Although Product Distributor’s Web Activity Did not Create Minimum Contacts with Forum State, Personal Jurisdiction Held Proper

The plaintiff, a New York resident, brought claims under the Lanham Act, Clean Air Act, Kansas state unfair trade law, and common law negligence against several defendants in the District of Kansas. The defendants included the manufacturer (a Kansas resident) and two distributors (the movants here, neither resident in Kansas) of ‘Black Knight,’ a reptile care product. These two distributors moved to dismiss before trial for lack of personal jurisdiction.The plaintiff argued that the out-of-state distributors had ‘minimum contacts’ with Kansas, sufficient for personal jurisdiction under the Supreme Court’s Int’l Shoe analysis, in at least one of three ways: (1) by offering to sell Black Knight to Kansas residents; (2) by likely selling Black Knight to Kansas residents; and (3) by purchasing Black Knight from the Kansas manufacturer.

Viewing all evidence in the light most favorable to the plaintiff, the court found that one of the distributors had neither sold nor offered to sell Black Knight to Kansas residents. The other distributor, however, had offered Black Knight for sale on its website, proexotics.com, which advertised shipment “across the country!” Finally, both distributors had indeed purchased Black Knight from the Kansas manufacturer.

To decide whether the proexotics.com offer to sell and ship Black Knight constituted minimum contacts with Kansas, the court invoked the Tenth Circuit analysis adopted in Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1297 (10th Cir. 1999). The analysis posits a spectrum, on one side of which are defendants who clearly do business over the Internet, and on the other side of which are defendants who do no more than post information, making it available to residents of foreign jurisdictions. Because the proexotics.com website provides access to e-mail communication, the court reasoned, it is ‘minimally interactive’ and falls in the middle of the spectrum, requiring the court to examine “the level of activity and commercial nature of the exchange of information” on the website. Making this inquiry, the court decided that there were no minimum contacts because there was no evidence (1) that Kansas residents had visited the site or (2) that the proexotics.com website was designed to target Kansas residents.

While the online offer to sell and ship Black Knight did not create minimum contacts, however, the court ruled that the distributors’ purchase of Black Knight from the Kansas manufacturer did create minimum contacts sufficient for jurisdiction. The court applied a ‘but-for’ test, concluding that minimum contacts exist because the plaintiff would not have suffered his alleged injury but for the distributors’ purchases from the manufacturer.

Finally, the court considered the reasonableness of jurisdiction in this case, concluding that its exercise does not offend “traditional notions of fair play and substantial justice” because, among other reasons, (1) the distributors are not being deprived of due process and (2) Kansas has a strong interest in adjudicating cases involving an allegedly unlawful product manufactured within the state. The court therefore denied the distributors’ motions for dismissal.

Robert Pound v. Airosol Company, Inc., et al., No. 02-2632-CM (D. Kan. 2003)

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