A recent decision from the Northern District of California highlights how Personal Jurisdiction in TCPA cases can serve as a defense for defendants facing lawsuits in states where they neither reside nor operate. This ruling underscores the importance of jurisdictional challenges in TCPA litigation, particularly when defendants are out-of-state entities.
What is Personal Jurisdiction?
The bane of many a first-year law student, the concept of personal jurisdiction is simple in theory yet tremendously complicated in practice. It refers to a court’s jurisdiction over the parties involved in a lawsuit, as opposed to subject matter jurisdiction, which concerns whether a court has the requisite authority to adjudicate the particular case brought before it.
The mere fact that a plaintiff filed suit in one state against a defendant residing in another does not mean that the court has personal jurisdiction over that defendant. The due process clause of the Fourteenth Amendment comes into play here, and it limits a court’s ability to exercise personal jurisdiction over an individual or entity that resides outside the territory covered by the court.
To simplify matters slightly, personal jurisdiction comes in two flavors, general and specific. A court has general jurisdiction over any individual or entity that maintains a physical presence in the forum state. Thus, individuals who own property in the forum state but reside in another are nevertheless subject to the general personal jurisdiction of courts in the forum state. The same is true of a corporation that was formed in another state but maintains an office in the forum state.
By contrast, a court may only exercise specific personal jurisdiction over an out-of-state defendant if the defendant consented to be hauled in to court in the forum state. Depending upon the nature of the case, this determination can be relatively simple. For example, in the context of a contract dispute, consent to have such disputes adjudicated in a particular forum is usually included in the body of the contract. In a personal injury suit stemming from an automobile accident, the defendant’s mere presence in the state when the accident occurred constitutes consent to be sued there.
In other cases, the question of specific personal jurisdiction is far more difficult to determine. For a court in one state to have jurisdiction over an out-of-state corporation, it comes down to the application of the forum state’s long-arm statute, which enables a court to establish personal jurisdiction over an out-of-state defendant if the defendant “purposefully availed” itself of conducting business in the forum state. To make this determination, a court looks to see whether there are sufficient contacts between the defendant and the state.
In a landmark Supreme Court case called International Shoe Co. vs. Washington, the Court laid out the basic framework necessary to make this determination. In a nutshell, a defendant must have engaged in “continuous and systematic activity” within the state, and the grounds for the lawsuit must have arisen as a result of that activity. A subsequent Supreme Court decision later raised additional factors for consideration, including the state’s interest in hearing the case, the interests of the plaintiff in litigating the matter there, and that particular court was the most efficient forum for resolving the dispute.
In the context of a TCPA case, specific Personal Jurisdiction in TCPA cases over an out-of-state defendant is typically established through the calls or texts the defendant intentionally directed to a plaintiff residing in that state. However, determining jurisdiction is not always straightforward, as illustrated by the case of Ingram v. Money Map Press.
Lack of Personal Jurisdiction in TCPA Cases: Ingram v. Money Map Press Example
The plaintiff in Ingram was a resident of San Jose, CA who filed a lawsuit in the Northern District of California based on his receipt of 124 unsolicited marketing text messages to his DNC-listed cellular phone, which he alleged were sent by the defendant in violation of the TCPA.
Defendant Money Map Press, a Maryland LLC headquartered in Maryland, moved to dismiss the case for lack of personal jurisdiction, as it did not have sufficient contacts with California to support a lawsuit against it there.
The Court granted the defendant’s motion to dismiss. In doing so, it first confirmed that it did not have general personal jurisdiction over a company that was both incorporated and headquartered in Maryland. It then engaged in an analysis to determine whether it could exercise specific personal jurisdiction over Money Map Press and determined that it could not, even though the defendant sent marketing text messages to the plaintiff in California.
A key element to this analysis lies with the fact that the California plaintiff’s phone number had a Nevada area code. Therefore, the court reasoned, there was no evidence that Money Map Press specifically targeted California numbers, or otherwise undertook any substantial activities in the state of any kind.
As the court aptly stated, “in TCPA actions, courts consistently decline to find personal jurisdiction where the cellphone number at issue has an out-of-state area code, and no other relevant evidence suggests that the defendant purposefully directed conduct at the forum state.”
Not Necessarily the End
Whether a court can exercise Personal Jurisdiction in TCPA cases over a defendant is a critical question that can potentially dismiss a TCPA lawsuit. However, as with any legal remedy, there are several important caveats to consider, which may affect the outcome of the jurisdictional challenge.
First, personal jurisdiction challenges must be raised in the initial response to the Complaint. A defendant is deemed to have waived contesting the issue if it fails to do so at that point, even if a court’s lack of personal jurisdiction is manifestly clear. In addition, as with any aspect of litigation, challenging personal jurisdiction can be an expensive proposition. Between the motions, responses, and oral arguments, legal fees can easily reach five figures.
Finally, a plaintiff whose case is dismissed for lack of personal jurisdiction is generally free to refile the matter in a forum that can exercise personal jurisdiction over the defendant. If the plaintiff this case elects to refile it in Maryland, Money Map Press will find itself back to square one and will still have to answer for the 124 texts the plaintiff claims to have received.
