Selling Online Into a State You Have Never Visited

An online business has customers in states it has never seen, and the question of where it can be sued has an answer that is more favorable than most owners fear and less favorable than the phrase we only sell online suggests. The line courts draw is about choice, and a business that understands it can position itself on the right side of it deliberately.

The basic distinction

Accessibility is not availment. A site that can be opened anywhere has not thereby reached into anywhere, and courts rejected the contrary proposition early.

Passive sites sit at one end. A page that posts information and invites nothing has been treated as close to an advertisement in a national publication, which does not create jurisdiction in every state it circulates.

Transactional sites sit at the other. A platform through which contracts are formed, payment is taken and goods are dispatched is conducting business with the customer's state, not merely near it.

Most sites are in the middle. Which is why the sliding-scale framing is a starting point rather than an answer, and why the underlying contacts analysis in the contacts a court looks for still does the deciding.

And the forum's statute still has to be satisfied. The constitutional analysis is only half of it, for the reasons set out in what a long-arm statute reaches.

What courts actually weigh

Whether the state was targeted. Advertising bought for that market, local delivery options, state-specific content or pricing, and listings on regional marketplaces all indicate a decision about that state.

How many transactions were completed. Not visits or traffic, but sales actually concluded with residents, since a completed transaction is a contract performed at least partly in the state.

Who arranged delivery. A seller that ships into the state under its own arrangements has done something there; a seller whose buyer arranged collection has not, a distinction explored in shipping, advertising and purposeful availment.

Whether a relationship continued. Subscriptions, support obligations, warranty service and repeat business create the continuing connection that a single sale lacks.

And whether the claim relates to any of it. Specific jurisdiction requires a connection between the contacts and the dispute, so a defect claim by a local buyer stands differently from an unrelated commercial dispute.

The common fact patterns

The marketplace seller. A business selling through a large platform frequently has no direct relationship with the state, and courts have looked at who set the shipping terms, who held the inventory and whether the seller could exclude particular states.

The subscription service. Recurring billing to a resident, delivered continuously, is among the strongest forms of ongoing contact and rarely benefits from the passive-site argument.

The digital product. Software, courses and downloads have no shipment to point at, so the analysis turns on marketing, licensing terms and any support obligations.

The service provider working remotely. Advice delivered into a state to a client there resembles a contract performed partly in that state, and the harm from bad advice is generally felt where the client is.

The one-off order. Weak on its own, and rarely the whole picture, because a business that fulfilled one order usually did several other things as well.

What a business can control

Decide which states to sell into. Restricting shipping or availability is a real and enforceable choice, and one that shows in the record if jurisdiction is ever contested.

Keep marketing records. Where advertising was bought, and where it was not, is the clearest evidence of targeting or its absence, and it is only available if retained.

Use terms with a forum clause. A properly incorporated clause selecting the seller's own state is the most effective single measure, subject to the limits in forum selection clauses and their limits.

Do not confuse the tax question. Sales tax registration is driven by statutory thresholds and does not require targeting, as described in economic nexus and the threshold a business crosses.

And review registration decisions. Qualifying to do business in a state may carry jurisdictional consequences that have nothing to do with the website, examined in what appointing a registered agent concedes.

Responding to a claim

Establish what actually happened with that state. Order counts, shipment records, advertising spend, support tickets and any local presence, gathered before any position is taken.

Separate the platform from the seller. Where a marketplace controlled fulfillment, pricing and delivery, the contacts may be the platform's rather than the business's.

Preserve the objection properly. Personal jurisdiction is lost by conduct as easily as by concession, so the sequence in appearing to object without submitting matters.

Weigh what winning achieves. A successful motion sends the claim to the business's home state, which is usually better, and occasionally the difference is not worth the cost of the motion.

And look at the whole exposure. A business sued in one state on facts that would be replicated in twenty others has a strategic problem rather than a procedural one, and the answer usually lies in changing how it sells rather than in litigating each case.

The reassuring part of this area is that the law has not, in the end, treated the internet as a special case. The same question is asked of an online seller as of a traveling salesman: did this business decide to do something in this state, and does the claim come out of that decision? Businesses that can answer no to the first part are generally safe, businesses that answer yes have known it was a choice, and the cases that are genuinely hard are the ones where nobody at the company ever thought about it either way.

The evidence that decides these cases is unusually mundane, which is fortunate for a business that keeps it. Order records showing how many transactions were concluded with residents and over what period. Shipping records showing who arranged carriage and to what address. Advertising invoices showing which markets were bought and which were not. Support logs showing whether customers in the state received continuing service. Terms of sale showing what the buyer agreed to, including any forum clause. None of this is difficult to retain and all of it is difficult to reconstruct once a dispute begins.

It is equally worth understanding what does not help. Screenshots of the website prove accessibility, which nobody disputes and which decides nothing. Traffic analytics showing visitors from a state prove interest by residents rather than direction by the seller. Total revenue figures without a geographic breakdown are unhelpful to both sides. A business preparing to contest jurisdiction should assemble the first list and expect the second to be produced by the other side.

Finally, a note on scale. Small online sellers frequently assume that their size protects them, and it does not: the analysis asks what the business chose to do, not how much of it there was. A one-person operation that advertises in a state, ships there and supports customers there has made the same kind of decisions as a large one, on a smaller scale. What actually protects a small seller is the practical cost of suing it somewhere inconvenient, which is a commercial protection rather than a legal one, and it disappears the moment the amount in dispute becomes worth pursuing.