eBay auction not enough to confer personal jurisdiction

Great Notions, Inc. v. Danyeur, No. 06-656, 2007 WL 944407 (N.D. Tex. March 28, 2007)

Courts faced with the question of personal jurisdiction involving eBay transactions have consistently held that the typical online auction process, in and of itself, is insufficient to confer specific personal jurisdiction over an out-of-state defendant. The recent case of Great Notions, Inc. v. Danyeur, No. 06-656, 2007 WL 944407 (N.D. Tex. March 28, 2007) does not deviate from that trend.

Plaintiff sued an Arkansas defendant for copyright infringement and unfair competition. The defendant was accused of counterfeiting and selling plaintiff’s designs through his online account with eBay. There were no allegations that the eBay auction process was altered or circumvented in any way.

Defendant moved to dismiss for lack of personal jurisdiction. The court granted the motion, dismissing the case without prejudice.

Because the Texas long-arm statute confers jurisdiction to the limits of the federal constitution, the court concerned itself only with the federal due process inquiry. That question involved an analysis of (1) whether the defendant had minimum contacts with Texas resulting from an affirmative act on his part such that he could reasonably anticipate being haled into a Texas court, and (2) whether the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice.

The court needed only to consider the first element, namely, whether there were minimum contacts with Texas. It held that conducting a straightforward eBay auction was insufficient to confer specific jurisdiction. The facts of this case could be distinguished from another Northern District of Texas case by the name of McGuire v. Lavoie, No. 03-161, 2003 WL 23174356 (N.D. Tx. Aug 19, 2003), in which personal jurisdiction was found where the eBay seller ended the auction prematurely and entered into a traditional sales relationship through a series of transactions with a known buyer.

For a recent eBay personal jurisdiction case with a different result, read about last year’s decision by the Eastern District of Michigan in the case of Dedvukaj v. Maloney.