Jurisdiction

=Jurisdiction=

== toc

As defined by **Ferrera** et al., “jurisdiction” is the authority given to a court to hear cases and resolve its disputes (Ferrera et al.17). It also refers to the authority given to a court to judge situations such as acts committed in a certain territory, types of cases or persons (Duhaime Law 2005).

Today, with the growth of cyberspace and the wide spread use of the World Wide Web, e-commerce business can reach out to anyone, anywhere and at anytime, thus increasing the complexity and complicatedness of jurisdiction.

Types of Jurisdictions
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There are several categories of jurisdiction which are both carried in the Canadian and American legal systems, such as **personal jurisdiction**, **subject matter jurisdiction** or **in rem jurisdiction** (Ferrera et al.17-18).


 * Personal jurisdiction is generally required for an out-of-state defendant with either a legal agreement or someone who had committed tort with the state (Ferrera et al.17). Judgment can be conducted at any state where the “defendant company has property” (qtd. In Ferrera et al.17).
 * **Subject matter jurisdiction**Subject matter jurisdiction is used for patent of trademark cases, or when the plaintiff and the defendant are residence of two different states and the amount of money exceeds $75, 000 (**Ferrera et al.**Ferrera et al. 17). Then again, state laws are often applied where the court is located (Ferrera et al.18).
 * **In rem jurisdictions**In rem jurisdictions are usually claims over wills or land title claims, which requires that the defendant’s property be in the state where the court is (Ferrera et al.18).

Effects of Globalization on Jurisdiction
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It was necessary for the concept of “jurisdiction” to change even before the advent of the internet due to the rapid increase in globalization and technology.

The concept of jurisdiction changes according to issues that arise in a particular geographic region. “In rem” jurisdiction was established so that a state is given the power to determine title to all property. (Find Law). However, the main reason for changes in the concept of jurisdiction was to fill the jurisdictional gap (Council on Foreign Relations).

The jurisdictional gap needs to be closed so that all relevant sectors in cooperating countries can operate from a universal set of rules that permit the flow of information in cases involving borders beyond their jurisdiction (Council on Foreign Relations). In order to fill the gap, the creation of an international legal framework is required so that the exchange of information among regulators and law enforcement can be synchronized (Council on Foreign Relations).

This legal framework would point its attention to establishing common tracking and disclosure mechanisms which may be applicable to goods, people and information related to law enforcement and money (Council on Foreign Relations). Because of the size of our global market, the concept of jurisdiction needed to be revised so that justice could still be served beyond a jurisdiction’s reach. Mass production and mass consumption in the twenty-first century was the prime reason for this change.

Globalization and the advent of the internet have presented new challenges for courts worldwide simply because it is not owned by a single corporation or government (Jurisdiction Under). Internet traffic not only crosses provincial borders but also those which are international (Jurisdiction and Taxation). Information from websites cannot be limited to a target audience as such, but is rather distributed all together to a global market (Jurisdiction and the Internet). __**
 * __

The Role of the FTC
The Fair Trading Commission (FTC) obtains its jurisdiction from the Fair Competition Act (FCA). Section 5 under the FCA permits the FTC to carry out investigations in relation to the conduct of business in foreign countries and whether any enterprise is involved in business practices that shows infringement of the Act. A person carrying on business in a foreign country is an enterprise, hence, under the Act, the FTC only has jurisdiction over enterprises in a particular foreign country.

For instance, suppose a misleading depiction made from an American website affects Jamaican consumers who visit that website in negative way. These consumers will be able to obtain rights only from the jurisdiction where the offending material’s enterprise is present (Jurisdiction Under).

More recently, the FTC had a case in which a consumer visited a Japanese website that had information about certain motor vehicles sold in Japan. This consumer ordered one particular vehicle from this website via the Internet and arranged for the vehicle to be shipped to directly Jamaica. When the consumer received the shipment, the motor vehicle turned out to be quite different from that which was advertised (Jurisdiction Under). The FTC received the complaint but had no jurisdiction to follow up the issue because the enterprise was located outside of the jurisdiction (Jurisdiction Under).

In circumstances like these, the FTC will try to get in touch with its counterpart in the appropriate jurisdiction and direct the consumer to that specific agency (Jurisdiction Under). Buying products online can be a tricky issue when it comes to the subject of jurisdiction. Consumers located all over the world surf the web with the sole purpose to buy products from other countries and pay for these products by using their credit card. The products are then shipped off to different countries, depending on where the consumer is located.

If these products are defective in some way, or start to malfunction, during a period of time for which the products would usually be covered under warranty, the FTC will not be able to interfere because it does not possess any power to act extra-territorially (Jurisdiction Under). Obviously when it comes to justice and the internet, there are still some common issues we will continue to face. These are the issues that need to be taken into consideration in order to establish a strong jurisdiction over the internet.

Jurisdiction in Canada
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Here in Canada, each jurisdiction has a judicial council that is responsible for encouraging professional conduct and standards (Canada’s Court System). Disputes that arise are subject to the jurisdiction of the Supreme Court of that specific province the dispute arose or the Supreme Court of Canada. With respect to the internet, a court can implement jurisdiction in Canada only if there is a “real and substantial connection” between the jurisdiction and the subject matter of the litigation (Doing Business). In addition, a website will be subject to Canadian laws if the site owner’s activity is in Canada or if the site activity targets people in Canada. If in fact the physical location of a website’s server is situated outside Canada, this will not aid the website owner from the legal consequences in Canada (Doing Business).

Jurisdiction in the U.S
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In the Unites States of America, every state has its own court system that hears cases arising from that particular state (Federal Court Concepts). In order to determine whether an American court has personal jurisdiction over an out-of-state defendant, both the forum state’s long-arm statute and constitutional needs to be taken into consideration (Boam and Hoegle 1). Long-arm statutes vary in each state. These statutes enable a court to practice its jurisdiction outside the forum and bring a non-resident defendant into the forum in order to defend a lawsuit (Boam and Hoegle 1).

General jurisdiction requires evidence of substantial, continuous and systematic contacts between the defendant and the forum. On the other hand, specific jurisdiction will occur if the claim results straight from the defendant's contacts with the forum state (Boam and Hoegle 1).

Suppose there was a case involving a citizen of Mississippi sued a citizen of Alabama due to a real estate transaction that occurred in the state of Georgia. The case could either be brought in Mississippi’s state court, or Alabama’s state court because of where the parties live. The case could also be brought in Georgia since that is where the property issue is located (Federal Court Concepts).

Currently, the “effects test”, the “totality of contacts” and the Zippo test are being used by American courts. These tests are for deciding whether any user be taken to other courts outside his/her jurisdiction because of his/her presence on the net (Jurisdiction and the Internet).

We can see that in Canada, jurisdiction is established both provincially and federally. In the United States, jurisdiction is established in each state as well as federally.

Jurisdiction in E-Business
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It is important to establish reliable ways of determining whether an individual or organization’s actions may come under the jurisdiction of other courts because consequences might be severe. Every jurisdiction has its own laws and something that may be legal in one country can certainly be illegal in the next. When organizations decide to conduct business over the internet, intellectual property, copyright, trademarks, content, security and jurisdiction need special attention.

**__CompuServe v. Patterson__**
For example, CompuServe v. Patterson is an Internet-based decision on jurisdiction where the court agreed that a computer user cannot come under the jurisdiction of Ohio courts just because the computer network was based in that state (Boam and Hoegle 1). However, the defendant had placed items into the "stream of commerce" using the Ohio-based computer system, he was "doing business", claiming that in the forum, that is sufficient to declare jurisdiction (Boam and Hoegle 1). On the other hand, the lower court in CompuServe stated that it would be "manifestly unreasonable" to declare personal jurisdiction in Ohio just because CompuServe was located in that state (Boam and Hoegle 1). Further along in this case, the U.S. Court of Appeals for the Sixth Circuit indicated that the software was stored in CompuServe's Ohio computer system (Boam and Hoegle 1). Even though the defendant had never physically entered Ohio territory, it was found that he conducted business within Ohio over the internet on purpose (Boam and Hoegle 1). In addition, the right that Patterson wanted to protect, a common law trademark in which CompuServe wanted a declaration of non-infringement, was decided by Ohio law and could only exist due to the law of Ohio (Boam and Hoegle 1). The CompuServe court acknowledged the defendant's activity in the state of Ohio and a common law trademark action, were adequate for jurisdiction, in comparison to the just location of the server (Boam and Hoegle 1).

**__Decker v. Circus Circus Hotel__**
Another case concerning e-commerce was the restriction of jurisdiction for a negligence claim associated to personal injury through a traditional forum selection clause on a website (Boam and Hoegle 1). The plaintiffs in the case involving Decker v. Circus Circus Hotel filed a lawsuit against a hotel which maintained a website where users could make reservations (Boam and Hoegle 1). Included in the site was a forum selection clause indicating that customers making reservations over the internet agree in advance to have all disputes settled in the state of Nevada and federal courts (Boam and Hoegle 1). The court's ruling explained that the defendant had placed its services into an "endless stream of commerce" and that the forum selection clause should be enforced (Boam and Hoegle 1). If this U.S. decision is considered to be a means of developing internet "contract" law, then site administrators would be much more secure if their consumers confirm that they have read the terms and understand the conditions of a forum selection clause by clicking on a link before being permitted to engage in any e-commerce transaction (Boam and Hoegle 1). If laws and regulations about internet jurisdiction are established accurately and the terms are written clearly, then when it comes to the court’s decision about certain cases there would be no dispute. Also, if these terms and conditions are easily available to the users and organizations, there should be no surprises or assumptions made with respect to jurisdiction. It is important for any individual to understand and to be aware of the consequences of their actions.

**Advantages and Disadvantages of Jurisdictions**
As intellectual property becomes a major asset in e-business, companies who invest in such activities are at a lot of risk without the proper established jurisdictions. This is evident in cases whereby firms gets sued and are being judged in the state law of the plaintiff, this can bring rise to a lot of expenses in regards to the defendant even though the case should comply to some other countries jurisdictions (Johnson 1999). The defendant would be at a disadvantage because:
 * The jury may not be familiar or feel sorry to the e-business (Ferrera et al. 18)
 * The defendant’s lawyer would also not be familiar with the jury and thus unfamiliar with their decisions (Ferrera et al. 18).

As email and online chat becomes more widely used by everyone, privacy becomes an issue. Without the proper jurisdictions, valuable and private information could be intercepted easily by hackers. Jurisdictions also allow people to conduct business through the web safely. Copyrights also protect inventers and artists property. With the implement of personal jurisdiction, e-business is entitled “to the protection of the U.S. Constitution, the state constitution, and the local law where the company is located” (Ferrera et al. 25).

//“Terabytes, or trillions of bytes are circulating on the net at any given time. Trying to locate illegal or offensive data on the net would be harder than trying to isolate two paired words in all the world’s telephone conversations and TV transmissions at once. And this difficulty grows worse every hour.” (Biegel 51) //

What Should an E-Business Manager be Aware of?
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 * Be familiar with the jurisdictions that an e-business can be exposed to and speak to a lawyer to draft a forum selection and choice of law clause that will be placed at the end of their e-business home page in its Terms of Use section (Ferrera et al. 40).
 * Advise the lawyer to draft it in a fair and reasonable manner so that the clause would be enforced by the courts if you unfortunately do get sued by an online foreign consumer (Ferrera et al. 35).
 * Make sure that the insurance company would cover remote jurisdictions expenses (Ferrera et al. 41).
 * It would also be advisable to sell your products and services to only certain states and countries so that we will not have to face legal actions in other countries (Ferrera et al. 40).
 * Use technological filters to prevent the Web sites to be viewed in certain countries or states where doing businesses are not applicable (Ferrera et al. 41).
 * Control the contents on the Websites based on certain country’s objections (Ferrera et al. 41).
 * Create a passive Web site (which only provides information (Ferrera et al. 25)) compared to an interactive one (which solicits business(Ferrera et al. 25)), for interactive Web sites are subjected in any state or country to personal jurisdiction (Ferrera et al. 41).
 * The documentation of sales in a foreign country or state would be advisable, so that you can use them as proof if a lawsuit was filed against us (Ferrera et al. 41).
 * Most importantly, he should separate the Web site from any related existing business so as to protect it from expenses because of claims made against our e-business website (Ferrera et al. 41).

=__**References**__=

Biegel, Stuart. “Is There Really a Problem Here? Sorting Out Categories of Allegedly Problematic Conduct.” __Beyond our Control__.United States of America: Massachusetts Institute of Technology, 2001. 51-96.

Boam, Christopher and Hoegle, Robert. “The Internet and Jurisdiction**:** International Principles Emerge but Confrontation Looms.” The Journal of World Intellectual Property Vol. 3. No. 1 January (2001): 1-5. **<**http://www.clm.com/pubs/pub-964671_1.html>. Canada’s Court System. 04/24/2003. Department of Justice Canada. 02/26/06 .

Council on Foreign Relations. Council on Foreign Relations. 02/26/06 < http://www.cfr.org/publication.php?id=5655>.

Doing Business in Canada. Blake, Cassels and Graydon LLP. 02/26/06 .

__Duhaime Law: Duhaime’s Online Legal Dictionary__. 2004. 24th Feb. 2006 .

Federal Court Concepts. Center for Assistive Technology and Environmental Access. 02/26/06 .

Ferrera, et al. “Jurisdiction” __CyberLaw: Text and Cases__. 2nd Edition, United States of America: Thomson, 2004. 15-44.

Find Law for Legal Professionals. Find Law. 02/26/06 .

Johnson, Simon. “Internet Activity and Jurisdiction over Foreign Defendants.” __Gary Dunn: Computer and Technology Law__. 30th Nov. 1999. Gary Dunn. 24th Feb. 2006 

Jurisdiction and Taxation. 03/16/2004. Industry Canada. 02/26/06 .

Jurisdiction and the Internet. Asian School of Cyber Laws. 02/26/06 .

Jurisdiction Under the Fair Competition Act. 02/26/06 <[|http://www.jftc.com/news&publications/Publications/PDF%20DOCUMENTS/02??isdiction%20under%20the%20FCA.pdf]>.

Knowledge Case NexisLexis Academic. LexisNexis. 02/26/06 .

U.S. Department of Justice. U.S. Department of Justice. 02/26/06 