Where Can Your Business Be Sued? More Places Than You Think
You may be worried about whether your business can be sued and how, and those are legitimate concerns. But have you ever wondered where your business can be sued? Do not assume that because you may have a Florida business, that you can only be sued in Florida. Your potential exposure area can be much greater than that.
The law and the constitution say that someone can only be sued in states where they have had what are known as “minimum contacts.” The law asks whether it is foreseeable that you could be sued in a given state, and whether it is fair for you to be sued somewhere else.
A good question to ask is whether or not your business derives a benefit from other states, or the residents of other states. If so, you can be sued in that state. Usually this question is whether or not you have done business in a particular state, but it doesn’t have to be.
Any type of benefit can constitute a minimum contact with a given state. It can be making sales to end use consumers, or contracting with other suppliers, providers, or contractors. Certainly, renting property in another state or maintaining financial accounts in other states, can subject you to the laws of that state as well.
Intent and Knowledge
The law will look to knowledge, foreseeability and intent. If you knowingly sell handbags to people in New Jersey, it’s reasonable to think you could be sued in New Jersey. But if you sell handbags in New Jersey, and someone takes your handbag to New York when they move to New York, they couldn’t later sue you in New York, just because that’s where your product ended up.
Advertising and Jurisdiction
Advertising can create some problems, but the good news is that just because your marketing materials or ads may be seen everywhere—such as when you advertise on the web, or on a social media platform—that doesn’t automatically mean you can be sued anywhere. The question is whether you specifically targeted a state or its residents in your marketing campaign or materials.
Where You Can Be Sued: It Matters
Knowing where you can be sued, and limiting your exposure, is a big deal that should not be overlooked.
Having to defend a lawsuit in another state can be expensive, burdensome, and risky. You may not be able to use the lawyers that you are comfortable with, and instead, may need to find business attorneys you may have never met, and who are likely located wherever the lawsuit is filed.
You may have a general familiarity with Florida business laws, but you may be totally unfamiliar with the laws in the state that you are sued.
Additionally, everything becomes a significant expense. Appearing for hearings or depositions now involve travel, and the attendant costs, and time away from your business to attend these court proceedings.
Call the West Palm Beach business litigation lawyers at Pike & Lustig for help today in keeping your business safe and limiting your legal exposure.