Brief Fact Summary.
Plaintiff filed a products-liability suit in a state court in New Jersey, where the accident occurred. Defendant sought to dismiss the suit for want of personal jurisdiction. The State Supreme Court held that New Jersey’s courts could exercise jurisdiction over a foreign manufacturer so long as the manufacturer knew or reasonably should have known that its products are distributed through a nationwide distribution system that might lead to sales in any of the States.
Synopsis of Rule of Law.
For a defendant to be subject to a state’s personal jurisdiction, it must purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.
Due process protects the defendant's right not to be coerced except by lawful judicial power.View Full Point of Law
Plaintiff were seriously injured while using a metal-shearing machine manufactured by Defendant. Although the injury occurred in New Jersey, the machine was manufactured in England where Defendant is incorporated. The New Jersey Supreme Court found that, even though Defendant never marketed its goods in the state nor shipped them there, New Jersey courts had jurisdiction over the company because the manufacturer knew or should have reasonably known that its products were distributed through a nationwide distribution system that might lead their products being sold in any of the 50 states, including New Jersey. Defendant appealed and the U.S. Supreme Court granted certiorari to review.
May a consumer sue a foreign manufacturer in state court over a product that the foreign company marketed and sold in the United States?
No. The Supreme Court reversed the decision of the lower court in a plurality opinion.
Justice Ginsburg, Sotomayor, & Kagan
The dissent argued that Defendant should not be able to escape liability in an American court simply by having independent distributors marketed it. Defendant manufactured machines with the intent of selling them within the borders of the United States. It hired a distributor to accomplish this task, and should be held answerable in New Jersey court.
Justice Breyer & Alito
They argued that Plaintiff simply failed to meet his burden to demonstrate that jurisdiction over Defendant was proper. They noted that there had been many recent changes in commerce and communication, many of which were not anticipated by our precedents. However, this case did not present any of those issues. Therefore, it was unwise to announce a rule of broad applicability without full consideration of the modern-day consequences.
For a defendant to be subject to a state’s personal jurisdiction, it must purposefully avail itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Purposeful availment may include actual presence in the state when the suit is commenced, citizenship or domicile in the state, and incorporation or having a place of business within the state. Conversely, those who live or operate outside of a state have a right not to be subjected to judgment in its courts. The court’s precedents make clear that it is the defendant’s actions, not expectations, that allow a State’s courts to exercise jurisdiction over the defendant. Although a defendant may be subject to the federal courts due to a relationship with the federal government but not to a court of any particular state in some instances, that is an exception to the general rule. Here, Defendant could not be subjected to the jurisdiction of a New Jersey court because it did not engage in any conduct purposefully directed at New Jersey. Therefore, the judgment of the New Jersey Supreme Court was reversed.