SW Legal Educational Publishing

Internet Advertisers Subject to Personal Jurisdiction
Description In a case of first impression, a Minnesota appeals court held that a Nevada provider of an Internet gambling service was subject to personal jurisdiction in Minnesota in an action by the state for false advertising and consumer fraud.
Topic Cyberlaw
Key Words Internet, Personal Jurisdiction, Due Process, Long-Arm Statute, Gambling
C A S E   S U M M A R Y
Facts An Internet wagering service, WagerNet, was being established in Nevada that "will provide sports fans with a legal way to bet on sporting events from anywhere in the world ... 24 Hours a Day!" The service, which was advertised at www.vegas.com, gave a toll free number to call for more information. The phone contact said it was legal for Minnesota residents to bet via WagerNet (for a 2.5 percent commission). The Minnesota attorney general sued for consumer fraud by advertising in Minnesota that gambling on the Internet is legal. Defendant moved to have the suit dismissed for lack of jurisdiction. Motion to dismiss denied. Defendant appealed.
Court of Appeals Decision Affirmed. Defendant "availed itself of the privilege of conducting activities within every state from which [the Internet] information may be accessed." The Due Process Clause requirement that a defendant have "minimum contacts" with the forum state has been met. That allows the Minnesota long-arm statute to apply. The five factors to determine if minimum contacts with the forum state was satisfied. The factors are:
  1. quantity of defendant's contacts;
  2. quality of defendant's contacts;
  3. connection between the cause of action and the contact;
  4. state's interest in providing a forum, and
  5. the convenience of the parties.
Citation State by Humphrey v. Granite Gate Resorts, ---N.W.2d---, 1997 WL 557670 (Ct. App., Minn.)
568 N. W. 2d 715 (Ct. App., Minn., 1997)

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