During and after the coronavirus pandemic, people’s reluctance to visit brick-and-mortar stores and businesses led to increased online purchasing. Some people are buying more online from trusted big box retailers, while others are seeking new sources for finding what they need — and smaller businesses are moving online because they want to be profitable even with decreased in-store foot traffic.
And, shortages of some popular goods have meant that people are ordering items from retailers they’ve never heard of. When the big box stores are out of stock on popular items, customers search online and buy different products than what they’re normally used to.
One of the downsides of buying online from a new retailer or company is that it’s not always easy to determine if the product is safe and effective.
If you’re injured by a defective product and need to file a lawsuit, things are a little more complicated when the defendant doesn’t have a physical location — but it’s not impossible.
Personal jurisdiction
A court requires personal jurisdiction to hear a case. That means the court has the legal power to make a decision over the person who’s making the claim and the person being sued. A state or federal court has personal jurisdiction over a resident of that state.
If the defendant’s principal place of business is in another state, the plaintiff needs to show that the defendant has a meaningful connection or contact with the state where the lawsuit is filed.
What’s a “meaningful connection”?
For example, let’s say you were injured by a defect in a barbecue grill that you purchased from a big box home improvement store with a retail location near you. Even if the manufacturer is out of state, if the retailer is carrying its products in your local store, then it’s enough of a connection that the manufacturer is considered to be doing business in your state.
If a business meets the standard of having minimum contacts in a particular state, it can be ordered into court in that state. Here are some examples of minimum contacts:
- The business regularly solicits business in that state.
- The business derives substantial revenue from goods or services sold in the state.
- The business engages in some other persistent course of conduct in the state.
Establishing minimum contacts when the business is a website
Most lawyers agree that a website owner can’t be subject to personal jurisdiction just because their website is viewable or shares information that is viewable in a particular state. But, when a website takes your credit card information to make a sale or conducts other active business, it becomes interactive — and that’s more likely to qualify as minimum contact.
Generally, the court applies a test to determine if the website’s engagement with a plaintiff in another state is active or passive.
| Active = minimum contact | Passive = not enough for minimum contact |
|---|---|
| The user interacts with the website, either by providing personal information or sending money in exchange for a product or service. | One-way interaction when a user visits the website, reads or views content, but doesn’t interact in any other way (like providing their own information or money). |
Here are some questions that can help answer whether a website has active or passive interaction with a person in another state:
- Does the website do direct sales (meaning, it sells directly to consumers without a reseller or offline distributor)?
- Did the online business know what state the buyer was in at the time of the transaction (for example, if you had a package shipped to you or submitted your address for some other reason)?
- Does the online company do regular business with residents in your state?
- Does the company have an office or employee in your state, even if it primarily does business online?
- Does the company advertise in your state?
The answer doesn’t have to be “yes” to all of these questions, but they’re the kinds of things the court would look at to determine jurisdiction.
Intentional injuries
If a business uses the internet to intentionally cause an injury (for example, in libel or slander cases), the person who caused the injury can be sued in the state where the injury occurred (in other words, where the plaintiff lives).
In-person service of process
If a defendant resides out-of-state, they can be sued in the plaintiff’s state if the defendant enters the state where the injury occurred and is served with a summons and complaint while physically present in the state.
In other words, if the defendant resides in New York and the plaintiff was injured in Florida — and if there’s no other minimum contact — if the defendant vacations in Florida and the plaintiff is able to have them served with a lawsuit while there, it would be valid for a Florida lawsuit.
Consent to a lawsuit
No one wants to be sued.
But sometimes a company is required to consent to be subject to a state’s jurisdiction in order to do business in that state. As part of their incorporation process, the business would need to designate an agent within the state who would accept the service of process (filing a lawsuit).
Can you be sued by an online retailer?
It goes both ways. Just like you can sue an online individual or business, they can sue you. However, it depends on the level of contact you have. If you’re a consumer who’s made occasional purchases from the company, they can’t force you into court in their state. If you have ongoing back-and-forth business with a company in another state, it would meet the minimum contact requirements.
How do you file a lawsuit against an online company?
The most common types of lawsuits related to websites or online companies are injuries from defective products or defamation.
If you’re considering suing the owner of a website or an online company, first check to see if there’s any information about where it’s located.
You can also consult an attorney who understands jurisdictional rules, has investigators who can determine who owns a website and how to find them, and who will guide you through the process of filing a lawsuit in the appropriate court.