American College Connection, Inc. v. Berkowitz
332 Ga. App. 867
| Ga. Ct. App. | 2015Background
- Berkowitz, a Georgia resident, sues ACC in Georgia for declaratory judgment and damages for breach of contract.
- ACC is Nebraska-based; it moves to dismiss for lack of personal jurisdiction; trial court denies; interlocutory appeal follows.
- ACC and Berkowitz entered in 2007 into an independent consultant/contractor agreement; Berkowitz would procure referrals for ACC and receive commissions.
- Berkowitz signed a non-compete agreement; ACC later claimed she violated it and terminated her access in December 2013.
- ACC operates a website to recruit and manage clients; Berkowitz, a Georgia resident, helped recruit Georgia clients.
- Georgia’s long-arm statute permits jurisdiction over nonresidents who transact business in Georgia; the case hinges on whether ACC transacted business and/or had minimum contacts with Georgia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ACC have minimum contacts with Georgia under OCGA 9-10-91(1)? | ACC transacts business via a Georgia-facing website and Georgia clients. | ACC has no substantial presence or transactions in Georgia. | Yes; ACC had sufficient minimum contacts; jurisdiction proper. |
| Can Berkowitz's role be treated as an agent for minimum contacts purposes, given contractor status? | Berkowitz acted to obtain Georgia clients for ACC, supporting agency-based contacts. | Berkowitz was an independent contractor, not an agent, so her Georgia activities don’t bind ACC. | Agency/independent-contractor distinction is not controlling; Georgia contacts exist through ACC's interactive website and Georgia clients. |
Key Cases Cited
- Innovative Clinical & Consulting Servs. v. First National Bank of Ames, 279 Ga. 672 (2005) (broad interpretation of transacting business under OCGA 9-10-91(1))
- Aero Toy Store, LLC v. Grieves, 279 Ga. App. 515 (2006) (interactive website and minimum contacts analysis for online activity)
- Paxton v. Citizens Bank & Trust of W. Ga., 307 Ga. App. 112 (2010) (three-part minimum contacts test; relevance to transacting business)
- Continental Resources Corp. v. Reeves, 204 Ga. App. 120 (1992) (agency vs. independent contractor in minimum contacts context)
- Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997) (sliding-scale analysis for internet-based contacts)