Thursday, December 21, 2006
Web Marketing Not Enough to Sustain State’s Jurisdiction—C.A.
By a MetNews Staff Writer
An out-of-state business’ web site and minimum prior sales to California residents were not sufficient to confer personal jurisdiction over the business on California courts, the Sixth District Court of Appeal ruled yesterday.
The court affirmed Santa Clara Superior Court Judge William Elfving’s order granting the motion of a Florida car dealer to quash service of summons in an action filed by a California purchaser of one of the dealer’s cars.
Sanfer Sports Cars, Inc., is a Florida corporation that maintains its only physical place of business in Miami, the record showed. Sanfer sells new and used automobiles, principally to residents of southern Florida.
The company has never owned or leased property in California, has never directly advertised in the state, and has never intentionally targeted any California resident as a potential buyer or seller of an automobile.
Though it has sold as many as 10 cars to California residents, that was over a 32 year period and out 44,800 total vehicles sold.
The company maintains a Web site that is accessible to anyone in the world with access to the Internet. The site states that the company ships vehicles worldwide and has a page for a credit application.
The Web site does not specifically target California residents.
In 2004, Bryan Shisler saw a 2002 BMW M5 advertised on Sanfer’s Web site. Shisler wrote to and telephoned Sanfer to inquire about the vehicle and ultimately purchased it.
The contract for sale was prepared in Florida and mailed to Shisler in California. Shisler arranged his own financing and did not use Sanfer’s financing service.
When Shisler asked Sanfer about shipping arrangements, Sanfer sent him a list of shipping companies from which he could choose. Shisler used one of the companies on the list.
The parties agree that title to the vehicle passed to Shisler when the shipper took possession of the vehicle in Florida.
When the BMW arrived in California, it did not have features which were promised, Shisler alleged. After negotiations broke down, Shisler filed suit in California stating claims under both California and Florida law and alleging in his complaint that the action would be governed by Florida law because “the transaction . . . occurred partially in Florida.”
Sanfer moved to quash service of the summons on the grounds that it lacked minimum contacts with the State of California. Elfving granted the motion, and Shisler appealed.
On appeal, Shisler argued that Sanfer’s web site and previous sales to California residents were sufficient to confer California courts with general jurisdiction over the company.
Justice Eugene M. Premo, in an unpublished opinion for the Court of Appeal, disagreed, saying:
“[T]he sale of 10 vehicles to California residents out of a total of more than 40,000 vehicles over a period of 32 years in business is hardly continuous and systematic contact. Furthermore, there is no evidence that any of those 10 sales took place in California.”
“Even if the Web site is as represented, there is no evidence that it established the continuous, systematic contact with California necessary to trigger general jurisdiction.”
Shisler also argued that Sanfer’s use of fax, telephone, United States mail, e-mail and its “interactive” Web site to communicate with plaintiff and negotiate the sale of the vehicle was sufficient to establish specific jurisdiction over Sanfer.
But Premo said:
“Although there were an unknown number of communications between the parties in this case, there is no evidence that this was anything other than a one-time transaction. Further, there is no evidence that defendant ever expressly reached out to California in search of this or any other business opportunity.”
The justice continued:
“After the vehicle left defendant’s business in Florida, defendant’s only further contact with plaintiff concerned the dissatisfaction that led to the instant lawsuit. There was no ongoing business relationship.”
Premo’s opinion quoted heavily from the California Supreme Court’s decision in Pavlovich v. Superior Court (Copy Control Assn., Inc.) (2002) 29 Cal.4th 262. In Pavlovich the court held by a 4-3 vote that publication of alleged trade secrets on the defendant’s web site did not confer personal jurisdiction over the defendant.
Justice Janice Rogers Brown, who wrote the majority opinion in Pavlovich has since joined the U. S. Court of Appeals for the D.C. Circuit, and has been replaced on the California Supreme Court by Justice Carol A. Corrigan.
Presiding Justice Conrad L. Rushing and Justice Franklin D. Elia concurred in the opinion.
The case is Shisler v. Sanfer Sports Cars Inc., H029791
Copyright 2006, Metropolitan News Company