Thursday, August 21, 2008
Single eBay Sale Does Not Support Jurisdiction—C.A.
By STEVEN M. ELLIS, Staff Writer
A lone sale to a California buyer via Internet auction website eBay does not give rise to sufficient “minimum contacts” supporting personal jurisdiction over a nonresident seller in California courts, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
Affirming a ruling by U.S. District Judge Vaughn R. Walker of the Northern District of California in a San Francisco man’s breach of contract and fraud action against a group of Wisconsin automobile dealerships and one of their employees, the court held that the man needed to show more than a single transaction to demonstrate the defendants purposefully availed themselves of the privilege of conducting business in the state.
Paul Boschetto placed the winning $34,106 bid in 2005 on a 1964 Ford Galaxie that had been listed on eBay by one of the dealerships’ employees, Jeffrey Hansing. However, after paying for the vehicle and its transport from Wisconsin to California, Boschetto claimed that the vehicle was neither the ‘R Code’ model identified in the listing, nor in the “awesome condition” the listing had indicated,
He later filed suit in federal court, alleging state law causes of action for violation of the California Consumer Protection Act, breach of contract, misrepresentation and fraud. However, his complaint did not make any allegation that the defendants regularly used eBay to sell their cars.
Walker granted the defendants’ motion to dismiss for lack of personal jurisdiction, reasoning that “eBay acted not as a ‘distribution center’ but rather as a virtual forum for the exchange of goods.” He concluded that, in a standard eBay transaction, the item goes to whoever is the highest bidder, so the seller “does not purposefully avail himself of the privilege of doing business in a forum state absent some additional conduct directed at the forum state.”
Noting that Boschetto had failed to allege any such conduct in his complaint, Walker similarly denied Boschetto’s request to conduct additional discovery relevant to jurisdiction, labeling it “premised on speculat[ion] without any support.”
On appeal, Senior Judge Betty B. Fletcher described the three-step process governing specific personal jurisdiction over nonresident defendants for cases sounding in contract, and wrote that Boschetto “fails at step one”—a showing of personal availment—where there were no continuing commitments assumed by the defendants, or any requirement that they engage in substantial business in California.
Agreeing with the district judge that the transaction was a “one-shot affair,” she wrote that “the fact that eBay was used as the conduit for this sale does not affect the jurisdictional outcome, at least not on the particular facts here…. [T]raditional jurisdictional analyses are not upended simply because a case involves technological developments that make it easier for parties to reach across state lines.”
Fletcher also opined that the district court had not erred by denying Boschetto’s discovery request “given the total absence of any evidence or allegations that the conduct here involved more than just this one sale.”
Senior U.S. District Judge Kevin Thomas Duffy of the Southern District of New York, sitting by designation, joined Fletcher in her opinion.
Judge Pamela Ann Rymer concurred, but wrote separately to underscore her disagreement with Boschetto’s argument that sellers on eBay necessarily availed themselves of the privilege of doing business in each state across the nation.
A defendant “must do ‘something more,’ such as individually targeting residents of a particular state, to be haled into another jurisdiction,” she wrote.
The case is Boschetto v. Hansing, 06-16595.
Copyright 2008, Metropolitan News Company