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Resuscitation Technologies Inc. v. Continental Health Care Corp.

In this case, the Indiana District Court held that out-of-state residents that neither had offices, nor conducted business in Indiana, were subject to jurisdiction in Indiana because of their participation in e-mail and telephone communications with an Indiana resident about forming a company which would in part be based in Indiana. Plaintiff was an Indiana-based start-up company in need of capital. It created a web site, where it indicated its need for the same. Defendants, out-of-state residents who did not have offices, nor conduct business in Indiana, expressed interest in supplying capital via an e-mail message sent to plaintiff in Indiana. There ensued between the parties a series of 80 e-mail communications, as well as two telephone conference calls. Documents were also faxed back and forth between the parties. Representatives of plaintiff and the defendants met in person two times, in Michigan and New York. Two confidentiality agreements were executed by defendants (outside of Indiana) and a draft letter of intent forwarded by defendants to plaintiff for the formation of a joint enterprise which would include plaintiff's Indiana operations. When plaintiff broke off negotiations with the defendants, defendants claimed that plaintiff had breached agreements between them, and would not be bound by the parties' confidentiality agreements. Plaintiff brought a declaratory judgment action in Indiana, seeking a declaration that there was no contractual relationship between the parties outside of the confidentiality agreements, which were enforceable. Defendants moved to dismiss for want of personal jurisdiction. In denying this motion, the court held: "The contacts between the parties in this case began with [plaintiff's] solicitation on the . The anticipated benefit from the solicitation materialized in the form of defendant's expression of interest by electronic mail. The parties continued to communicate extensively through electronic mail ... Certainly, one or two inquiries about some Indiana goods or services would not support local jurisdiction. Here, however, the electronic mail messages were numerous and continuous over a period of months. The purpose of that activity was for the defendants and the plaintiff to unite in a joint venture to capitalize production of certain medical devices. Without question, Falkson, Continental and Stone reached beyond the boundaries of their own states to do business in Indiana. It is not unreasonable for them to be hailed into an Indian forum. The goal of their negotiations, to form a joint venture or public company with an Indiana citizen, thereby financing the development of Indiana based intellectual property, supports this finding. The exercise of jurisdiction in this case is proper."

The full text of this decision can be found on a website maintained by the John Marshall Law School.