Evan Brown of Internet Cases has just posted a blog on a Michigan federal court which has exercised personal jurisdiction over out-of-state eBay seller. The case involved allegations of breach of contract, fraud and misrepresentation over the sale of artwork through an eBay auction.
In Dedvukaj v. Maloney, 2006 WL 2520347 (E.D. Mich., August, 31, 2006), the U.S. District Court for the Eastern District of Michigan exercised its jurisdiction based upon:
the seller’s statements that it would ship anywhere in the United States;
the fact that the seller did not deny buyers from Michigan the right to participate in the eBay auction;
the seller willingly communicated with buyers from any state;
the seller corresponded with the buyer multiple times via email and phone;
the intentional and misleading nature of the seller’s statements; and
the defendant’s acceptance of payment from Michigan.
For these reasons, the court found that the eBay seller had purposefully availed himself to the benefits of conducting business in Michigan and was, therefore subject to jurisdiction therein. The court based its ruling in part on precedent, such as First Tenn. Nat’l Corp. v. Horizon Nat’l Bank, 225 F. Supp. 2d 816, 821 (W.D.
Tenn. 2002) (website stated the bank could lend in all 50 states) and Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 891-92 (6th Cir.
2002) (website stated it would do business in any state, specifically including Michigan).
In denying the seller’s motion to dismiss for lack of personal jurisdiction, the court stated “sellers cannot expect to avail themselves of the benefits of the internet-created world market that they purposefully exploit and profit from without accepting the concomitant legal responsibilities that such an expanded market may bring with it.”
I, myself have negotiated and litigated multiple interstate internet disputes, some involving eBay. The hardest part of any case of this type is fighting over jurisdiction. The defendant is nearly always a fraudulent con-artist relying jurisdiction issues to retain their ill-gotten gains. The Dedvukaj ruling seems to be the best holding ever proffered on the subject. Dedvukaj may indeed be the beginning of the end for internet scam artists. Let’s just keep our fingers crossed that more courts adopt the blindingly obvious reasonableness of the Dedvukaj ruling.