Is Revenue Generated in CT by an Out-of-State Individual for the Benefit of His Employer Sufficient to Assert Long-Arm Jurisdiction?

A recent Connecticut Superior Court holding says “NO.”

The issue at hand in this recent case was whether a Texas resident, the defendant in this action, who visited Connecticut for business several times, and who did business with CT residents could be haled into court in Connecticut for his role in the alleged theft of intellectual property. The Court in this case held that because the revenue generated by the TX resident was earned by the large, multi-national corporation he worked for rather than by him individually, a sufficient basis did not exist to exert personal jurisdiction over him under C.G.S. § 52-59b(a)(3)(B).

The statute relied upon by the Court in making their decision is C.G.S. § 52-59b(a)(3)(B), which states, in part, that: a court may exercise personal jurisdiction over any nonresident individual… who in person or through an agent commits a tortious act outside the state causing injury to person or property within the state,… if such person or agent expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce. The court admits that the Texas resident committed a tortious act outside the state that caused injury within the state, however they held that the foreign resident himself did not derive substantial revenue from interstate commerce.

In explaining their rationale, the Superior Court found that because “[the] defendant was essentially if not actually always acting on behalf of his employer, who is not claimed to have done anything wrong” there can be no personal jurisdiction because “[h]is contacts [with Connecticut] had no connection with his personal business; it was all in his capacity as a representative of his employer, and there is no suggestion that his employer… was in any way involved in the tortious conduct about which the plaintiffs complain.” Thus, the substantial revenue was earned by the foreign resident’s employer, not by him personally, nor was the employer involved in the tortious activity, and as a result, the “substantial revenue” prong, the court held, was not satisfied.

Further, the court wrestled with the question of whether it is “consistent with issues of fairness and due process to assert personal jurisdiction over an individual engaged in interstate commerce when the act giving rise to claimed liability and jurisdiction is wholly unrelated to any such interstate activity?” The tortious acts in question were committed by the defendant, not the company he worked for, and although the company benefitted, their interstate commercial activity was not transferred to the defendant solely by his virtue of employment there.

The court ultimately distilled the argument down to the following: “[t]he due process notions of fairness and foreseeability would seem to be inconsistent with assertion of jurisdiction based on conduct that, at best, was wholly unrelated to the conduct giving rise to the litigation.”  Although the defendant did cause tortious acts out of state that caused harm in Connecticut, he was able to evade liability because defendant’s employer, and not defendant himself, was involved in interstate commerce, and the substantial revenue from the theft of IP benefitted the employer financially not defendant.[1]


[1] The defendant’s employer in this action had previously settled with the plaintiff, and was thus was not subject to suit.


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