Attention jurisdiction geeks....

Sean Sirrine, a 1L at Lewis & Clark and one of the bloggers at Blog De Novo, recently posted there on Shisler v. Sanfer Sports Cars (--- Cal.Rptr.3d ----, 2006 WL 3735715), and wondered how both a California Superior Court judge and a Court of Appeals board could fail to find California jurisdiction in, as he put it, a “cut-and-dry” case of minimum contacts jurisdiction, and suggested that the California Supreme Court might take the case up at some point. I respectfully disagree, and will present my analysis of the jurisdictional issues in the case after the jump (I would post it on his site, but I am having some trouble with posting comments).

I’m mostly happy that there are other 1L’s out there that find jurisdiction interesting, and really just want to put my own newly-developed jurisidiction analysis skills to work. But... if there are any District Court judges reading this who would like a summer intern who gets off on jurisdictional analysis, feel free to contact me!

If minimum contacts doesn’t make you want to stand up and shout “Hallelujah!”, then you probably don’t want to click here.

Here are the facts in Shisler: Defendant is a Florida corporation in the business of selling autos with it’s principal place of business in Florida. Defendant maintains a website that is non-interactive, and is available to anyone with internet access. Plaintiff is a California resident. Plaintiff found Defendant’s website, and contacted defendant to purchase one of the cars he saw advertised on the site. The court found that the contract to sell an auto was formed in Florida, and the title transferred to Plaintiff in Florida when the auto was delivered to the third party shipper who eventually conveyed the auto to Plaintiff in California. Plaintiff alleges that the car is not as warranted, and filed a suit alleging breach of contract in California. Defendant filed a motion to quash service of summons on jurisdictional grounds, which was granted by the trial court and affirmed on appeal.

Mr. Sirrine contends that the above courts erred in relying on Pavlovich v. Superior Court (29 Cal.4th 262, 2002) and other decisions’ analysis of whether or not Defendant’s website constituted a basis for specific jurisdiction. Instead, Mr. Sirrine seems to think that the courts should have found that Defendant’s shipping of a car in this instance, as well as the sale of at least 10 other cars to California residents, constituted contacts so continuous, systematic and substantial that California may exert jurisdiction. Says Mr. Sirrine:

The court then goes on to explain how the web site at issue didn't target California residents and so on, but never discusses the fact that a car was purchased by a California resident and actually delivered to him. In fact, the whole rest of the opinion fails to even discuss the facts found in the case. This case is not about sending files over the internet, it is about a contract for the purchase of a car which was delivered to California. (The court notes that there were at least 10 sales of vehicles from this salesman to California using the web site.)

And later:

I could understand the opinion if the plaintiff were trying to serve the defendant on an issue not relevant to their transaction, (say a libel claim), but this case is a cut and-dry example of a situation in which personal jurisdiction should have been found.

I expect we will see this case at the California Supreme Court in the near future.

The jurisdiction of California courts is, of course, restricted to the constitutional limits, and California has a long-arm statute that allows jurisdiction to the extent of those limits. The court in Shisler correctly summarized the rule for the exercise of Specific jurisdiction in California and other states that observe the constitutional limits: “(1) ‘the defendant has purposefully availed himself or herself of forum benefits’ [citation]; (2) ‘the “controversy is related to or ‘arises out of’ [the] defendant’s contacts with the forum” ’ [citations]; and (3) ‘ “the assertion of personal jurisdiction would comport with ‘fair play and substantial justice.’ (Pavlovich, supra, 29 Cal.4th at p. 269.).”

What Mr. Sirrine has missed is the “purposeful availment” analysis that comes from Hanson v. Denckla (358 U.S. 858, 1958), and is embodied in prong one of the test laid out in Shisler. In the context of commercial transactions contracted at a distance, SCOTUS has found in Hanson, Burger King Corp. v. Rudzewicz (471 U.S. 462, 1985) and arguably in Asahi Metal Industry v. Superior Court (480 U.S. 102, 1987) that, generally, if a defendant doesn’t actively seek out business in a particular forum, they will not be subject to jurisdiction in that forum. However, Asahi did muddle things a bit, so it is not entirely clear how the SC would rule on a jurisdiction question similar to the one presented in Shisler, and indeed there is a state split on this question (according to my CivPro Professor, Eastern mercantilist states tend to find jurisdiction on these facts, while Western agrarian states find no jurisdiction, as California here).

For an example, see Conn v. Whitmore (9 Utah 2d 250, 1959), where the Utah SC found that a Illinois judgment had no validity in Utah because of lack of jurisdiction in Illinois. In that case, a Illinois plaintiff sent a advertisement to a Utah resident in regard to a mare he had for sale. Utah Defendant agreed to purchase the mare, and mailed his down payment to Illinois. Upon receiving the mare he decided it wasn’t as warranted, and discontinued payments. Plaintiff filed a suit for breach in Illinois. The Utah SC found that the defendant’s entering into a contract with a plaintiff in Illinois did not constitute jurisdiction in that state because defendant did not initiate the transaction, and therefore did not “purposefully avail” himself of the protection of the Illinois laws.

The California Court of Appeals has explicitly adopted this approach in Belmont Industries v. Superior Court (31 Cal.App.3d 281, 1973), citing Conn.

Of course, the facts in Conn are different than in Shisler, in that the seller is the plaintiff in Conn and the buyer is the plaintiff in Shisler. However, I do not believe that is relevant, as both are related to a business transaction and one party’s breach of contract (failure to provide merchandise as warranted in one, failure to make payment in the other). In Helicopteros Nacionales de Colombia v. Hall (466 U.S. 408, 1984), the court found a distinction between purchases and sales as it related to general jurisdiction (it makes sense in general jurisdiction, because if a party were subject to general jurisdiction in a forum solely on the basis of purchases, that would greatly discourage inter-state trade and would be contrary to public policy), but I know of no case that finds such applicability in the context of specific jurisdiction, “arising from” the specific transaction that is the subject of the suit. Rather, the focus is, as always, on the relationship between the defendant, the forum, and the litigation.

In this case, the defendant’s relationship to California and the litigation is that a California resident called him up and asked him to sell and ship him a car. Defendant did not advertise in California (with the exception of the website, which is why Pavlovich and Zippo Mfg. Co. v. Zippo Dot Com, Inc. (52 F.Supp. 1119, 1997) figure so prominently in this case), and therefore did not “purposefully avail” himself of the protections of California laws. Should a defendant be subject to the jurisdiction of every person who, unsolicited, calls him up and asks him to sell him a car? Or should the defendant refuse the business of any non-Floridian, on the basis that accepting their business would subject him to being haled into the courts of the purchaser’s residence? I think not, and am fairly certain the California Supreme Court would agree.

There are also no convenience factors in play here, as Plaintiff can easily sue Defendant in Florida, and there is no obvious evidentiary concerns.

While I believe this is a case that is somewhat near the margins of personal jurisdiction jurisprudence, I hardly agree with Mr. Sirrine that this is a “cut and dry” case where the court should have found jurisdiction. Rather, I think the weight of precedent, both California and constitutional, goes against jurisdiction here, and that the question of whether or not the internet advertising constitutes minimum contacts is, indeed, the controlling question (and as the law stands now under Pavlovich and Zippo, there is clearly not jurisdiction on the basis of Defendant’s non-interactive website, as the court in Shinsler also held).