The Mississippi Supreme Court has upheld a judgment against AF, LLC, doing business as ACF Wholesale, and its principal, Benjamin Chad Moody, for violations of the Michigan Consumer Protection Act. The ruling, issued on October 8, 2026, affects the company’s ability to operate and sets a precedent for how online businesses engage with consumers across state lines.
The court’s decision came after the Michigan Attorney General, Dana Nessel, obtained a default judgment against ACF Wholesale for $124,998.68, which included damages, civil fines, and attorney fees. The ruling emphasizes the responsibilities of online retailers when dealing with customers from different states.
ACF Wholesale, based in Mississippi, sold furniture online and had over a thousand transactions with Michigan residents. However, the company failed to deliver the purchased items and kept the payments, leading to numerous complaints. Following an investigation, the Michigan Attorney General filed suit against the company, which did not respond, resulting in the default judgment.
Background
AF, LLC is a Mississippi limited liability company operated by Benjamin Chad Moody, who is also its sole principal. The company sold furniture online using a drop-shipping model, where they accepted orders and payments through their website and coordinated deliveries from third-party manufacturers to customers. Despite having no physical presence in Michigan, ACF Wholesale conducted significant business with Michigan residents, accepting payments and arranging deliveries for over a thousand orders.
The dispute arose when the Michigan Attorney General filed a lawsuit against ACF Wholesale in January 2024, alleging violations of the Michigan Consumer Protection Act (MCPA) and statutory conversion of consumer funds. The Attorney General claimed that ACF Wholesale had taken payments for furniture that was never delivered. ACF Wholesale did not appear in court, leading to a default judgment against them.
The Michigan court found that ACF Wholesale had knowingly engaged in business with Michigan residents and had purposefully availed itself of the state’s market. The judgment was later enrolled in the Lowndes County Circuit Court in Mississippi, where ACF Wholesale objected, arguing that the Michigan court lacked personal jurisdiction over them.
The Ruling
The Mississippi Supreme Court affirmed the circuit court's decision to enroll the Michigan judgment, stating that the Michigan court had personal jurisdiction over ACF Wholesale. The court ruled, "Defendants operated a fully interactive commercial website through which Michigan residents selected furniture, paid Defendants directly, and supplied Michigan delivery addresses."
The court emphasized that ACF Wholesale had purposefully engaged with Michigan consumers and that the Michigan court's exercise of jurisdiction was reasonable. The ruling noted that the judgment carried a presumption of validity and that the burden was on ACF Wholesale to prove otherwise.
Justice Ishee delivered the opinion for the court, stating that the company’s conduct of accepting payments and failing to deliver goods constituted sufficient minimum contacts with Michigan to satisfy jurisdictional requirements. The court also rejected ACF Wholesale’s arguments regarding the validity of the forum-selection clause in their Terms of Use, stating that it did not negate their purposeful availment of Michigan's market.
Impact
This ruling has significant implications for online businesses operating across state lines. It establishes that companies engaging with consumers in other states can be held accountable under those states' laws, even if they do not have a physical presence there. The decision underscores the importance of compliance with consumer protection laws and the potential legal consequences for businesses that fail to deliver on their promises.
The court's ruling reinforces the principle that businesses cannot evade jurisdiction by claiming they only operate from their home state while actively engaging in commerce with residents of other states. This case may serve as a warning to other online retailers about the legal responsibilities they face when selling to consumers outside their home state.
What's Next
ACF Wholesale may seek to appeal the decision to the U.S. Supreme Court, but details on any such plans were not available in the court filing. The case highlights ongoing legal challenges faced by online retailers and could influence future cases involving interstate commerce and consumer protection.