Paula G. Freston

Cole v. Mileti

133 F.3d 433 (1998)

U.S. Court of Appeals, 6th Circuit

Key Facts: Cole, who lived in Ohio lent money to Mileti for a business venture Mileti had in California. As part of their agreement, Mileti 
promised to repay the $475,000. The contractual agreement to repay was conducted via phone calls and correspondence between California and Ohio. When Mileti’s venture failed 
and he didn’t repay the loan to Cole, Cole was unable to repay his loan to the bank. The bank sued Cole and Cole in turn sued Mileti.

Issue: Can a court exercise personal jurisdiction (in personam) over a nonresident defendant (Mileti) based on telephone and mail contacts?

Rule: There is a 3-part test to determine jurisdiction. First, the defendant must purposefully avail himself of the privilege of conducting activities within the forum state; second, the 
cause of action must arise from the defendant’s activities there; and third, the acts of the defendant or consequences caused by the defendant must have a substantial enough
connection with the forum state to make its exercise of jurisdiction over the defendant fundamentally fair.

Application: Cole engaged in activities within the State of Ohio via telephone and mail contacts; the loan and the defendant’s failure to repay it arose from the defendant’s 
contacts; the conducting of business and arranging of contracts via mail and telephone into a jurisdiction are sufficiently substantial to establish a connection to the State and thereforethe exercise of jurisdiction is fair.

Conclusion: The U.S. Court of Appeals for the Sixth Circuit held that yes, the district court could exercise in personam jurisdiction over Mileti.