When a resident of one state wants to bring a resident of another state into the home state's court, they must prove the local court has personal jurisdiction over the defendant. This involves two things. First, most states, have a "long arm statute." This law defines how far the court can reach out and touch someone in another state, forcing them to defend themselves here. Second, that process may not violate due process under the U.S. Constitution.
A key issue in what can be a lengthy analysis is whether the guy who sold you the car has "minimum contacts" here. This question comes up more frequently now with internet sales across state lines. This often involves a specific computer listing, not a series of continuous contacts with this state. Has the out-of-state seller purposefully availed himself of the protections of, let's take for example, New Hampshire law? Constitutionally, would it be fair and reasonable to require the seller to defend the suit in New Hampshire? In one case a New Hampshire resident purchased a John Deere excavator from a New Jersey resident over "eBay." According to the case it had numerous defects. The New Hampshire Supreme Court upheld a lower court in rejecting jurisdiction. It was based on the isolated nature of the transaction and the fact that the seller was an individual, not a commercial dealer. So, in the 2002 case of Metcalf v. Lawson, the court ruled that the out of state private seller did not engage in sufficient activity to make it fair and reasonable under the constitution to require them to defend the case out of their own state. Law doesn't change as quickly as technology. But, as of August of 2007, at least ten other states agreed with the above New Hampshire ruling. This was noted in a Louisiana decision that actually went the other way. But, the dissenting justice said New Hampshire and 10 other states got it right in holding that the use of eBay to advertise a vehicle does not justify assertion of jurisdiction over an out of state private seller because the contact is too "attenuated" and "random".
The internet challenges old ways of looking at personal jurisdiction. Most courts find that the constitutionality of a State's use of jurisdiction is proportional to the nature and quality of the defendant's commercial activity on the web. Courts apply a sliding scale approach.
At one end of the scale are people or businesses that clearly do business over the internet. If their web presence involves the knowing and repeated transmission of computer files over the internet, personal jurisdiction is proper. At the other end of the scale are those who simply post information on a website, obviously accessible to folks in foreign jurisdictions. A passive website that does little more than make information available to those who are interested is not grounds for the exercise of personal jurisdiction. In between those two extremes, courts have to consider the nature and extent of information exchanged and the level of interactivity between buyer and seller.
A final note: this addresses only civil disputes. Those who break criminal laws in one state and try to hide in another state find that the long arm of the law has much less trouble reaching out and grabbing them. The above glimpse of the civil law has nothing to do with that.