U.S. Supreme Court Lays Down Hard Line on States’ Ability to Assert Jurisdiction Over Out-of-State Defendants
The U.S. Supreme Court has just made it harder for plaintiffs to convince state courts to assert personal jurisdiction over foreign manufactures on products cases.
In J. McIntyre Machinery, Ltd. v. Nicastro, decided June 27, 2011, the question was whether the New Jersey Supreme Court properly exercised jurisdiction over a British manufacturer of scrap metal machines. The record showed that (1) an independent company had agreed to sell McIntyre’s machines in the United States, (2) McIntyre officials had attended annual conventions of the scrap metal industry in the United States, but never New Jersey, (3) between 1 and 4 of McIntyre’s machines—including the machine that caused the injury—had ended up in New Jersey, (4) McIntyre had U.S. patents on its scrap recycling technology and (5) the injury occurred in New Jersey.
In a plurality opinion and a concurrence, six justices ruled that these facts were not sufficient to support an exercise of personal jurisdiction. Squarely rejecting “fundamental fairness” and “foreseeability” analyses, and reaffirming that a manufacturer’s amenability to suit does not “travel with the chattel,” the Court applied an analysis heavy on considerations of federalism. The Court noted that the federal government and the governments of the several states are separate. Just because a manufacturer is subject to the jurisdiction of the federal government in one kind of matter does not mean that it is subject to the jurisdiction of each of the fifty sovereign states in other matters. And the mere fact that a manufacturer is subject to jurisdiction in one state does not mean it is subject to jurisdiction in others. Recognizing that “jurisdiction is power to declare the law,” the Court held that the only way in which a company can be held to have subjected itself to a state’s laws is by purposefully availing itself of the privilege of conducting activities there. The Court cited express consent, physical presence, citizenship and domicile as examples of the kinds of activities that can constitute “purposeful availment.”
In a striking aside, the Court noted that the same rules would apply to American companies or individuals who are haled into the court of another state.
The plurality opinion said it was “clarifying” confusion that had arisen because of different language used in Justice O’Connor’s plurality opinion in Asahi Metal Industry Co. v. Superior Ct. of Cal., Solano Cty., 480 U.S. 102 (1987) and Justice Brennan’s concurring opinion in the same case. Justices Breyer and Alito, concurring with the McIntyre plurality, asserted that the result was clearly compelled by clear precedents.
In summary, the mere fact that an American or foreign manufacturer or seller targets the U.S. market or can foresee that its products will end up in a state does not mean that manufacturer or seller is amenable to jurisdiction in that state. The plaintiff bears the burden of showing that the manufacturer or seller “purposely availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.”
Jamie L. Filipovic named Partner
We are proud to announce the election of Jamie L. Filipovic to Partner. Congratulations Jamie!
Defense Verdict in Augusta, Georgia
O’Hagan Spencer secured a defense verdict in a major case in U.S. District Court in Augusta. The case involved allegations that a popular passenger car had a handling defect. The plaintiff had been rendered a quadriplegic when the driver jerked the steering wheel to avoid another car, then ran into and over a guardrail. The plaintiff’s demand was in 8 figures prior to trial, and began to drop only while the jury was out. The 12 person jury returned a unanimous verdict for our client. Chris Spencer was lead counsel, supported by associate Ellen Bergren and able local counsel Chuck Reed, Suneel Gupta, Jill Kuhn and Nan Morgan from Atlanta’s McKenna, Long and Aldridge.
Plaintiff Forced to Drop Major Case Mid-Trial
After concluding her evidence and in the midst of hearing the presiding judge announce from the bench the reasons he was going to dismiss her case, a Virginia plaintiff was forced to nonsuit her claims even before the defense began its case.
The case involved a young lady rendered a quadriplegic in a single vehicle rollover. The plaintiff presented evidence from two well-heeled experts that the vehicle was defective and that the defect caused the plaintiff’s injuries. Unfortunately, their testimony did not pass Virginia’s prohibitions against conclusory testimony that is unsupported by facts and science. Although it was clear to everyone in the courtroom (including, we later learned, the jurors) but plaintiff’s counsel that the proof was not getting past the legal threshold, the plaintiff’s team failed to retool and make out a prima facie case.
The nonsuit, which Virginia plaintiffs have an unfettered right to exercise until the moment the axe comes down, gives the plaintiff a right to start all over and try again.
One of the more gratifying events of the trial came when, after the jurors were discharged, one of them sought to hire us to represent him.
The O’Hagan Spencer trial team consisted of Chris Spencer, Elizabeth Shoenfeld and Tracey Turner, with remote support from Susan White, Sandy Treakle and Ellen Begren.
Summary Judgment in Cook County & Removal to Federal Court
A team from our Chicago and Richmond offices, led by Denean Sturino, just won summary judgment for a car dealer in Cook County Circuit Court. This allowed us to remove to federal court claims against the designer and manufacturer of the product in question. This move was fiercely resisted by the plaintiffs’ lawyers, who were desperate to stay in Cook County and go to trial before a Cook County jury. We were happy to face either jury in either forum, but, as plaintiffs’ counsel knew, federal court is harder on weak claims. This was a good win for a good client.
Defense Verdict in Maryland Products Trial
O’Hagan Spencer secured a defense verdict for a major vehicle manufacturer in a products trial that ended today in Prince George’s County, Maryland. Five children were passengers in a minivan whose window was blown out. The cause was disputed. Each of the children allegedly sustained facial lacerations. One child lost an eye. The plaintiffs contended that the van’s glass should have been treated with a laminate and that it was too thin for a large opening. We argued that there was nothing odd or unusual about the glass and that it was appropriately designed and selected. The jury deliberated two hours before returning a unanimous defense verdict.
Our trial team included Chris Spencer (partner) and Carla Stone (paralegal) from our Richmond office, with support from long-time local counsel Tony Conti of Conti, Fenn and Lawrence in Baltimore.