who lived in Georgia, responded to an ad in a magazine (published in
Nebraska) for a customized truck made by Gust in Wisconsin.Flint sent $6k to Gust as a
deposit for a special truck.Gust was unable to deliver the truck and offered a substitute.Flint refused the substitute, Gust
refused to return the deposit, Flint sued in Georgia under a long-armstatute.
sued for both breach of contract and fraud.
moved to dismiss on the ground that there was no personal jurisdiction.
had never conducted any business in Georgia prior to the deal with Flint.
Trial Court found that there was no jurisdiction.
Appellate Court affirmed for breach of contract and reversed for fraud.
to Georgia's long arm statute,
jurisdiction over a nonresident defendant for breach of contract can
be exercised if the nonresident defendant,
"transacted any business in the State," which Gust did.
On the other hand, there are two theories for establishing jurisdiction for torts like fraud:
New York Rule is that a tort is
only deemed to have been committed in a State if the tortuous act is
deemed to have been committed there, and not merely the injury resulting therefrom occurred
the Illinois Rule says that a
tort resulting in damage inside the State is deemed to have occurred in
the State regardless of where the tortuous act took place (see Gray v. American Radiator (176 N.E.2d 761 (Ill. 1961))).
In this case, the Appellate
Court decided to use the Illinois Rule and
found that by not giving back the deposit, Gust purposely,
intentionally, and specifically directed his actions towards a Georgia
resident.That meets the
minimum contact standards of due process.
countersued to get the fraud charge dismissed.
Appellate Court threw out the fraud charge.
Court found that regardless of whether you use the New York Rule or the Illinois Rule, the Georgia Statute requires that an
out-of-state defendant must do certain acts within Georgia before he can
be subjected to personal jurisdiction.Gust did none of those things.
laws restrict Georgia's personal jurisdiction to a narrower definition
than would be defendable under the Constitution.
Georgia's long arm statute has an
exception for defamation torts.This dates back to the civil rights era in the 1960s.An Alabama official sued for
defamation against the NY Times for publishing photos of him beating
protestors.Back then, the
jury was going to be all white.The Federal Appellate Court ruled that when there are 1st
Amendment issues, there must be more than minimal contacts (New York Times v. Sullivan (376 U.S. 254 (1964))).They did this to ensure that these
cases would not be heard by biased juries.
US Supreme Court rejected this argument in Calder v. Jones (465 U.S. 783 (1984)).