No Personal Jurisdiction Under the Foreseeability Test
(December 2011) By Gregory L. Arbogast, Associate
For more information, contact Paul
Farquharson.
Windsor v. Spinner Indus. Co., Civil No.: JKB-10-114 (D. MD. 12/15/11) |
View pdf
In Windsor v. Spinner Industries, Co., Judge Bredar gives a
comprehensive analysis of personal jurisdiction law where an out-of-state
defendant only sells products in the forum state through third-party
distributors. Ultimately, Judge Bredar held that Plaintiffs did not make a
showing that Defendant had sufficient contact with the forum state to establish
personal jurisdiction. Judge Bredar, however, ordered a hearing on the motion,
given the state of flux of the personal jurisdiction law to determine whether
there was any other conduct in the forum state which could establish personal
jurisdiction.
Windsor is a products liability case involving the front
wheel of a bicycle, which came dislodged and caused Mr. Windsor and his toddler
son to allegedly sustain personal injuries. Plaintiffs alleged that a defective
design caused the injuries. Defendant, Joy Industrial Co. (“Joy”) is the
manufacturer of the bicycle components. Joy is a Taiwanese corporation, which
sells its products to third-party distributors, manufacturers, and trading
companies, which then market them in every state in the United States. Joy does
not itself have contact with Maryland, other than through its third-party
distributors.
Joy filed a Motion to Dismiss Plaintiffs’ Complaint
based on lack of personal jurisdiction. In its motion, Joy argued that it
did not have sufficient contacts in Maryland to establish personal
jurisdiction under the Due Process Clause. Specifically, Joy argued that
Maryland cannot exercise specific jurisdiction over a non-resident
manufacturer whose only connection to Maryland is that the products are sold
by third-party distributors.
Judge Bredar engaged in an in-depth analysis of
personal jurisdiction law in order to determine whether personal
jurisdiction existed. Specifically, Judge Bredar analyzed the recent Supreme
Court opinion of J. McIntyre Machinery, Ltd. v. Nicastro, 131 S.Ct. 2780,
2793 (2001). In McIntyre, Justice Kennedy, Chief Justice Roberts, Justice
Scalia, and Justice Thomas, in their plurality opinion, argued for a
restrictive view of jurisdiction. Justice Kennedy’s opinion flatly rejected
the foreseeability standard, which states that personal jurisdiction exists
where a company places its product in the stream of commerce, such that it
will foreseeably reach the forum state. Justices Ginsburg, Sotomayor and
Kagan issued a dissenting opinion embracing the foreseeability standard of
personal jurisdiction. The deciding votes were cast by Justices Breyer and
Alito, who concurred in the judgment, but found that the case need not be
decided on the foreseeability standard, because jurisdiction was not
foreseeable under the facts of the case.
Applying McIntyre, Judge Bredar found that, absent some
additional conduct in Maryland, Maryland does not have personal jurisdiction
over Joy simply by distribution of goods through third-party distributors.
Judge Bredar found that the Supreme Court militated against use of the
foreseeability standard. Therefore, he found that there was no personal
jurisdiction over Joy.