Note: Clarifying the Standards for Personal Jurisdiction in Light of Growing Transactions on the Internet: The Zippo Test and Pleading of Personal Jurisdiction
By Annie Soo Yeon Ahn. Full text here.
Currently, despite the vast and attractive Internet market, the Supreme Court has not ruled definitively on which test should govern personal jurisdiction in cases involving transactions on the Internet. As a result, different tests and diverging results have developed concerning the constitutionality of specific jurisdiction on the Internet, and cases range from those finding that advertising on a website is sufficient for personal jurisdiction to those requiring that a defendant must have specifically directed activities towards the forum state with the manifested intent to do business in the state. Rules for jurisdictional discovery are similarly unclear—one reason being the lack of consideration about how personal jurisdiction, jurisdictional discovery, and pleading standards are related. The lack of clarity in the rules for personal jurisdiction and jurisdictional discovery creates problems for businesses and sellers who are uncertain about the kinds of activities that might subject them to jurisdiction in a particular state. This uncertainty discourages businesses that are worried about the costs of litigation from using the Internet to share information and engage in business transactions, thus inhibiting their growth and ability to compete.
This Note argues that courts should use the Zippo test for analyzing specific jurisdiction in cases involving commercial transactions on the Internet and should interpret the pleading standard for personal jurisdiction in accordance with the approach of the Eighth Circuit. The Zippo test, described in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., supports analyzing personal jurisdiction on the Internet by considering the level of interactivity of the website and the nature and quality of commercial activity that occurs on the Internet. This Note first introduces the history of personal jurisdiction and the relationship among personal jurisdiction, jurisdictional discovery, and pleading standards. Second, this Note discusses how the uncertainty caused by the lack of clear rules for personal jurisdiction and jurisdictional discovery restricts the sharing of information on the Internet, commerce, and competition. Finally, this Note supports use of the Zippo test by explaining the benefits of the Zippo test, which includes its focus on objective factors and objective manifestations of intent in analyzing personal jurisdiction, and why the Zippo test is better than alternative tests. This Note also proposes extending the plausibility standard that applies to Federal Rule of Civil Procedure Rule 8(a)(2) to cover pleading of personal jurisdiction in Rule 8(a)(1), consistent with the Eighth Circuit’s approach and in harmony with the use of the Zippo test. This would require the plaintiff to state in the complaint facts sufficient to support a reasonable inference that the defendant may be subject to personal jurisdiction. The solutions suggested in this Note aim to promote business transactions and the sharing of information on the Internet.