MACPA's Statement - October 2010 - (Page 34)
Can your website expose you to a lawsuit in a distant land?
By edward e. sharKey
ebsites – every business has one. A recent opinion from the U.S. District Court in Maryland highlights ways that a website might get a business sued in a far-off jurisdiction. It’s hard enough to be sued. Make sure you or your clients don’t needlessly land in court away from home if you don’t have to. Litigating in a distant state is costlier and riskier than litigating at home. Despite modern technology, it is more expensive to supervise and manage litigation away from home. In addition, bias favoring local companies can affect the ultimate outcome. In Music Makers Holdings v. Sarro, the U.S. District Court addressed a dispute between two parties over the trade name “Bach to Rock.” A Maryland company and a New York woman both wanted to use it and demanded the other desist. The Maryland company got to court first, suing the New York woman in Maryland. The woman protested. She argued she was not subject to jurisdiction in Maryland because she did no business in the state. The Maryland company pointed out that the defendant marketed her business to Maryland citizens on her website. In deciding the issue, the court looked at the defendant’s website and applied a “sliding scale” test applicable in Maryland, and, in one form or another, in many jurisdictions. By this test, the mere act of placing information on the Internet is not sufficient by itself to subject that person to jurisdiction in each state where the information is accessed. Instead, the defendant must have acted with the intent of targeting residents in that state. Under the sliding scale model, there are passive, interactive and semi-interactive websites. At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents that involve the knowing and repeated transmission of computer files over the Internet, the defendant can be sued in that state. At the opposite end are situations in which a defendant has simply posted information on a website. A passive website that does little more
Edward E. Sharkey is founder of the Law Office of Edward E. Sharkey, LLC, a Bethesda-based firm focusing on business transactions, including the negotiation and documentation of business financing. He can be reached via www.sharkeylaw.com.
Laptop for Dummies, 4th Edition Product code: PMlAP Price: $23 members* $28 non-members* Quickbooks 2010 on Demand Product code: PMQuICk10 Price: $32 members* $38 non-members* Excel 2007 Macros Made Easy Product code: PMEx07M Price: $22 members* $26 non-members* * plus tax and shipping to order: www.macpa.org/books
MoRE oN TEcHNoLogy
tech-related news, articles and resources are available on our web site:
Table of Contents for the Digital Edition of MACPA's Statement - October 2010
MACPA's Statement - October 2010