These Shoes Aren't Made For Walkin': New Jersey Court Declines To Extend In Personam Jurisdiction To Internet Seller Of Classic Car

Newark, N.J. (February 11, 2020) - In the first quarter of 2019, 11% of all retail sales in the United States, or more than $146 billion, were internet-based transactions. Recently, the New Jersey Appellate Division approved for publication an opinion confirming that a person-to-person transaction over the internet will not automatically confer personal jurisdiction on the seller when the buyer is a New Jersey resident. This opinion is consistent with both federal and existing state law. It draws into focus, however, the jurisdictional standards that were established at a time when this sort of transaction could not even have been contemplated.

A Brief History of Personal Jurisdiction

Midway through the second half of the 1800s, the U.S. Supreme Court decided that the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution proscribed personal jurisdiction of state courts over non-resident civil defendants. Pennoyer v. Neff, 95 U.S. 714, 733 (1878). That case and its progeny led to the Court opening the door to such jurisdiction in International Shoe Co. v. Washington, 326 U.S. 310, 316-17 (1945), so long as the non-resident had established "minimum contacts" with the forum state, such that conferring jurisdiction did not "offend 'traditional notions of fair play and substantial justice.'" Id. at 317(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Thus began the torture of every first year law student through to the present day.

Jurisdictional questions are analyzed in two forms: (1) general jurisdiction, i.e., whether the defendant's contacts with the forum state are sufficient such that it should expect to be subject to the state court's jurisdiction there, and (2) specific jurisdiction, where the defendant's conduct as it relates to the issue raised by the lawsuit shows that the defendant "purposely availed itself of the privilege of conducting activities" there. Hanson v. Denckla, 357 U.S. 235, 253 (1958).

Jardim v. Overley

In the case at issue, Joseph Jardim owned a used car business in Roselle, New Jersey. In May 2018, Jardim noticed an advertisement on a website called Hemmings.com, where motor vehicles are sold through the site. Hemmings.com is an example of an internet marketplace. It does not purchase or take possession of the vehicles, but rather is a forum where those transactions can take place.

Michael Edward Overley was a California resident who was interested in selling a vintage 1960 Buick Invicta...