Jennings v. Ac Hydraulic a/S

• Decision Date: 02 September 2004
• Docket Number: No. 03-2157.,03-2157.
• Citation: Jennings v. Ac Hydraulic a/S, 383 F.3d 546 (7th Cir. 2004)
• Parties: Pamela J. JENNINGS, individually and as personal representative of the estate of James R. Jennings, Plaintiff-Appellant, v. AC HYDRAULIC A/S, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

383 F.3d 546

Pamela J. JENNINGS, individually and as personal representative of the estate of James R. Jennings, Plaintiff-Appellant, v. AC HYDRAULIC A/S, Defendant-Appellee.

No. 03-2157.

United States Court of Appeals, Seventh Circuit.

Argued November 4, 2003.

Decided September 2, 2004.

Appeal from the United States District Court for the Southern District of Indiana, Larry J. McKinney, C.J Stephen L. Williams, Mann Law Firm, John P. Nichols (argued), Anderson &amp Nichols, Terre Haute, IN, for Plaintiff-Appellant.

Brian J. Paul (argued), Ice Miller, Indianapolis, IN, for Defendant-Appellee.

Before EASTERBROOK, ROVNER, and EVANS, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

As James Jennings was working under a forklift that was hoisted by a floor jack, the jack allegedly failed and the forklift fell on Jennings and crushed him. Jennings died as a result of this accident, and his widow sued the manufacturer of the jack, AC Hydraulic A/S, in Indiana state court.¹ AC Hydraulic removed the suit to federal court on diversity grounds and later moved for dismissal for lack of personal jurisdiction. The district court granted the dismissal, and we affirm because Jennings did not demonstrate that AC Hydraulic had sufficient contacts with Indiana to establish personal jurisdiction.

In conjunction with AC Hydraulic's motion to dismiss, the parties presented the following undisputed facts about the extent of AC Hydraulic's contacts with Indiana. AC Hydraulic manufactures various types of jacks and has its principal place of business in Denmark. It is not an Indiana corporation, nor is it licensed to do business in the state. It does not maintain there a registered agent for service of process, an office, a telephone listing, a bank account, property, or any employees. AC Hydraulic distributes more than 80% of its products in the world export markets. As for distribution in the United States, on occasion AC Hydraulic has sold its products to two distributors in Florida, but the record does not contain any information on the volume of sales to these distributors nor precisely where the distributors resell the products. AC Hydraulic maintains a website (www.achydraulic.com) with English translations that is accessible throughout the United States. On the website AC Hydraulic provides contact information and descriptions of its various product lines, but consumers cannot order its products via this website. Mrs. Jennings alleged that Mr. Jennings's employer, an Indiana corporation named BGM Equipment, purchased the jack at issue in this suit, but she did not cite to any affidavits or other evidence to substantiate this assertion or present any further details on this alleged purchase (such as where, when, and from whom). She also identified the serial number on the jack, but did not present any tracking information based on this serial number.

As noted above, the district court dismissed Jennings's suit for lack of personal jurisdiction over AC Hydraulic. Personal jurisdiction determines, in part, where a plaintiff may hale a defendant into court. Once a defendant moves to dismiss for lack of personal jurisdiction, as AC Hydraulic did here, the plaintiff bears the burden of demonstrating the existence of jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.2003). In diversity cases, such as this one, a federal court must determine if a court of the state in which it sits would have personal jurisdiction over the defendant. Id. at 779. Thus, the jurisdictional inquiry begins with an application of the statutory law of the forum state, in this case, Indiana's equivalent of a long-arm statute, Trial Rule 4.4(A). Id. Although we recognize that Jennings gave only cursory treatment to this issue in her opening brief on appeal, we will assume, as did the district court, that AC Hydraulic's conduct was sufficient to establish personal jurisdiction under Indiana's long-arm statute. We move to the principal issue that the parties contest on appeal — whether exercising personal jurisdiction in Indiana over AC Hydraulic comports with due process.

Due process limits when a state may exercise personal jurisdiction over nonresident defendants. Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 108, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). This limitation allows potential defendants to structure their contacts with different forums so as to plan where their business activities will and will not render them liable to suit. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559. Personal jurisdiction comes in two forms (so-called "general" and "specific" jurisdiction), Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984), and Jennings argues that a court in Indiana may exercise specific jurisdiction over AC Hydraulic because the basis for the suit arises out of or is related to AC Hydraulic's contacts with Indiana, namely, the manufacture and distribution of the jack that is alleged to have contributed to Mr. Jennings's death. To establish specific jurisdiction under the familiar "minimum contacts" analysis, a plaintiff must show that the defendant has purposefully availed itself of the privilege of conducting activities within the forum state, Asahi, 480 U.S. at 108-09, 107 S.Ct. 1026; Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), and that the exercise of personal jurisdiction over that defendant would comport with "traditional notions of fair play and substantial justice," Asahi, 480 U.S. at 113, 107 S.Ct. 1026; Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In this case, Jennings relies on two main theories in an effort to establish specific jurisdiction in Indiana over AC Hydraulic: (1) AC Hydraulic advertised its products to consumers in the United States, including Indiana residents, by maintaining an English-translated website, and (2) AC Hydraulic sold some of its products to distributors in Florida, thus placing them in the "stream of commerce" of the U.S. market, which includes Indiana.

Jennings's first argument, that personal jurisdiction may be premised on the maintenance of Internet sites, sweeps too broadly. Other circuits have recognized that the operation of an "interactive" website, such as one (although this is not an exclusive definition) on which consumers can order the defendant's goods or services, may subject a defendant to the exercise of personal jurisdiction (either specific or general). See, e.g., Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 399 (4th Cir.2003); Bridgeport Music, Inc. v. Still N The Water Publ'g, 327 F.3d 472, 483 (6th Cir.2003) (per curiam); Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 513 (D.C.Cir.2002). We need not decide in this case what level of "interactivity" is sufficient to establish personal jurisdiction based on the operation of an interactive website. Rather, it is enough to say that this logic certainly does not extend to the operation of a "passive" website, such as the one that AC Hydraulic maintains, which merely makes available information about the company and its products. The exercise of personal jurisdiction based on the maintenance of a passive website is impermissible because the defendant is not directing its business activities toward consumers in the forum state in particular. Cf. Burger King, 471 U.S. at 476, 105 S.Ct. 2174 (explaining that personal jurisdiction may be established without showing physical presence of defendant in forum state as long as its business activities are "purposefully directed" toward consumers in that state). With the omnipresence of the Internet today, it is unusual to find a company that does not maintain at least a passive website. Premising personal jurisdiction on the maintenance of a website, without requiring some level of "interactivity" between the defendant and consumers in the forum state, would create almost universal personal jurisdiction because of the virtually unlimited accessibility of websites across the country. See ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712-13 (4th Cir.2002). This scheme would go against the grain of the Supreme Court's jurisprudence which has stressed that, although technological advances may alter the analysis of personal jurisdiction, those advances may not eviscerate the constitutional limits on a state's power to exercise jurisdiction over nonresident defendants. See Hanson, 357 U.S. at 250-51, 78 S.Ct. 1228; see also ALS, 293 F.3d at 711. This court has never addressed this argument as applied to passive websites, but we now join the several circuits that have addressed and rejected it, see, e.g., ALS, 293 F.3d at 714; Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1297 (10th Cir.1999); Mink v. AAAA Dev. LLC, 190 F.3d 333, 337 (5th Cir.1999), and hold that a defendant's maintenance of a passive website does not support the exercise of personal jurisdiction over that defendant in a particular forum just because the website can be accessed there. Thus, the district court in this case concluded correctly that AC Hydraulic's maintenance of a passive website did not contribute to Jennings's effort to establish specific jurisdiction in Indiana.

Jennings's second argument, that AC Hydraulic should be subject to specific jurisdiction in Indiana because it placed its products in the "stream of commerce," is equally unpersuasive. If a defendant delivers products into a stream of commerce, originating outside the forum state, with the awareness or expectation that some of the products will be purchased in the forum state, that defendant may be subject to...