Rilley v. MoneyMutual, LLC - 884 N.W.2d 321 (Minn. 2016)

Rule:

Minimum contacts exist when a defendant purposefully avails itself of the privileges, benefits, and protections of the forum state, such that the defendant should reasonably anticipate being haled into court there. The minimum contacts necessary to support specific personal jurisdiction over the defendant must focus on the relationship among the defendant, the forum, and the litigation, and the defendant's suit-related conduct must create a substantial connection with the forum state, such that the litigation results from alleged harms that arise out of or relate to the defendant's contacts with the forum. This minimum-contacts inquiry must look to the defendant's contacts with the forum state itself and not the defendant's random, fortuitous, or attenuated contacts with persons affiliated with the state or persons who reside there. But in some cases, a defendant's contacts with the forum state may be intertwined with his transactions or interactions with the plaintiff or other parties. 

Facts:

Appellant MoneyMutual, LLC operates a website that allows individuals to apply for short-term loans, commonly known as "payday loans." After an individual submits a loan application through MoneyMutual's website, MoneyMutual "matches" the applicant with a payday lender in its network. For each matched applicant, MoneyMutual receives a "lead" fee from the lender. Respondents are four Minnesota residents who used MoneyMutual's website to obtain payday loans. Respondents filed a class-action complaint, alleging that MoneyMutual matched respondents with payday lenders that were unlicensed in Minnesota. The complaint also alleged that the terms of the payday loans respondents received were illegal under Minnesota's payday-lending statutes because, among other claims, the annual percentage rates (APRs) advertised by MoneyMutual—which ranged "between 261% and 1304% for a 14 day loan"—exceeded the maximum allowable APRs under Minnesota law. Respondents also claimed that MoneyMutual's website and advertising contained misrepresentations that violated Minnesota's consumer protection statutes, Minn. Stat. §§ 325D.44, 325F.67, 325F.69, (2014). Finally, the complaint alleged that MoneyMutual unjustly enriched itself; that MoneyMutual participated in a civil conspiracy; and that MoneyMutual aided and abetted unlicensed lenders in making illegal loans to Minnesota residents. MoneyMutual claims that the district court erred when it concluded that it could exercise specific personal jurisdiction over MoneyMutual based on MoneyMutual's email correspondence with Minnesota residents and advertising in Minnesota. The court of appeals affirmed the district court's decision, concluding that specific personal jurisdiction existed. 

Issue:

Did the district court err when it concluded that it could exercise specific personal jurisdiction over MoneyMutual based on MoneyMutual's email correspondence with Minnesota residents and advertising in Minnesota?

Answer:

No.

Conclusion:

The court held that MoneyMutual had the necessary minimum contacts with Minnesota to support a personal jurisdiction finding under Minnesota's long-arm statute, Minn. Stat. § 543.19 (2014), and the Fourteenth Amendment, U.S. Const. amend. XIV, because MoneyMutual sent emails to known Minnesota residents, thus purposefully directing the emails at the forum. On the other hand, national television advertising that did not target Minnesota specifically could not support a finding of personal jurisdiction. Online search advertising designed to target Minnesota residents whose search terms included their Minnesota locations was sufficiently related to the cause of action. Exercising personal jurisdiction was reasonable in light of Minnesota's strong interest in protecting its residents from predatory lending.