The World in U.S. Courts: Fall 2015 - Personal Jurisdiction/Forum Non Conveniens
Nebraska resident Henry Davis filed suit in Nebraska for breach of contract and fraudulent or negligent misrepresentation stemming from an allegedly deficient vacation rental in St. Martin. Davis named three defendants: the web-based vacation rental company, Rental Butler, the property management company in St. Martin, and the individual owner of the vacation rental. Nebraska's long-arm statute extends to the limits of the Due Process Clause of the U.S. Constitution, and the Court dismissed the case upon finding that jurisdiction over each of the three defendants would violate due process.
Rental Butler is a Canadian company that contracted with Davis for the rental in St. Martin. In the rental process, Davis and Rental Butler exchanged 55 e-mails and spoke on the phone five times. But the Court noted that Rental Butler only knew Davis was a Nebraska resident because of the signature line on his e-mail. There was no evidence that Rental Butler conducted any marketing in Nebraska. In determining whether specific personal jurisdiction existed over a website, the Court applied the widely-accepted "Zippo" test that establishes a "sliding scale" for the assertion of jurisdiction, asking whether a website is interactive, and if so the extent of the interactions relating to the dispute that is the subject of the suit. Here, the Court noted that Rental Butler's website did not allow visitors to make any reservations or otherwise make a transaction; in order to book the property, Davis had to reach out to Rental Butler in Canada and wire his payments there. The Court also emphasized that the alleged breach of the contract, and any harmful effects suffered therefrom, took place in St. Martin, where the vacation property allegedly did not meet the specifications of the contract between Rental Butler and Davis.
Neither the property manager (a French company located in St. Martin) nor the property owner (an Illinois resident) had any contacts with Nebraska. Davis argued that personal jurisdiction could be found over these two defendants based on an agency theory but the Court, having found that Rental Butler was not subject to personal jurisdiction, concluded that no personal jurisdiction could be imputed to the other defendants.