BioTherapies, Inc. v. Natural Bodylines, Inc.

99-1187 (U.S. Dist. Ct. D. N.J. 1999) (Unpublished)
  • Opinion Date: August 3, 1999

CONTRACTS; INTERNET; JURISDICTION—The Court analyzes the bases under which Internet activities can expose a party to the jurisdiction of New Jersey courts.

A New Jersey medical doctor and a New Jersey corporation allegedly entered into contract or contracts with a Florida corporation involving the marketing and selling of products to the health care industry. No written agreement was ever executed. The doctor and his company felt that the Florida company was not living up to its obligations, and commenced suit in the United States District Court for the District of New Jersey. The Florida company and the related defendants moved to dismiss the suit on the ground that the Court lacked personal jurisdiction over all of the defendants. The Federal Rules of Civil Procedure authorize personal jurisdiction over non-resident defendants “to the extent permissible under the law of the state where the district court sits.” New Jersey’s long-arm statute permits its courts to exercise personal jurisdiction over non-resident defendants “consistent with due process of law.” Personal jurisdiction, therefore, is permitted “to the uttermost limits of the United States Constitution.” There are two types of personal jurisdiction, general and specific. “When a state has general jurisdiction over a party, that party can be haled into court in that state ‘regardless of whether the subject matter of the cause of action has any connection to the forum.’” A court may exercise general personal jurisdiction over a non-resident defendant where such defendant’s contacts with the forum state are “continuous and systematic.” The burden of showing that a court has personal jurisdiction lies with the plaintiff. Here, the plaintiffs pointed to only one contact to support their claim that this Court could exercise personal jurisdiction over the defendants: the defendants’ purported Internet website. Although the Third Circuit had not addressed this issue, those lower courts in the circuit which had been confronted with this question had held that “[i]n analyzing a defendant’s contacts through the use of the Internet, the probability that personal jurisdiction may be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.” Courts have distinguished three types of Internet contacts to determine whether personal jurisdiction is proper. Where an out-of-state defendant sells its products or services over the Internet to residents within a state, personal jurisdiction is proper. The second type of contact occurs “when a user can exchange information with the host computer.” In such cases, a court determines whether jurisdiction is proper by “examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.” The third type of conduct involves posting information or advertisements on an Internet website “which is accessible to users in foreign jurisdictions.” Personal jurisdiction is not proper for this type of contact because “a finding of jurisdiction ... based upon an Internet web site would mean that there would be nationwide (indeed, worldwide) personal jurisdiction over anyone and everyone who establishes an Internet web site. Such nationwide jurisdiction is not consistent with traditional personal jurisdiction case law.” The plaintiff submitted copies of printed pages from two websites which may have been the defendant’s own websites. Nonetheless, the Court held that even if the plaintiff had downloaded these exhibits from the defendant’s website, a web page that “merely provides information but through which no business is transacted, cannot provide sufficient basis upon which to base general or specific information over an out-of-state defendant.” In fact, the Third Circuit had previously held that advertising in a national publication is not sufficient to establish the continuous and substantial contacts with the forum state required for federal jurisdiction. The doctor and his company did not plead any facts showing that any of the defendants had had “continuous and systematic” contacts with New Jersey. “Creating a [web] site, like placing a product into the stream of commerce, may be felt nationwide - or even worldwide - but, without more, it is not an act purposefully directed towards [New Jersey].” Where general jurisdiction over a non-resident defendant is lacking, a court may consider whether specific personal jurisdiction exists. A court has specific jurisdiction over a defendant when the plaintiff’s claim “is related to or arises out of the defendant’s contacts with the forum.” The doctor and his company alleged that one of the defendants came to New Jersey to purchase products from it. However, that trip involved an unrelated contract for a purchase of products that did not relate to the subject matter of this litigation. Further, none of the other defendants had ever been to New Jersey in connection with the subject matter of the litigation. Consequently, the doctor and his company were unable to carry their burden of demonstrating that the defendants had the minimum contacts with New Jersey necessary for the District Court to exercise specific jurisdiction.