At the first instance, the United States District Court for the Northern District of California decided against Boschetto and held that a lone “eBay sale consummated with a California purchaser, was insufficient to establish jurisdiction over any of the defendants.”[3] Boschetto appealed against the decision to the United States Court of Appeals for the Ninth Circuit.

Boschetto alleged, that on August 1, 2005, defendant Hansing posted a listing for auction on eBay.com advertising a 1964 Ford Galaxie car as an "R Code" in "awesome condition," "recently rebuilt" and "ready to be driven."

In his complaint, he alleged four state law causes of action (violation of the California Consumer Protection Act; breach of contract; misrepresentation; and fraud).

With regard to the first issue the court held that the "sale of one automobile via the eBay website, without more, does not establish jurisdiction over a non-resident defendant in the forum state".

In reaching its conclusion about the lack of personal jurisdiction, the court applied a three-part test from Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir.

[6] Further, "the claim must be one which arises out of or relates to the defendant's forum-related activities"; and "the exercise of jurisdiction must comport with fair play and substantial justice".

[6] The court further observed that the plaintiff had the burden of proving the first two prongs of the foregoing test and only then the defendant was required to come forward and show that the "exercise of jurisdiction would not be reasonable".

[7] Applying the "purposeful availment" standard to the facts of the case, the court noted that the arrangement between Boschetto and Hansing was a contract for a sale of a good and was "insufficient to have created a substantial connection with California".

Further, "the Boucher Defendants did not create any ongoing obligations with Boschetto in California; once the car was sold the parties were to go their separate ways".

[11] The court held, quoting from International Shoe Co. v. Washington, 326 U.S. 310,[12] [1] that "where eBay is used as a means for establishing regular business with a remote forum such that a finding of personal jurisdiction comports with traditional notions of fair play and substantial justice.., then a defendant's use of eBay may be properly taken into account for purposes of establishing personal jurisdiction."