Internet Jurisdiction — U.S. Court of Appeals Endorses Use of "Effects Test"

Where do you sue when the damages were incurred over the Internet? The U.S. Court of Appeals for the Ninth Circuit has recently put its mind to the thorny issue of forum in the unpublished case of Northwest Healthcare Alliance Inc. v. Healthgrades.com Inc. The defendant, Healthgrades.com, operated a website which rated home healthcare providers across the U.S. Healthgrades.com was a Delaware corporation with its principle place of business in Colorado. The plaintiff was a home healthcare provider operating in Washington State. After receiving a poor review on the Healthgrades.com site, the plaintiff brought an action in Washington against Healthgrade.com. The Court applied the "Effects Test" in order to determine whether personal jurisdiction could be exercised over the out-of-state website operator. Under the "Effects Test", the exercise of jurisdiction over an out-of-state defendant is proper if the defendant's actions were intentional and expressly aimed at the forum state and the defendant knows harm due to these actions would likely be suffered in the forum state. The Court determined that the website content was aimed at Washington state consumers, the alleged defamation was against a Washington resident, and the majority of the effects of the alleged defamation were felt in Washington. The Court found that Washington state had personal jurisdiction. Northwest Healthcare Alliance Inc. v. Healthgrades.com Inc. is an unpublished decision.