Tulsa Attorney BlogOklahoma Residents May Now Sue Out-of-State Web Merchants

Oklahoma civil law attorneyOklahoma residents may go to Oklahoma courts to file lawsuits against out of state Internet merchants. A Feb. 11, 2014 Oklahoma Supreme Court decision determined the state’s courts have jurisdiction over some individuals and companies who do business with state residents from outside the state.

The ruling relied on federal court decisions that say an out-of-state tortfeasor must have at least minimum contacts in the state where an injured party alleges a tort to be subject to local jurisdiction. The court did not set out exact limits on which out-of-state sellers may be subject to lawsuits filed in Oklahoma courts. Even if a seller has never been to Oklahoma, the court found that there may be sufficient evidence of minimum contacts in the state to ascribe jurisdiction to Oklahoma.

Oklahoma’s Lemon Law Applies in Tennessee

The case involved a Tennessee resident and a related Tennessee corporation involved in sale of cars through eBay, the well-known online auction service. Samantha Guffy – an Oklahoma resident – was the winning bidder on 2009 Volvo. After winning the auction, she determined the Volvo was not in the condition the seller had claimed. She sued, alleging fraud and violations of the Oklahoma Consumer Protection Act.

The seller, Odil Ostonakulov and Motorcars of Nashville, Inc. (MNI) moved to dismiss the case. The motion claimed Oklahoma lacked personal jurisdiction over a seller based in Tennessee. After a round of responses and an amended petition, the Oklahoma City district court held a hearing on a second motion to dismiss.

The district court agreed with the Tennessee respondent that the Oklahoma court lacked jurisdiction. A footnote to the Supreme Court decision indicates the trial court likely dismissed the case to expedite appeals on the questions about Oklahoma courts’ jurisdiction over out-of-state sellers doing business with state residents via the Internet.

On appeal, the Supreme Court noted that challenges of in personam jurisdiction are subject to review based on the trial court record. A plaintiff must have shown that a nonresident party had “sufficient contacts with the state to assure that traditional notions of fair play and substantial justice will not be offended,” the court concluded.

Minimum Contact Establishes Personal Jurisdiction in Oklahoma

Citing federal court precedents, the Oklahoma justices said minimum contact depends on the “quality and nature of activity in relation to the fair and orderly administration of the laws…” Citing its own precedents, the Oklahoma court held that minimal contact exists when “a non-resident deliberately engages in significant activities in a forum state and creates continuing obligations between the non-resident and the residents of the forum…”

In this case, the court noted that the contact with Oklahoma residents was more than a single, isolated transaction by a random seller. The defendants regularly sell vehicles on eBay. And the sales process was not limited to the eBay auction. During the action, the seller spoke with the buyer by telephone to negotiate a sale before the plaintiffs landed the winning bid. A thirty-day limited warranty created a continuing obligation between the Oklahoma buyer and the out-of-state seller.

The February, 2014 ruling indeed paves the way for Oklahoma residents to sue out of state Internet merchants, but collecting on those judgments might not prove as easy as winning the case in Oklahoma. Collection of the judgment would encounter practical hurdles – including procedural approval by a court in the out-of-state jurisdiction to enforce a lein, levy or garnishment issued in Oklahoma.

It would seem reasonable to assume that larger Internet sellers might eventually go to great lengths to protect their business from legal challenges in each state where they ship merchandise. Some may seek to enforce terms of service that assert disputes must be resolved in the courts of the seller’s home state.

Free Consultation: Tulsa Civil Law Attorney

On the other hand, an out of state seller may be more willing to honor a warranty or negotiate favorably with a dissatisfied Oklahoma buyer backed by Oklahoma courts’ assertion of personal jurisdiction over out-of-state sellers. If you have purchased merchandise or services from an out-of-state seller over the Internet, you may not need to find an attorney in that state to exercise your rights.

Contact an Oklahoma civil law attorney at Wirth Law Office to find out if you may have grounds to sue an out-of-state Internet seller. For a free consultation with a Tulsa civil law attorney, contact the Wirth Law Office at (918) 879-1681 or toll free at (888) Wirth-Law. If you prefer written correspondence, you may submit a question through the form at the top right of this page.

Read the full text of Guffy v Ostanokulov (214 OK 6) here.

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