Key Points

  • The Mississippi Supreme Court unanimously affirmed enrollment of a $124,998.68 Michigan default judgment against AF LLC, doing business as ACF Wholesale, and its sole principal, Benjamin Chad Moody.
  • The court held that a seller that knowingly accepted orders from Michigan addresses and arranged more than 1,000 deliveries into Michigan purposefully availed itself of that state, regardless of its drop-shipping model.
  • The court characterized the website's 'Governing Jurisdiction' clause as a choice-of-law provision that neither declined Michigan business nor negated the company's contacts with the state.
  • The court reached the jurisdictional question on the merits despite the circuit court's waiver finding, reviewing it de novo under Michigan law.
  • The court held that the size of a sister-state judgment is not a ground for denying full faith and credit, because enrollment turns only on jurisdiction and fraud.

The Mississippi Supreme Court on Oct. 8 ordered enforcement of a $124,998.68 Michigan judgment against an online furniture seller in Columbus, Mississippi, that kept customers' money without delivering their orders. The court held that a business that made more than 1,000 deliveries into Michigan could be sued there, even though its owner never set foot in the state.

Justice Ishee wrote for the court, and all eight other justices concurred. The decision affirmed a Lowndes County Circuit Court order placing the judgment, won by Michigan Attorney General Dana Nessel, on the county's judgment rolls. The seller, AF LLC, which did business as ACF Wholesale, and its sole principal, Benjamin Chad Moody, had refused to defend the Michigan suit. They chose instead to contest Michigan's jurisdiction when Nessel came to Mississippi to collect.

The ruling rejects the argument that a clause in a seller's website terms, declaring that Mississippi law governed, could wall the company off from a state where it did business. The court held that the clause chose a governing law rather than a court, and that "a company cannot claim to have disclaimed a market it served more than a thousand times." It also held that the size of a judgment is no reason to refuse it full faith and credit, the constitutional requirement that states honor one another's court judgments.

According to the opinion, ACF Wholesale used a "drop shipping" model. It took orders and payment on its website, placed matching orders with furniture manufacturers and arranged for outside carriers to haul the goods to buyers. The company kept no office, employees, bank accounts or property in Michigan. By the defendants' own account in the record, "[t]ons of Michigan customers orders were fulfilled" before the site shut down in early 2023.

Beginning in June 2020, the court wrote, the company began keeping payments for furniture it never delivered. It told buyers their addresses were too "remote" to serve, then failed to send promised refunds while it kept taking new orders. The conduct drew thousands of Better Business Bureau complaints, dozens of them from Michigan. Ten Michigan consumers were ultimately identified by affidavit as owed refunds totaling $6,187.06.

Nessel sued in Ingham County on Jan. 18, 2024, under the Michigan Consumer Protection Act, which sends enforcement actions against out-of-state defendants to that county's circuit court. In a March 14, 2024, letter, the defendants' lawyer told her they would not respond and would challenge any judgment on jurisdictional grounds at enforcement. The Michigan court entered a default judgment that August, awarding $18,561.18 in damages, $100,000 in civil fines and $6,437.50 in attorneys' fees. Its entire treatment of jurisdiction was one sentence: "This Court has considered the matter of personal jurisdiction and finds that it has such jurisdiction over both Defendants."

Circuit Judge James T. Kitchens Jr. overruled the defendants' objections in August 2025 and found in a footnote that they had waived their jurisdiction arguments. The Supreme Court decided the case on the merits anyway. "An affirmance resting on waiver alone would leave the validity of the judgment hanging over every future execution effort, which serves no one," Ishee wrote.

The central question was purposeful availment, the due-process requirement that a defendant deliberately reach into a state before that state's courts may hear claims against it. The defendants argued that their Michigan sales reflected only the choices of Michigan shoppers who found a nationally accessible website. The court disagreed. "A customer's visit to the website only began each exchange; Defendants completed it," Ishee wrote, noting that every checkout required a delivery address, so the company knew each buyer was in Michigan before accepting payment.

The court also rejected the argument that drop shipping kept the company out of Michigan because it never handled the furniture. Availment "turns on the purposefulness of the defendant's decision to serve the forum, not on physical handling of goods or physical presence," the opinion said. The court relied in part on its 2020 decision in Fitch v. Wine Express, which found minimum contacts for out-of-state websites that sold thousands of bottles of alcohol to Mississippians.

On the website terms, Ishee wrote that a seller that does not want to answer in a distant state can simply refuse to sell there. "If boilerplate of this kind could neutralize years of knowing commercial contacts, every online seller could draft itself an immunity from suit anywhere but home," the opinion said. Quoting the U.S. Supreme Court, the opinion said businesses that profit from interstate activity may not wield the Due Process Clause as a "territorial shield" against the obligations that activity creates.

The defendants also cited letters in which Nessel's office told complainants in Colorado, California and Texas it could not help them. The court said the letters reflected the limits of her statutory authority and that "an office's inability to champion a Texan's complaint does not subtract one delivery from the thousand Defendants aimed in Michigan." It likewise dismissed the claimed burden on a small Mississippi business of litigating in Michigan, writing that "a defendant cannot build that compelling case out of the hypothetical cost of a defense it deliberately skipped."

On the size of the award, the court noted that Michigan's statute allows a civil fine of up to $25,000 for each persistent and knowing violation, and that Nessel had sought that amount for four provisions. The damages reflected trebling under Michigan's conversion statute. "Whether Michigan's penalties were proportionate was a merits question for the Michigan proceeding Defendants boycotted and the Michigan appeal they never took," Ishee wrote.

The defendants had warned that affirmance would expose every small e-commerce business in the country to suit in all 50 states. The court answered that its rule reaches only sellers that knowingly and repeatedly contract with a state's residents. "A small online business that does not wish to answer in Michigan can decline Michigan orders," the opinion said.

Courtney Bradford Smith represented AF and Moody on appeal. Darrin F. Fowler represented the Michigan attorney general.

The decision leaves in place the circuit court's order directing enrollment of the Michigan judgment in Lowndes County, where the defendants live and do business. The opinion's case header listed no motion for rehearing as of its release.