through Facebook, Twitter, LinkedIn, etc.—in the “minimum contacts” analysis for personal jurisdiction.

Courts frequently analyze how “interactive” a website is between a company and residents of a particular forum to decide if it subjects that company to personal jurisdiction. The more interactive the website, the more likely that the company has “purposefully availed” itself of the forum and thus subjected itself to personal jurisdiction. Is social media, a company’s quintessential “interactive” advertising option, sufficiently interactive to create personal jurisdiction under this analysis? This article explores when a company’s use of e-advertisements, websites, and social media could expose a company to personal jurisdiction in a state where it has no other contacts.

Personal Jurisdiction

The Due Process Clause protects companies from being hailed into a foreign (read: out-of-state) court unless it has “purposefully avail[ed] itself of the privilege of conducting activities within the forum state.”2 To determine if the threshold is met, courts review the company’s contacts with the forum state. A company with “systematic and continuous” contacts with the state is subject to personal jurisdiction there for any claim.3

Where a company has fewer contacts with the forum state, a court has jurisdiction only if (1) the company purposefully directs its activities at residents of the forum, (2) the claim arises out of or relates to these activities, and (3) asserting jurisdiction comports with fair play and substantial justice.4 Because the quantity and quality of contacts affect jurisdiction, a company can limit its contacts with other states to control the risk of being hauled into court there.

Courts traditionally considered a company’s physical contacts with a state, such as resident employees or products and advertisements mailed to state residents, to determine personal jurisdiction. As technology has evolved to include widespread use of television advertisements and mail order catalogs, so too did the minimum contacts analysis. The Supreme Court held in Burger King v. Rudzewicz, that physical contact with a state is unnecessary to incur personal jurisdiction there, because “it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines….”5

Technology is expanding modes of advertising and communicating information. How do virtual contacts and internet-based ephemera fit into the minimum contacts analysis? Courts frequently turn to two tests.

InZippo Mfg. v. Zippo Dot Com, the court explained that websites fall along a sliding scale of interactivity.6 On one end, a company “clearly does business over the internet” and personal jurisdiction is proper. On the other end of the scale, “passive” websites simply “make information available to those who are interested in it,” which alone cannot support personal jurisdiction. For those websites that fall in between, the Zippo court held that personal jurisdiction turns on the interactivity of the website: “[I]f the website is interactive to a degree that reveals specifically intended interaction with residents of the state,” then personal jurisdiction is appropriate.

Other courts have applied the “Calder effects test” in the virtual context. In Calder v. Jones, the Supreme Court held that a California court had personal jurisdiction over a Florida-based national magazine because the focus and effects of the alleged defamation would likely be in California.7 This “Calder effects test” finds personal jurisdiction if a company (1) commits an intentional act, (2) expressly aimed at the forum state, (3) which causes harm it knows is likely to be suffered in the forum state. By substituting a nationally accessible website for a nationally distributed magazine ad, courts apply Calder to tortious activity in the virtual context.

However, even the most basic online communications can complicate the analysis. For example, the U.S. Court of Appeals for the Fourth Circuit modified the Calder effects test for Internet-based defamation, shifting the focus of the jurisdiction analysis from the effect of the tort on the plaintiff in his home state to whether the defendant intended to target readers in the plaintiff’s home state.8 The new test, more reminiscent of Zippo’s analysis of intent, requires the plaintiff to show that the defendant specifically targeted an audience in the forum state for that state to exercise jurisdiction. Notably, this analysis relies on the presumption that the Internet—which is accessible everywhere—is targeted nowhere.9

Not All Social Media Uses

On its face, the language of Zippo suggests that companies advertising via interactive social media such as a Facebook page or Twitter feed open to friends, likes, or followers across the nation could be subject to personal jurisdiction in virtually any state. With the rise of social media, however, courts require more.

For example, two courts recently found that mere use of standardized social media tools did not satisfy the “interactivity” needed for personal jurisdiction. The District of Massachusetts in Sportschannel New England v. Fancaster explained: “In the era of Facebook, where most websites now allow users to ‘share’ an article, choose to ‘like’ a particular page, add comments, and email the site owners, …[i]nteractivity alone cannot be the linchpin for personal jurisdiction.”10 That court found that features such as a registration page, online trivia, or the ability to email the website operators, stream video, and to “fan” or “share” a page or video, were insufficient to establish personal jurisdiction. Similarly, the Western District of Michigan recently held in Thomas v. Barrett that, “[t]he opportunity to comment on, ‘like,’ or ‘share’ Facebook posts does very little to move Defendants’ page farther up the continuum from passive to interactive.”11

A recent New York case addressed this issue in the global context. In Lyons v. Rienzi & Sons, the court lacked personal jurisdiction over an Italian company whose address and telephone and fax numbers were in Italy, who conducted all of its work in Italy, and whose website did not permit customers to purchase or request services.12 The court explained that “mere possession” of a Facebook account was not “a sufficient predicate for hauling [the company] into a court in New York.” Rienzi, however, left unanswered whether a U.S. court has jurisdiction over a global company that lacks a U.S. physical presence but engages in a more extensive social media advertising campaign. It is unclear at what point a social media campaign crosses the line between making information available to and targeting U.S.-based consumers.

Not a Safe Harbor, Either

However, social media is not a shield from personal jurisdiction, and particular aspects of the interaction may be enough to support jurisdiction.

For example, one company’s use of Internet postings—by both readers and the company—to drive additional traffic to its website was the basis of personal jurisdiction in a state halfway across the country. The Western District of Kentucky in Jones v. Dirty World Enter. Recordings considered its jurisdiction over the owners of an Arizona-based Internet gossip forum that invited viewers to post gossip and who also commented on such posts themselves. The court held that the owners effectively created a “dialogue” aimed at the home state of the gossip subjects and that they intended this “dialogue” to increase the website’s hits and its advertising income. Thus, the company fairly could be described as reaching out “beyond the boundaries of its home state to conduct business and interact with residents of other states” to an extent sufficient to create personal jurisdiction in the gossip subject’s home state.13

Moreover, the court held that personal jurisdiction was appropriate in Kentucky even though the company’s owners did not know that plaintiff was a Kentucky resident, but only that she worked in nearby Cincinnati. Thus, the site owner could not be said to have intentionally directed its conduct at the state at all. Nonetheless, personal jurisdiction was upheld.

In a potentially significant development, personal jurisdiction may attach through targeted marketing on social media. The U.S. Court of Appeals for the Ninth Circuit, for example, held in Mavrix Photo v. Brand Techs., that California courts had jurisdiction over an Ohio-based website that invited visitors to submit news, tips, and photos of celebrities and to post comments on other posts.14 The defendant had no offices, no real property, no staff, no taxes, and no license to conduct business in California. However, third-party advertisements on the website targeted California residents. The court found the third-party ads enough to establish that the website owner “knows—either actually or constructively—about its California user base, and that it exploits that base for commercial gain,” thus providing a sufficient basis for personal jurisdiction in California.

Social media also can be the source of admissions that support personal jurisdiction, an extension of a black letter law into the Internet context. A court may use admissions from any source to determine personal jurisdiction, and recent case law demonstrates that virtual admissions hold no less weight than their more traditional counterparts. For example, the Northern District of California in Juniper Networks v. Juniper Media, recently denied a defendant’s motion to dismiss for lack of personal jurisdiction based in part on that company’s social media presence: the defendant’s LinkedIn profile claimed the company was headquartered in California, its Twitter account listed Los Angeles as the feed origin, and several California residents listed the defendant as their employer on LinkedIn.15

Defendant argued that its Twitter feed and headquarters were in fact Florida-based. The court found these facts unavailing even if true: “A finding of personal jurisdiction does not require defendant’s having actually posted to Twitter from Los Angeles, or maintained a physical headquarters in California—only that defendant represented itself as having done so…”

And even if social media contact alone does not support personal jurisdiction, a court may consider all contacts with the forum, including social media, in its personal jurisdiction analysis. Combined with a company’s other contacts with the forum state, one court found that the aggregate—including national advertising via Facebook, Google, and YouTube and the company’s sponsorship of online forums for the company’s products’ users—warranted general jurisdiction over the company.16

Silicon Valley Contacts

Finally, several courts have considered whether a company’s contracts with California-based social media companies such as Facebook, Google, Twitter, or YouTube are sufficient to create personal jurisdiction in California. Most courts hold that these contacts are not enough, though this view is not unanimous.17

One court has noted that when the forum selection clause in contracts with these social media companies identifies California, it “goes to the reasonableness” of a finding of personal jurisdiction in that forum relating to other suits.18 Considering the variety of Silicon Valley-based virtual services—from social media to cloud computing or virus protection—it would not be difficult for a company to sign multiple service contracts containing forum selection clauses that identify California. It remains to be seen whether other California courts will find these forum selection clauses significant to the personal jurisdiction analysis.

Conclusion

Few would contest the benefits of a successful social media campaign to businesses reaching their customer base or introducing a new product. But when analyzing new and innovative ways to reach customers, it is worth considering a campaign’s impact on personal jurisdiction. Though courts generally find a basic Facebook page or Twitter feed insufficient to subject a company to nationwide personal jurisdiction, technology continues to advance, and social media increasingly targets specific customers. How much can a company “interact” via social media with its customer base broadly, and with particular customers in particular jurisdictions, before it exposes itself to personal jurisdiction there? It is a question worth following.

Carla Walworth is a litigation partner and Mor Wetzler is a litigation associate at Paul Hastings in New York. Jess Oliva, also a litigation associate at the firm, contributed to this article.

Endnotes:

1. “Demystifying Social Media” McKinsey & Co. April 2012, available at http://www.mckinseyquarterly.com/Demystifying_social_media_2958.

2. Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).

3. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416 (1984).

4. Burger King, 471 U.S. at 472, 476.

5. Id.

6. 952 F.Supp. 1119 (W.D. Pa. 1997).

7. 465 U.S. 783 (1984).

8. Young v. New Haven Advocate, 315 F.3d 256, 258-59 (4th Cir. 2002), cert. denied, 538 U.S. 1035 (2003).

9. See also Dailey v. Popma, 662 S.E.2d 12, 19 (N.C. Ct. App. 2008) (“An internet posting, such as the ones in this case—which is not ‘sent’ anywhere in particular, but rather can be accessed from anywhere in the world—is a contact of a qualitatively different ‘nature’ than a physical mailing.”)

10. Sportschannel New England v. Fancaster, No. 09-CV-11884, 2010 WL 3895177, at *6 (D. Mass. Oct. 1, 2010).

11. Thomas v. Barrett, No. 1:12-CV-00074, 2012 WL 2952188 (W.D. Mich. July 19, 2012).

12. No. 09-CV-4253, 2012 WL 1393020, at *1 (E.D.N.Y. April 23, 2012).

13. Jones v. Dirty World Enter. Recordings, 766 F.Supp.2d 828, 833-4 (E.D. Ky. 2011) (the court found jurisdiction was also appropriate under the Calder effects test).

14. Mavrix Photo v. Brand Techs., 647 F.3d 1218 (9th Cir. 2011), cert. denied, —U.S.—, 132 S. Ct. 1101 (2012).

15. Juniper Networks v. Juniper Media, No. 11-03906 WHA, 2012 WL 160248, at *3 (N.D. Cal. Jan. 17, 2012).

16. See, e.g., West Marine v. Watercraft Superstore, No. C11-04459 HRL, 2012 WL 479677 (N.D. Cal. Feb. 14, 2012).

17. Compare Adobe Sys. v. Trinity Software Dist., No. C12-1614 SI, 2012 WL 3763643, at *6 (N.D. Cal. Aug. 29, 2012) with DFSB Kollective v. Tran, No. 11-CV-01049-LHK, 2011 WL 6730678 (N.D. Cal. Dec. 21, 2011).

18. West Marine, 2012 WL 497677, at *6.