Michigan

Could a Michigan Business Be Subject to the Jurisdiction of a Different Country's Courts Because of Its Website?

As noted in my last post, doing business on the Internet can be a double-edged sword for Michigan businesses. While the the Internet may provide tremendous business opportunities, in certain cases, such activity might be enough to cause a business to be subject to the legal jurisdiction of a foreign country.

For example, the European Commission's Regulation on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters could be used by a foreign plaintiff to sue a Michigan business in a member foreign country. This regulation provides jurisdiction against a defendant if the defendant "pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State." This language means that someone in a foreign jurisdiction might be able to bring a case in that foreign jurisdiction relative to a contract that was entered into over the Internet. The language is broad enough that even merely advertising a product on the Internet could subject a business to the jurisdiction of a foreign country if the legal claim is related to the advertised product.

Such broad jurisdiction would not be entirely without precedent. In 2002, the High Court of Australia issued a decision holding that a defamation claim against the Wall Street Journal could be litigated in Australia based on the Wall Street Journal's operation of a website that was accessible in Australia.

There are a number of international organizations that are working to implement uniform standards and rules for governing e-commerce and the legal issues arising from such activity. These organizations include the Organisation for Economic Cooperation and Development, the United Nations Commission on International Trade Law (UNCITRAL), as well as the Hague Conference on Private International Law. However, these things take time, and there is no way of knowing when, if ever, these initiatives will be finalized and implemented.

The issue of Internet jurisdiction over Michigan businesses can be very confusing and difficult. A Michigan business lawyer with experience in Internet issues should be consulted on any legal questions or issues that may arise relative to a business's Internet activities.

Full post as published by Michigan Business Lawyer Blog on July 16, 2008 (boomark / email).