Long Arm Of The Law
Commercial Litigation on June 13, 2013
Long-arm statutes permit a court in a particular state to bring within its jurisdictional reach nonresident persons who, by their actions, have had at least such “minimum contacts” with the forum state that it is fair and just to subject them to the powers of a court in that state. In earlier times such contacts were as likely as not to take a physical form. But today, as a recent case illustrates, in the age of computers and the Internet the only thing physical about the contact may be someone’s clicking a mouse or striking a keyboard from his or her home in another state or country.
A chemical company based in Connecticut decided to terminate the employment of Jackie, an employee of a Canadian subsidiary of the company. Jackie lived and worked in Ontario, Canada. According to the company, upon learning of her impending termination and just before it, Jackie forwarded from her company email account to her personal email account some confidential and proprietary data files belonging to the company.
She had previously agreed in writing to safeguard such information and to use it only for proper company purposes. The company sued Jackie in a federal court for unauthorized access to, and misuse of, a computer system and for misappropriation of trade secrets, in violation of Connecticut statutes.
Jackie’s contention that she was beyond the reach of Connecticut’s long-arm statute was ultimately unsuccessful. Her conduct while she was domiciled and working in Canada, in accessing a computer server located in Connecticut to misappropriate confidential information belonging to her employer, was sufficient to confer personal jurisdiction over her under Connecticut’s long-arm statute.
While even more generally worded parts of the long-arm statute may have supported this result, the statute specifically provides for personal jurisdiction over persons who use a “computer” or a computer network located within the state, and the court found that the company’s server, which Jackie had used, was a “computer” for jurisdictional purposes.
For a court to exercise personal jurisdiction over a nonresident, not only must the jurisdiction be authorized under the state’s long-arm statute, but such an exercise of power must satisfy the requirements of the Due Process Clause of the Fourteenth Amendment.
Under well-settled U.S. Supreme Court precedents, this means that the nonresident must have engaged in some act by which it availed itself of the privilege of conducting activities in the forum state, and the resulting exercise of personal jurisdiction must be “reasonable.” The facts of the chemical company’s case against Jackie met these constitutional tests.
First, Jackie had purposefully availed herself of the “privilege” of conducting activities within Connecticut by allegedly accessing a computer server located in Connecticut in order to misappropriate confidential information belonging to her employer. She was allegedly aware of the centralization and housing of her employer’s email system and the storage of confidential proprietary information and trade secrets in Connecticut, and she used that email system and its Connecticut servers in retrieving and emailing confidential files. Moreover, it was also significant that Jackie had directed her allegedly tortious conduct towards a corporation in Connecticut.
As for the reasonableness of bringing the nonresident defendant before a court in Connecticut, the court explained that although Jackie would have to travel to Connecticut to defend the suit, both Connecticut and the employer company had sufficient interests in resolving the matter in Connecticut. Not only was the employer based in Connecticut, which was where the majority of the corporate witnesses were located, but also Connecticut itself had an interest in the proper interpretation of its laws.