A long-standing precedent is the right not to be compelled to personally answer a lawsuit in a foreign state jurisdiction absent some minimum contacts with the foreign state. States typically enact long-arm statutes to impose personal jurisdiction in situations such as where the defendant is involved in an auto accident or has engaged in a demonstrative action such as doing business in the foreign state. However in McDermid, Inc. v. Dieter, the 2nd Circuit recently upheld the imposition of Connecticut’s long-arm statute where the minimum contacts were of the electronic or digital variety.
The facts, as related by the Court, show that MacDermid, Inc. is a specialty chemical company with its principal place of business in Waterbury, Connecticut. Jackie Deiter, however, resided in Ontario, Canada where she was employed by MacDermid’s Canadian subsidiary, MacDermid Chemicals, Inc., as an account manager from May 2008 until her termination in April 2011. Prior to termination, Deiter forwarded allegedly confidential and proprietary MacDermid data files from her MacDermid email account to her personal email account. In order to do this, Dieter needed to access MacDermid’s Waterbury computer servers.
As Deiter had signed an employment agreement prohibiting this access, MacDermid sued Deiter in United States District Court for the District of Connecticut, alleging unauthorized access and misuse of a computer system and misappropriation of trade secrets in violation of Conn. Gen. Stat. §§ 53a-251 and 35-51 et seq. Dieter raised lack of personal jurisdiction as a defense to this action which the District Court upheld only to be reversed by the 2nd Circuit. In the digital age, geographic barriers are becoming marginalized and the consequences can be devastating. The corollary to the legal and administrative cost of fencing-in IP assets is the cost incurred by a suspected Trespasser. That Dieter must bear the expense of travel and out of state counsel to defend this action seems harsh, particularly when the Employer maintained a subsidiary with a physical location near her residence in Canada.