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Out-Of-State Defendants Have Something To Be Thankful For This Year (NJ)

November 27, 2019

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<p style="text-align: justify;">Retail transactions conducted over the internet, as we all know, are prevalent throughout the nation.  One would think that in today’s modern society, a seller in California who sells and ships a good from California to New Jersey would be amenable to suit in New Jersey.  Not so according to the New Jersey Appellate Division in <em><a href="https://www.wcmlaw.com/wp-content/uploads/2019/11/Jardim-v.-Overley.pdf">Jardim v. Overley</a>.</em></p>
<p style="text-align: justify;">In <em>Jardim</em>, a California seller sold a car to a New Jersey buyer.  The transaction was conducted over the internet and via telephone.  The car was eventually shipped from California to New Jersey.  However, upon receipt of the vehicle, the New Jersey buyer was displeased because the vehicle was not in a good condition.  Accordingly, the New Jersey buyer filed suit in New Jersey.</p>
<p style="text-align: justify;">The California seller moved to dismiss the matter for lack of personal jurisdiction.  In determining whether there was jurisdiction, relying on pro-business decisions from the United States Supreme Court, the New Jersey Appellate Division ultimately declared that a one-time sales transaction conducted over the internet does not subject an out of state seller to jurisdiction in New Jersey.  Further, the parties’ telephone conversations also did not confer jurisdiction on the California seller.</p>
<p style="text-align: justify;">This case follows a trend in New Jersey where courts are dismissing cases for lack of personal jurisdiction.  Prior to recent United States Supreme Court cases, New Jersey courts allowed virtually any cause of action against an out-of-state defendant so long as there was some nexus between the out-of-state defendant and New Jersey.  For example, under older precedent, a seller in California would be amendable to suit in New Jersey if the seller advertised in New Jersey.  This is no longer the case.  It appears, for now, out-of-state defendants can rest easier knowing that they cannot be subject to suit in New Jersey solely by virtue of conducting interstate commerce.</p>
<p style="text-align: justify;">Thank you to Michael Noblett for his contribution to this post.  Please email <a href="mailto:chayes@wcmlaw.com">Colleen E. Hayes</a> with any questions.</p>

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