Kauffman Racing Equip. v. Roberts

• Decision Date: 10 June 2010
• Docket Number: No. 2008-1038.,2008-1038.
• Parties: KAUFFMAN RACING EQUIPMENT, L.L.C., Appellee,v.ROBERTS, Appellant.
• Court: Ohio Supreme Court

126 Ohio St.3d 81

930 N.E.2d 784

2010 Ohio 2551

KAUFFMAN RACING EQUIPMENT, L.L.C., Appellee,v.ROBERTS, Appellant.

No. 2008-1038.

Supreme Court of Ohio.

Submitted April 22, 2009.

Decided June 10, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Brett Jaffe and Dennis C. Belli, Columbus, for appellee.

Kepko & Phillips Co., L.P.A., William J. Kepko, and Sherry M. Phillips, Mount Vernon, for appellant.

PFEIFER, J.

{¶ 1} In this case, we address whether an Ohio court can properly assert personal jurisdiction over a nonresident defendant when jurisdiction is predicated on that defendant's publication of allegedly defamatory statements on the Internet. For the reasons that follow, we hold that the trial court erred when it declined to assert personal jurisdiction over the nonresident defendant in this case.

Factual and Procedural Background

{¶ 2} Appellee, Kauffman Racing Equipment, L.L.C. (“KRE”), is an Ohio limited-liability company that constructs engine blocks and related high-performance automotive equipment for public sale. Although its business dealings are nationwide, KRE maintains its sole business operations and office in Glenmont, Ohio.

{¶ 3} Appellant, Scott Roberts, is a 30-year resident of Virginia. Roberts has never physically entered Ohio. On February 6, 2006, using the name “Central Virginia Machine,” Roberts purchased from KRE an MR-1 Pontiac engine block after viewing the block on KRE's website.

{¶ 4} In October 2006, eight months after purchasing the engine block, Roberts contacted KRE by telephone, claiming that the block was defective. Although its products are sold “as is,” KRE offered to retrieve the block from Virginia and bring it back to KRE's Ohio office for inspection. KRE and Roberts agreed that if KRE could verify that the product was defective it would buy back the engine block at the price paid by Roberts.

{¶ 5} KRE's inspection revealed that after KRE had delivered the block to Roberts, substantial modifications had been made from the block's original specifications. When KRE contacted Roberts and presented this information, Roberts admitted that Central Virginia Machine had altered the block. Because KRE believed that Roberts's modifications were the cause of the defects, it declined to buy back the block and instead shipped it back to Roberts in Virginia.

{¶ 6} Roberts was dissatisfied. As a result, from October 18, 2006, through November 2006, Roberts posted numerous rancorous criticisms of KRE on various websites devoted to automobile racing equipment and related subjects. His commentary appeared on the public-forum section of the websites PerformanceYears.com and PontiacStreetPerformance.com and in an item description on the Internet auction website eBay Motors.

{¶ 7} Roberts sought to affect KRE's reputation. In an October 18, 2006 post on the PerformanceYears.com website, Roberts wrote:

{¶ 8} “Bought a MR-1 Block from Kauffman in march [sic] of this year * * *

{¶ 9} “Now, I have and have had since the day the block was delivered, a USELESS BLOCK. I didn't say worthless! I plan to get a lot of mileage out of it[.] And when i'm [sic] done Steve Kauffman will be able to attest to its worth.” (Capitalization sic.)

{¶ 10} Later the same day, Roberts added:

{¶ 11} “I did send it back. They still have it. Steve Kauffman admitted on the phone that he got similar numbers on the sonic test as i [sic] did but he won't take it back because I did some work to it and have had it to [sic] long. I guess it doesn't matter that the day I got it all of the defects exsisted [sic] and nothing I have done caused them. But don't worry about that. What I loose [sic] in dollars I will make up in entertainment at their expence [sic].” (Boldface sic.)

{¶ 12} The following day, October 19, 2006, Roberts wrote:

{¶ 13} “You don't seem to understand. As far as Steve kauffinan [sic] is concerned the issue is resolved. * * * Again, this is not to get a resolution. I have a much bigger and dastardly plan than that and this is the perfect place to start. * * * (LOL) * * * Here is another good board to visit! * * * Just trying to help other potential victims.” (Emoticons omitted.)

{¶ 14} On the eBay Motors auction site, Roberts ostensibly listed the block for sale. In the item description, he wrote:

{¶ 15} “This is a Kauffman MR-1 Block. It has some real issues. * * * Steve Kaufmann [sic] says it's the best aftermarket block out there for a Pontiac, but I now know better. * * * Basically this block is junk and I have bought an IA-II block to replace it. It has never been assembled. * * * Also the service you would get from Steve Kauffman of K & M performance is less than honorable. I brought the issues to his attention and he basically gave me the middle finger salute. He would not take it back because I had it for more than 90 days. I will never do business with Kauffman or KRE again. Not just because of the block issues but mostly the lack of service issues. E-mail me and I will tell you the whole story. However the block (junk) is for sale ‘as is'!”

{¶ 16} Roberts explained his eBay Motors auction in another post on PerformanceYears.com:

{¶ 17} “As far as the block on e-bay. Thats [sic] nothing more than getting the FACTS out to more people. Do you believe anyone will read that add [sic] and buy it? I can assure you this block issue is faaaaar from over. Do you think I would spread this around like I have and plan to if I thought I couldn't back EVERYTHING up?

{¶ 18} “Again, I am not here to stir any pots. I posted facts I can back up 100%. I can't control what others say or do!” (Capitalization sic.)

{¶ 19} Steve Kauffman of KRE personally received separate inquiries regarding Roberts's Internet postings from at least five Ohio residents.

{¶ 20} Consequently, KRE filed a complaint in Knox County Court of Common Pleas seeking money damages from Roberts for defamation and intentional interference with contracts and business relationships. The trial court granted Roberts's motion to dismiss for lack of personal jurisdiction on June 1, 2007, and dismissed KRE's complaint.

{¶ 21} KRE appealed. The Fifth District Court of Appeals reversed the trial court's judgment. Kauffman Racing Equip., L.L.C. v. Roberts, Knox App. No. 07-CA-14, 2008-Ohio-1922, 2008 WL 1821374, ¶ 36. The court of appeals held that the Ohio long-arm statute and Civ.R. 4.3(A) confer jurisdiction on the trial court and that the exercise of personal jurisdiction over Roberts did not deprive him of his right to due process of law under the Fourteenth Amendment to the United States Constitution. Id. at ¶ 23.

{¶ 22} The cause is before this court upon the acceptance of a discretionary appeal. Kauffman Racing Equip., L.L.C. v. Roberts, 119 Ohio St.3d 1471, 2008-Ohio-4911, 894 N.E.2d 331.

Law and Analysis

{¶ 23} This case emanates from comments Roberts allegedly made on the Internet. Does this fact affect the way this court should approach the jurisdictional question? In this case, we think not.

{¶ 24} Over 50 years ago, the United States Supreme Court acknowledged that jurisdictional jurisprudence must evolve alongside technological developments: “As technological progress has increased the flow of commerce between States, the need for jurisdiction over nonresidents has undergone a similar increase.” Hanson v. Denckla (1958), 357 U.S. 235, 250-251, 78 S.Ct. 1228, 2 L.Ed.2d 1283. Along comes the Internet, and with it, the opportunity for civil disputes has greatly expanded. “As [Internet] availability expands, the opportunity for civil disputes could expand proportionately, meaning that the American court system will be called upon to adjudicate an even greater number of cases. Since these cases will be predicated on Internet activity, the parties often will be from different parts of the country, or even from different countries. As a threshold issue, courts must decide whether such cases are properly before them.” Scott T. Jansen, Oh, What a Tangled Web * * * The Continuing Evolution of Personal Jurisdiction Derived from Internet-Based Contacts (2006), 71 Mo.L.Rev. 177, 180.

{¶ 25} The rise in Internet-related disputes does not mean courts should ignore traditional jurisdiction principles. “ ‘[T]he Internet does not pose unique jurisdictional challenges. People have been inflicting injury on each other from afar for a long time. Although the Internet may have increased the quantity of these occurrences, it has not created problems that are qualitatively more difficult.’ ” Jansen, 71 Mo.L.Rev. at 182, 183, quoting Allen R. Stein, Symposium Personal Jurisdiction and the Internet: Seeing Due Process Through the Lens of Regulatory Precision (2004), 98 Nw.U.L.Rev. 411.

{¶ 26} In some cases involving the Internet, the Zippo test, developed in Zippo Mfg. Co. v. Zippo Dot Com, Inc. (W.D.Pa.1997), 952 F.Supp. 1119, 1124, has been employed to determine whether Internet activity between the defendant and the forum state establishes jurisdiction. The court established a “sliding scale” approach to Internet-based jurisdiction whereby the level of interactivity of the website is examined to determine whether the exercise of personal jurisdiction is proper. At one end of the scale are “situations where a defendant clearly does business over the Internet.” Id. “A defendant purposefully avails itself of the privilege of acting in a state through its website if the website is interactive to a degree that reveals specifically intended interaction with residents of the state.” Neogen Corp. v. Neo Gen Screening, Inc. (C.A.6, 2002), 282 F.3d 883, 890. At the other end of the Zippo scale are informational websites. Zippo, 952 F.Supp. at 1124. But as Roberts points out in his brief, “[t]he Zippo model was developed in a commercial or business context and is factually distinct from this case.” When the Internet activity in question “is non-commercial in nature, the Zippo analysis * * * offers little to supplement the traditional framework for considering...