Car Dealer Lawyer

The United State Court of Appeals for the Ninth Circuit addressed a novel issue for the circuit courts in Boschetto v. Hansing, No. 06-16595 (9^th Cir. Aug. 20, 2008).  That is, “[d]oes the sale of an item via the eBay Internet auction site provide sufficient “minimum contacts” to support personal jurisdiction over a nonresident defendant in the buyer’s forum state”?  The court concluded that, under the facts of this case, a single sale of an item over eBay does not create jurisdiction in the buyer’s state.

San Francisco resident Paul Boschetto bought a 1964 Ford Galaxie on eBay from the Wisconsin-based Boucher Automotive Group.  Boschetto arranged to have the car picked up and delivered to him in San Francisco.  When it arrived, he was unhappy with the condition and tried to rescind the transaction (or to use the technical term, he tried to “p#ss backwards on the deal.”)  When he was unable to resolve the issue with Boucher or eBay, Boschetto sued in federal court and based his claims on California law.

While this might seem like something that would only interest a bar examiner, these cases are critically important for dealers.  State laws relating to car sales can vary dramatically from state to state.  The last thing that a dealer like Boucher would want is to defend its claim in a state like California.   So let’s spend a little time and dig into what this case means.

First, every state has a “long-arm statute” that allows it’s courts to have power over nonresidents.  In California, the “long-arm statute” has been interpreted to be co-extensive with the federal standard.  That means that California will exercise long-arm jurisdiction whenever it “comports with federal constitutional due process.”  It is also important to note that this case involved “specific” jurisdiction (as opposed to “general jurisdiction”) where the transaction in question is the subject matter of the lawsuit.

The Ninth Circuit concluded that Boschetto did not allege facts to show that Boucher “performed some type of affirmative conduct which allows or promotes the transaction of business within” California.  In other words, the mere fact that Boucher sold a vehicle to a California resident on eBay was not enough to meet the “purposeful availment” standard.  The court noted that this was a “one-shot affair.”  The court noted that there were no more contractual duties that had to be performed in California.  The court also noted that there were not other facts showing that Boucher did business in California.

The Boschetto court distinguished cases that analyzed whether the site was “interactive.”  In other words, some cases held that having a static website that can be read in a different state does not “purposefully avail” you of that court’s jurisdiction, but suggest that if the site is interactive, then jurisdiction might exist.  The Ninth Circuit noted that although eBay’s site is interactive, eBay is not the defendant.  Simply using eBay’s interactive site was not enough to invoke jurisdiction. 

Reading the court’s analysis suggests that there could be circumstances where the outcome would be different.  For example, the court noted that there were no on-going obligations in the contract.  So perhaps if the contract involved payments or warranty service, the outcome would have been different.  The court also noted that Boschetto did not allege that Boucher regularly did business on eBay.  It did not elaborate, but it might leave room to argue that if you use eBay routinely, then it would be fair to haul you into a foreign court.  Finally, if a customer bought a car from your own interactive website, then it might be different than simply using an auction site such as eBay.

All in all, if you get worked up about things like this (like I do), this is an important case.  Although it is not controlling outside of the Ninth Circuit, the case is well-written and the Ninth Circuit is an influential court.  By addressing the issue first, the Boschetto case could help set some limits to states’ long-arm jurisdiction.