The recent decision in Ferrari S.p.A. v. Romanelli provides valuable insights for international corporations conducting business in the United States. The case revolves around whether a Florida court could exercise general jurisdiction over Ferrari S.p.A., an Italian corporation, based on its business activities in the state. This ruling reinforces the stringent requirements for asserting general jurisdiction over foreign entities and offers key takeaways for businesses navigating cross-border legal risks.
Case Background
Plaintiffs Gregory Romanelli and TR3 Racing, Inc. sued Ferrari S.p.A., alleging strict liability and breach of warranty claims. They argued that Florida courts had general jurisdiction over Ferrari because its business activities in the state were extensive enough to render it "essentially at home" under Florida’s long-arm statute.
In support of their claim, they cited Ferrari’s:
- Presence of seven Ferrari-authorized dealerships in Florida;
- Online marketing targeting Florida customers;
- Sales of Ferrari museum tickets to Florida residents;
- Annual dealer meetings held in Daytona Beach; and
- Executives attending racing events in Florida.
Ferrari moved to dismiss for lack of personal jurisdiction, submitting affidavits stating that:
- It is incorporated and headquartered in Italy;
- It designs and manufactures its vehicles in Italy, not Florida;
- It does not maintain an office, sales force, or real estate in Florida;
- Its authorized dealerships are independently operated entities;
- It does not sell museum tickets directly in Florida.
The trial court denied Ferrari’s motion, finding that these contacts were sufficient for general jurisdiction. Ferrari appealed, arguing that its Florida business presence did not meet the high threshold required to establish general jurisdiction.
Key Legal Issues and Findings
1. The Burden-Shifting Framework for Jurisdiction
Florida follows the Venetian Salami burden-shifting test for determining personal jurisdiction.
Under this framework:
- The plaintiff must first allege a basis for jurisdiction under the Florida long-arm statute.
- If the defendant challenges jurisdiction with affidavits rebutting the complaint’s allegations, the burden shifts to the plaintiff to provide sworn proof supporting jurisdiction.
- If the plaintiff fails to produce sworn proof, dismissal is required.
In this case, Ferrari’s affidavits effectively rebutted the complaint’s allegations, shifting the burden to the plaintiffs. However, plaintiffs failed to submit counter-affidavits or sworn proof, instead relying on unsworn documents such as web pages and invoices. This failure to meet the evidentiary burden meant Ferrari was entitled to dismissal.
2. The High Threshold for General Jurisdiction
General jurisdiction allows a court to hear any claim against a corporation, regardless of where the claim arose. However, under Daimler AG v. Bauman, general jurisdiction is typically only appropriate where the corporation is "at home"—which, for a corporation, is usually its place of incorporation or principal place of business. Outside of those locations, general jurisdiction is only available in "exceptional cases."
The court found that Ferrari’s contacts with Florida were insufficient to meet this standard. Even though Ferrari-authorized dealerships operated in Florida, they were independent entities not directly controlled by Ferrari. Additionally, Ferrari’s marketing efforts and event participation did not rise to the level of continuous and systematic business operations required for general jurisdiction.
3. The Limited Impact of Online Presence on Jurisdiction
A key point of contention was Ferrari’s online presence and its accessibility to Florida consumers. However, courts have consistently ruled that merely having a website accessible to users in a forum state does not establish general jurisdiction. As noted in prior rulings, passive websites or online interactions do not constitute a substantial connection that makes a corporation "at home" in a state.
Lessons for International Businesses
1. Understand the Limits of General Jurisdiction
Foreign companies should recognize that merely conducting business in a U.S. state—such as selling products through independent dealerships, engaging in marketing efforts, or participating in events—does not automatically subject them to general jurisdiction. To be considered "at home" in a state, the business must have a significantly deeper operational presence.
2. Properly Structure Business Relationships with U.S. Entities
International corporations should maintain clear legal separations between themselves and local distributors or dealers to avoid having their operations attributed to them for jurisdictional purposes. Ferrari’s ability to establish that its Florida dealerships were independently operated played a critical role in its defense.
3. Sworn Proof is Essential in Jurisdictional Disputes
When contesting jurisdiction, companies must submit detailed affidavits outlining their lack of sufficient contacts with the forum state. Likewise, plaintiffs seeking to establish jurisdiction must provide sworn evidence, as unsworn documents and internet screenshots alone will not suffice.
4. Online Presence Does Not Equal Jurisdiction
A company’s website or digital marketing efforts, even if accessible in the forum state, do not automatically subject it to general jurisdiction. Businesses should be aware that passive online activities generally do not meet the legal threshold for "continuous and systematic" contacts.
Conclusion
The Ferrari S.p.A. v. Romanelli decision reaffirms that Florida courts cannot exercise general jurisdiction over a foreign corporation unless its ties to the state are so substantial that it is effectively "at home" there. This ruling serves as a crucial reminder for international businesses to carefully evaluate their U.S. operations and ensure that their legal structures minimize unnecessary jurisdictional risks.
For companies engaged in global commerce, this case underscores the importance of maintaining proper legal separations and understanding the nuances of personal jurisdiction to avoid costly litigation in foreign jurisdictions.
Rosenthal Law Group has extensive experience handling personal jurisdiction challenges. You can reach us at www.rosenthalcounsel.com or (954) 384-9200.