RICHARD R. ORSINGER
Attorney at Law
[Home]


CYBER HAZARDS:
Legal and Ethical Pitfalls
in Using the Internet©


RICHARD R. ORSINGER
Attorney at Law
310 S. St. Mary's Street
Suite 1616
San Antonio, Texas 78205
(210) 225-5567 (Telephone)
(210) 267-7777 (Telefax)
rrichard@txdirect.net
http://www.txdirect.net/users/rrichard/hazard.htm


LAWTECH '97
Sep. 17 - 18, 1997 - Dallas, Texas

© 1997
Richard R. Orsinger
All Rights Reserved

CYBER HAZARDS:
Legal and Ethical Pitfalls
in Using the Internet©
By


Richard R. Orsinger
Board Certified in Family Law
and Civil Appellate Law by the
Texas Board of Legal Specialization


I. SCOPE OF ARTICLE
This Article discusses some of the legal and ethical pitfalls of using the Internet for your law practice.

II. INTRODUCTION
At the present time, the main value of the Internet to lawyers is as a vehicle for (i) research, (ii) communication, and (iii) marketing. The Internet: What's Out There for Lawyers, by Arthur L. Smith: http://www.abelaw.com/bamsl/lpm/inet.htm.

A. Research.
Locating the information you want on the Internet is one of the challenges in using the Internet. Reliability of information is also a consideration when doing research on the Internet. See Texas Legal Information Resources on the Internet: Back to the Future, by Lydia M.V. Brandt (1996), http://brandtlaw.com/lydia/orsinger_2.html. Also, what you do with the data you find on the Internet raises issues of intellectual property rights.

B. Communication.
Communicating via the Internet raises issues of preserving confidentiality, creating an attorney-client obligation, unauthorized practice of law, malpractice, and libel.

C. Marketing.
Marketing legal services on the Internet raises issues relating to Bar control over advertising and soliciting, as well as unauthorized practice of law.

III. AREAS OF CONCERN The areas of concern, regarding legal and ethical hazards for lawyers using the Internet, that are covered by this Article, are: advertising and soliciting, communicating with represented parties, unauthorized practice of law, preserving client confidentiality, malpractice, libel, and violation of intellectual property rights. An excellent resource for these issues is a WWW site, Legalethics.com, <http://www.legal ethics.com>. This WWW site has links to papers on e-mail issues, advertising /solicitation, and unauthorized practice of law. http://www.legalethics.com/issues.htm. There is also a list of articles covering a broad range of legal considerations regarding the Internet. http://www.legalethics.com/articles.htm.

IV. ADVERTISING RESTRICTIONS The State Bar of Texas has been an early entrant into the arena of regulating the marketing of legal services on the Internet. On January 7 & 8, 1996, the Advertising Review Committee of the State Bar of Texas approved the following interpretive comment concerning how Part 7 of the Texas Disciplinary Rules of Professional Conduct will be applied to attorney presences on the Internet. Attorneys were given until June 1, 1996 to bring their Internet advertising into compliance and file it with the Advertising Review Committee. This comment reads as follows:

[Beginning of Quotation]


17. The Internet and Similar Services Including Home Pages.

A. The Home Page First Screen.

Certain publications on the Internet or similar services are public media advertisements and are subject to the provisions of Part 7 of the Texas Disciplinary Rules of Professional Conduct. Unless the home page would otherwise be exempt from the filing requirements under Rule 7.07(d), a lawyer or firm publishing a home page on the Internet must file a hard copy, including the URL address of: (1) the first screen which is sent to the computer of an accessing person when the homepage location (URL) is accessed; and (2) any material changes in format that vary from the first screen of the original home page. Pre-approval for the first screen of the home page is available. B. Information Linked to the First Screen of the Home Page. Generally, additional information that the lawyer or law firm publishes on the Internet or other similar services beyond the first screen of the home page should not be submitted for pre-approval or filed with the Advertising Review Committee. However, additional information beyond the first screen that is primarily concerned with solicitation of prospective clients by a lawyer or law firm is considered public media advertisement that must comply with Part 7 of the Texas Disciplinary Rules of Professional Conduct, including the filing requirements of 7.07. The following examples are generally not considered to be primarily concerned with solicitation of prospective clients: newsletters; news articles; legal articles; editorial opinions; illustrations; questionnaires; fact or opinion survey forms; announcement of office openings and relocations; request for proposals or information from the public; legal product specifications; E-mail and E-mail response forms; attorney biographical information; announcement or personnel changes; attorney and support staff recruiting; job openings; legal development and events, including verdicts, judgments, court rulings, administrative rulings, and/or legislation; announcement of seminars and events, including on- line registration forms therefor; links to other Internet sites (legal or otherwise); and entertainment/amuse-ment devices. C. Compliance with Part 7 of the Texas Disciplinary Rules of Professional Conduct Including Rule 7.04(a-c) and (h-o). Information that may not be considered primarily concerned with solicitation of prospective clients must still comply with the applicable provisions of Part 7 of the Texas Disciplinary Rules of Professional Conduct, including Rule 7.04(a-c) and (h-o). Attorney biographical information must contain appropriate statements and/or disclaimers as required by 7.04(a-c). References to a submitting lawyer's or law firm's accomplishments or record, including verdicts, judgments, court rulings, and administrative rulings, must be accompanied by an appropriate disclaimer as well as the information set forth in Interpretive Comment 3 regarding unjustified expectations. The home page first screen must also disclose the geographic location by city or town of the lawyer's or firm's principal office.

In order to maintain consistency and bring Interpretive Comment 15 into line with the language in Comment 17, the following amended version of Comment 15 (which was previously published in the November Bar Journal) was approved by the Committee as well.

15. Advertisements Referring to Additional Information or Recordings. If a public media advertisement or writing refers to additional information which may be available to prospective clients, such as taped messages or printed pamphlets that provide information concerning a person's or entity's legal rights, the additional information should not be submitted for pre-approval or filed with the Advertising Review Committee. However, if the information contains matters designed primarily to solicit prospective clients by the lawyer or firm, then this information must be filed in accordance with Rule

7.07. A lawyer who responds to a request for information by a prospective client with an individualized letter is not subject to the Rule 7.05 governing written solicitation communications and is not required to file such letter.

[End of Quotation]


Thus, In Texas putting a home page on the WWW is considered to be a species of advertising, subject to regulation by the Bar. Note that interior pages of a WWW site must also be filed if they contain material changes in format that vary from the first screen of the original home page. Note also that TCRPC 7.04(f) requires the lawyer to keep a hard copy of the advertisement for four years after its last dissemination.

Direct communication with others through the Internet can have features that might trigger solicitation rules, like Texas Disciplinary Rule of Professional Conduct 7.05.

It is suggested that the lawyer with a home page on the WWW "carefully scrutinize all material that is to be made accessible through a law firm home page to ensure that it complies with the advertising rules." The Internet -- Hip Or Hype? Legal Ethics and the Internet, by Professors Catherine J. Lanctot and James Edward Maule (Villanova University Law School): http://www.law.vill.edu/vcilp/MacCrate/mcle/lanctot.htm. The professors also suggest that "lawyers insure that posting to bulletin boards or chat groups for the purpose of obtaining clients also comply with the advertising rules." Id. The professors also suggest caution in initiating contact with potential clients. If such a solicitation would violate advertising rules if done over the telephone, they suggest it would likewise violate the same rules if done over the Internet. Id.

In an article in Internethics: What Every Texas Attorney Should Know About the Ethics of Advertising on the Internet, by John P. Hagan, Computer Law Review and Technology Journal 56 (Winter 1996/1997), Hagan draws a distinction between an informational home page and an advertising home page. Id. at 63. An informational home page republishes court decisions, law review articles or on-line discussions of the law. An informational home page does not propose a commercial transaction; a commercial home page does. Hagan argues that informational home pages should be exempt from state bar ethical advertising regulations. Id. at 64.

V. DIRECT CONTACT WITH REPRESENTED PARTY.

Professors Lanctot and Maule, in their article on Hip or Hype, also raised the issue of direct contact with represented parties through the Internet. This can occur when: (i) a lawyer accesses the home page of an opposing party and communicates through e-mai; (ii) when a lawyer e-mails to someone represented by another lawyer, by responding to inquiries on a bulletin board; and (iii) when a lawyer is moderating a listserve or newgroup and an opposing party subscribes. Id. At p. 10. Texas Disciplinary Rule of Professional Conduct 4.02 prohibits communications with represented parties only where the lawyer is doing so "in representing a client." Therefore, communications that are not in the context of representing a client do not violate this standard.

However, what if you are representing a client who is litigating against a corporation, and you access that corporation's WWW site? Since that is a passive communication, it would probably not fit within the proscription. What if the WWW page permits interactive use, which triggers additional information from the Company? Does that constitute communication with the adverse party? Professors Lanctote and Maule cite Ceramco, Inc. v. Lee Pharmaceuticals, 510 F.2d 28 (2nd Cir. 1975), involving a motion to disqualify a law firm whose associate telephoned the order department of the opposing party, without identifying himself as opposing counsel, and obtained information pertaining to jurisdiction and venue. The court denied disqualification, but suggested that the behavior might technically be misconduct, but not sufficiently wrong to warrant disqualification. Lanctot & Maule, p. 11.

VI. UNAUTHORIZED PRACTICE OF LAW

The issue of unauthorized practice of law arises when a lawyer practices law in a jurisdiction where (s)he is not licensed. For example, a lawyer participating in an electronic discussion and giving legal advice to a participant who is in a state in which the lawyer is not licensed to practice may be engaged in the unauthorized practice of law. The Internet -- Hip Or Hype? Legal Ethics and the Internet, by Professors Catherine J. Lanctot and James Edward Maule (Villanova University Law School): http://www.law.vill.edu/vcilp/MacCrate/mcle/lanctot.htm. When a law firm's WWW site deals with interstate issues, such as federal law, and it draws inquiries from persons or companies located in other states, and those inquiries result in telephone or e-mail communications that constitute legal advice, is the legal service rendered at the lawyer's office, or Internet service provider, or at the quasi-client's office? This might impact the issue of in what jurisdiction law is being practiced.

Professors Lanctot and Maule suggest that lawyers avoid giving personalized legal advice over the Internet. You should go no further than you would in talking with a stranger over the telephone. They also suggest that, if the lawyer has a WWW site that includes a discussion group, all participants should be required to register and provide basic identifying information. Id. at p. 8.

VII. CLIENT CONFIDENTIALITY

Issues of client confidentiality and the Internet arise in connection with discussion groups, and in connection with misdirected or improperly intercepted e-mail messages.

When a lawyer posts a notice asking a question regarding a client's case, even if the names are changed and the facts disguised, perhaps a third party, such as the opposing attorney, can read the posting and glean information regarding the matter.

There is a problem with a mis-addressed e-mail, just like a misaddressed fax or misaddressed letter, as to whether a confidential communication loses its confidentiality by being sent to the wrong recipient.

Additionally, e-mail that travels the Internet is subject to interception at a number of points along its journey. This risk of interception of Internet e-mail is widely known, and therefore presents a possible argument that sending an e-mail by the Internet has no expectation of confidentiality, and thus is not confidential. Several state and local bars have suggested that an attorney should not conduct confidential discussions on a cellular telephone because they are so easy to intercept. E-Mail and the Attorney-Client Privilege, , p. 1, by Arthur L. Smith: http://www.abelaw.com/bamsl/lpm/email.htm. Ethics panels in Massachussetts, New York City, and New Hampshire have said that confidential communications should not occur over a cellular telephone, without informed consent from the client. Malpractice Concerns Cloud E-mail, On-line Advice, p. 3, by Joan C. Rogers (Legal Editor of the ABA/BNA Lawyers' Manual on Professional Conduct): http://www.bna.com/hub/bna/legal/adnew2.html[link dead]. Can the same thing be said about Internet e-mail? Apparently the State Bar of Iowa has said so. Iowa Ethics Opinion 95-30 (formal ethics opinion stating that attorneys must encrypt sensitive material before sending it by e-mail), cited in E-mail: How Attorneys Are Changing the Way They Communicate, p. 2, by Susan B. Ross, http://www.collegehill.com/ilp-news/ross-email.html.

It is believed that proprietary e-mail systems like MCI Mail and AT&T Mail are more secure, as well as self-contained systems like AOL and Compuserve. However, it is certain that e-mail on those systems is subject to viewing by system operators who can view e-mail without leaving a trace, whereas U.S. postal employees and Federal Express employees cannot open an envelope or package without evidencing that fact. Encryption is the only way to guard against prying eyes of e-mail interceptors.

Writing in Communicating with or About Clients on the Internet: Legal, Ethical, and Liability Concerns, Attorney's Liability Assurance Society Loss Prevention Journal 17, 19 (Jan. 1996), William Freivogel, an ALAS attorney who works on loss prevention wrote that he felt that fear of interception of Internet e-mail was exaggerated. The computers which pass e-mail messages pass thousands if not millions of messages per day, and identifying a particular computer, and trapping a specific message would take time, money, technical proficiency, and a willingness to violate federal law, 18 U.S.C. 2510 et seq. Freivogel concluded that lawyers may ethically communicate with or about clients in the Internet without encryption. He further stated that he did not believe that illegal interception of an e-mail message would waive confidentiality, or that criminal interception of an e-mail message would trigger lawyer liability. See Malpractice Concerns Cloud E-mail, On-line Advice, p. 5, by Joan C. Rogers (Legal Editor of the ABA/BNA Lawyers' Manual on Professional Conduct): http://www.bna.com/hub/bna/legal/adnew2.html[link dead].

VIII. MALPRACTICE

One of the key issues involving malpractice and the Internet is the inadvertent creation of an attorney-client relationship with someone who visits your WWW page, or who reads a posting you leave on a discussion site, or especially with whom you com- municate by e-mail. Another malpractice concern is the revealing of confidential information through posting messages, or through sending e-mails that are sent to the wrong address or are intercepted and revealed. Another question is whether a lawyer has a legal duty to utilize the Internet for legal research or information gathering, as compared to using more traditional forms of research. Also, is there malpractice exposure for relying on the accuracy of information obtained from the Internet which proves to be inaccurate? Much of the information on the Internet is unedited, and is correspondingly subject to error. Also, a search for case law conducted solely though the Internet might arguably be more prone to omission error than a search through a comprehensive database like Westlaw or Lexis.

IX. LIBEL

The potential for making a libelous statement using the Internet is not much greater than by telephone or letter.

One big difference, however, is the extent to which a libelous statement can be disseminated using the Internet, and the fact that a statement placed on the Internet arguably is published all over the USA, and in fact all over the world, leading to the possibility of a suit being filed in a more remote location, and with potential injury to reputation being more widespread.

E-mail creates special concerns, however. Since e-mail is so informal, and is more akin to a voice conversation than exchanging letters, people tend to be more frank or revealing in e-mails than they would be in formal letters. This might lead someone into making a libelous statement that is in "print" (i.e., in an e-mail message) that they wouldn't dream of making in a letter. And yet the e-mail messag is permanently recorded just as much as if the message had been typed into a letter. Not only can e-mail messages be stored or printed by the recipient, but a "written" record of e-mail messages can be saved in system back-ups of the senders computer network. Employers who have a number of employees on an internal network, need to be concerned about libelous e-mail messages being transmitted on the internal network. And if the employees are connected to the Internet, employers need to be concerned about employees sending libelous e-mail messages over the Internet, under the employer's name. Most e-mail messages carry the employer's name and Internet address as part of the identifying information, which carries with it the possibility of tacit enforsement of the libelous statement.

X. VIOLATING INTELLECTUAL PROPERTY RIGHTS

While we all have had the experience of standing at a photocopy machine and copying a case or an article, those types of violations of copyright laws are so private and so limited that there is virtually no chance of legal intervention. However, when copyrighted information is obtained from the Internet, it is so easy to digitally copy and republish it that such republication happens more often. If the information is used at a WWW site, then it is republished for others outside the office to see, again increasing the chances that the copyright owner will learn of a violation and become involved.

An interesting problem with the Internet is that browsing the Internet requires in the user's browser creating an exact reproduction of the WWW page in the user's computer. Since this is known to the persons who hold the copyright to the WWW page, there would appear to be an implied license to copy for this purpose. Now, are things different if I affirmatively download the WWW page (HTML code and all) onto my hard disk? In Religious Technology Center v. Lerma, 908 F. Supp. 1362, 1368 (E.D. Va.1995), the court held that a reporter who had merely downloaded information from the Internet to his computer disk was not liable for copyright infringement, saying that "the party who downloads information cannot be liable for misappropriation because there is no misconduct involved in interacting with the Internet." See Net Users Could Face IP Liability, by Christopher Wolf, The National Law Journal p. C-35 (May 20, 1996).

The "fair use" exception to copyright protection, now included in the Copyright Act, shields limited use of works for some purposes, such as educational, parody and criticism. Four factors are recognized in fair use analysis: (I) the purpose and character of the use; (ii) the nature of the copyrighted work; (iii) the amount and substantiality of the portion used; and (iv) the effect upon the potential market or value of the work. Id.

XI. E-MAIL POLICIES

If you have management responsibilities for a firm, and your employees have access to e-mail, especially Internet e-mail, you might wish to consider adopting a firm-wide policy regarding the use of e-mail by your employees. Mark K. Smallhouse has set out some sample e-mail policies in Drafting Effective E-Mail Privacy and Use Policies,: http://www.pacificrim.net/~ncpl/EArt.html. His suggestions include: (i) statement whether e-mail is solely for business or includes personal use; (ii) prohibiting sexual content or comments on race, creed or national origin; (iii) prohibiting use of a password unknown to the firm, and prohibiting the use of another employee's password; (iv) reserving the firm's right to read e-mail and securing employees' blanket consent; (v) developing objective criteria on when e-mail will be monitored; (vi) blanket policy to delete e-mail within 15 days unless there is a specific business purpose; (vii) warning that e-mail can be forwarded or printed out, and the privacy cannot be assured; (viii) procedures for disciplining employees who violate the e-mail policy.

XII. PERSONAL JURISDICTION

An issue arises in cyberspace as to what kinds of contacts can create personal jurisdiction in another state. In an 8-8-97 article entitled E-mail Can Establish Personal Jurisdiction http://www.counsel.com/doc/almnews/html/CC16356871065369/EDT0808C.HTM, the author discussed Hall v. LaRonde, B107423, which held that communications from New York to California that consisted entirely of mail, telephone and e-mail, established minimum contacts in California, even though the plaintiff and the defendant had never met. A copy of the appellate court's opinion is attached as an appendix to the back of this article. On September 10, 1997, a news article appeared on Counsel Connect, announcing that a Minnesota court had ruled that it had jurisdiction over a Nevada company's web site: " The Minnesota Court of Appeals has held that the state's courts have jurisdiction over a Las Vegas-based gambling company's Web site. The court said Granite Gate Resorts Inc. 'purposefully availed themselves of the privilege of doing business in Minnesota' by seeking business from Minnesota residents via the Internet. Minnesota Attorney General Hubert Humphrey III accuses the site's operator of false advertising, deceptive trade practices and consumer fraud, and said he will seek a court order to block the site from soliciting Minnesota residents. Kerry Rogers, president of Granite Gate, said he will appeal. (The Wall Street Journal)" See Opinion in Paragraph XIV.B below.

A comprehensive article on the subject can be found at: http://www.finnegan.com./finnegan/finnegan/library/wired.htm. A page of links to cases involving personal jurisdiction and the Internet can be found at http://www.jmls.edu/cyber/index/juris.html.

XIII. SOURCE MATERIAL

The following on-line resources are used as the basis for this Article. In the on-line version of this Article, the URLs are actual links.

Advertising


  1. Attorney Sites Can Avoid Violations of Ethics Rules (A disclaimer can emphasize that a lawyer's Web site doesn't offer advice, solicitation or referrals); by Jeffrey R. Kuester, Special to the National Law Journal, Vol. 18, No. 50, p. B11, August 12, 1996 <http://www.computerbar.org/netethics/ nlj.htm>.


  2. Ambulance Chasers on the Internet: Regulation of Attorney Web Pages, by Mark Hankins, 1 J. TECH. L. & POL'Y 3, <http:// journal.law.ufl. edu/~techlaw/1/hankins.html> (1996).


  3. E-mail: How Attorneys Are Changing the Way They Communicate, by Susan B. Ross, <http://www. collegehill.com/ilp-news/ross-email.html>.


  4. The Ethical Boundaries of Selling Legal Services in Cyberspace, by William E. Hornsby, Jr. (staff counsel to the American Bar Association Commission on Advertising):
<http://www.computerbar. org/netethics/abawill.htm>.

  1. Ethical Considerations of Legal Netvertising, by Lori Christman, Keith Porterfield, and Brandon Unterreiner (August 1995): <http://www.com puterbar.org/netethics/brandy.htm>.


  2. How Do Advertising Rules Apply to Lawyers on the 'Net?, by Joan C. Rogers (Legal Editor of the ABA/BNA Lawyers' Manual on Professional Conduct):
< http://www.bna.com/hub/bna/legal/ adnew.html>.

  1. The Internet -- Hip Or Hype? Legal Ethics and the Internet, by Professors Catherine J. Lanctot and James Edward Maule (Villanova University Law School):
<http://www.law.vill.edu/vcilp/Mac Crate/mcle/lanctot.htm>.

  1. Internethics: What Every Texas Attorney Should Know About the Ethics of Advertising on the Internet, by John P. Hagan, Computer Law Review and Technology Journal 56 (Winter 1996/1997).


Preserving Confidentiality


  1. Client Confidentiality: A Lawyer's Duties with Regard to Internet E-Mail, by Robert L. Jones, August 16, 1995: <http://www.computerbar.org/ netethics/bjones. htm#fn19>


  2. E-Mail and the Attorney-Client Privilege, By Arthur L. Smith:
<http://www.abelaw.com/ bamsl/lpm/email.htm>.

  1. E-mail: How Attorneys Are Changing the Way They Communicate, by Susan B. Ross, 7/19/96:
<http://www.collegehill.com/ilp-news/ross-email. html>

  1. Drafting Effective E-Mail Privacy and Use Policies, by Mark K. Smallhouse: <http://www.
pacificrim.net/~ncpl/EArt.html>.

  1. Malpractice Concerns Cloud E-mail, On-line Advice, by Joan C. Rogers (Legal Editor of the ABA/BNA Lawyers' Manual on Professional Conduct):
<http://www.bna.com/hub/bna/legal/ adnew2.html>.

Malpractice


  1. Lawyers and the Internet: Are You Connected? by Courtney G. McKenzie, South Carolina Bar: SC Lawyer Magazine - September/October 1996:
<http://www.scbar.org/scbar/ reference/sclawyer/ 1996so-a2.stm>

  1. Accidents On the Information Su
perhighway: On-Line Liability And Regulation, by Marc L. Caden & Stephanie E. Lucas: <http:// www.urich.edu/~jolt/v2i1/caden_ lucas.html>.

Libel


  1. Responsibility as an Issue in Internet Communication: Reading Flames as Defamation, James A. Inman and Ralph R. Inman (1996):
<http://journal.law.ufl.edu/~techlaw/ 1/inman.html>.

  1. Responsibility as an Issue in Internet Communication: Reading Flames as Defamation, by James A. Inman and Ralph R. Inman: <http://journal.law. ufl.edu/~techlaw/1/inman.html>.


XIV. APPENDIX

A. Hall v. LaRonde

BLAKE HALL, Plaintiff and Appellant,

v.

BRAD LARONDE, Defendant and Respondent.

No. 2d Civil No. B107423 Second Appellate District Division Six Super. Ct. No. 165615 Superior Court County of Ventura, Hon. Frederick A. Jones, Judge Filed August 7, 1997

COUNSEL

Kevin M. Filo for Plaintiff and Appellant.

Archbald & Spray, J. William McLafferty, Peri Maziarz, and Karen Burgett for Defendant and Respondent. GILBERT, J.:

Here the long arm of the Internet reaches from California to New York. We hold that the use of electronic mail and the telephone by a party in another state may establish sufficient minimum contacts with California to support personal jurisdiction. We reverse a judgment of dismissal arising from the trial court's grant of defendant's motion to quash service.

FACTS

Appellant, Blake Hall alleged in his complaint that in September of 1994 he entered into a contract with Brad LaRonde doing business as LaRonde Technical Consulting. The contract authorized LaRonde to sell licenses for the use of a computer software application to the general public. LaRonde agreed to compensate Hall by paying him $1 for every license sold. Hall received payments for sales through September of 1995 in the amount of $2,633.60. Although LaRonde continued to market the application, Hall has received no further payments.

The complaint further alleged that Hall is a resident and maintains his principal place of business in Manhattan Beach, California.[FOOTNOTE 1] LaRonde, however, maintains his principal place of business in Skaneateles, New York.

LaRonde made a motion to quash service of the summons on the ground that the courts in California have no jurisdiction. LaRonde claimed that sufficient minimum contacts with California were lacking.

Hall submitted an affidavit in opposition to the motion. Hall declared that he originally contacted LaRonde by electronic mail. The contact concerned a software module Hall had written. LaRonde responded with the idea of integrating Hall's module into LaRonde's software package. LaRonde suggested various modifications. Hall made the modifications and the module was incorporated into LaRonde's retail product.

Hall declared that after he furnished the module, he continued to assist LaRonde in upgrading its application to new and existing software. For example, when the new Microsoft Word 6.0 came out, Hall had to make adjustments to his module to work smoothly with that program.

Hall stated that he performed all the work on the module in California; that all negotiations were conducted by electronic mail and telephone; and that he had no other business or personal connections with New York. LaRonde did not contradict the statements made by Hall.

At the hearing on the motion, Hall asked for a continuance to allow discovery into whether LaRonde has other contacts with California that might confer general jurisdiction. The court denied Hall's request for a continuance. The court granted LaRonde's motion to quash and ordered the case dismissed.

DISCUSSION

Each person has a liberty interest in not being subject to judgments of a forum with which he or she has no minimum contacts. (Von's Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 445.) The requirement of minimum contacts ensures that the assertion of jurisdiction does not violate "'traditional notions of fair play and substantial justice.'" (International Shoe Co. v. Washington (1945) 326 U.S. 310, 316 [90 L.Ed. 95, 102].)

Personal jurisdiction may be either general or specific. Where a nonresident's contacts with the forum state are "'substantial . . . continuous and systematic,'" a court may assert general jurisdiction over the person of the nonresident. (Von's Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at p. 445.) Such general jurisdiction does not require a connection between the specific transaction at issue and the forum state. (Ibid.)

Hall does not contend there is sufficient evidence to support a finding of general jurisdiction. He attributes the lack of such evidence to the trial court's error in denying him the right to conduct discovery on the issue. Hall, nevertheless, contends the evidence shows sufficient minimum contacts for specific jurisdiction.

Specific jurisdiction may be asserted where the defendant has purposefully availed himself of forum benefits and the controversy is related to or arises out of the defendant's contacts with the forum. (Von's Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal.4th at p. 446.) Sufficient minimum contacts for specific jurisdiction exist where a nonresident "'deliberately' has engaged in significant activities within a state [citation] or has created 'continuing obligations' between himself and residents of the forum. [Citation.]" (Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462, 475-476 [85 L.Ed.2d 528, 543].)

Where, as here, there is no conflict in the evidence, the question of personal jurisdiction is one of law. (Great-Western Life Assurance Co. v. Guarantee Co. of North America (1988) 205 Cal.App.3d 199, 204.) In such a case, the lower court's determination is not binding on the reviewing court. (Ibid.)

LaRonde argues that Interdyne Co. v. SYS Computer Corp. (1973) 31 Cal.App.3d 508 is on point. There, the plaintiff was a California corporation. Plaintiff's sales representative contacted defendant in New Jersey. The contact resulted in some small orders placed through an intermediary. Later, the intermediary asked plaintiff to submit a quote to defendant. This led to direct communication between the parties. Negotiations over the contract were carried on by letter and telephone over a period of several months. Ultimately, the parties reached an agreement and plaintiff shipped the goods. When defendant failed to pay, plaintiff sued in California. Other than the contacts with plaintiff, defendant had no contact with California.

The Court of Appeal upheld the trial court's decision to grant defendant's motion to quash. In doing so, the court stated: "The facts as they appear from the record before us disclose a situation which lies somewhere between that held sufficient to support jurisdiction in American Continental Import Agency v. Superior Court (Pasadena Investment Co.) (1963) 216 Cal.App.2d 317 and that held insufficient to support jurisdiction in Tiffany Records, Inc. v. M. B. Krupp Distributors, Inc. (1969) 276 Cal.App.2d 610 . . . ." (Interdyne Co. v. SYS Computer Corporation, supra, 31 Cal.App.3d at p. 511.) The court opined that the only significant difference between the cases is that in Tiffany, where the facts were held insufficient to support jurisdiction, no representative of the defendant buyer ever came to California in connection with the purchase. (Ibid.)

The court concluded, "When a California business seeks out purchasers in other states--purchasers who are not 'present' in California for general purposes--deals with them only by out-of-state agents or by interstate mail and telephone, it is not entitled to force the customer to come to California to defend an action on the contract." (Interdyne Co. v. SYS Computer Corporation, supra, 31 Cal.App.3d at pp. 511-512.)

Unlike the court in Interdyne, we do not believe that the physical presence of a representative of the defendant in California should be determinative. Much has happened in the role that electronic communications plays in business transactions since Interdyne was decided more than 20 years ago. The speed and ease of such communications has increased the number of transactions that are consummated without either party leaving the office. There is no reason why the requisite minimum contacts cannot be electronic.

It is uncontroverted that Hall reached out to New York in a search for business. It is also uncontroverted that LaRonde reached back to California. The record shows that LaRonde's contacts with California consisted of more than simply purchasing a software module from Hall. LaRonde worked with Hall to integrate the module into LaRonde's software package. Even after the initial adaptation was finished, LaRonde continued to work with Hall to modify the module for new and existing software. In addition, the contract contemplated that LaRonde would make continuing royalty payments to Hall. Thus, LaRonde created a "'continuing obligation[]'" between himself and a resident of California. (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at pp. 475-476 [85 L.Ed.2d at p. 543].)

LaRonde's contacts with California were more than "'random,' 'fortuitous,' or 'attenuated.'" (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at p. 475 [85 L.Ed.2d at p. 542].) Nor were the contacts the "'unilateral activity of another party or third person.'" (Ibid.) LaRonde purposefully derived a benefit from interstate activities. (Id., at pp. 473-474 [85 L.Ed.2d at p. 541].) It is fair to require that he account in California for the consequences that arise from such activities. (Ibid.)

Where, as here, the plaintiff establishes sufficient minimum contacts, the burden shifts to the defendant to "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." (Burger King Corp. v. Rudzewicz, supra, 471 U.S. at p. 477 [85 L.Ed.2d at p. 544].) LaRonde fails to point to any place in the record where he raised such considerations in the trial court. For the first time on appeal he claims that maintaining the action in California would effectively deprive him of his right to represent himself.

Not only is LaRonde's claim late, it is hardly the type of "compelling case" the court in Burger King had in mind. Such a claim, if accepted, could be used to defeat jurisdiction in most cases where out of state residents are defendants. Moreover, the claim is entirely hypothetical. LaRonde has been represented by counsel throughout this action.

The judgment is reversed. Costs on appeal are awarded to Hall.

STONE, P. J., and YEGAN, J., concurring

::::::::::::::::::::FOOTNOTE:::::::::::

FN 1. Code of Civil Procedure section 395, subdivision (a) provides in part, "If none of the defendants reside in the state . . . the action may be tried in any county which the plaintiff may designate in his or her complaint . . . . "

B. Minnesota v. Granite Gate Resorts, Inc.

STATE OF MINNESOTA
IN COURT OF APPEALS
C6-97-89

State of Minnesota by its Attorney
General Hubert H. Humphrey, III,
Respondent,

vs.

Granite Gate Resorts, Inc., d/b/a On Ramp Internet Computer Services; et al., Appellants.

Filed September 5, 1997

Affirmed

Willis, Judge

Ramsey County District Court

File No. C6957227

Hubert H. Humphrey III, Attorney General, Carolyn P. Ham, Ann Beimdiek Kinsella, Assistant Attorneys General, 1400 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101 (for Respondent)

Ronald I. Meshbesher, Meshbesher & Spence, 1616 Park Avenue, Minneapolis, MN 55404 and Eckley M. Keach, Goodman, Chesnoff & Keach, 520 South Fourth Street, Las Vegas, NV 89101 (for Appellants)

Considered and decided by Willis, Presiding Judge, Crippen, Judge, and Harten, Judge.

S Y L L A B U S

Appellants, having advertised on the Internet a forthcoming on-line gambling service and having developed from the Internet a mailing list that includes one or more Minnesota residents, are subject to personal jurisdiction in Minnesota because they purposefully availed themselves of the privilege of conducting commercial activities in this state to an extent that maintenance of an action here does not offend traditional notions of fair play and substantial justice.

O P I N I O N

WILLIS, Judge

Respondent State of Minnesota filed a complaint against appellants Granite Gate Resorts, Inc., d/b/a On Ramp Internet Computer Services, and Kerry Rogers, individually and as principal officer of Granite Gate Resorts, Inc., alleging that appellants engaged in deceptive trade practices, false advertising, and consumer fraud on the Internet. Appellants challenge the district court's denial of their motion to dismiss for lack of personal jurisdiction. We affirm.

FACTS

Rogers, a Nevada resident, is president of Granite Gate, a Nevada corporation that does business as On Ramp. Until August 1995, On Ramp provided Internet advertising on the site located at http://www.vegas.com, which provides Nevada tourist information. Among the sites advertised as WagerNet, an on-line wagering service planned to be available internationally in the fall of 1995, whose page enabled Internet users to subscribe for more information about the service.

The WagerNet site, designed by Rogers, stated:

On-Line sports wagering open to International markets, Fall of 1995

Global Gaming Services Ltd, based in the country of Belize, is pleased to introduce WagerNet, the first and only on-line sports betting site on the Internet. WagerNet will provide sports fans with a legal way to bet on sporting events from anywhere in the world. . . 24 Hours a Day!

How it Works

First, there is a $100 setup fee, for necessary hardware and software. For security and privacy, all members are issued a card system linked to their personal computer to access WagerNet. Once on-line, the bettor selects the team/s and amount/s they wish to wager. WagerNet then matches your bet with an opposing bettor or bettors to cover your wager. WagerNet charges each bettor a transaction fee of ONLY 2.5% as opposed to the 10% fee charged by most bookmakers.

The website invited Internet users to put themselves on a mailing list for WagerNet information and included a form for that purpose. It gave a toll-free number for WagerNet and also told Internet users to contact On Ramp at a Nevada telephone number for more information. A note on the page advised users to consult with local authorities regarding restrictions on offshore sports betting by telephone before registering with WagerNet.

A linked web page listed the terms and conditions to which an Internet user assented by applying for the private access card and special hardware and software required to access WagerNet's services. This page stated that any claim against WagerNet by a customer must be brought before a Belizian court, but that WagerNet could sue the consumer in his or her home state to prevent the consumer "from committing any breach or anticipated breach of this Agreement and for consequential relief."

On July 5, 1995, Jeff Janacek, a consumer investigator for the Minnesota Attorney General's office, telephoned the toll-free number shown on an On Ramp site that advertised All Star Sports, a sports handicapping service, and asked how to bet on sports events. An On Ramp employee told Janacek to call Rogers directly. Janacek dialed the number he was given, which was the same number that the WagerNet site directed Internet users to call to receive more information, and spoke with an individual who identified himself as Rogers. Janacek identified himself as a Minnesotan interested in placing bets. Rogers explained how to access WagerNet, told Janacek the betting service was legal, and stated that he hoped the service would be up and running by the 1995 football season.

In July 1995, the attorney general filed a complaint alleging that appellants had engaged in deceptive trade practices, false advertising, and consumer fraud by advertising in Minnesota that gambling on the Internet is lawful. In October 1995, Janacek subscribed to the WagerNet mailing list under a fictitious name and received an on-line confirmation stating that he would be sent updates on the WagerNet service. Appellants filed a motion to dismiss for lack of personal jurisdiction. The district court allowed limited discovery to determine the quantity and quality of appellants' contacts with the state. Rogers refused to produce the names of the persons on the WagerNet mailing list, claiming that the information is the sole property of a Belizian corporation. As a sanction, the court found that it is established as a fact for this action that the WagerNet mailing list contains the name and address of at least one Minnesota resident. In December 1996, the district court denied appellants' motion to dismiss for lack of jurisdiction.

ISSUE

Did the district court err in denying appellants' motion to dismiss for lack of personal jurisdiction?

ANALYSIS

This is the first time a Minnesota court has addressed the issue of personal jurisdiction based on Internet advertising. We are mindful that the Internet is a communication medium that lacks historical parallel in the potential extent of its reach and that regulation across jurisdictions may implicate fundamental First Amendment concerns. It will undoubtedly take some time to determine the precise balance between the rights of those who use the Internet to disseminate information and the powers of the jurisdictions in which receiving computers are located to regulate for the general welfare. But our task here is limited to deciding the question of personal jurisdiction in the instant case, and on the facts before us, we are satisfied that established legal principles provide adequate guidance.

Minnesota's long-arm statute, Minn. Stat. 543.19 (1996), "permits courts to assert jurisdiction over defendants to the extent that federal constitutional requirements of due process will allow." Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn.), cert. denied, 116 S. Ct. 583 (1995). To satisfy the Due Process Clause of the Fourteenth Amendment, a plaintiff must show that the defendant has "minimum contacts" with the forum state "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343 (1940)). There must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958).

Appellants allege that the district court erred in denying their motion to dismiss because a nonresident defendant that places information on the Internet has not purposefully availed itself of the privilege of conducting activities within every state from which that information may be accessed. The assertion of personal jurisdiction in Minnesota, appellants argue, would not comport with the traditional notions of fair play and substantial justice.

A court must consider five factors in determining whether a defendant has established minimum contacts with the forum state: (1) the quantity of the defendant's contacts; (2) the nature and quality of the defendant's contacts; (3) the connection between the cause of action and the defendant's contacts; (4) the state's interest in providing a forum; and (5) the convenience of the parties. Rostad v. On-Deck, Inc., 372 N.W.2d 719-20 (Minn. 1985). The first three factors are of primary importance. Land-O-Nod Co. v. Bassest Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir. 1983). In close cases, "doubts should be resolved in favor of retention of jurisdiction." Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 411-12 (Minn. 1992).

1. Quantity of Contacts.

The quantity of contacts here supports the contention that appellants purposefully availed themselves of the privilege of conducting commercial activities in Minnesota. The district court found that (1) computers located throughout the United States, including Minnesota, accessed appellants' websites, (2) during a two-week period in February and March 1996, at least 248 Minnesota computers accessed and "received transmissions from" appellants' websites, (3) computers located in Minnesota are among the 500 computers that most often accessed appellants' websites, (4) persons located throughout the United States, including persons in Minnesota, called appellants at the numbers advertised on its websites, and (5) the WagerNet mailing list includes the name and address of at least one Minnesota resident.

In Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328 (E.D. Mo. 1996), a Missouri federal court exercised personal jurisdiction over the California operator of an Internet site that provided information on a forthcoming service that would charge advertisers for access to a mailing list of Internet users. Id. at 1334. In analyzing the quantity of the defendant's contacts with Missouri, the Maritz court found that the defendant "has transmitted information into Missouri regarding its services approximately 131 times," which allowed an inference that the defendant purposefully availed itself of the privilege of conducting activities in Missouri. Id. at 1333. The quantity of contacts here exceeds that in Maritz.

2. Quality of Contacts.

Even where the quantity of contacts with a state is minimal, the nature and quality of the contacts may be dispositive. Trident Enters. Int'l, Inc. v. Kemp & George, Inc., 502 N.W.2d 411, 415 (Minn. App. 1993); see also Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) (concluding "likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the internet"). Advertising in the forum state, or establishing channels for providing regular advice to customers in the forum state, indicates a defendant's intent to serve the market in that state. Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 112, 107 S. Ct. 1026, 1032 (1987).

Appellants argue that they "have not directed their activities at the citizens of Minnesota" because they "only placed information on the internet." An Internet site, however, can be viewed as an "advertisement" by which [the foreign corporation] distributes its pictorial images throughout the United States. That the local user "pulls" these images from [the corporation's] computer in [in that case] Italy, as opposed to [the corporation] "sending" them to this country, is irrelevant. By inviting United States users to download these images, [the corporation] is causing and contributing to their distribution within the United States.

Playboy Enters., Inc. v. Chuckleberry Publ'g, Inc., 939 F. Supp. 1032, 1044 (S.D.N.Y. 1996).

The Maritz court also rejected the view that Internet advertising is a passive activity:

[Defendant's] posting of information about its new, up-coming service through a website seeks to develop a mailing list of internet users, as such users are essential to the success of its service. Clearly, [the defendant] has obtained the website for the purpose of, and in anticipation that, internet users, searching the internet for websites, will access [the defendant's] website and eventually sign up on [the defendant's] mailing list. Although [the defendant] characterizes its activity as merely maintaining a "passive website," its intent is to reach all internet users, regardless of geographic location. * * * Through its website, [the defendant] has consciously decided to transmit advertising information to all internet users, knowing that such information will be transmitted globally.

Id. at 1333; see also Inset Sys., Inc. v. Instruction Set, Inc., 937 F. Supp. 161, 165 (D. Conn. 1996) (holding that Massachusetts corporation purposefully availed itself of privilege of doing business in Connecticut by advertising its activities and its toll-free number on Internet because Internet and toll-free numbers are designed to communicate with people in every state).

Minnesota courts have concluded that defendants who know their message will be broadcast in this state are subject to suit here. See, e.g., Tonka Corp. v. TMS Entertainment, Inc., 638 F. Supp. 386, 391 (D. Minn. 1985) (holding that Minnesota can exert personal jurisdiction over California corporation that produced television program it knew would be broadcast nationwide); BLC Ins. Co. v. Westin, Inc., 359 N.W.2d 752, 755 (Minn. App. 1985) (holding that Wisconsin corporation's purposeful behavior in advertising its Wisconsin bar on Twin Cities radio station is such that it should have reasonably anticipated being haled into Minnesota court), review denied (Minn. Apr. 15, 1985); see also A. Uberti & C. v. Leonardo, 892 P.2d 1354, 1362 (Ariz. 1994) (concluding that defendant intending to sell its products to any and all United States citizens can be held accountable in any jurisdiction where its products cause injury), cert. denied, 116 S. Ct. 273 (1995). Other states have held that direct mail solicitation into the state is sufficient contact to justify personal jurisdiction. See, e.g., State ex rel. Miller v. Baxter Chrysler Plymouth, Inc., 456 N.W.2d 371, 377 (Iowa 1990); Kugler v. Market Dev. Corp., 306 A.2d 489, 491 (N.J. Super. Ct. Ch. Div. 1973); State v. Colorado State Christian College, 346 N.Y.S.2d 482, 485 (N.Y. Sup. Ct. 1973); State v. Reader's Digest Ass'n, Inc., 501 P.2d 290, 302 (Wash. 1972).

Internet advertisements are similar to broadcast and direct mail solicitation in that advertisers distribute messages to Internet users, and users must take affirmative action to receive the advertised product. Here, the WagerNet site itself stated that it was "open to International markets," indicating an intent to seek customers from a very broad geographic area. The fact that WagerNet had apparently paid for advertising in English on an American commercial site indicates an intent to reach the American market, and by advertising their services with a toll-free number, appellants indicated their intent to solicit responses from all jurisdictions within that market, including Minnesota. A defendant cannot "hide behind the structuring of its distribution system when [the defendant's] intent was to enter the market [in the forum state] and profit thereby." Rostad, 372 N.W.2d at 722. The presence of the disclaimer on the site may be relevant to the merits of the consumer fraud action, but appellants' clear effort to reach and seek potential profit from Minnesota consumers provides minimum contacts of a nature and quality sufficient to support a threshold finding of personal jurisdiction. [1]

3. Connection Between Cause of Action and Contacts.

If the cause of action arises from the nonresident defendant's contacts with the forum state, even a single transaction can be sufficient to establish personal jurisdiction over the defendant. See McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199 (1957). Advertising contacts justify the exercise of personal jurisdiction where unlawful or misleading advertisements are the basis of the plaintiff's claims. See Baxter, 456 N.W.2d at 377 (holding that defendants' acts in advertising within forum state are sufficient to render them amenable to suit there in action alleging the advertising is unlawful); Reader's Digest, 501 P.2d at 302-03 (concluding that unfair competition cause of action arose from contacts because mailing sweepstakes entry information constituted illegal lottery within state).

In this case, the state alleges violations of Minn. Stat. 325D.44, subd. 1 (1996) (engaging in deceptive trade practices), 325F.67 (1996) (making false statements in advertisements), and 325F.69, subd. 1 (1996) (engaging in fraud, misrepresentation, or deceptive practices), based on appellants' alleged misrepresentations regarding the legality in Minnesota of the services offered by All Star Sports and WagerNet. Under Minn. Stat. 8.31, subd. 3 (1996), the attorney general is authorized to seek injunctive relief and civil penalties when satisfied that any of the laws referred to in Minn. Stat. 8.31, subd. 1 (1996), which include the consumer statutes allegedly violated here, "is about to be violated." Thus, the causes of action against appellants arise out of the information that appellants posted on their website inviting Internet users to use the on-line gambling service when it becomes operational, which, as discussed, was directed toward Minnesota and received here. See Maritz, 947 F. Supp. at 1333 (concluding that trademark infringement and unfair competition causes of action result from injuries that arise out of or relate to defendant's website).

4. State's Interest.

Minnesota's interest in providing a forum for a resident plaintiff cannot alone establish jurisdiction, but it can support the exercise of jurisdiction over a nonresident defendant when viewed in light of the first three factors for evaluating whether minimum contacts exist. Trident, 502 N.W.2d at 416. The state has an interest in enforcing consumer protection statutes and regulating gambling. See State v. Alpine Air Products, Inc., 490 N.W.2d 888, 892 (Minn. App. 1992) (concluding that consumer fraud statutes were designed to protect and enhance public interests), aff'd, 500 N.W.2d 788 (Minn. 1993); see also State v. Brown, 486 N.W.2d 816, 817 (Minn. App. 1992) (concluding that Minnesota gambling industry "is highly regulated to prevent its commercialization and to ensure that profits generated from gambling are used for lawful purposes"). The state's interest in providing a forum to enforce its consumer protection laws weighs in favor of exerting jurisdiction over appellants. See Reader's Digest, 501 P.2d at 303 (holding that Washington court had jurisdiction over foreign defendant that advertised there, noting that "[i]f our courts are not open, the state will be without a remedy in any court and the Consumer Protection Act will be rendered useless").

5. Convenience of Parties.

The convenience of the parties is "of minor interest in comparison to the first three factors." Rostad, 372 N.W.2d at 722.

As technological progress has increased the flow of commerce between States, * * * progress in communications and transportation has made defense of a suit in a foreign tribunal less burdensome.

Hanson, 357 U.S. at 250-51, 78 S. Ct. at 1238.

Appellants argue that the district court placed excessive weight on WagerNet's statement that it reserved the right to sue customers in the customer's home forum or Belize, at WagerNet's option, because WagerNet is not a party to this action. The district court's decision, however, does not rely significantly on WagerNet's claimed choice of forums. Moreover, appellants do not contest the district court's finding that appellant Rogers "makes all the decisions regarding WagerNet." "Foreign" corporations that seek business in Minnesota and reserve the right to sue Minnesota customers in courts here cannot claim inconvenience as an excuse to avoid personal jurisdiction here, particularly in light of the state's interest in regulating advertising and gambling. Appellants, an American corporation and its officer, who facilitated WagerNet's solicitation of business in Minnesota, have not shown that the inconvenience of defending themselves in Minnesota would be so great, by itself, as to offend traditional notions of due process.

D E C I S I O N

Appellants, through their Internet advertising, have demonstrated a clear intent to solicit business from markets that include Minnesota and, as a result, have had multiple contacts with Minnesota residents, including at least one successful solicitation. The cause of action here arises from the same advertisements that constitute appellants' contacts with the state and implicates Minnesota's strong interest in maintaining the enforceability of its consumer protection laws. Appellants have not demonstrated that submission to personal jurisdiction in Minnesota would subject them to any undue inconvenience. For these reasons, we hold that appellants are subject to personal jurisdiction in Minnesota because, through their Internet activities, they purposefully availed themselves of the privilege of doing business in Minnesota to the extent that the maintenance of an action based on consumer protection statutes does not offend traditional notions of fair play and substantial justice.

Affirmed.

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Footnotes

[1] The balance of equities may be different where a defendant disseminates a message on the Internet for a purpose other than the solicitation of business, but we need not decide that issue here.

- September 11, 1997