The COVID-19 pandemic brought videoconferencing into many people's daily work lives. Estimates assert that the global videoconferencing market size in 2022 was $7.2 billion, and that market is expected to grow to $21 billion by 2032.[1]
The growth of videoconferencing is understandable because it provides a more cost-effective and convenient means for people from around the world to meet and collaborate.
It also provides new and unique legal issues that courts have yet to conclusively address. One of those issues is whether appearing in videoconferences could subject a defendant to the jurisdiction of a state where the defendant is not a resident.
This is a significant issue because a person or business could face the prospect of being forced to defend themselves in litigation far from home simply because they participated in videoconferencing with residents of other states or even countries.
Such far-flung litigation would expose that person or business to expensive legal defense costs and potentially other costly liabilities. This is because clients and lawyers should expect that courts will view participation in videoconferencing as a factor in favor of exercising personal jurisdiction over a defendant in civil litigation.
Personal Jurisdiction at a Glance
In cases dealing with out-of-state defendants, a fundamental question is whether the subject court possesses personal jurisdiction over the defendants. This is because the due process clause of the U.S. Constitution's Fourteenth Amendment limits the personal jurisdiction of state courts.[2]
As a result, the U.S. Supreme Court held in its 1980 World-Wide Volkswagen Corp. v. Woodson decision, "[a] judgment rendered in violation of due process is void in the rendering State and is not entitled to full faith and credit elsewhere."[3]
The seminal case related to personal jurisdiction is the Supreme Court's 1945 decision in International Shoe Co. v. Washington, which established two types of personal jurisdiction: general jurisdiction and specific jurisdiction.[4]
For general jurisdiction, the analysis focuses on where the defendant — whether an individual or entity — is based.[5] In other words, in what jurisdiction is the defendant regarded as at home?[6]
As the Supreme Court articulated in its 2017 Bristol-Myers Squibb Co. v. Superior Court of California decision, "A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State."[7]
Participation in videoconferencing does not affect general jurisdiction because videoconferencing does not affect where a defendant is considered home. In fact, it does not appear that any court has considered videoconferencing as a factor for establishing general jurisdiction.
However, videoconferencing is a factor courts consider in exercising specific jurisdiction.
Specific jurisdiction contrasts greatly to general jurisdiction.[8] In order for a state court to exercise specific jurisdiction, the suit must arise or relate to the defendant's contacts with the forum state.[9] To put it simply, the court held in Bristol-Myers, quoting precedent, there must be:
"an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation."[10]
Thus, if the defendant's actions related to the subject litigation do not have a connection to the forum state, there is no specific jurisdiction, regardless of how many unconnected activities the defendant has with the forum state.[11]
Courts use the "minimum contacts" test to evaluate whether a court has specific jurisdiction over a defendant.[12]
When applying the minimum-contacts test, courts consider whether a defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice,'" as articulated by the court in International Shoe.[13]
Factors courts evaluate when applying the test are (1) a defendant's purposeful availment of the forum state; (2) the benefits and protection that a defendant sought and obtained from the forum state; (3) causes of action that arise out of or relate to contacts with the forum state; and (4) the reasonable foreseeability that a defendant would be haled into court in the forum state.[14]
How Videoconferencing Affects Personal Jurisdiction
As people become more dependent on and skilled with technology, questions regarding personal jurisdiction have become more complex. This is because what it means to have minimum contacts in a foreign jurisdiction is changing as people become more accustomed to meeting via video.
As a result, determining if personal jurisdiction exists is more complex than the traditional analysis, which relied primarily upon a person's physical presence in a forum state.[15]
Unfortunately, thus far, the U.S. Supreme Court has been reluctant to address these complexities.[16] This has resulted in lower courts having disjointed and inconsistent approaches to considering virtual contacts in the context of specific jurisdiction.[17]
The most commonly used approach to virtual and online contacts is a sliding scale methodology.[18] As the U.S. District Court for the Western District of Pennsylvania held in its Zippo Manufacturing Co. v. Zippo Dot Com Inc. decision, the sliding scale approach provides that [i]f the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper.[19]
The district court held that on the other end of the scale, "where a defendant has simply posted information on an Internet website which is accessible to users in foreign jurisdictions," there is no personal jurisdiction.[20]
The problem with this approach is that it does not account for situations where a defendant appears on a videoconference in another state. There is no clear-cut answer to the videoconference circumstance, which is distinctly different from typical internet communications because, arguably, the defendant is appearing in another state via video.
Courts have considered videoconferences in specific jurisdiction analyses regarding whether videoconferences establish minimum contacts with the forum state. However, there is not significant case law on the issue, and it does not appear that an appellate court has addressed the issue at all.
The U.S. District Court for the Southern District of Indiana found last February in Prolific LLC v. Freedom Central Holdings Inc. that a Zoom call between an Indiana resident and a defendant outside of Indiana, prior to executing a contract, was insufficient to establish personal jurisdiction over the defendant in Indiana.[21]
Conversely, a few weeks later, the U.S. District Court for the Southern District of California found in Rewardify Inc. v. Synvest Canco Inc. that defendants did have sufficient contacts to establish personal jurisdiction in California when the defendants had approximately 10 Zoom meetings and one in-person meeting in the state with a California-based plaintiff.[22]
As a result, it does not appear that videoconferences themselves are enough to establish personal jurisdiction over a defendant. Nor does it appear that courts view videoconferences the same as in-person meetings for personal jurisdiction analyses.
As videoconferencing continues to become more common, that may change. At a minimum, lawyers should advise clients that courts will consider participation in videoconferencing as a factor in deciding whether to exercise specific jurisdiction.
That fact may be used as a sword or a shield when advising clients how to communicate with out-of-state parties.
As a sword, a person could conduct numerous videoconferences with an out-of-state person with the knowledge that if a dispute arises, that person could potentially be hauled into foreign state litigation based upon their videoconference participation.
As a shield, a person could choose videoconferences in lieu of in-person meetings with the knowledge that videoconferencing is not as strong a basis for personal jurisdiction as physically being in a foreign state.
The fact that courts have yet to fully address how videoconferencing affects person jurisdiction further complicates the issue.
Patrick J. Hickey is a litigation attorney at Moye White LLP
The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] https://www.yahoo.com/lifestyle/video-conferencing-size-increase-cagr-
061700946.html.
[2] Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1779 (2017).
[3] World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S. Ct. 559, 564
(1980).
[4] Int'l Shoe Co. v. Wash., 326 U.S. 310 (1945); Bristol-Myers Squibb, 137 S. Ct. at 1780
(2017).
[5] Bristol-Myers Squibb.
[6] Id.
[7] Id.
[8] Id.
[9] Id. (citations omitted).
[10] Id. (citations omitted).
[11] Id. at 781.
[12] Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945).
[13] Id.
[14] NOTE: Dropping the Other Shoe: Personal Jurisdiction and Remote Technology in the
Post-Pandemic World, 73 Hastings L.J. 861, 884 citing Hanson v. Denckla, 357 U.S. 235,
253 (1958); Int'l Shoe Co. v. Washington; World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980); Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, 141 S. Ct. 1017,
1025 (2021).
[15] Elliott v. Cabeen, 224 F. Supp. 50, 57 (D. Colo. 1963).
[16] J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 887, 131 S. Ct. 2780, 2791 (2011)
(Breyer Concurring) noting, "I do not doubt that there have been many recent changes in
commerce and communication, many of which are not anticipated by our [personal
jurisdiction] precedents. But this case does not present any of those issues. So I think it
unwise to announce a rule of broad applicability without full consideration of the modernday
consequences."
[17] NOTE: Dropping the Other Shoe: Personal Jurisdiction and Remote Technology in the
Post-Pandemic World, 73 Hastings L.J. 861, 866.
[18] Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997).
[19] Id.
[20] Id.
[21] Prolific, LLC v. Freedom Cent. Holdings, Inc., No. 1:21-cv-02725-SEB-TAB, 2022 U.S.
Dist. LEXIS 119047, at *7 (S.D. Ind. Feb. 25, 2022).
[22] Rewardify, Inc. v. Synvest Canco, Inc., No. 3:21-cv-00046-H-JLB, 2022 U.S. Dist.
LEXIS 43136, at *21 (S.D. Cal. Mar. 10, 2022).