Gdisis v. Smith

Filing 17

ORDER DISMISSING CASE signed by Judge Rudolph T. Randa on 4/9/2014 GRANTING 9 MOTION to Dismiss for Lack of Jurisdiction filed by Greg Smith. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ERNEST WAYNE GDISIS,
Plaintiff,
-vs-

Case No. 13-C-1172

GREG SMITH,
Defendant.
DECISION AND ORDER

This case involves the sale of a 1948 Buick Roadmaster by Greg Smith, a
North Carolina resident, to Ernest Wayne Gdisis, a Wisconsin resident.

Smith

removed this action from Racine County Circuit Court and now moves to dismiss for
lack of personal jurisdiction. Fed. R. Civ. P. 12(b)(2). In ruling on such a motion, the
Court may consider matters outside the pleadings including, as here, competing
affidavits submitted by the parties. Clover Tech. Group, LLC v. Oxford Aviation, Inc.,
--- F. Supp. 2d ---, 2013 WL 7094739, at *2 (N.D. Ill. Nov. 13, 2013) (citing Purdue
Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)).
When the Court considers personal jurisdiction without holding an evidentiary hearing,
the Court must determine whether the plaintiff has made out a prima facie case of
jurisdiction, resolving conflicts in favor of the plaintiff. Id.
According to the complaint, Smith advertised the car nationally in Hemmings
Motor News and on eBay. These advertisements induced Gdisis to purchase the car

for $37,000.00. Gdisis seeks exemplary damages of three times the amount of actual
damages, Wis. Stat. § 895.446(3)(c), so the amount in controversy requirement has
been satisfied for purposes of subject matter jurisdiction. 28 U.S.C. § 1332(a).
Gdisis avers that he called Smith on June 28, 2012 after seeing the
advertisements. The parties engaged in phone negotiations, eventually arriving at the
agreed price of $37,000. Smith identified his location in Racine, Wisconsin as the
ultimate destination of the vehicle. Gdisis made a down payment of $500 on Paypal.
On June 29, Gdisis requested more photos to verify the condition and quality of the
vehicle.

Smith sent additional photographs which appeared to represent that the

vehicle was in good condition.

Gdisis relied upon Smith‟s representations as

referenced in the advertisements and as confirmed in the parties‟ phone conversations.
Gdisis talked with Smith on the phone regarding final payment and the
procedures for transportation from North Carolina to Wisconsin. Smith provided
advice as to an appropriate transportation company. On July 1, Gdisis sent a check by
mail to Smith for the $36,500 balance. Subsequently, Gdisis and Smith discussed gate
codes for the truck driver picking up the vehicle. Further, because of rain on the day
of pickup, Gdisis called Smith to express concerns regarding leaks that might damage
the vehicle, but Smith was unable to answer the phone. However, Smith later told
Gdisis that as long as rain was coming straight down, there wouldn‟t be any problem.
Smith avers that he is a lawyer who has a hobbyist interest in buying and
selling automobiles. Smith decided to sell the vehicle in question by listing it for
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auction on eBay and by paying for a classified ad in Hemmings Motor News. Both of
those services can be accessed on the Internet. After seeing the eBay auction listing,
Gdisis contacted Smith in North Carolina, and the parties engaged in the negotiations
discussed herein. Smith encouraged Gdisis to arrange for a vehicle inspection, but
Gdisis never did so. Gdisis initially suggested that he would drive to North Carolina to
pick up the vehicle himself, but later decided to contract with a commercial shipping
company. The eBay listing provided that “Shipping arrangements and cost also the
responsibility of the buyer.”
Due process prevents a state from exercising specific jurisdiction over a
defendant unless the defendant had “certain minimum contacts” with the forum state
“such that the maintenance of the suit does not offend „traditional notions of fair play
and substantial justice.‟” Citadel Group Ltd. v. Washington Regional Med. Ctr., 536
F.3d 757, 761 (7th Cir. 2008) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945)).

Smith‟s contacts with Wisconsin were far from “continuous and

systematic,” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416
(1984), so general jurisdiction is off the table. The issue with regard to specific
jurisdiction is whether the defendant “purposefully avail[ed] [himself] of the privilege
of conducting activities within the forum State, thus invoking the benefits and
protections of its laws.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985).
The defendant‟s contacts cannot be “random, fortuitous, or attenuated; rather, the
„defendant‟s conduct and connection with the forum State‟ must be such that [he]
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should „reasonably anticipate being haled into court there.‟” Citadel Group at 761
(quoting Burger King at 474-75).
Regarding eBay transactions, courts have “uniformly held that the usual online
auction process does not rise to the level of purposeful conduct required to assert
specific jurisdiction.” Foley v. Yacht Mgmt. Group, Inc., No. 08 C 7254, 2009 WL
2020776, at *3 (N.D. Ill. July 9, 2009) (collecting cases). This transaction was not
completed using eBay‟s auction process, but the result should be the same regarding
specific jurisdiction: there is none. Smith used the internet to advertise his car for
sale, but this does not mean that he purposefully availed himself of the benefits and
protections of any particular state, including Wisconsin. At bottom, this was a simple
transaction, much like the one considered almost thirty years ago by the Seventh
Circuit:
An Indiana resident read an ad in an Indiana publication that offered a
specific item (a 1963 Trinity propane anhydrous ammonia tanker
transport) for sale. The ad stated that the seller was from Illinois. Mr.
Indiana, in direct response to the ad, telephoned Mr. Illinois to discuss
the tanker, and Mr. Illinois sent pictures and literature about the tanker
to Mr. Indiana. Mr. Indiana traveled to Illinois, examined the tanker,
decided to purchase it, did so, and transported it back to Indiana. The
tanker soon proved to be defective (the fact that it ultimately blew up is
not important on the jurisdictional issue), and this suit essentially for
breach of warranty and rescission of the sales contract was born.
Hall’s Specialties, Inc. v. Schupbach, 758 F.2d 214, 216 (7th Cir. 1985). The court
found that the seller, “Mr. Illinois,” could not be sued in Indiana because he “did not
knowingly cause the ad to appear in the Indiana publication.” Id. at 216. Therefore,

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Mr. Illinois did not “knowingly solicit (in more than a general way) the sale” in
Indiana. Id. at 217. Similarly, Mr. North Carolina (Smith) did not knowingly solicit
the sale of his car to Mr. Wisconsin (Gdisis). The fact that a Wisconsin resident
responded to the ad was random and fortuitous. While technology has evolved to the
point that placing ads in print publications seems anachronistic, the constitutional
principles that underlie the Seventh Circuit‟s analysis in Hall’s Specialties are
essentially unchanged. See, e.g., Drake v. Ocwen Fin. Corp., No. 09-C-6114, 2010
WL 1910337, at *6 (N.D. Ill. May 6, 2010) (“national advertisements (including those
on the Internet) are insufficient to subject a defendant to jurisdiction” in a particular
state).
Smith‟s motion to dismiss [ECF No. 9] is GRANTED. The Clerk of Court is
directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 9th day of April, 2014.
BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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