Recently, Chief Judge Vaughn Walker of the Northern District of
California ruled in Boschetto v. Hansing (Case No. C-06-1390, order
issued July 13, 2006) that a Wisconsin resident's sale of a vehicle
on eBay to a California resident did not give rise to personal
jurisdiction in California. In so doing, the Northern District joins
several other jurisdictions in finding that a single online auction
sale does not constitute the requisite "purposeful availment" with
the forum state for the exercise of specific jurisdiction.
This ruling clarifies that a single sale or perhaps even occasional
sales to California buyers will not alone create specific jurisdiction,
much less give rise to general jurisdiction. While the opinion
recognized the chilling effect that "too easy a test of personal
jurisdiction could do to Internet commerce," it does not indicate
whether the result necessarily would have been different had the
defendant been a commercial or repeat seller and/or shipped
the vehicle to the forum. Thus, what constitutes "purposeful
availment" of California in the context of Internet commerce
undoubtedly will continue to unfold.
Defendant Jeffrey Hansing, a Wisconsin resident, allegedly posted
for sale on eBay a 1964 Ford Galaxie. Plaintiff Paul Boschetto,
a California resident, submitted the winning bid. Hansing
subsequently sent Boschetto an email advising him that he
could pick up the car from the Wisconsin car dealership where
Hansing worked. Boschetto instead hired a delivery company to
transport the car to California. Boschetto thereafter filed suit in
the Northern District of California, alleging that the car he received
was defective and not as advertised, naming Hansing, the auto
dealership, and two related auto dealerships as defendants on the
theory that the dealerships' operation of a website accessible in
California, and Hansing's relationship with one of the dealerships,
brought them all within the purview of California's jurisdiction. All
defendants moved to dismiss for lack of personal jurisdiction.
The court easily concluded that Boschetto had failed to satisfy his
"fairly high burden" of establishing general jurisdiction over the defendants because he had failed to adduce any evidence that
Hansing or the auto dealerships had continuing or systematic
contacts with California.
The court then examined whether it could exercise specific
jurisdiction over any of the defendants, which the Ninth Circuit
has held requires a showing that: (1) the non-resident defendant
purposefully directed his activities toward the forum or resident
thereof; (2) the claim relates to such activities, and (3) the exercise
of jurisdiction comports with "fair play and substantial justice."
Under this standard, the court also concluded Boschetto had also
failed to satisfy his burden because the evidence showed that the
defendants had not purposefully directed their activities toward
California. Specifically, the negotiations between Boschetto and
Hansing took place only over the Internet and never physically
occurred in California, there was only one transaction between
Boschetto and Hansing, Boschetto made his own arrangements
to pick up the car, and there was no evidence that Hansing had
deliberately chosen to do business with a California resident.
The court noted that several other jurisdictions have reached
the same conclusion in disputes between eBay users, reasoning
that sales on eBay are "random," "attenuated," and "the choice
of the [the] highest bidder is... beyond the control of the seller."
While the court noted two divergent opinions, it did not find them
persuasive. The court concluded by noting the significant harm
to Internet commerce that could result from creating "too easy a
test" for personal jurisdiction, observing that due process is not
offended by requiring a buyer who deliberately chose to purchase
an item from an out-of-state seller without inspecting it first to
have to travel to that state to assert his claim.
For further information, please contact:
Jennifer Lloyd Kelly, Litigation Associate
J. Carlos Orellana, Litigation Associate
This update is intended by Fenwick & West LLP to summarize recent developments in the law. It is not intended, and should not be regarded,
as legal advice. Readers who have particular questions about these issues should seek advice of counsel.
© 2006 Fenwick & West LLP. All Rights Reserved.