Written by Michael S. Dorsi
Smartphone applications, or apps, control an increasing share of internet traffic, and also an increasing share of litigation. Disputes about apps range from copyright infringement to contract disputes. But unlike car accidents or real estate disputes, there is no physical place where the wrongdoing happened. So where to sue? Where is the App Store? California?
The Rules of Jurisdiction
A person may only be sued either where the person is, or where the person may reasonably be called into court.[1] In the case of disputes concerning a specific product or service, the court will need to be satisfied that:
- The defendant has purposefully directed activities at the forum state,
- The plaintiff’s claim arises out of or relates to those activities, and
- The assertion of personal jurisdiction is reasonable and fair.[2]
What About The Internet?
The expanded use of the internet in the mid-1990s forced courts to examine this test in a new light. Concerning the first part of the test — purposeful direction — a federal court in Pennsylvania set out the rule, known as the Zippo test, that has been adopted in most of the country: websites fall along a sliding scale, with websites that engaged in commercial interactions at end of the scale toward finding jurisdiction, and websites that did not interact with their users at all, just showing a page, at the other.[3] Many other courts adopted the sliding scale from Zippo.[4]
Are Apps Like Websites?
Courts have not yet clearly stated whether Apps will be treated like websites. Two cases show potentially different outcomes with Apps based on being filed in different districts. In Intercarrier Communs. LLC v. WhatsApp Inc.,[5] a federal court in Virginia found that customers using WhatsApp — an instant messenger application — was insufficient to find jurisdiction. Of note, WhatsApp users did not make purchases through WhatsApp, but paid third parties such as Apple and those third parties delivered the app to the user’s phone.
But in Zherebko v. Reutskyy,[6] a federal court in California concluded that an interactive app — in that case a game that sold hints to players — satisfied the first part of the personal jurisdiction test because, under the sliding scale from Zippo, the app was commercially interactive.
The court also found that the second part — the relation to activities in the forum state — was satisfied because according to Apple’s terms and conditions, title to the app transfers electronically through Apple in California.
Although the court concluded that the case did not satisfy the third part of the test — jurisdiction was not reasonable because none of the parties were from California — the court’s analysis indicated that California will be an one of the best places bring cases about iPhone apps, and future courts may reach a similar conclusion about Android apps. In effect, a plaintiff suing about a smartphone app may only need to prove the third part of the test in order to establish jurisdiction in California.
[1] See International Shoe Co. v. Washington, 326 U.S. 310, 320 (1945).
[2] See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-77 (1985).
[3] See Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).
[4] See Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997).
[5] Intercarrier Communs. LLC v. WhatsApp Inc., 2013 U.S. Dist. LEXIS 131318 (E.D. Va. Sept. 12, 2013), available at https://casetext.com/case/intercarrier-commcns-llc-v-whatsapp-inc.
[6] Zherebko v. Reutskyy, 2013 U.S. Dist. LEXIS 113493 (N.D. Cal. Aug. 12, 2013), available at https://cases.justia.com/federal/district-courts/california/candce/3:2013cv00843/263828/31/0.pdf?ts=1377209210.