Ninth Circuit: No personal jurisdiction over out of state eBay seller

Boschetto v. Hansing, — F.3d —, 2008 WL 3852676 (9th Cir. August 20, 2008)

Hansing, a resident of Wisconsin, offered a 1964 Ford Galaxie for sale on eBay. Boschetto, a California resident, was the winning bidder, and sent Hansing $34,106. He also arranged to have the car shipped from Wisconsin to California. After Boschetto found that the car didn’t meet the description in the eBay listing, he sued Hansing in California federal court, based on diversity subject matter jurisdiction. (Never mind how far below $75,000 the amount that was in controversy appears.)

Hansing moved to dismiss for lack of personal jurisdiction, and the court granted the motion. Boschetto sought review with the Ninth Circuit. On appeal, the court affirmed.

Single eBay transaction not enough

The question was whether this single transaction – enabled by eBay – constituted minimum contacts between Hansing and California to satisfy constitutional due process. A threshold question in that analysis was whether Hansing had purposely availed himself of the privileges of conducting activities in California, thereby invoking the benefits and protections of its laws.

The court answered the purposeful availment question in the negative. The single transaction did not create any ongoing obligations in California, nor did it result in substantial business being conducted by Hansing there. On this point, the court nodded to the oft-cited Burger King v. Rudzewicz case for its holding that a contract alone does not automatically establish minimum contacts in the plaintiff’s home forum. 471 U.S. at 478.

eBay as facilitator a “distraction” to the jurisdictional analysis

What makes this case worth noting (in light of the fact that personal jurisdiction cases can be pretty dull) is the court’s rejection of Boschetto’s argument that the eBay component of the deal defined the analysis. Boschetto had argued that the eBay listing would have been viewed by anyone in California, thus that functionality supported an exercise of personal jurisdiction.

But “the issue [was] not whether the court [had] personal jurisdiction over the intermediary eBay but whether it [had] personal jurisdiction over an individual who conducted business over eBay.” The court noted that in other Internet-related personal jurisdiction cases, like Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) and the famous case of Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119 (W.D.Pa. 1997), the interactive nature of the websites had jurisdictional significance because they permitted the defendants to maintain ongoing contact with the forum.

An isolated sale on eBay, however, is different in nature. In this case, the court found that the eBay aspect was “a distraction from the core issue.” The use of eBay was to facilitate a one time contract that created no substantial connection with or ongoing obligations in the forum state.

This is not to say that the use of eBay could never give rise to personal jurisdiction outside a defendant’s home forum. A number of cases have so held. See, e.g., Dedvukaj v. Maloney. The court noted that where eBay is used as a means for establishing regular business with a remote forum, the traditional notions of fair play and substantial justice might provide for the exercise of personal jurisdiction. But this was not one of those cases.

(Photo of 1964 Galaxie courtesy of Flickr user Brain Toad Photography under a Creative Commons license.)

Postings to newsgroup support exercise of personal jurisdiction

Goldhaber v. Kohlenberg, — A.2d —-, 2007 WL 2198181 (N.J.Super.A.D. Aug. 2, 2007).

A pair of New Jersey plaintiffs sued a California defendant over “vile” messages that the defendant allegedly posted about the plaintiffs on a newsgroup devoted to cruises and cruise ships. The defendant didn’t answer the complaint, and the trial court entered a default judgment against him in excess of $1 million. That got the defendant’s attention, so he hired local counsel to move to set aside the default judgment, claiming the court lacked personal jurisdiction over him. The trial court denied the motion, and the defendant sought review with the appellate court. On appeal, the court affirmed the denial, holding that the exercise of personal jurisdiction was proper.

The case is particularly interesting in the Internet law context, because the allegations of personal jurisdiction stem exclusively from the defendant’s alleged web-based activity. Looking to an earlier Internet jurisdiction case decided by the New Jersey Supreme Court, Blakey v. Continental Airlines, 164 N.J. 38 (2000), the court observed the implicit application therein of the well-known Calder v. Jones “effects test” [465 U.S. 783, 104 S.Ct. 1482, 79 L. Ed.2d 804 (1984)].

In Calder, the defendants “edited an article that they knew would have a potentially devastating impact upon [the plaintiff],” knowing that “the brunt of that injury would be felt by [the plaintiff] in the State in which she live[d] and work[ed].” The New Jersey court found similarities in this case, even though, in reciting the facts, it stated that the defendant had “no contacts of any type with New Jersey.”

The court concluded that the author of the message board postings did, indeed, target them to New Jersey, not only knowing that plaintiffs resided there, but also knowing the municipality in which they resided. He made specific disparaging references to that municipality in many of his postings, some of which were made in response to plaintiffs’ replies to offending comments. This intentional and directed conduct, and its connection to New Jersey, according to the court, was such that the defendant should reasonably have anticipated being haled into court there.

Zippo “sliding scale” approach to personal jurisdiction rejected

Howard v. Missouri Bone and Joint Center, Inc., No. 05-476, — N.E.2d —-, 2007 WL 1217855 (Ill.App. 5th Dist. April 24, 2007)

Plaintiff Howard filed suit in Illinois against defendant Missouri Bone and Joint Center, alleging personal injury arising from “athletic training services” that defendant provided to plaintiff at its Missouri facility. Defendant moved to dismiss for lack of personal jurisdiction, arguing that its contacts with Illinois were insufficient: it had no facilities and did not transact business there, and owned no property located in the state. Further, defendant argued it was not registered to do business in Illinois, and all its activities took place at its Missouri location.

Responding to the motion to dismiss, plaintiff argued that the court could exercise general jurisdiction over defendant due to its “continuous and systematic general business contacts” in Illinois. Relying on the Zippo sliding scale test [Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. Pa. 1997)], plaintiff claimed these contacts arose through defendant’s website which allowed its visitors to make appointments, fill out surveys, and ask questions.

The court initially denied the motion to dismiss, and the case proceeded to trial. After the court awarded a substantial judgment to the plaintiff, the defendant moved for reconsideration of the question of personal jurisdiction. This time the court found that it lacked personal jurisdiction, and it vacated the judgment. Plaintiff sought review with the Appellate Court of Illinois. On appeal, the court affirmed.

The appellate court rejected the Zippo test:

Instead, we find that the web page’s level of interactivity is irrelevant. In reality, an interactive website is similar to telephone or mail communications. A passive website is much the same as advertising on the radio or in a magazine. An ad on the Internet is no different than an ad in any other medium that provides a telephone number or other means to contact a potential defendant. It is mere advertisement or solicitation of business. Illinois courts have long held that a mere advertisement or solicitation is not enough to sustain personal jurisdiction in Illinois.

In this case, the court held that the defendant had done nothing more that advertise and solicit business in Illinois. That conduct, in and of itself, was insufficient to give rise to personal jurisdiction. The court compared the facts of the case to two previous Illinois appellate cases, Pilipauskas v. Yakel, 258 Ill.App.3d 47 (1994), and Excel Energy Co. v. Pittman, 239 Ill.App.3d 160 (1992) to support its holding. The nature and quality of the acts occurring in Illlinois were insubstantial. The plaintiff had chosen to contact the defendant, and had chosen to travel to Missouri for treatment. Accordingly, the court held that exercising jurisdiction over the defendant “would not be fair, just, or reasonable.”

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.

1 2 3 4 5 6