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- Note: I'm not seeking legal advice. I simply noticed that two subjects that have been vigorously discussed here may have some intersection, and want to see what people's thoughts are.
- Often when GDPR is discussed here this is a sub-discussion over whether or not the EU can actually enforce it if you do not have an EU presence or any assets they can reach.
- The US often will allow foreign judgments to be enforced in the US [1], if the US agrees that the foreign court had both personal and subject matter jurisdiction, and that you had notice and the opportunity to defend yourself.
- With no physical presence, there was a good chance US courts would find you did not a "nexus" with the foreign state, meaning that they do not have personal jurisdiction.
- Until late last week, that was *also* the reason courts would not let states make online sellers with physical presence collect and remit sales tax.
- But late last week, in SOUTH DAKOTA v. WAYFAIR, INC., ET AL., the Court overturned its earlier precedent and decided that doing online business in a state that you have no presence in can be enough to establish a nexus. The exact parameters of this are yet to be determined, other than it will probably require that the revenue or number of transactions you do in the state must be above some threshold to establish a nexus.
- Will this loosened standard for what can establish a nexus only apply to taxes between states, or is this the new standard for all inquiries a to the existence of a nexus? If so, does that mean it will now be easier to establish that a foreign court had personal jurisdiction, and so easier to get foreign judgments enforced in the US?
- There are some categorical limits on foreign judgments. For example tax and penal judgments will not be enforced by US courts. I do not know if GDPR fines fall under any of the forbidden categories.
- If they do, a US GDPR transgressor still might not be out of the woods, because GDPR also allows the data subjects themselves to sue for compensation, and foreign judgments for compensation (as opposed to punitive judgments) are usually allowable I believe. (Based on prior comments here and on Reddit, this came as a surprise to many in Europe, as apparently Europe usually does not make a private cause of action with their regulations. I wonder if GDPR took this apparently unusual step specifically in order to provide a way a path for someone to go after foreign transgressors that the EU regulators cannot reach?)
- If SOUTH DAKOTA v. WAYFAIR, INC., ET AL. really is redefining what it takes to establish a nexus, what else might be significantly affected? Whether or not there is a nexus is one of the basic questions in any cross-border lawsuit or state regulator action, so such a change could affect a lot more than just sales taxes and foreign judgment enforcement.
- [1] https://uk.practicallaw.thomsonreuters.com/0-619-6072
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