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In Which Jurisdiction Are Online Companies Sued?


These days, many businesses exist without a specific headquarters, instead operating almost entirely within the digital world. If they do have some kind of fixed address, it may also be virtual in nature, and if you were to travel to this location, you would find no actual evidence of the company’s presence. This can pose a bit of an issue in the legal world, as plaintiffs need to file their lawsuits in the correct jurisdiction. So how do they figure out where to sue a company that operates entirely online? This is a question that the courts in Texas are currently struggling with.

If your business operates entirely online and you’re facing a lawsuit, your first step should probably be to get in touch with a qualified, experienced team of business litigation attorneys in Texas. These legal professionals can help you avoid legal action if a plaintiff has filed a lawsuit in the wrong jurisdiction, allowing you to continue with business operations as usual. Working with professionals saves you considerable time and effort down the road – especially if you’re serious about avoiding legal consequences and winning lawsuits.

How Online Businesses Choose Virtual Addresses 

Determining the actual physical location of an online business can be tricky for a number of reasons. First of all, businesses can now operate entirely online without any office space. In fact, many successful eCommerce companies operate without any employees whatsoever, and the entire business operates via a dropshipping model. All the business owner needs to do is create a professional website and attract customers, while third-party manufacturers and shippers handle the physical aspects of the business. This is just one example of how businesses can operate almost entirely in the digital world.

Companies today can also choose a “virtual address,” allowing them to associate themselves with virtually any American city they want. For example, a startup tech company might choose a virtual address located in Silicon Valley, despite being headquartered in a rural town in Texas. This allows them to appear more prestigious and legitimate, and this can serve as their official mailing address when they fill out the paperwork to form their corporation.

Texas is Struggling to Figure Out Where Online Companies Can Be Sued 

These new developments are creating considerable confusion in Texas courts. From a defense perspective, this may prevent plaintiffs from filing lawsuits easily. A clear example came on April 28th, when it was reported that a libel lawsuit involving The Huffington Post had been dismissed. A judge stated that Texas did not have jurisdiction over this matter, largely because the publication was entirely digital.

The Huffington Post’s lawyers argued that:

 “The panel correctly applied well settled 5th Circuit precedent, which has long recognized that a plaintiff in an online defamation case must show that the out-of-state publisher targeted the forum through its publication or through its development of the reporting. There simply wasn’t any evidence here that HuffPost aimed its reporting or its commercial activities at Texas. Neither the Supreme Court nor any court of appeals has ever found personal jurisdiction under these circumstances.”

Enlist the Help of a Qualified Attorney Today

The dedicated Brownsville commercial litigation lawyers at Colvin, Saenz, Rodriguez & Kennamer, L.L.P. are prepared to assist you today. Over the years, we have helped numerous organizations fight for their rights and avoid legal consequences in a confident, efficient manner. With more companies than ever before operating entirely online, there may be additional ways to avoid liability and have certain lawsuits dismissed. Book your consultation today to learn more.



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