Ex Parte Pope Chevrolet, Inc.
Ex Parte Pope Chevrolet, Inc.
Opinion
This petition for writ of mandamus raises a question ofin personam jurisdiction over a Georgia automobile dealership, Pope *Page 110 Chevrolet, Inc. Emmie Wallace, an Alabama resident who bought a pick-up truck from Pope Chevrolet at its premises in Stone Mountain, Georgia, brought an action against Pope Chevrolet in the Circuit Court of Calhoun County, Alabama, alleging fraud and breach of contract. The circuit court denied Pope Chevrolet's motion to dismiss, and Pope Chevrolet filed this petition for a writ of mandamus ordering the circuit court to dismiss the action.
Wallace stated in her affidavit in opposition to the motion to dismiss that she had received television and newspaper advertisements at her home in Alabama in which Pope Chevrolet offered to sell motor vehicles "at a very low and favorable rate to buyers." She stated further that Pope Chevrolet knew that she would use the vehicle she was buying "primarily near her home in Alabama," and that Pope Chevrolet made a copy of her Alabama driver's license. Pope Chevrolet responded by saying that it aimed its advertising at the Atlanta market, placing ads in the Atlanta and Gwinnett County, Georgia, newspapers and with Atlanta television stations. Pope Chevrolet also stated that less than one-tenth of one per cent of its sales were to Alabama residents.
Rule 4.2(a)(1), Ala.R.Civ.P., provides that "Appropriate basis exists for service of process outside of this state upon a person in any action in this state when . . . the person has sufficient contacts with this state, as set forth in subdivision (a)(2) of this rule, so that the prosecution of the action against the person in this state is not inconsistent with the Constitution of this state or the Constitution of the United States." Rule 4.2(a)(2), in provisions (A) through (H), lists specific activities that constitute sufficient contacts, and, in provision (I), it adds that a person has sufficient contacts by "otherwise having some minimum contacts with this state and, under the circumstances, it is fair and reasonable to require the person to come to this state to defend an action."
These provisions have been held to make the "long-arm" jurisdiction of this state "as broad as the permissible limits of due process." Alabama Power Co. v. VSL Corp.,
"[D]ue process requires only that in order to subject a defendant to jurisdiction in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' "
Quoting Milliken v. Meyer,
Recent cases have reiterated and refined theInternational Shoe "minimum contacts" test. In World-WideVolkswagen Corp. v. Woodson,
Id., at 295,"Petitioners carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market."
The Court has articulated what may be called the "purposeful availment" and "stream of commerce" tests in applying the *Page 111 minimum contacts rule. An example of both tests may be seen in the following passage from World-Wide Volkswagen, supra:
"When a corporation 'purposefully avails itself of the privilege of conducting activities within the forum State,' Hanson v. Denckla, 357 U.S. [235 (1958)], at 253, [Id.,78 S.Ct. 1228 , at 1239-40,2 L.Ed.2d 1283 ], it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Cf. Gray v. American Radiator Standard Sanitary Corp.,22 Ill.2d 432 ,176 N.E.2d 761 (1961)."But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or Seaway in this case. Seaway's sales are made in Massena, N.Y. World-Wide's market, although substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to retail customers outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere 'unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.' Hanson v. Denckla, supra, at 253 [
78 S.Ct. at 1239-40 ]."
The Court relied extensively on the "purposeful availment" test in Burger King Corp. v. Rudzewicz,
Id., at 473-74,"[W]here individuals 'purposefully derive benefit' from their interstate activities, it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities; the Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed."
Id., at 475-76,"This 'purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another party or a third person.' Jurisdiction is proper, however, where the contacts proximately result from action by the defendant himself that create a 'substantial connection' with the forum State. Thus where the defendant 'deliberately' has engaged in significant activities within a State, or has created 'continuing obligations' between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by 'the benefits and protections' of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well."
"So long as a commercial actor's efforts are 'purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there."Id., at 476,
The Court in Asahi Metal Industry Co. v. Superior Court ofCalifornia,
All three opinions in Asahi rely largely on the "stream of commerce" test and also rely on the "purposeful availment" test. Justice O'Connor, with the concurrences of Chief Justice Rehnquist and Justices Powell and Scalia, said:
"The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant's awareness that the stream of commerce may or will sweep the product into the forum State does not convert the mere act of placing the product into the stream into an act purposefully directed toward the forum State."
Justice Brennan, with the concurrences of Justices White, Marshall, and Blackmun, said:
"The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale. As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State's laws that regulate and facilitate commercial activity. These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State. Accordingly, most courts and commentators have found that jurisdiction premised on the placement of a product into the stream of commerce is consistent with the Due Process Clause, and have not required a showing of additional conduct."
Justice Stevens, with the concurrences of Justices White and Blackmun, said:
"Whether or not this conduct rises to the level of purposeful availment requires a constitutional determination that is affected *Page 113 by the volume, the value, and the hazardous character of the components."
Helicopteros Nacionales de Colombia, S.A. v. Hall,
"[T]he bank on which a check is drawn is generally of little consequence to the payee and is a matter left to the discretion of the drawer. Such unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction."
This "unilateral activity" test was quoted in Burger King,
The Court has continued to use the International Shoe
"minimum contacts" test, but perhaps with a shade of difference: "[T]he constitutional touchstone remains whether the defendant purposefully established 'minimum contacts' in the forum State." Burger King, supra,
We have set out the above recapitulation of recent Supreme Court analysis of long-arm jurisdiction because the case before us presents such a close question on this issue. Can an automobile dealer be said to have purposefully availed itself of the benefits and protections of the laws of another state simply by selling a vehicle to one whom the dealer knows to be a resident of another state? Is the fact that defendant's advertising reached the plaintiff significant, even if the defendant did not aim its advertising at Alabama residents? Although this is not a classic "stream of commerce" case — such cases usually involve defendants who manufacture products, especially component parts such as that involved inAsahi2 — the analysis found in all three Asahi opinions could be applied to the facts of this case. Taking, for example, Justice Stevens's criteria, does the volume, the value, or the "hazardous character" (or lack thereof) of the sales of automobiles work for or against the trial court's assertion of jurisdiction?
Pope Chevrolet stated in answers to interrogatories "that it sells 300 to 400 new cars per month, in addition to a number of used vehicles. It is estimated that no more than one-tenth of one per cent of total sales [are] to residents of the State of Alabama." Pope Chevrolet points to this small percentage, but Wallace estimates from Pope Chevrolet's figures that Pope Chevrolet sells eight or nine cars per year to Alabama residents, and that the income from those sales must exceed $100,000.
After reviewing the record, we conclude that Wallace has shown that Pope Chevrolet has established at least the minimum contacts with Alabama necessary to subject it to the jurisdiction of the courts of this *Page 114
State. Pope Chevrolet is a large-volume dealership that does some of its business with residents of neighboring states, including Alabama. It advertises in a regional newspaper, theAtlanta Constitution, and with Atlanta television station WTBS, whose programming is broadcast in other states. Thus, it can reasonably be said to be soliciting sales from beyond the borders of Georgia. See Garrett v. Key Ford, Inc.,
For the foregoing reasons, Wallace has shown that Pope Chevrolet has at least the minimum contacts with this State necessary to subject it to in personam jurisdiction in this action. See Knowles v. Modglin,
WRIT DENIED.
HORNSBY, C.J., and MADDOX, JONES, SHORES, ADAMS, HOUSTON and KENNEDY, JJ., concur.
Reference
- Full Case Name
- Ex Parte Pope Chevrolet, Inc. (Re Emmie Wallace v. Pope Chevrolet, Inc.)
- Cited By
- 13 cases
- Status
- Published