In=20
The
For=20
The
CHOICE =
AUTO BROKERS,=20
INC., Appellant CARL =
DAWSON,=20
Appellees
On =
Appeal from the=20
152nd District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2006-62501
O P I N =
I O=20
N In this =
accelerated,=20
interlocutory appeal, appellant, Choice Auto Brokers, Inc. =
("CAB"),=20
challenges the trial court's order denying its special=20
appearance. We reverse and =
render.
CAB is a Florida corporation =
that sells=20
automobiles using both its own website and the internet auction =
site,=20
eBay. Dawson is a Texas resident, who =
purchased=20
an automobile from CAB. Dawson found the automobile on CAB's =
website,=20
which had a hyperlink to eBay to enable visitors to bid on =
vehicles=20
through the online auction site. Because the website required that =
bidders=20
who lacked a certain bidding history on eBay call before placing a =
bid,=20
Dawson called CAB. He later purchased the car through eBay using =
the=20
auction-ending function, "Buy It Now." Dawson's father took =
receipt of the=20
car in Florida on Dawson's behalf. Due to mechanical problems, =
Dawson's=20
father was unable to drive the car to Texas, and Dawson had it =
shipped to=20
Texas. Dawson sued for damages under =
the DTPA,=20
alleging that CAB had not been truthful about the car's age and =
condition.=20
Dawson argued that jurisdiction was proper because: (1) CAB had =
previously=20
sold 43 vehicles to Texas residents over a three-year period; (2) =
CAB=20
transported or arranged for the transportation of 19 of these to =
Texas;=20
(3) CAB's website states in more than one place that a bid on a =
vehicle is=20
a legally binding contract. In addition, CAB's website links =
directly to=20
eBay, where customers can bid on the vehicles advertised on CAB's=20
website. CAB filed a special appearance, =
alleging=20
that it does no business in Texas and was, therefore, not subject =
to=20
personal jurisdiction in Texas. CAB stipulated that: (1) it=20
maintained a website at the time of the sale; (2) visitors to its =
website=20
could view pictures and specific details of vehicles it was =
offering for=20
sale; (3) via the website, visitors could schedule a test drive of =
the=20
vehicles; and (4) via the website, visitors could request =
additional=20
information. CAB also provided printouts as exemplars of how the =
website=20
looked at the time of the sale. I The trial court denied CAB's =
special=20
appearance, and CAB timely appealed. Standard =
of=20
Review The existence of personal =
jurisdiction is=20
a question of law reviewed de novo by this Court. BMC Software =
Belg.,=20
N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002). However, this =
question=20
must sometimes be preceded by resolving underlying factual =
disputes.=20
Id. at 794. When, as here, the trial court does not issue =
fact=20
findings, we presume that the trial court resolved all factual =
disputes in=20
favor of its ruling. Am. Type Culture Collection, Inc. v.=20
Coleman, 83 S.W.3d 801, 806 (Tex. 2002). Personal =
Jurisdiction "Texas courts may assert =
personal=20
jurisdiction over a nonresident defendant only if the Texas =
long-arm=20
statute authorizes jurisdiction and the exercise of jurisdiction =
is=20
consistent with federal and state due process standards." =
Id.=20
(citing Guardian Royal Exch. Assurance, Ltd. v. English China =
Clays,=20
P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)); see Tex. =
Civ.=20
Prac. & Rem. Code Ann. =A7=A7 17.041-.045 (Vernon 2008) (Texas =
long-arm=20
statute). The long-arm statute allows Texas courts to exercise=20
jurisdiction over a nonresident defendant that "does business" in =
the=20
state. Tex. Civ. Prac. & Rem. Code Ann. =A7 17.042 (Vernon =
2008). The=20
Texas Supreme Court has held that "section 17.042's broad language =
extends=20
Texas courts' personal jurisdiction as far as the federal =
constitutional=20
requirements of due process will permit." BMC Software, =
83 S.W.3d=20
at 795. Initially, the plaintiff bears =
the burden=20
of pleading allegations sufficient to bring a nonresident =
defendant within=20
the terms of the Texas long-arm statute. Am. Type Culture=20
Collection, 83 S.W.3d at 807. However, when a nonresident =
defendant=20
files a special appearance, that defendant assumes the burden of =
negating=20
all bases of personal jurisdiction that the plaintiff has alleged. =
Id. Personal jurisdiction over =
nonresident=20
defendants is constitutional when two conditions are met: (1) the=20
defendant has established minimum contacts with the forum state =
and (2)=20
the exercise of jurisdiction comports with traditional notions of =
fair=20
play and substantial justice. Id. at 806 (citing =
Int'l Shoe=20
Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 =
(1945)). A=20
nonresident defendant's minimum contacts must derive from =
purposeful=20
availment: a nonresident defendant must have "purposefully =
availed" itself=20
of the privileges and benefits of conducting business in the =
foreign=20
jurisdiction to establish sufficient contacts with the forum to =
confer=20
personal jurisdiction. Id. (citing Burger King Corp. =
v.=20
Rudzewicz, 471 U.S. 462, 474-76, 105 S. Ct. 2174, 2183-84 =
(1985));=20
Xenos Yuen v. Fisher, 227 S.W.3d 193, 200 (Tex. =
App.--Houston=20
[1st Dist.] 2007, no pet.). An act or acts "by which the defendant =
purposefully avails itself of the privilege of conducting =
activities" in=20
Texas and "thus invok[es] the benefits and protections" of Texas =
law,=20
constitutes sufficient contact with Texas to confer personal=20
jurisdiction. Michiana Easy Livin' Country, Inc. v. =
Holten, 168=20
S.W.3d 777, 784 (Tex. 2005) (quoting Hanson v. Denckla, =
357 U.S.=20
235, 253, 78 S. Ct. 1228, 1240 (1958)). We consider three elements of =
purposeful=20
availment. See Michiana Easy Livin' Country, 168 S.W.3d =
at 785;=20
see also First Oil PLC v. ATP Oil & Gas Corp., No.=20
01-07-00703-CV, 2008 WL 2186781, at * 12-3 (Tex. App.--Houston =
[1st Dist.]=20
May 22, 2008, no pet.). First, we consider only the defendant's =
own=20
actions, not those of the plaintiff or any other third party. =
Michiana=20
Easy Livin' Country, 168 S.W.3d at 785; First Oil =
PLC, 2008=20
WL 2186781, at *12; see also U-Anchor Adver., Inc. v. =
Burt, 553=20
S.W.2d 760, 762-63 (Tex. 1977) (quoting Hanson, 357 U.S. =
at 253,=20
78 S. Ct. at 1240 (1958) ("The unilateral activity of =
those who=20
claim some relationship with a non-resident defendant cannot =
satisfy the=20
requirement of contact with the forum State. The application of =
that rule=20
will vary with the quality and nature of the defendant's activity, =
but it=20
is essential in each case that there be some act by which the =
defendant=20
purposefully avails itself of the privilege of conducting =
activities=20
within the forum State, thus invoking the benefits and protections =
of its=20
laws.")). Second, the activities must be=20
purposeful, not random, isolated, or fortuitous. Michiana Easy =
Livin'=20
Country, 168 S.W.3d at 785; First Oil PLC, 2008 WL =
2186781,=20
at *12. "It is the quality rather than the quantity of contacts =
that is=20
determinative." First Oil PLC, 2008 WL 2186781, at *12 =
(emphasis=20
in original). Third, the defendant must seek some benefit, =
advantage, or=20
profit by virtue of its activities in the proposed forum state, =
because=20
this element is based on the notion of implied consent. =
Michiana Easy=20
Livin' Country, 168 S.W.3d at 785; First Oil PLC, =
2008 WL=20
2186781, at *12. Our jurisdictional analysis is =
further=20
divided into general and specific personal jurisdiction. CSR, =
Ltd. v.=20
Link, 925 S.W.2d 591, 595 (Tex. 1996). General jurisdiction =
will=20
attach when "a defendant's contacts in a forum are continuous and=20
systematic permitting the forum to exercise personal jurisdiction =
over the=20
defendant even if the cause of action did not arise from or relate =
to=20
activities conducted within the forum state." Id. To =
support=20
general jurisdiction, the defendant's forum activities must have =
been=20
"substantial," which requires stronger evidence of contacts than =
for=20
specific personal jurisdiction. Preussag Aktiengesellschaft v. =
Coleman, 16 S.W.3d 110, 114 (Tex. App.--Houston [1st Dist.] =
2000,=20
pet. dism'd w.o.j.). Specific jurisdiction lies when =
the=20
defendant's alleged liability arises from or is related to an =
activity=20
conducted within the forum. BMC Software, 83 S.W.3d at =
796. "For=20
a nonresident defendant's forum contacts to support an exercise of =
specific jurisdiction, there must be a substantial connection =
between=20
those contacts and the operative facts of the litigation." =
Moki Mac=20
River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007). =
This=20
requirement assesses "the strength of the necessary connection =
between the=20
defendant, the forum, and the litigation." Id. Internet =
Use &=20
Personal Jurisdiction Internet usage is divided into =
three=20
categories, using a sliding scale, for the purposes of =
establishing=20
personal jurisdiction. Reiff v. Roy, 115 S.W.3d 700, 705 =
(Tex.=20
App.--Dallas 2003, pet. denied). "At one end=20
of the scale are websites clearly used for transacting business =
over the=20
Internet, such as entering into contracts and knowing and repeated =
transmission of files of information, which may be sufficient to =
establish=20
minimum contacts with a state." Id. "On the other end of =
the=20
spectrum are 'passive' websites that are used only for advertising =
over=20
the Internet and are not sufficient to establish minimum contacts =
even=20
though they are accessible to residents of a particular state." =
Id. at=20
705-06. "In the middle are 'interactive' websites that allow the=20
'exchange' of information between a potential customer and a host=20
computer. Id. at 706. Jurisdiction in cases involving =
interactive=20
websites is determined by the degree of interaction. Id.=20
CAB's=20
website was more than a purely passive website. The website =
provided=20
advertising and some interactivity, because customers were able to =
email=20
CAB through the website to schedule a test drive or request =
additional=20
information about the vehicle. But the website did not allow a =
customer to=20
enter into a contract or purchase a vehicle directly; rather, it =
routed=20
the customer to eBay, where CAB had no control over who would be =
the=20
highest bidder. Because the degree of interactivity falls between =
the two=20
extremes, we look beyond the internet activity to the degree of=20
interaction between the parties. See Karstetter, 184 =
S.W.3d at=20
405. As to=20
specific jurisdiction, the record shows that Dawson initiated the=20
conversations with CAB and received the vehicle in Florida. There =
is no=20
evidence that CAB made misrepresentations to Dawson in Texas. In =
fact, the=20
record shows that the car initially malfunctioned while outside of =
Texas=20
as well. Nothing in the record suggests that CAB's potential =
liability=20
arises from or is related to an activity conducted within the =
forum.=20
See BMC Software, 83 S.W.3d at 796; see also Moki Mac =
River=20
Expeditions, 221 S.W.3d at 585. Therefore, we conclude that =
specific=20
jurisdiction does not exist. As to=20
general jurisdiction, the record shows that CAB sold 43 vehicles =
to Texas=20
purchasers, but the record does not quantify CAB's total sales. =
During the=20
same time period CAB shipped, or arranged for shipping, nineteen =
of those=20
vehicles to Texas. There is no indication in the record that CAB =
targeted=20
Texas customers in any way. Nothing in the record shows that CAB=20
maintained a physical presence in Texas, performed any business =
activities=20
in Texas, or otherwise structures its business affairs to benefit =
from the=20
Texas laws. The Texas=20
Supreme Court has held that an 18-year history of sales to Texas =
residents=20
was insufficient to confer general jurisdiction, when Texas sales=20
accounted for 3.5% of its total sales and title to the goods =
purchased=20
passed outside of Texas. Am. Type Culture Collection, 83 =
S.W.3d=20
801, 807-09 (Tex. 2002). In American Type Culture =
Collection, the=20
defendant also purchased supplies from over 33 Texas vendors over =
a=20
five-year period and sent representatives to five scientific =
conferences=20
in Texas over a seven-year period. Id. at 808. But the =
defendant=20
did not advertise in Texas or maintain a physical presence in =
Texas.=20
Id. at 810. It performed its business services outside of =
Texas=20
and constructed its contracts to ensure it did not benefit from =
Texas=20
laws. Id. The supreme court concluded that these factors, =
taken=20
together, did not establish a pattern of continuing and systematic =
activity sufficient to support the exercise of personal =
jurisdiction in=20
Texas. Id. at 809-10. Likewise,=20
we hold that CAB's activities do not establish a pattern of =
continuing and=20
systematic activity sufficient to support the exercise of personal =
jurisdiction in Texas. We hold that the trial court erred in =
denying CAB's=20
special appearance. We reverse=20
the trial court's order denying CAB's special appearance and =
render=20
judgment dismissing the case against it for lack of personal =
jurisdiction.=20
The Clerk of this Court is directed to issue the mandate =
immediately.=20
See Tex. R. App. P. 18.6. Sam=20
Nuchia Panel=20
consists of Chief Justice Radack and Justices Nuchia and=20
Higley.
1. "The usual eBay auction process is, after =
almost a=20
decade in existence, now a matter of common knowledge of which the =
Court=20
takes judicial notice. See Fox v. West Palm Beach, 383 =
F.2d 189,=20
194 (5th Cir.1967) ('The most frequent application of the judicial =
notice=20
doctrine is common knowledge.') A seller advertises an item on the =
eBay=20
interface, using a template. The seller establishes a minimum =
initial bid=20
and a deadline for the item's auction to end. Buyers may then bid =
for the=20
item through the eBay interface, which for each item posts the =
current bid=20
and the time remaining. At the expiration of the auction period, =
the=20
highest bidder wins the item. EBay puts the seller and winning =
buyer in=20
contact by email to arrange payment and shipping." Action =
Tapes, Inc.=20
v. Weaver, No. Civ. 3:05-CV-1693-H, 2005 WL 3199706, at *2 =
(N.D. Tex.=20
Nov. 23, 2005). 2. This test was first created in Zippo=20
Manufacturing Co. v. Zippo Dot Com, Inc.