In Auction Sales Using Internet Auction Websites, Seller of an Item is not Subject to Specific Jurisdiction in the Buyer’s State of Residence Without Further Ties to that State

In MacNeil v. Trambert, 401 Ill. App. 3d 1077 (Ill. App. Ct. 2010), the Illinois Appellate Court discussed jurisdictional questions relating to sellers involved in internet auction sales. The court held that, when a seller auctions and sells items using internet websites, the seller is not subject to specific jurisdiction in the buyer’s state unless there are further ties to that state.

MacNeil stems from a dispute over an internet purchase.  The Defendant Trambert (“Defendant”) listed a vehicle for auction sale using the “eBay” website.  The eBay contract terms included a "Shipping" clause, which read "Buyer responsible for vehicle pick-up or shipping."  The contract also showed California as the item location. Plaintiff MacNeil, an Illinois resident, was the highest successful bidder.  Plaintiff’s agent inspected and accepted delivery of the vehicle in California.  Later, when the vehicle was brought to Illinois, Plaintiff discovered that the vehicle did not have a satellite radio or DVD screens in the headrests.

Consequently, Plaintiff filed a complaint in small-claims court in Du Page County, Illinois, claiming breach of contract.  Plaintiff alleged that the eBay description of the vehicle stated that it had DVD screens in the headrests of the front seats and a satellite radio system, which were missing on actual delivery. Defendant in turn filed a motion to dismiss the complaint, pursuant to sections 2--301 and 2--619(a)(1) of the Code (735 ILCS 5/2--301, 2--619(a)(1) (West 2008)), alleging that the trial court lacked personal jurisdiction over him. Defendant argued that he did not have the necessary minimum contacts with Illinois to support the court's exercise of personal jurisdiction.
The trial court granted Defendant's motion to dismiss, finding that "the mere formation of an on-line contract in the defendant's limited e-mail and telephonic correspondence with the Illinois plaintiff regarding that contract *** are by themselves insufficient to establish minimum contacts with Illinois, and the defendant did not purposely direct any eBay sales *** specifically toward Illinois residents or use Ebay to establish the regular business in Illinois." Id. at 1079. This appeal followed.

A court has specific jurisdiction over the defendant if the suit directly arises "‘out of the contacts between the defendant and the forum.’" Id. at 1081 (quoting  Spartan Motors, Inc. v. Lube Power, Inc., 337 Ill. App. 3d at 561). With respect to specific jurisdiction, Plaintiff asserted that the trial court had personal jurisdiction over Defendant because the Defendant transacted business in and had extensive contacts with Illinois regarding this sale.
The appellate court referred to Foley v. Yacht Management Group, Inc., No. 08--C--7254, 2009 U.S. Dist. LEXIS 58441 (N.D. Ill. July 9, 2009)in which the U.S. District Court addressed the specific issue of personal jurisdiction over the defendants offering an item for Internet auction on eBay. In Foley, the plaintiff, an Illinois resident was the highest bidder for a Yacht listed for auction on eBay.  The defendants were located in Massachusetts. eBay emailed the Plaintiff and informed him that he was the winning bidder and he subsequently submitted a $ 2,000 deposit through the Internet monetary transfer service PayPal. But the defendants soon thereafter refused to accept the deposit and refunded the money to the plaintiff, and the transaction was never completed. So, the plaintiff filed a lawsuit for breach of contract, which one of the defendants moved to dismiss for lack of personal jurisdiction. Foley court held that the seller of an item on eBay, without further ties to the state in which the buyer resides, was not subject to specific jurisdiction in that state.  The court concluded that “‘a seller who posts an item on eBay for auction has no control over who ultimately purchases that item, and therefore the seller does not engage in conduct that rises to the level of purposeful availment necessary to establish personal jurisdiction.’” Id. at 1082 (quoting Foley, 2009 U.S. Dist. LEXIS 58441at *10).

The appellate court agreed with the court's analysis in Foley that a seller of an item on eBay, without further ties to a forum, is not subject to specific jurisdiction in that forum. Id.   The court observed that the Defendant in this case listed the vehicle for sale on eBay and had no control over who ultimately would purchase the item or in which state the buyer would reside. Id.   Further, once the Plaintiff purchased the item, the Defendant had limited contacts with Plaintiff. Id.  Therefore, the appellate court found that Defendant’s conduct directed at this forum did not rise to the level of purposeful availment necessary to confer personal jurisdiction. Id.

The appellate court further stated that Plaintiff was not successful in showing “repeated communication” with Defendant in Illinois, communication between the parties limited to an isolated phone call and limited email communication. Id. at 1083.   See Abbott Laboratories, Inc. v. Biovalve Technologies, Inc., 543 F. Supp. 2d 913, 922 (N.D. Ill. 2008). Abbott  court stated that isolated telephone and e-mail communications, alone, are insufficient bases for asserting personal jurisdiction, although sustained contact over the course of several months could be sufficient. Additionally, the limited communications between Defendant in California and Plaintiff in Illinois do not render inapplicable the above analysis, i.e., that a seller of an item on eBay has no control over who purchases that item. Based on the above discussions, the appellate court concluded that Defendant's contact with Illinois was random, fortuitous, and attenuated.  Id. The court stated that, although the buyer suffered economic injury in Illinois, this fact alone could not establish that personal jurisdiction over the seller was proper in Illinois.