Quality Design and Const. v. Tuff Coat Mfg.
2006 WL 1900964, 939 So. 2d 429, 2006 La. App. LEXIS 1570 (2006)
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Rule of Law:
A nonresident defendant's passive, informational website, which does not allow for online purchases and has limited interactivity, does not establish the sufficient minimum contacts required for a forum state to exercise personal jurisdiction consistent with due process.
Facts:
- Quality Design and Construction, Inc. (Quality Design), a Louisiana corporation, was the general contractor for a public water park project in Gonzales, Louisiana.
- The project required a non-slip coating for the concrete surfaces of the park's 'sprayground'.
- Tuff Coat Manufacturing, Inc. (Tuff Coat), a Colorado corporation, manufactures a polyurethane coating called Ultra Tuff.
- Tuff Coat maintains a website that is accessible worldwide, providing product information and contact details, but does not allow users to purchase products directly through the site.
- Quality Design found Tuff Coat's website and initiated a phone call to Tuff Coat in Colorado to purchase the Ultra Tuff product.
- After Quality Design installed the coating at the Louisiana park, pigment leached from the product.
- The leached pigment allegedly damaged the park's water purification system and required costly repairs and recoating of the surfaces.
Procedural Posture:
- Quality Design and Construction, Inc. filed suit against Tuff Coat Manufacturing, Inc. in the 23rd Judicial District Court in Ascension Parish, Louisiana, a state trial court.
- In response, Tuff Coat filed a declinatory exception, objecting to the court's exercise of personal jurisdiction over it.
- The district court held a hearing and sustained Tuff Coat's exception, dismissing Quality Design's petition for lack of personal jurisdiction.
- Quality Design, as appellant, appealed the trial court's dismissal to the Court of Appeal of Louisiana, First Circuit. Tuff Coat is the appellee.
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Issue:
Does a nonresident defendant's website, which is primarily informational and does not permit online commercial transactions, establish sufficient minimum contacts with Louisiana to subject the defendant to specific personal jurisdiction in that state?
Opinions:
Majority - McClendon, J.
No. A nonresident defendant's website that is primarily informational and does not permit online commercial transactions does not establish sufficient minimum contacts with Louisiana to justify the exercise of specific personal jurisdiction. Applying the 'Zippo' sliding scale test, Tuff Coat's website is classified as passive. It does not allow online purchases, and its only interactive feature—allowing customers to request their name be added to a list—is minimal and initiated by the customer. The handful of sales to Louisiana customers, including the one to Quality Design, were initiated by the customers and are considered random or fortuitous contacts, not evidence that Tuff Coat purposefully availed itself of the privilege of conducting business in Louisiana. Therefore, Tuff Coat could not reasonably anticipate being haled into a Louisiana court.
Dissenting - Whipple, J.
Yes. The defendant's website and sales activities established sufficient minimum contacts to justify the exercise of personal jurisdiction. The website is better classified as interactive or in the 'middle of the spectrum' because it actively solicits customers to add their names to a list and uses a prominent Louisiana company (Bollinger Shipyards) as a marketing tool to target other customers in the state. Tuff Coat made a conscious choice to sell its products to residents of Louisiana, and these sales were not fortuitous. By choosing to profit from Louisiana residents, Tuff Coat purposefully availed itself of the state's market and should have reasonably anticipated being subject to suit there. Furthermore, exercising jurisdiction would not offend traditional notions of fair play and substantial justice, as Louisiana has a strong interest in protecting its citizens from defective products used in a public park.
Analysis:
This case illustrates the application of the 'Zippo' sliding scale test for determining personal jurisdiction based on a defendant's internet presence. The court's decision reinforces the distinction between passive websites that merely provide information and active websites that conduct commercial transactions. It sets a precedent in this jurisdiction that merely maintaining a globally accessible, non-transactional website, even when coupled with a few unsolicited sales, is insufficient to establish purposeful availment. This ruling makes it more difficult for plaintiffs to sue out-of-state defendants whose only connection to the forum is a basic web presence, thereby protecting such defendants from litigation in any state where their website can be viewed.
