Caiazzo v. American Royal Arts Corp.
2011 WL 2135585, 2011 Fla. App. LEXIS 8078, 73 So. 3d 245 (2011)
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Rule of Law:
Personal jurisdiction in cases involving the internet is determined by Florida's traditional two-step analysis of the long-arm statute and constitutional minimum contacts, not the Zippo sliding-scale test for website interactivity. While an interactive commercial website can support specific jurisdiction for claims arising from its use, it is generally insufficient by itself to establish the continuous and systematic contacts required for general jurisdiction.
Facts:
- Frank Caiazzo operates a sole proprietorship, 'Beatles Autographs,' specializing in buying, selling, and authenticating Beatles memorabilia.
- American Royal Arts Corp. (ARA), a Florida-based seller of rock-n-roll memorabilia, entered into an agreement to sell a signed Beatles 'Revolver' album.
- ARA's customer sent a scan of the album cover to Cooper Owen, an auction house in England, for evaluation.
- Cooper Owen forwarded the scan to Caiazzo for his expert opinion.
- Caiazzo opined to Cooper Owen that the signatures on the album were forgeries.
- Based on Caiazzo's opinion, the customer canceled the purchase from ARA.
- From 2003 to 2007, sales to Florida addresses made through Caiazzo's website constituted 4.35% of his total sales, amounting to approximately $100,000.
- Caiazzo also resided in and operated his business from Florida for approximately one year, between November 2004 and December 2005.
Procedural Posture:
- American Royal Arts Corp. sued Frank Caiazzo in a Florida trial court, alleging violations of trade practices, defamation, and unlawful restraint of trade.
- Caiazzo filed a motion to dismiss for lack of personal jurisdiction.
- After limited discovery and an evidentiary hearing, the trial court denied Caiazzo's motion, finding both specific and general personal jurisdiction.
- Caiazzo, as appellant, appealed the trial court's order to the Florida Fourth District Court of Appeal.
- Before the appellate court issued its opinion, Caiazzo filed a notice of voluntary dismissal.
- The Court of Appeal exercised its discretion to retain jurisdiction and issue an opinion due to the public importance of the legal issue.
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Issue:
Does a Florida court have personal jurisdiction over a non-resident defendant whose primary contacts with the state consist of operating a commercial website that generates a de minimis percentage of total sales from Florida residents, and allegedly directing tortious communications into the state against a Florida-based competitor?
Opinions:
Majority - Per Curiam
Yes, a Florida court has personal jurisdiction, but only specific jurisdiction. The court explicitly rejects the 'Zippo' sliding-scale test for internet jurisdiction and instead applies Florida's traditional two-step analysis. Specific jurisdiction exists for ARA's claims because Caiazzo's alleged business practices and tortious acts were purposefully directed at Florida. Caiazzo's sales to Florida (4.35% of total), his alleged disparagement of a Florida-based competitor to enhance his own sales in the state, and his communications into Florida are sufficient minimum contacts for claims arising from those activities. However, general jurisdiction does not exist because these contacts are not 'continuous and systematic' enough to subject him to suit in Florida on any matter. The court reasoned that a defendant's website sales constituting a de minimis percentage of total revenue, without specific targeting of the forum state, does not meet the much higher threshold required for general jurisdiction.
Analysis:
This decision provides significant guidance on personal jurisdiction in the internet age within Florida, cementing the state's rejection of the widely-used Zippo test. By adhering to the traditional minimum contacts framework, the court clarifies that the internet is a medium for contact, not a separate legal category that requires a new jurisdictional test. The opinion reinforces the high bar for establishing general jurisdiction, making it clear that merely operating a nationally accessible commercial website does not render a defendant subject to suit on any claim in every state where the site is visible. This holding protects small online businesses from universal jurisdiction while confirming that they can be haled into court in a state where they purposefully direct their activities and cause injury.
