The Massachusetts Appeals Court ruled today that a Newton man who sells perfume can continue his state lawsuit against a New Yorker he says owes him nearly $530,000 for perfume shipped but never paid for.
A lower-court judge had agreed with the defendant that Massachusetts had no jurisdiction in the case because he had no offices in Massachusetts and paid no taxes to our fair commonwealth. And all of the Cool Water, Echo, Still by J-Lo, Glow by J.Lo, Joop, Burberry Brit, Alfred Sung, Opium and Polo Green was shipped from a warehouse in New Jersey, not Massachusetts.
The appeals court, however, said Jeffrey Parker could continue his lawsuit against Dennis Schnur over 35,693 bottles of perfume under the state's "long-arm" statute because modern technology means new ways of doing business that do no require one to be physically present in the state to do business here, and that the key is not a person's physical presence but the transactions he conducts:
While Selective [Schnur's company] may not have entered the Commonwealth physically, it maintained an ongoing pattern of electronic contact with the Commonwealth by placing numerous telephone, facsimile, and e-mail orders for large quantities of products. As the Supreme Judicial Court observed almost thirty-five years ago, "Modern technology has taken us far beyond the point where two [persons] must stand in each other's physical presence to transact business. Widespread use of the telephone and the mails make[s] actual physical presence unnecessary in many cases." ... This statement applies all the more forcefully today as commercial activity proceeds far more dominantly by electronic communication.
The court added it was hardly onerous for Schnur to testify in a case brought in a neighboring state and that Massachusetts has an interest in providing a forum for its residents to bring legal actions. Still, the decision could prove moot since Parker has also sued Schnur in federal court in New York, and federal courts take priority over state actions involving residents of different states in disputes over $75,000 or more. However, the appeals court said neither side really made a big deal of that issue in their pleadings, so it felt it should address the basic question raised in the suit.
One justice dissented, saying e-mail transactions without any physical presence or products here was not enough to warrant Massachusetts taking control of the case.