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Tuesday, September 14, 2010

Ind. Decisions - Interesting Illinois case decided today by 7th Circuit

In State of Illinois v. Hemi Group LLC, Judge Kanne writes:

The state of Illinois sued Hemi Group LLC for selling cigarettes to Illinois residents in violation of state laws and for failing to report those sales in violation of federal law. The district court denied Hemi’s motion to dismiss for lack of personal jurisdiction, finding that the Internet transactions sufficed to establish personal jurisdiction over Hemi in Illinois. We affirm. * * *

This case is still at the very earliest stages of litigation, and we conclude only that Illinois has established a prima facie case of personal jurisdiction over Hemi in Illinois. Moving forward, the district court will be able to employ other mechanisms to balance the various competing interests in this litigation.

We note the legitimate concern that “[p]remising personal jurisdiction on the maintenance of a website, without requiring some level of ‘interactivity’ between the defendant and consumers in the forum state, would create almost universal personal jurisdiction because of the virtually unlimited accessibility of websites across the country.” Jennings, 383 F.3d at 550. Courts should be careful in resolving questions about personal jurisdiction involving online contacts to ensure that a defendant is not haled into court simply because the defendant owns or operates a website that is accessible in the forum state, even if that site is “interactive.” Here, we affirm the district court’s conclusion that Hemi is subject to personal jurisdiction in Illinois, not merely because it operated several “interactive” websites, but because Hemi had sufficient voluntary contacts with the state of Illinois. See Neogen, 282 F.3d at 890-91. We make no comment on whether Hemi may be subject to personal jurisdiction in any other state.

Posted by Marcia Oddi on September 14, 2010 10:44 AM
Posted to Ind. (7th Cir.) Decisions