eBay Seller in Michigan Safe from Lawsuit in Arizona

Civil Procedure—Personal Jurisdiction

Holland v. Hurley, __Az. Adv. Rep. __, 2 CA-CV 2008-0126 (App., Div. II, May 19, 2009) (Justice Pelander)

PERSONAL JURISIDICTION IS LACKING ON INTERNET eBAY AUCTION PURCHASE OF CAR FROM OUT OF STATE SELLER

Plaintiff purchased a 1976 Cadillac from defendant, a Michigan resident, for $15,100 on and eBay auction. Plaintiff arranged for the car to be delivered to Tucson only to find it was not in the condition represented by defendant and required substantial repairs. Defendant moved to dismiss plaintiff's lawsuit filed in Pima County Superior Court pursuant to Rule 12(b)(2) lack of minimum contacts and therefore lack of personal jurisdiction. The trial court granted the motion and the Court of Appeals affirmed.

The court noted that in order for personal jurisdiction to be met the defendant “must have sufficient minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice . . . the constitutional touchstone remains whether the defendant purposefully established 'minimum contacts' in the forum State.” This involves a qualitative not quantitative analysis.

General jurisdiction exists when a defendant has “continuous and systematic” contacts in Arizona. Here plaintiff admits defendant has no office, agents or property in the state so there is no general jurisdiction. Hence the focus must be on special jurisdiction where a defendant “purposefully avails himself of the privilege of conducting business in the forum, the claim arises out of the defendant's contact with the forum and the exercise of jurisdiction is reasonable.”

Here, the court found the defendant did not purposefully seek to do business in Arizona because he did not own or operate the website that was directed to Arizona and the 49 other states, therefore had no ongoing contact with Arizona but instead was a party to a one time “random, attenuated and fortuitous” sale in Arizona. His only contact with Arizona was this single sale and a few e-mails and phone calls related to the sale all initiated by the plaintiff. Proof the defendant had made other sales in Arizona through eBay, had other contacts or otherwise availed himself of the benefit of doing business in Arizona may have resulted in a different conclusion. The burden to establish minimum contacts by affidavit, deposition or otherwise is on the plaintiff.

The court suggested that a better effort to develop facts showing the defendant purposefully took advantage of the opportunity to do business in Arizona may have changed the result here.