Knowing, Repeated Online Sales Establish Specific Jurisdiction Despite Home-State Choice-of-Law Terms

1. Introduction

This decision addresses a central problem of interstate e-commerce: when does an online retailer become answerable in the courts of a state where it has no physical presence? It also examines whether a retailer can avoid that jurisdiction through website terms selecting its home state’s law, and whether its home-state courts must enforce an resulting out-of-state default judgment.

AF, LLC, doing business as ACF Wholesale, operated an online furniture business from Mississippi. Its sole principal, Benjamin Chad Moody, also lived in Mississippi. The company used a drop-shipping model: it accepted orders and payments, then arranged for manufacturers and independent carriers to deliver furniture directly to customers. Neither defendant maintained offices, employees, property, bank accounts, or advertising in Michigan, and neither traveled there on company business.

Nevertheless, the defendants knowingly served Michigan customers for years and arranged more than one thousand deliveries into that state. Each transaction required a delivery address, making the Michigan destination apparent before payment was accepted. Beginning in June 2020, the defendants retained payments for some furniture they never delivered and failed to provide promised refunds.

Michigan Attorney General Dana Nessel sued the company and Moody under the Michigan Consumer Protection Act (“MCPA”) and Michigan’s statutory conversion law. The defendants deliberately declined to appear, intending to challenge personal jurisdiction if Michigan’s judgment was later enforced in Mississippi. After Michigan entered a $124,998.68 default judgment, the Attorney General sought enrollment in Lowndes County, Mississippi.

The Mississippi Supreme Court held that Michigan had personal jurisdiction over both defendants. Their deliberate commercial dealings with Michigan residents supplied the required contacts, notwithstanding their Mississippi location, third-party fulfillment arrangements, and contractual choice of Mississippi law. Accordingly, full faith and credit required recognition of the judgment.

2. Summary of the Opinion

Procedural history and relief awarded

The Attorney General filed the Michigan action on January 18, 2024. After receiving the complaint and extensions to obtain Michigan counsel, the defendants announced that they would not respond. Defaults followed, and the Michigan court entered its final monetary order on August 13, 2024.

The Michigan court also held Moody personally liable because he directly participated in the unlawful practices. Its jurisdictional explanation consisted of one sentence stating that it had considered personal jurisdiction and possessed it over both defendants.

The Attorney General enrolled the judgment under Mississippi Code Section 11-7-305. The defendants objected, principally relying on their website’s Terms of Use. The circuit court rejected those objections and directed enrollment. The Supreme Court affirmed that order.

Principal holdings

• The jurisdictional challenge would be decided on its merits. Although the defendants inadequately developed their minimum-contacts argument below, the Court declined to resolve the appeal solely through waiver.
• The Michigan court’s conclusory jurisdictional statement did not prevent independent review. The judgment remained presumptively valid, but constitutional jurisdiction was examined de novo.
• Michigan’s long-arm statutes reached both defendants. Their transactions, delivery commitments, and allegedly tortious conduct satisfied the relevant statutory grounds.
• Due process was satisfied. The defendants purposefully served Michigan, the claims arose directly from that activity, and litigation there was reasonable.
• The website provision selected law, not a forum. It neither required litigation exclusively in Mississippi nor erased the defendants’ Michigan contacts.
• The judgment’s amount did not defeat full faith and credit. Objections to the penalties concerned the merits, not the rendering court’s jurisdiction.

3. Analysis: Legal Reasoning

A. Recognition of a judgment is distinct from reconsideration of its merits

The Court began with Article IV, Section 1, of the United States Constitution, the Full Faith and Credit Clause. Under the framework stated in the opinion, Mississippi must recognize a sister-state judgment unless it was procured through qualifying fraud or the rendering court lacked jurisdiction over the parties or subject matter. The defendants invoked only the jurisdictional exception.

This distinction defined the permissible inquiry. Mississippi could examine whether Michigan had authority to bind these defendants. It could not use enrollment proceedings to retry the consumer-protection claims, recalculate damages, or reconsider the penalties merely because the defendants found them excessive.

The defendants’ deliberate nonappearance preserved their opportunity to challenge personal jurisdiction collaterally. But that strategy carried substantial risk: if jurisdiction existed, the adverse merits judgment remained enforceable. Choosing not to participate did not transform enrollment into a substitute Michigan trial or appeal.

B. De novo review and presumptive validity operate together

The Court distinguished two propositions that the parties’ arguments threatened to conflate. First, a sister-state judgment carries a presumption of validity, and the challenger bears the burden of affirmatively demonstrating invalidity. Second, a bare jurisdictional declaration in a default judgment does not foreclose constitutional review.

Accordingly, the Michigan court’s one-sentence finding was neither conclusive nor fatal to enforcement. The Mississippi Supreme Court independently evaluated the existing record. Its conclusion rested on the defendants’ documented dealings with Michigan, not on deference to Michigan’s unexplained assertion.

The Court also declined to affirm solely on preservation grounds. The defendants had raised jurisdiction, although chiefly through their mistaken interpretation of the contract provision. Because the issue concerned a potentially void judgment, was purely legal, and had been fully briefed on a complete record, the Court resolved it. This is a case-specific decision to reach the merits, not a general elimination of appellate preservation requirements.

C. Michigan law supplied the statutory jurisdictional framework

Because Michigan rendered the judgment, Michigan’s jurisdictional law governed the collateral inquiry. The relevant long-arm provisions authorize limited personal jurisdiction based on transacting business, causing in-state consequences resulting in a tort action, and contracting to furnish materials or services in Michigan.

The defendants’ conduct satisfied those grounds. Their acknowledged thousand-plus deliveries constituted substantial business activity; their sales contemplated furnishing furniture in Michigan; and retaining Michigan customers’ payments without delivery or refund produced the consequences underlying the conversion and MCPA claims.

For Moody, the Court relied on his personal direction of the unlawful conduct. His role was therefore more than ownership of the company. The opinion does not establish that every owner or manager automatically becomes subject to personal jurisdiction wherever the business sells products.

Michigan interprets these statutes broadly, to the limits permitted by due process. Nevertheless, the opinion retained the two-step structure: statutory authorization first, constitutional validity second.

D. Purposeful availment arose from commercial decisions, not website accessibility alone

The decisive contacts were the defendants’ own choices. Michigan consumers may have initiated visits to the website, but the defendants knowingly accepted their orders, collected their money, agreed to deliver to Michigan addresses, arranged fulfillment, and continued corresponding with them afterward.

Those were bilateral commercial transactions, not unilateral consumer activity. The required shipping addresses were especially important: they showed that the defendants knew the forum destination when accepting each purchase. Repetition over several years further demonstrated deliberate service of Michigan’s market.

The Court used the Zippo internet-jurisdiction framework, but its reasoning did not depend exclusively on website interactivity. Traditional purposeful-availment principles and a totality-of-the-circumstances assessment independently supported jurisdiction. An interactive website was the mechanism through which the defendants knowingly conducted forum-directed business.

Nor did drop shipping alter the result. Outsourcing manufacturing and transportation did not change who accepted the customers’ payments or undertook to supply furniture in Michigan. Physical possession of inventory and physical presence in the forum were unnecessary.

E. Choice of law did not amount to a jurisdictional exclusion

Section 9 of the Terms of Use stated that the website operated in Mississippi and that Mississippi law governed the terms. Despite its heading, “Governing Jurisdiction of the Courts of Mississippi,” its operative language did not identify an exclusive court or require suits to be filed in Mississippi.

The Court therefore classified the provision as a choice-of-law clause, not a forum-selection clause. A contractual selection of governing law addresses which law applies to the agreement; it does not itself determine which courts can exercise personal jurisdiction.

The provision also did not reject Michigan orders. Its disclaimer about the website’s availability elsewhere was contradicted, for jurisdictional purposes, by the defendants’ sustained acceptance and fulfillment of Michigan purchases. Purposeful availment depends on actual conduct, not merely on contractual descriptions of that conduct.

Additionally, the Attorney General brought a statutory enforcement action and was not a party to the consumer contracts. The defendants did not maintain that she was contractually bound. Although the Michigan court had declared the supposed forum clause void under Michigan Compiled Laws Section 445.910(2), the Supreme Court’s analysis did not require a sweeping ruling against genuine forum-selection agreements.

Equally important, the Court did not decide that Mississippi choice-of-law provisions are generally invalid. It decided that this provision could not negate Michigan contacts or prevent this public enforcement action.

F. The alleged intentional misconduct supplied an additional jurisdictional connection

The Court also applied the intentional-tort “effects” analysis. The defendants allegedly accepted money from buyers known to be in Michigan, sometimes researched their Michigan locations, failed to deliver, and withheld promised refunds. The resulting Michigan injury was not accidental.

This alternative rationale rested on conduct directed toward the forum, not merely on the consumers’ residence there. That distinction matters: a plaintiff’s location alone cannot establish jurisdiction over an out-of-state defendant. Here, the defendants created the Michigan connection through their own transactions and subsequent dealings.

G. Relatedness and reasonableness were strongly established

The claims arose from the very Michigan transactions that supplied the defendants’ contacts. This was not a case requiring an expansive understanding of claims merely “related to” forum activity. Taking payments from Michigan consumers and failing to deliver or refund were both the jurisdictional conduct and the basis of the lawsuit.

Michigan also had a substantial interest in enforcing its consumer-protection statute for its residents. Consumer witnesses were located there, and the MCPA designated Ingham County as the venue for the Attorney General’s action against defendants not established in Michigan.

The defendants’ small-business status and resource imbalance with the Attorney General did not establish that Michigan was an unreasonable forum. Those disadvantages would exist in Mississippi as well. Although interstate litigation imposes burdens, the defendants did not present a compelling reason why the burdens here were constitutionally unacceptable.

Mississippi’s interest in its resident businesses did not make its jurisdiction exclusive. Multiple states can have legitimate interests in a controversy without either state’s exercise of specific jurisdiction violating due process.

H. Penalty proportionality was not decided in the enrollment proceeding

The Court explained that the award reflected Michigan’s statutory remedial scheme: treble conversion damages, civil fines, and attorneys’ fees. More decisively, the amount did not demonstrate absence of jurisdiction or qualifying fraud.

The Court therefore rejected the award-size argument as a ground for refusing recognition. It did not independently adjudicate every possible constitutional challenge to the fines or hold that any statutorily authorized penalty is necessarily proportionate. Its holding concerned the limits of collateral review at enrollment.

4. Analysis: Precedents Cited and Their Influence

A. Review, recognition, and collateral challenges

• Tel-Com Mgmt., Inc. v. Waveland Resort Inns, Inc., Fitch v. Wine Express Inc., and Yatham v. Young support de novo review of personal jurisdiction and the resulting full-faith-and-credit question. Their function is to identify the reviewing court’s independent responsibility to resolve legal questions. Yatham v. Young also supplies a Mississippi analogue for the distinction between statutory authorization and constitutional due process.

• Sollitt v. Robertson is central to the procedural framework. The opinion relies on it for applying the rendering state’s jurisdictional law and for permitting a nonappearing defendant to contest jurisdiction when enforcement is sought elsewhere. It also supplies the jurisdictional exception to mandatory recognition.

• In re Est. of Provenza reinforces the rendering-state-law approach. Its cited role concerns the governing jurisdictional framework, rather than the substantive law applicable to the furniture transactions.

• Galbraith & Dickens Aviation Ins. Agency, Inc. v. Gulf Coast Aircraft Sales, Inc. establishes the presumption that a sister-state judgment validly rests on jurisdiction and places the burden of showing invalidity on the challenger. This principle explains why identifying an abbreviated jurisdictional finding was insufficient: the defendants still had to establish an actual jurisdictional defect.

• Reeves Royalty Co., Ltd. v. ANB Pump Truck Service supplies the fraud exception involving a false representation without which the judgment would not have been rendered. Davis v. Davis collects that exception and the jurisdictional exception into the recognition framework applied here. Fraud was not asserted in this appeal, so these authorities principally defined the boundaries of permissible resistance to enrollment.

• Davis v. State states the ordinary rule against considering arguments inadequately developed below. The Court acknowledged that principle but did not make waiver dispositive. Hamm v. Hall is cited in support of resolving the jurisdictional validity question rather than leaving it unresolved for subsequent execution efforts.

• Dep't of Hum. Servs. v. Shelnut establishes that a default judgment’s bare jurisdictional recital does not foreclose collateral constitutional review. It allowed scrutiny of Michigan’s unexplained finding without eliminating the separate presumption of validity recognized in Galbraith & Dickens Aviation Ins. Agency, Inc. v. Gulf Coast Aircraft Sales, Inc..

B. Michigan’s statutory reach and constitutional structure

• Sifers v. Horen supports Michigan’s broad construction of its long-arm statutes to the limits of due process. This authority made the constitutional inquiry especially important: satisfying a broadly construed statutory category did not dispense with constitutional fairness.

• Miller v. AXA Winterthur Ins. Co., quoting Neogen Corp. v. Neo Gen Screening, Inc., supplies the proposition that the “slightest act of business in Michigan” satisfies the transaction-of-business statutory prong. Against that standard, the admitted thousand-plus deliveries overwhelmingly established statutory business activity. This low statutory threshold should not be mistaken for automatic constitutional jurisdiction.

• Jeffery v. Rapid Am. Corp. supports the separate statutory and constitutional inquiries and the factors used to assess reasonableness. It also supports requiring a defendant who purposefully directs activity toward the forum to present a compelling case that other considerations make jurisdiction unreasonable.

• City of Fraser v. Almeda Univ. supplies Michigan’s three-part due-process test: purposeful availment, a claim arising from forum activities, and a sufficiently substantial connection to make jurisdiction reasonable. It is also a close factual analogy because the online university knowingly accepted Michigan applications and payments and mailed diplomas into the state.

• Int'l Shoe Co. v. Washington provides the constitutional foundation: minimum contacts consistent with traditional notions of fair play and substantial justice. Milliken v. Meyer appears as the source of the fairness language quoted through that foundational decision; it does not independently resolve the internet-commerce issue.

• Oberlies v. Searchmont Resort, Inc. emphasizes fairness and reasonableness rather than mechanically weighing individual factors. It also describes the need to exclude random, fortuitous, attenuated, or purely unilateral contacts. The defendants’ sustained Michigan commerce satisfied that concern because it reflected their own deliberate decisions.

C. Purposeful availment through online commerce

• Burger King Corp. v. Rudzewicz explains why purposeful commercial activity can create obligations outside the defendant’s home state. The opinion uses it both to reject reliance on fortuitous contacts and to reject treating due process as a “territorial shield” against obligations arising from interstate business. It also supplies the demanding standard for showing that otherwise justified jurisdiction is unreasonable.

• Hanson v. Denckla distinguishes a defendant’s purposeful conduct from another person’s unilateral activity. The defendants invoked the underlying concern, but their acceptance and performance of Michigan orders defeated their attempt to characterize the transactions as solely the customers’ choices.

• W.H. Froh, Inc. v. Domanski establishes that physical presence is unnecessary and identifies the relevant fairness factors. It therefore answers the defendants’ emphasis on their lack of Michigan offices, travel, personnel, and property.

• Zippo Mfg. Co. v. Zippo Dot Com, Inc. supplies the internet “sliding scale,” distinguishing passive informational websites from websites used to conduct knowing, repeated commercial transactions. ACF Wholesale occupied the commercial end of that spectrum. The opinion also adopts its practical observation that sellers can avoid serving a forum by declining transactions there.

• Neogen Corp. v. Neo Gen Screening, Inc. provides a particularly useful comparison: fourteen Michigan transactions annually supported jurisdiction because accepting payments and mailing results to Michigan addresses reflected intentional business activity. ACF Wholesale’s much larger course of dealing made the inference of purposeful availment stronger.

• Fitch v. Wine Express Inc. is the principal Mississippi internet-commerce precedent. Out-of-state sellers using interactive websites to sell thousands of bottles of alcohol to Mississippi residents had sufficient contacts under either Zippo or a totality approach. The present opinion applies the same reasoning when a Mississippi seller knowingly serves another state’s consumers, rejecting any home-state exemption.

• Parish v. Mertes states that a single transaction can establish minimum contacts under Michigan law. Its inclusion is important to the holding’s scope: the Court did not create a thousand-sale threshold. Repetition strengthened this record, but transaction quality and deliberate forum connections remain essential.

• Ford Motor Co. v. Montana Eighth Jud. Dist. Ct. supports jurisdiction over claims connected with a market the defendant regularly serves. Here, the link was stronger than the relatedness sufficient in that precedent: the transactions constituting forum contacts were the same transactions generating the claims.

• Illinois v. Hemi Grp. LLC rejects the argument that willing internet sellers merely react to unilateral consumer conduct. A retailer that knowingly does business with forum residents participates in creating those contacts. That reasoning directly answered ACF Wholesale’s claim that Michigan customers alone initiated the relevant relationships.

D. Distribution arrangements and the absence of physical handling

• J. McIntyre Machinery, Ltd. v. Nicastro and Vargas v. Hong Jin Crown Corp. concern stream-of-commerce questions involving manufacturers and independent distribution. The Court distinguished that setting: ACF Wholesale did not merely place goods into an uncontrolled distribution chain. It directly contracted with identified Michigan buyers and arranged delivery to their addresses.

• Am. Cable Corp. v. Trilogy Commc'ns, Inc. supports evaluating purposeful service of the forum rather than demanding physical presence or handling of goods. It helped defeat the argument that jurisdiction depended on loading trucks or dispatching furniture from Mississippi.

• Mor-Dall Enterprises, Inc. v. Dark Horse Distillery, LLC rejected an attempt to defeat jurisdiction through third-party sales arrangements. The opinion uses its anti-gamesmanship reasoning to show that outsourcing fulfillment cannot erase the seller’s own decision to serve the forum. The similar rejection of F.O.B. arrangements in Fitch v. Wine Express Inc. reinforces that conclusion.

E. Foreseeability and intentionally directed injury

• World-Wide Volkswagen Corp. v. Woodson supplies the foreseeability standard: the defendant’s own conduct and forum connection must make litigation there reasonably anticipatable. The defendants’ recurring Michigan sales and alleged violations affecting Michigan consumers supported that expectation. The relevant foreseeability was being sued because of deliberate forum activity, not simply the possibility that goods might travel there.

• Calder v. Jones supplies the effects test for intentional tortious conduct expressly aimed at a forum where the resulting harm is known to occur. The Court treated the knowing retention of Michigan consumers’ money as an additional jurisdictional basis beyond ordinary commercial contacts.

• Ross v. Robinson, Hoover & Fudge, PLLC is cited for treating consumer-protection violations as tortious conduct within this analysis. Its role is to connect the MCPA misconduct to the intentional-effects framework, not to substitute for proof of forum-directed activity.

• Walden v. Fiore supplies an important limiting comparison. Forum injury cannot be considered apart from the defendant’s own forum connections. Here, Michigan was linked to the defendants by the transactions they knowingly accepted, so the jurisdictional theory rested on more than the victims’ residence.

F. Fairness and the limits of enrollment review

• Aaronson v. Lindsay & Hauer Int'l Ltd. recognizes a state’s substantial interest in providing effective relief to residents harmed by out-of-state actors. That interest was especially strong because Michigan itself brought the statutory enforcement action.

• Felland v. Clifton distinguishes ordinary interstate litigation burdens from burdens sufficient to make jurisdiction unreasonable. The defendants’ generalized financial disadvantages did not establish an exceptional Michigan-specific hardship.

• Cappaert Manufactured Hous., Inc. v. Thronson directly resolves the award-size objection. The amount of a judgment is neither evidence of absent jurisdiction nor extrinsic fraud and therefore cannot itself justify denying full faith and credit. This precedent kept enrollment review from becoming reconsideration of Michigan’s remedies.

5. Impact and Limits of the Decision

Consequences for online retailers

The opinion reinforces that operating exclusively from one state does not confine a retailer’s litigation exposure to that state. Retailers that knowingly accept orders for delivery elsewhere create jurisdictionally significant contacts even when third parties perform every physical fulfillment task.

Website boilerplate cannot replace operational decisions. If a seller wishes to avoid deliberately serving a particular state, refusing that state’s orders is materially different from accepting them while declaring that the business operates under home-state law.

Consequences for consumer-protection enforcement

The decision supports states’ ability to pursue out-of-state retailers whose deliberate transactions harm local consumers. It also distinguishes the Attorney General’s territorial enforcement authority from constitutional personal jurisdiction. Letters declining to assist consumers outside Michigan described limits on the Attorney General’s statutory mandate; they did not negate the defendants’ Michigan contacts.

Consequences for default-judgment strategy

A defendant may preserve an available collateral jurisdictional challenge by declining to appear, but the resulting default is not provisional on the merits. Once jurisdiction is established, later enrollment generally cannot supply the defense or appeal the defendant elected to forgo.

Important boundaries

• The decision concerns specific jurisdiction over claims connected to Michigan activity, not jurisdiction over every dispute involving these defendants.
• National website accessibility alone was not sufficient; knowing transactions, delivery arrangements, and subsequent dealings were decisive.
• The thousand-plus deliveries were strong evidence, not a mandatory numerical threshold.
• The opinion does not invalidate all genuine forum-selection clauses or all home-state choice-of-law provisions.
• Moody’s personal participation mattered; sole ownership alone was not the stated basis.
• Recognition of the award did not constitute an independent ruling on every potential constitutional objection to its amount.

The decision’s principal significance is therefore an application and consolidation of existing jurisdictional doctrine, rather than the invention of jurisdiction whenever consumers access an online store.

6. Complex Concepts Simplified

Personal jurisdiction

A court’s authority to enter a judgment binding a particular defendant. An out-of-state business can be subject to that authority without maintaining a local office.

Specific or limited jurisdiction

Authority over claims arising from or sufficiently connected to the defendant’s dealings with the state. It does not give the state authority over every unrelated claim against that defendant.

Long-arm statute

A state law identifying circumstances in which its courts may exercise jurisdiction over out-of-state defendants. Constitutional due process still limits that authority.

Purposeful availment

The defendant’s deliberate decision to conduct activities connected with the state. Knowingly accepting and fulfilling orders there is different from a consumer independently moving a product there.

Choice of law versus forum selection

Choice of law identifies the law governing an agreement. Forum selection identifies where disputes must or may be litigated. The former does not automatically accomplish the latter.

Full faith and credit

The constitutional obligation to recognize qualifying judgments from other states, subject to limited grounds for refusing recognition.

Enrollment

The process of placing an out-of-state judgment on the local judgment rolls so it can be enforced in the receiving state.

Collateral attack

A challenge made outside the original lawsuit. Here, the defendants challenged Michigan’s authority when the judgment reached Mississippi for enforcement.

De novo review

Independent review of a legal question rather than deference to the lower court’s legal conclusion.

Void versus voidable judgment

A judgment entered without necessary jurisdiction is void. A judgment containing an ordinary legal error is not necessarily void and ordinarily must be challenged through the original proceedings or direct appeal.

Conversion and treble damages

Conversion concerns wrongful control over another’s property; the Michigan judgment treated the retained consumer funds as statutory conversion. Treble damages multiply the qualifying loss by three.

7. Conclusion

AF, LLC v. Nessel confirms that deliberate service of another state’s consumers carries legal consequences there. The defendants’ knowing Michigan transactions established specific jurisdiction despite their Mississippi location, drop-shipping model, and home-state choice-of-law terms.

The judgment was therefore entitled to full faith and credit. Its abbreviated jurisdictional explanation permitted independent review but did not establish invalidity, and its substantial penalties could not be reconsidered through Mississippi enrollment proceedings. The central lesson is that actual interstate conduct—not contractual labels or fulfillment arrangements—determines the jurisdictional consequences of online commerce.