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Company's website not enough to establish jurisdiction.

Byline: Jessica Shumaker

A Pennsylvania corporation is not subject to Missouri jurisdiction merely because it operates a business website that may be viewed in Missouri as well as other locations, the state's Supreme Court ruled Nov. 20.

The court said unanimously that the St. Louis County Circuit Court has no jurisdiction to decide a claim against PPG Industries Inc. PPG was the defendant in a negligent-representation lawsuit filed in November 2017 by Hilboldt Curtainwall Inc. in St. Louis County. PPG supplies paints, industrial coatings and other specialty materials.

Hilboldt agreed to provide building materials for a Missouri construction project, according to the opinion written by Judge Mary R. Russell. The company's role was to supply curtainwalls, or exterior coverings, which included coated aluminum extrusions.

The project's specifications required that the aluminum extrusions be coated by a PPG product or an approved substitute.

Hilboldt alleges that it contracted with Finishing Dynamics after seeing the company listed on the PPG website as an approved applicator of the coating.

Dissatisfied with the work, Hilboldt sued PPG and Finishing Dynamics after Finishing Dynamics allegedly failed to properly coat the aluminum extrusions, rendering them unusable.

PPG filed a motion to dismiss for lack of personal jurisdiction. The company argued its website was insufficient to render it subject to the state's personal jurisdiction.

St. Louis County Circuit Judge Maura B. McShane overruled the motion, prompting PPG to file a petition for a writ of prohibition from the Missouri Supreme Court. The Supreme Court granted a preliminary writ of prohibition to PPG.

In its arguments before the court, Hilboldt asserted that the circuit court has personal jurisdiction under Missouri's so-called long-arm statute because PPG committed the tortious act of negligent misrepresentation in Missouri.

PPG argued that Hilboldt failed to establish that the circuit court has personal jurisdiction because it is a Pennsylvania-based corporation and its only ties to Missouri in Hilboldt's case were the representations it made on its passive website, which was not specifically aimed at Missouri consumers.

The parties agreed that their case involved the circuit court's specific jurisdiction over PPG. Russell wrote that specific jurisdiction exists over a nonresident defendant when the underlying claim arises out of the defendant's contacts with the forum.

She said Missouri courts use a two-prong test to determine if personal jurisdiction exists over a nonresident defendant.

First, the out-of-state defendant's conduct must fall under the state's long-arm statute. Then, the court must determine whether the defendant has sufficient minimum contacts with Missouri to satisfy due process.

The court ruled that Hilboldt was unable to satisfy the first prong.

An allegation that a website that is accessible by a national audience published false or misleading statements is not enough to conclude the website owner acted tortiously in Missouri, Russell wrote.

"To find specific jurisdiction under these facts would allow PPG and virtually any other company with a website to be sued in Missouri if its website was viewed by a party who believes it was aggrieved by the information obtained," she wrote.

"Such a result would open up Missouri courts to suits against companies who lack even negligible contacts with the state."

Dennis Dobbels of Polsinelli in Kansas City represented PPG. He said the ruling clarifies the extent by which a state can exercise personal jurisdiction over a nonresident defendant.

"The case clearly holds that it's not enough for a plaintiff in Missouri to say that they relied on statements in a website because that would essentially eliminate the distinction between general and specific jurisdiction," he said.

He said his client's concern with that lack of a distinction was that "it would mean that [PPG] would be subject to suit anywhere in the country simply because they had a website and somebody read it."

"I think the Supreme Court followed what was common sense in many ways, but also constitutional law," he said.

Philip J. Christofferson of Cockriel & Christofferson in St. Louis represented Hilboldt. He could not be reached for comment.

The case is State ex rel. PPG Industries Inc. v. McShane, SC97006.

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Publication:Missouri Lawyers Media
Geographic Code:1U4MO
Date:Nov 26, 2018
Words:681
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