In what is believed to the the first case of its kind, a judge in New York has held that a resident of New York who purchases something over eBay cannot sue the seller in New York if the seller lives elsewhere.
Put another way, the Court ruled that the seller, who in this case lives in Missourri, cannot be reached by New York’s jurisdiction just because he sold something to someone who lives in New York, even if he did cheat the New York buyer.
The issue arose when Masood H. Sayeedi bid on and won a Chevy engine. He paid the seller, Timothy Walser, nearly $1,500 for it. Walser’s eBay listing claimed that the engine was brand new, “fresh from the shop”, and “built by a pro”.
In reality, when Sayeedi received the engine, he had to take it in to a mechanic, and another $1,100 later, he was told that the camshaft was damaged, the connecting rod broken, and, the mechanic’s report advised, “Engine is no good, need to replace engine.”
That’s when Sayeedi sued in New York on the premise that by selling across the Internet to a resident of New York, Walser had conducted business in New York state sufficient to draw him in to New York’s jurisdiction.
The judge, Philip Straniere, held that Sayeedi’s premise was wrong, holding that “Given this unique sale style, even though a contract may be formed, the location of delivery is not likely in the seller’s realm of contemplation. In the typical on-line auction sale the ultimate destination of any item is completely determined by the potential buyers through the bidding process. Accordingly, to summon the Defendant into a New York court on this matter would contravene the traditional notions of ‘fair play’ and ‘substantial justice’ that have become the touchstone of personal jurisdiction.”
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The Court concluded that “The Court lacks the personal jurisdiction required to reach the merits of this case. A single transaction conducted on-line via eBay between members where one member is a resident of a state other than New York, without more, does not constitute sufficient purposeful availment to satisfy the minimum contacts necessary to justify summoning across state lines, to a New York court, the seller of an alledgedly non-conforming good.”
Now, before all you eBay sellers go running out and start selling flawed items figuring that so long as the buyer is a few states away, they can’t do anything, there are a few things you need to know about this case.
First, this court was the trial level court. Which means it does not set any precedent. Second, neither party had a lawyer (and in fact Walser didn’t even bother to show up). Had Sayeedi had a lawyer – particularly one knowledgeable about Internet and interstate law – he might have presented a more credible arguement which in turn might have swayed the judge in his favour.
Finally, because this is a trial court decision, Sayeedi can appeal, and if he does, and with a lawyer, this could go in a completely different direction – and as an appeal that would set precedent.
Ironically – or perhaps poetically – the New York civil code which deals with jurisdiction, and which Judge Straniere applied in this case, was code 404, which in this case clearly meant “jurisdiction not found.”
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