On Friday, September 23rd, the Alabama Supreme Court decided an issue of first impression with significant implications: Is operation of a website with Alabama members sufficient to confer personal jurisdiction in Alabama? In Ex parte Getloaded Corp., Transcore and Roper Industries, Inc. (Case No. 1100885), the Court answered the question in the negative. The case, in which Bradley Arant Boult Cummings, LLP represented the website-connected defendants, should have implications in many future cases related to jurisdiction over internet businesses.
The case arose from an accident in Montgomery County in which six passengers and the driver of a van were killed in a head-on collision with a tractor truck hauling a load of timber through Alabama on its way from Texas to Florida. Specifically, the website defendants operate, or are in the ownership chain of, an online "load board" on which truckers and trucking companies can advertise that their trucks are available and shippers and brokers can advertise that they have loads that need to be transported. The website also has a message board that allows truckers, trucking companies, shippers and brokers to communicate with one another, and has links to various providers of other transportation-related services. Users are required to become members of the website and pay a fee. The website has members in every state, including Alabama, who access and use the website's services.
The trucking company, which owned the tractor truck involved in the collision, and the timber company, whose load was being transported, found each other by using the subject website. In their complaint, plaintiff estate representatives alleged that despite its poor safety record, the trucking company was allowed to join the website as a member and "list itself as a safe, qualified common carrier available to shippers and/or brokers." Plaintiffs further alleged that the website "made no effort to inquire into the accident history, vehicle history, and/or driver's history" despite the fact that other similar websites "routinely undertake such an investigation before allowing [a trucking company or trucker] to be listed as a safe hauler of freight."
The website defendants are all corporations with principal places of business in states other than Alabama. These companies also own no property in Alabama and maintain no offices, agents or employees in Alabama. Rather, as the Court noted, "these companies have no meaningful contacts with Alabama unless contacts sufficient for that purpose may be attributed to them as a result of the operation of the website or some shortcoming in the way in which the website was operated."
Under these circumstances, the Alabama Supreme Court held that any connection between the website defendants and the State of Alabama would not be an appropriate basis for Alabama courts to exercise jurisdiction. Because the website defendants were unaware of the terms of the carriage arrangement established between the trucking company and the timber company, the Supreme Court found that the website defendants "cannot be said to have an 'expectation' that anything they did would create a risk for the traveling public within the State of Alabama." The Court went on to state that the presence of the truck at issue in Alabama was a result of decisions made by parties other than the website defendants and, accordingly, "the necessary contact with the forum state cannot be the result merely of 'unilateral activity of another third person.'" (citing Ex parte DBI, 23 So. 3d at 653; Burger King, 471 U.S. at 475).
A full copy of this opinion can be found at the following link: http://www.babc.com/files/upload/Litigation%20Alert%20September%202011.pdf
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