Appeals Court Clarifies the Reach of Wisconsin’s Long-Arm
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
Sept. 11, 2012
– A state appeals court recently clarified the reach of
Wisconsin's long-arm statute in a breach of contract case against an
out-of-state defendant who never physically entered the state in his
dealings with a Wisconsin business.
Illinois (and later Arizona) resident James Sarver, doing business as
National Print Service, contacted Eau Claire-based Johnson Litho
Graphics in 2000 about commercial printing services. The parties
commenced a six-year business relationship conducted via telephone,
email, or fax.
In 2006, Sarver placed an order on behalf of a New York customer, which
accepted the goods without complaint. Sarver failed to pay the balance
on the transaction, $47,923.
Johnson Litho filed suit in Eau Claire County Circuit Court to collect
the balance. In response, Sarver argued that the Wisconsin court lacked
personal jurisdiction over him. The circuit court agreed with Sarver,
concluding that the exercise of personal jurisdiction would violate his
due process rights under the Fourteenth Amendment to the U.S.
But in Johnson
Litho Graphics of Eau Claire Ltd. v. Sarver, 2010AP1441 (Sept.
6, 2012), the District III Court of Appeals reversed, concluding that
Wisconsin does have personal jurisdiction.
Under Wisconsin’s long-arm statute, Wis. Stat. section 801.05,
Wisconsin courts have personal jurisdiction over defendants in actions
relating to goods shipped from Wisconsin by the plaintiff “to the
defendant on the defendant's order or direction.”
Sarver argued that Eau Clare County Circuit Court did not have personal
jurisdiction because Sarver ordered the goods delivered to his New York
Customer, a third party, not himself.
The appeals court disagreed.
“We see no principled difference under the long-arm statute
between nonresidents who direct Wisconsin companies to ship goods
directly to them and nonresidents who instead direct Wisconsin companies
to ship goods to third parties,” wrote Judge Paul
The court also rejected Sarver’s argument that exercising
personal jurisdiction would violate his due process rights. Personal
jurisdiction violates due process rights unless the defendant purposely
established “minimum contacts” with the forum state and the
contacts “comport with notions of fair play and substantial
justice, in light of relevant factors.”
The circuit court found that Sarver did not establish minimum contacts
with Wisconsin because his contacts were limited to placing purchase
orders by phone, email, or fax. But the appeals court concluded that
these contacts were enough to establish personal jurisdiction.
“A nonresident defendant’s communications with a forum
plaintiff via telephone, email and facsimile may comport with due
process principles, even when the defendant has not entered the state
physically,” Judge Higginbotham explained for the three-judge
Sarver also argued that exercising personal jurisdiction would offend
notions of fair play and substantial justice based on the consideration
of five factors, including Wisconsin’s interest in adjudicating
the dispute, Johnson Litho’s interest in obtaining convenient
relief, Sarver’s burden of defending the suit in Wisconsin, and
the interstate judicial system’s interest in efficiency.
“In this case, Sarver has failed to meet his burden of presenting
‘a compelling case’ that the exercise of personal
jurisdiction offends traditional notions of fair play and substantial
justice,” Judge Higginbotham wrote, noting that evidence and
witnesses are primarily located here.