Intellectual Property, Internet & E-Commerce, Litigation Articles

Jurisdiction Over Defendants in Remote States Not Automatic in E-Commerce Cases
by Leila C. Knox

October 01, 2008

Technological advancements that make it easier for parties to reach across state lines to transact business do not automatically confer jurisdiction over defendants, the Ninth Circuit Court of Appeals in San Francisco recently ruled in a case involving the sale of a car on eBay by a resident of Wisconsin to a resident of California.  See Boschetto v. Hansing, 2008 WL 3852676 (Aug. 20, 2008).  The quality and nature of the contacts must be examined to determine whether personal jurisdiction is warranted, despite the fact that, in this case, the use of eBay by the seller made it easier to reach a California buyer.

Boschetto was a San Francisco resident who had the winning bid on eBay for a 1964 Ford Galaxie offered for sale by automobile dealers in Wisconsin.  Upon the Galaxie's arrival in San Francisco, Boschetto discovered several problems with the vehicle and attempted to rescind the purchase.  When that failed, he filed a complaint in the Northern District of California.  Defendants moved to dismiss the case based on a lack of personal jurisdiction, and the District Court agreed, reasoning that the single jurisdictionally relevant fact – that the purchaser was a California resident – was not enough to establish personal jurisdiction over the defendants. 

The Ninth Circuit affirmed, reasoning that a contract with a non-resident was not enough to create jurisdiction over the defendants.  Addressing the technology issue, the Court found that defendants had not engaged in broad e-commerce activity targeted at California residents.  This was a one-time contract for the sale of a good that involved California only because that is where the purchaser happened to live.  Otherwise, there was no "substantial connection" or ongoing obligation by the defendants in California. 

The court cautioned that the use of an e-commerce site such as eBay does not automatically shield defendants from personal jurisdiction in all instances.  Where an e-commerce site is used as a means for establishing regular business with a remote forum such that the finding of personal jurisdiction comports with "traditional notions of fair play and substantial justice," personal jurisdiction over the defendant may be found.

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