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The 9th U.S. Circuit Court of Appeals will reconsider a ruling from last year allowing an East Coast business to be sued in California, even though it has no stores there. The jurisdictional hook, a three-judge panel held, was Maine retailer L.L. Bean’s Web site, which the company uses to sell its wares worldwide. Thursday’s decision to take the case en banc was closely watched by practitioners in the still-developing realm of e-commerce law. The outcome will help settle disputes involving the myriad companies that post catalogs on the Internet and sell their products all over the world. The circuit first ruled on Gator.com Corp. v. L.L. Bean, Inc. 341 F.3d 1072, in September, when a unanimous panel reversed U.S. Magistrate Judge Maria-Elena James. She had ruled against California-based Gator, saying her court had no jurisdiction over L.L. Bean. James had granted L.L. Bean’s motion to dismiss a declaratory judgment action filed by Gator. Gator went to court after receiving a letter from L.L. Bean threatening to sue over a Gator product that generated pop-up advertisements for an L.L. Bean competitor when Internet surfers using the product visited L.L. Bean’s Web site. The opinion was written by Senior Judge Warren Ferguson and joined by Senior Judge Melvin Brunetti and Judge A. Wallace Tashima, who dispatched the decision in a quick 17 pages — even though the court admitted that e-commerce law is sparse. “It is increasingly clear that modern businesses no longer require an actual physical presence in a state in order to engage in commercial activity there,” Ferguson wrote. “Businesses may set up shop, so to speak, without ever actually setting foot in the state where they intend to sell their wares. Our conceptions of jurisdiction must be flexible enough to respond to the realities of the modern marketplace.” Elizabeth Rader, an attorney and fellow at the Center for Internet and Society at Stanford Law School, said the court’s taking the case en banc is significant because the issue of jurisdiction is going to come up again and again as more transactions occur online. “It’s a lot easier to go everywhere and do business,” Rader said. Since courts are just starting to deal with the issue, she said, “It’s not as easy to get sued.” In a few years, Rader added, instead of being a question of jurisdiction between different states and federal districts, the venue questions will be between different countries. L.L. Bean argues that other venues were more appropriate for litigation between the two companies, and that it is a burden to come to the Northern District. However, the panel, citing the number and type of contacts L.L. Bean has in California’s marketplace, said the court has general jurisdiction based on L.L. Bean’s popular Web site. “Admittedly, L.L. Bean has few of the factors traditionally associated with physical presence,” according to the opinion. “Nevertheless, its website is clearly and deliberately structured to operate as a sophisticated virtual store.” A call to L.L. Bean’s lawyer, Lewiston, Maine, solo Peter Brann, was not returned. Gator is represented by Cooley Godward partner Michael Traynor, who argued the case. Traynor could not be reached, and an associate at the firm, Brian Mitchell, said he was unable to comment.

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