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Ninth Circuit:
Jurisdiction Exists Over Out-of-State Seller on Amazon.com
Panel Finds Minimal Contacts Exist for Purpose of Long-Arm Statute Where Goods Are Delivered in Forum State Without Need to Show Consumers in That State Were Purposely Targeted Or That Sales in State Are Vast
By a MetNews Staff Writer
Sellers in one state that take orders for products via Amazon.com and deliver those products to customers in another state, may be sued in the state of delivery by the manufacturer of the product based on unauthorized sales even if such sales in the forum are not voluminous, the Ninth U.S. Circuit Court of Appeals held yesterday, reversing a dismissal for lack of personal jurisdiction over the defendants.
The opinion reinstates an action brought in the U.S. District Court for the District of Arizona by Herbal Brands, Inc. against New York companies that are not authorized distributors of the plaintiff’s health products. Yesterday’s decision, finding the due-process requirement of “minimal contacts” easily satisfied, is apt to attract en banc review.
At issue was whether the standard was met that there be “something more” than receipt of goods by a purchaser in a given state for a non-resident seller to be subject to the jurisdiction of courts of that state under a long-arm statute. District Court Judge Susan M. Brnovich of the District of Arizona declared, in dismissing Herbal Brands’s lawsuit against Photoplaza, Inc. and others:
“If Defendants can be haled into Arizona courts, then virtually any seller who places products for sale on Amazon can be haled into Arizona courts as well. However, the law in this circuit requires ‘something more.’ ”
Graber’s Decision
Writing for a three-judge panel, Circuit Judge Susan P. Graber said in yesterday’s opinion:
“We have not squarely addressed the question whether sales of a product to forum residents through an interactive website constitute ‘something more’ to establish express aiming when there is no evidence that the seller specifically targeted that forum. We now hold that if a defendant, in its regular course of business, sells a physical product via an interactive website and causes that product to be delivered to the forum, the defendant ‘expressly aimed’ its conduct at that forum. Though the emergence of the internet presents new fact patterns, it does not require a wholesale departure from our approach to personal jurisdiction before the internet age.”
She went on to say:
“Although the internet can be dizzyingly complex, for jurisdictional purposes, the act of selling physical products over the internet to a forum resident is substantially the same as selling those same products to a forum resident through a mail-order catalog.
“Thus, we conclude that the sales of physical products into a forum via an interactive website can be sufficient to establish that a defendant expressly aimed its conduct at the forum, provided that two key elements are present. First, the sales must occur as part of the defendant’s regular course of business instead of being ‘random, isolated, or fortuitous.’…Second, the defendant must exercise some level of control over the ultimate distribution of its products beyond simply placing its products into the stream of commerce.”
Targeting Not Required
The judge added:
“Although other factors may be relevant in certain circumstances, the express aiming inquiry does not require a showing that the defendant targeted its advertising or operations at the forum.”
She specified:
“The outcome of the express-aiming inquiry does not depend on the number of sales made to customers in the forum. Drawing a line based on the number of sales would require an arbitrary distinction that is not preferred in this area of the law.”
The case is Herbal Brands, Inc. v. Photoplaza, Inc., 21-17001.
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