Introduction

Legal Update: November 2021

Legal Update: November 2021

I've always found autumn to be a time of contemplation, a period to look back on the year's high and low points. And so it was with the courts this month. November continued October's trend with tons of new filings but relatively few judicial opinions. Here are some of the more interesting cases I came across-- and both of them look back on earlier opinions.

Recovering from Winegard v. Newsday: Is There a Growing Divide in the Second Circuit?

In my August Legal Update, I wrote about opinion by Judge Komitee from the Eastern District of New York in Winegard v. Newsday LLC, 2021 U.S. Dist. LEXIS 153995 (E.D.N.Y. 2021). In that case, the court held that Newsday’s website was not a place of public accommodation. I thought that the court’s reasoning was a bit off because the court should have focused on the simple question of whether Newsday fell within one of the 12 categories of places of public accommodation (which I don’t believe it did) instead of trying to tackle the more esoteric question of whether websites can independently be places of public accommodation.

Well, the Eastern District of New York is at it again—this time in Martinez v. Mylife.com, Inc., 2021 U.S. Dist. LEXIS 210585 (E.D.N.Y. 2021). In this case, Pedro Martinez sued Mylife.com, a purely online company that sells a subscription service to manage and improve one’s online reputation, because Mylife.com was not accessible to Mr. Martinez’s screen reader.

I think that, unlike the Winegard decision, however, Martinez decision makes more sense. In Winegard, the defendant was a news publishing company—and none of the 12 categories of places of public accommodation come close to including that kind of company. By contrast, Mylife.com is like an online public relations company. Mr. Martinez asserted that made Mylife.com into a “sales establishment” (one of the 12 categories)—but the judge picked this argument apart because all of the ADA's examples of sales establishments (“a bakery, grocery store, clothing store, hardware store, shopping center . . . or rental establishment") are physical bricks-and-mortar locations. By contrast, I would have argued that Mylife.com is a “service establishment” because that term includes “travel service, insurance office, or other service establishment”—some of which the Second Circuit have found to not specifically require a physical location (e.g. Palozzi v. Allstate Life Insurance Co., 198 F.3d 28 (2d Cir. 1999). The point, however, is that the type of business that Mylife.com operated fell much closer to one of the 12 categories of places of public accommodation—so an analysis of whether the website was covered was warranted in Martinez but not in Winegard.

And on that question of website coverage, the court followed a traditional straight-down-the-middle Second Circuit kind of analysis. The Martinez court didn’t take the broader approach used in some Second Circuit cases and agree that purely online companies were covered (e.g. Jaquez v. Dermpoint, Inc., 2021 U.S. Dist. LEXIS 96067, *7-8 (S.D.N.Y. 2021). But it also didn’t follow Judge Komitee’s Winn-Dixie like analysis. While the court didn’t articulate when a website gives rise to liability state that stand-alone websites with no public-facing retail operations do not qualify.

Usually, district courts within a Circuit tend towards consistency on issues, even when they don’t have a guiding decision from the appellate court. But not always. And it seems that there is developing split within the Second Circuit between the more expansive decisions in the Southern District and narrower opinions in the Eastern District. Then again, I could just be reading too much into two opinions from the Eastern District.

Limiting Personal Jurisdiction: Revisiting Thurston v. Fairfield Collectibles of Georgia

A year ago, I wrote about Thurston v. Fairfield Collectibles of Georgia, 53 Cal. App. 5th 1231, 2020 Cal. App. LEXIS 816 (Cal. App. Dep't Super. Ct. 2020). This was a California state court case in which the court held that an online company in Georgia could be sued in California and under California state law (including Unruh) because it did substantial business (over 10%) in California. But if the company was much smaller or did a lot less business in California, then the case may have turned out differently.

And that is exactly what happened this month in Basketry, Inc. v. Superior Court, 2021 Cal. App. Unpub. LEXIS 6946 (Ct. App. Cal. 2021). In this case, Anita Ogletree, a California resident, sued Basketry, Inc., a small gift basket company located in New Orleans under California’s Unruh Act and in California state court. Unlike Fairfield Collectibles, however, Basketry, Inc was tiny and only had $1,864,883 in total sales in 2019—and only had $7,725.23 in internet sales in California. This amounted to only 0.41% of its sales—less than 1/20th the volume of Fairfield Collectibles. While the court’s analysis of personal jurisdiction is quite substantial, the court unsurprisingly ruled that it lacked personal jurisdiction and dismissed the case.

But if you run an online business and find yourself worrying about California customers and potential exposure under Unruh, it’s probably a good idea to have your lawyer check out both the Fairfield Collectibles and Basketry, Inc. cases. Towards the end of the month, there was a third case that also addressed personal jurisdiction. In Brooks v. Y.Y.G.M. SA, 2021 U.S. Dist. LEXIS 225412 (E.D. Cal. 2021), the court considered whether a Swiss company could be sued for sales through an inaccessible web site to California residents. While the court also set forth a detailed personal jurisdiction, its decision ultimately hinged on one obvious factor—the plaintiff couldn’t prove that the defendant owned the web site. Ooops!

Disclaimer

Nothing in this post should be interpreted as legal advice or as forming an attorney-client relationship. It is offered for educational purposes only. You should always contact a qualified attorney in your area to discuss your legal rights and responsibilities.

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