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Thursday, May 23, 2024 | Back issues
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Internet Sales Open Seller to Oklahoma Suit

(CN) - A Tennessee-based eBay "power seller" that sold several cars to buyers in Oklahoma is subject to Sooner State law, the Oklahoma Supreme Court ruled.

"The use of a third-party auction site such as eBay as a vehicle for sales cannot serve as a shield and absolute bar to the exercise of in personam jurisdiction by this state, merely because the seller does not choose the buyer or the buyer's state, when otherwise sufficient minimum contacts exist so that the exercise of jurisdiction is reasonable and does not offend traditional notions of fair play and substantial justice," Justice Douglas Combs wrote for the unanimous court.

In 2012, Oklahoma resident Samantha Guffey bought a used 2009 Volvo XC 90 listed for auction on eBay by Motorcars of Nashville Inc. (MNI), a Tennessee corporation.

After receiving the car, however, Guffey discovered it was not in the condition advertised, and sued in state court for fraud and violations of the Oklahoma Consumer Protection Act.

Guffey claimed that MNI is subject to Oklahoma law because it is an active "power seller" on eBay, selling an average of 12 to 35 cars per day on the site, and has sold at least 30 days to Oklahoma residents.

These facts were not enough to convince an Oklahoma County judge that it had jurisdiction over MNI, and he dismissed Guffey's action in November 2013.

The Oklahoma Supreme Court reversed Tuesday, however, focusing not "merely on the eBay listing or the sale itself, but rather the totality of contacts between the non-resident defendants and Oklahoma."

MNI's sale to Guffey was not an isolated incident but part of the car dealer's systematic sales through eBay to buyers across the nation, including multiple other Oklahoma residents, the court found. The 30-day warranty accompanying Guffey's purchase also constitutes MNI's "ongoing obligations in Oklahoma," according to the ruling.

"The Supreme Court of the United States has warned against permitting the march of technological progress to destroy traditional notions of personal jurisdiction," Combs wrote. "However, the court has largely left it to lower federal and state courts to work out how to strike the proper balance in an increasingly connected age."

Dedvukaj v. Maloney, a 2006 federal ruling from Detroit, supports the determination. That case found that "Internet forums such as eBay expand the seller's market literally to the world and sellers know that, and avail themselves of the benefits of this greatly expanded marketplace. ... 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."

MNI's sale of the vehicle to Guffey and others, combined with its ongoing warranty obligations, "constitute more than sufficient minimum contacts for the exercise of in personam jurisdiction to be reasonable and comport with traditional notions of fair play and substantial justice," Combs concluded.

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