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«I. INTRODUCTION We often hear what the Internet can do for us. We should also think about what the Internet can do to us.' An amalgam of ...»

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Scott Wallin was a franchisee of Pillar To Post, Inc., a home inspection business 1 ° incorporated in the state of Delaware.' 4 ' Sandra Sublett was a California resident who had decided to purchase a house in New Mexico.' 42 Sublett learned of Pillar To Post and Wallin's New Mexico franchise (also named Pillar To Post) via a commercial Internet search engine and an advertisement in the Albuquerque phonebook. 4 3 While visiting the Pillar To Post Web site, Sublett used a feature labeled "Locate an inspector," whereupon she was asked to enter the name of the city in which she planned to have a home inspected.'" Upon receiving information about Wallin's Moriarty, New Mexico, franchise from the Pillar To Post Web site, Sublett "contracted with Wallin to inspect a house that [she] planned to purchase in Tijeras, New Mexico." ' 5 After purchasing the property, Sublett discovered that the pipes in the home's heating system were made from a defective material that the inspection had not revealed, despite Sublett's claim that she specifically inquired about them. 1 Sublett sued Wallin, the franchise, and Pillar To Post in the district court of Bernalillo County on a number of theories, including negligence, fraud, and breach of contract.'4 7 Sublett alleged that both Wallin, as franchisee, and Pillar To Post, as franchisor, had reason to know that she would rely on Wallin's inspection in making a decision to purchase the home.'4 8 At the trial court level, Pillar To Post moved to dismiss for lack of personal jurisdiction, asserting that the corporation was not subject to the New Mexico long-arm statute,14 9 as Sublett had "failed to allege sufficient facts to establish that Pillar To Post had minimum contacts with New Mexico."' 50 Sublett responded by arguing that the Pillar To Post corporation's Web site and its franchise relationship with Wallin were sufficient to sustain personal jurisdiction. 5 ' In support of this contention, Sublett attached materials that included her affidavit, a printout of the Web page listing Wallin's franchise under "Pillar To Post in your area," and her check to "Pillar To Post" which had been endorsed

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"Pillar To Post[,] Scott Wallin[,] For Deposit Only."152 The district court dismissed ' Sublett's action, and her appeal ensued.' Upon consideration of Sandra Sublett's appeal from the district court, in which she alleged that defendant company "Pillar To Post had the requisite minimum contacts with New Mexico" to sustain personal jurisdiction, 5 4 the New Mexico Court of Appeals affirmed the district court's dismissal of her cause of action.' Sublett asserted two grounds for the imposition of personal jurisdiction over Pillar To Post: the company's relationship with Wallin and his franchise, and the existence of the Pillar To Post Web site.'56 The court of appeals held "that the franchise relationship in this case [did] not establish the basis for personal jurisdiction," '5 7 and that Pillar To Post's "essentially passive" Web site also did not comprise a sufficient basis for personal jurisdiction.'58 IV. RATIONALE At the outset, the New Mexico Court of Appeals observed that the sole issue to be decided in Sublett was whether the district court correctly determined that it lacked personal jurisdiction over Pillar To Post, a question of law to be reviewed de novo 59 The court noted that, as a foreign corporation, Pillar To Post would have been subject to the personal jurisdiction of a New Mexico district court only if its conduct relating to Sandra Sublett's home purchase met a three-part test: (1) Pillar To Post "must have done at least one of the acts enumerated in" the New Mexico long-arm statute, 60 (2) Sublett's cause of action must have arisen from that act, and (3) Pillar To Post must have sufficient minimum contacts with the state to satisfy constitutional due process concerns. 161 In order to meet the first prong of this test, Sublett must have shown that Pillar To Post performed an act included in the longarm statute; specifically, the court of appeals noted that Sublett's action must have arisen from Pillar To Post's transaction of business within the state or from the company's commission of a tortious act within the state.

After holding that the franchisor/franchisee relationship between Pillar To Post 3 and Scott Wallin was not sufficient to provide a basis for personal jurisdiction, the court of appeals turned its attention to the existence of the Pillar To Post Web

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site.164 Specifically, the court analyzed whether the site's feature permitting a user to locate a local Pillar To Post franchise constituted a transaction of business and provided adequate minimum contacts in New Mexico to support personal jurisdiction.'65 The court noted that Sublett was the first166New Mexico state court case to deal with the Internet in a jurisdictional context.

The court began its analysis with a brief background discussion regarding the nature of the Internet. 167 Among the multitude of cases that attempted to resolve jurisdictional questions regarding the Internet, the court of appeals identified the emergence of the two major approaches discussed above:'68 the expansive view of personal jurisdiction exemplified in Inset Systems, Inc. v. Instruction Set, Inc., 1 9 6 and the "sliding scale" approach utilized in Zippo ManufacturingCo. v. Zippo Dot Com, Inc. 170 Relying on more recent legal authorities, 171 the court cautioned that the issue of Internet-based personal jurisdiction is "considerably more complex" than either Inset Systems or Zippo Manufacturingmay let on. 172 The court further noted that these approaches to Internet-based personal jurisdiction questions "operate with the backdrop of due process concerns." 173 To decide what approach best suited the courts of New Mexico, the court of appeals first looked to established case law regarding personal jurisdiction. 17 The 7 as opposed to court noted that this particular case alleged specific jurisdiction, general jurisdiction. 17 The court first reiterated "that a business that 'intentionally initiated commercial activities in New Mexico for the purpose of realizing pecuniary gain' subjects itself to personal jurisdiction" in the state.' 77 The court went on to recognize that "it is [a] defendant's activities which must provide the basis for personal jurisdiction, not the acts of other defendants or third parties.' 7 8 Moreover, the court noted its approval of the personal jurisdiction framework found in CabaLtd. Liability Co. v. MustangSoftware, Inc.179 that evaluates who initiated





164. Id. 22,94P.3datS5l.

165. Id.123,94P.3dat851.

166. Id. T1 23-24, 94 P.3d at 851. "The question of whether a foreign corporation's Web site can support a finding of personal jurisdiction in New Mexico is one of first impression." Id. 23, 94 P.3d at 851.

167. Id. 24, 94 P.3d at 851; see supra notes 72-83 and accompanying text.

168. Sublett, 2004-NMCA-089, 25, 94 P.3d at 851; see supra text accompanying notes 100-129.

169. 937 F. Supp. 161 (D. Conn. 1996); see supra text accompanying notes 100-109.

170. 952 F. Supp. 1119 (W.D. Pa. 1997); see supra text accompanying notes 110-129.

171. See Hy Cite Corp. v. Badbusinessbureau.com, L.L.C., 297 F. Supp. 2d 1154, 1160 (W.D. Wis. 2004) ("[R]egardless how interactive a website is, it cannot form the basis for personal jurisdiction unless a nexus exists between the website and the cause of action or unless the contacts through the website are so substantial that they may be considered 'systematic and continuous."'); Michael A. Geist, Is There a There There? Toward Greater Certainyfor Internet Jurisdiction, 16 BERKELEY TECH. L.J. 1345 (2001).

172. Sublett, 2004-NMCA-089, 25, 94 P.3d at 851.

173. Id.

174. Id. 1 28, 94 P.3d at 852.

175. See supra text accompanying note 18.

176. Sublett, 2004-NMCA-089, 28,94 P.3d at 852 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.15 (1985)).

177. Id. (quoting Cronin v. Sierra Med. Ctr., 2000-NMCA-082, 1 22, 10 P.3d 845, 852).

178. Id. (quoting Visarraga v. Gates Rubber Co., 104 N.M. 143, 147, 717 P.2d 596, 600 (Ct. App. 1986)) (emphasis added).

179. 1999-NMCA-089, 984 P.2d 803.

PERSONAL JURISDICTION

Summer 2005] the transaction that becomes the basis for jurisdiction, where that transaction was entered into, and where the performance was to take place.' 80 Based upon its analysis of the applicable case law, the court of appeals held that the "more restrictive" approach of Zippo Manufacturing"is better suited to New Mexico, at least where certain specific torts, such as defamation, are not involved."'' In reaching this holding, the court found that the sliding-scale approach emphasized "the degree to which the website operator intentionally initiates the contacts" within New Mexico.' 82 Additionally, the court of appeals opted for the Zippo Manufacturingstandard because it ensured "that the website operator intended the site to facilitate interactive business-like exchanges with users," thus minimizing "the possibilities that the actions of third parties" would subject the site operator to personal jurisdiction.'83 Finally, the court noted that the Zippo Manufacturing test inherently includes the three-part Caba analysis by examining the level of interactivity of a Web site.

Upon accepting a Zippo Manufacturingtype approach to Internet-based personal jurisdiction, the court of appeals held that the Pillar To Post Web site was "not sufficient to confer jurisdiction."' 85 Based upon its review of the affidavit and Web site printout provided by Sublett, the court found that the Web site merely provided information about the nearest Pillar To Post franchise.' 8 6 According to the court, personal jurisdiction has not been found in many cases where informational Web sites are involved.'8 7 The court also found that "[t]he only interactive feature of the website... was the 'Locate an inspector' feature, which requested minimal information and provided little more than additional advertising information...." 8 8 In total, the court found that the features of the Web site made it "primarily passive" and, thus, under the Zippo Manufacturingapproach, the court refused to apply personal jurisdiction to Pillar To Post.'89 As it had noted that the three-part test of Caba was inherently part of the Zippo ManufacturingWeb site analysis, the court of appeals went on to evaluate Sublett's interaction with Pillar To Post in light of the Caba test. 90 The court found that it was Sublett who initiated the Web site transaction by her use of a commercial search engine.' 9 ' While still in California, Sublett received information on Wallin's franchise, thus completing the transaction from the Web site.'92 Additionally, the court found that all subsequent transactions occurred between Sublett and Wallin,

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none of which involved the Web site beyond Sublett's initial call to Wallin.'93 Finally, the court observed that there was no indication that Pillar To Post benefited already received its monetarily from this particular transaction; "Pillar To Post had 94 from the website by contracting with its franchisees."'1 benefit The court summarized its ruling on Intemet-based personal jurisdiction by holding that a "degree of interactivity" is required before jurisdiction will be upheld.' 95 A passive, informational Web site, offering no opportunity for interaction, "will ordinarily not be enough" to uphold personal jurisdiction.' 96 However, the court contemplated the possibility of upholding jurisdiction for defamation, libel, or trademark actions involving a passive Web site.' 97 The court concluded by reiterating that the "issue of whether a particular defendant is subject to our longarm statute must be decided on a case-by-case basis."' 9' Having reaffirmed New Mexico's ad hoc basis for determining personal jurisdiction, the court of appeals left open the question of whether or not an active Web site would suffice to support personal jurisdiction in a particular case. 99 However, as this case involved a passive Web site, the court of appeals affirmed the district court's dismissal.2 "° The court held that New Mexico had no personal jurisdiction from either the franchise relationship or the existence of Pillar To Post's Web site.2"'

V. ANALYSIS & IMPLICATIONS

The vague standards regarding Internet-based personal jurisdiction set by the Sublett opinion-in fact, the lack of a cohesive standard among the number of federal and state courts to address this issue-should create a cause for concern in the minds of Web designers, publishers, bloggers, and corporate information technology officers.20 2 From the Web designer's point of view, the Internet "constitutes a vast platform from which to address and hear from a world-wide audience of millions of readers, viewers, researchers, and buyers. Any person or organization with a computer connected to the Internet can 'publish' information."20 3 However, Web designers must now be conscious of what level of interactivity is going into the sites that they create. Designers must be able to determine whether or not the addition of a login script, message board, or tech support forum would subject them or the site owners to personal jurisdiction in a given state. The problem, especially with rulings such as the one in Sublett that essentially "punt" on the question of what degree of interactivity is enough,2" is that a Web designer in one state may not

193. Id.

194. Id. 1 32, 94 P.3d at 853.

195. Id. 1 33, 94 P.3d at 853.

196. Id.

197. Id.

198. Id. (citing Winward v. Holly Creek Mills, Inc., 83 N.M. 469, 471, 493 P.2d 954, 956 (1972)).

199. Id.

200. Id. 34,94 P.3d at 853.

201. Id. 11 22, 33, 94 P.3d at 851, 853.

202. See generally Stephen T. Mahar, Nothing Personal?PersonalJurisdictionand the Internet, LAW PRODUCTS MAG. (forthcoming), available at http://www.usual.com/article8.htm (last visited Mar. 25, 2005);

Palmisano, supra note 1.

203. Reno v. ACLU, 521 U.S. 844, 853 (1997); see supra text accompanying notes 72-99.

204. See Sublett, 2004-NMCA-089, 1 33, 94 P.3d at 853.

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