Wrong Court: Due Process Protects Out-of-State Companies from Wisconsin Man’s TCPA Class Action Filed in California
In a world full of aggressive and creative TCPA-plaintiffs (and their lawyers), businesses can take some comfort in bedrock American legal principles–like due process. The United States Constitution shields an out-of-state company from a lawsuit if that company does not have “minimum contacts” with the state where the company is sued. The United States Supreme Court has repeatedly explained that such minimum contacts are necessary to satisfy due process and square with “traditional notions of fair play and substantial justice.” A company should not be haled into court based on “random, fortuitous, or attenuated” contacts with a state.
A recent decision by Judge Staton of the United States District Court for the Central District of California applied these bedrock legal principles to dismiss a plaintiff’s TCPA lawsuit for lack of personal jurisdiction. See Born v. Celtic Marketing, LLC, 8:190-cv-01950-JLS-ADS, 202 U.S. Dist. LEXIS 89220 (C.D. Cal. May 20, 2020). In that case, a Wisconsin resident sued several non-California companies in California based on a marketing call he received selling a Vehicle Protection Contract. The Wisconsin plaintiff admitted that the “lone alleged telemarketing call . . . was made to him in Wisconsin, via his cellular phone number, which bears a Wisconsin area code.” Given that, the Court explained, no wrongful conduct occurred in California. And so the California Court lacked jurisdiction over the lawsuit–consistent with due process and traditional notions of fair play and substantial justice.
The Court also rejected the Wisconsin plaintiff’s “more creative theories” about the reach of the court’s jurisdiction over the out-of-state company defendants for calls made to the plaintiff in Wisconsin. Namely, the out-of-state companies did not consent to jurisdiction merely because they entered into a third-party contract with a California company. The Court declined to impute the California company’s contacts with California as a basis for exercising personal jurisdiction over the out-of-state defendants.
Out-of-state companies should jealously guard their rights to avoid suits in states where they do not operate. This case provides a useful example of companies successfully doing so.