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Plaintiffs Are Given Another Bite of the Apple on Personal Jurisdiction Issue

Windsor v. Spinner Industry Co., Ltd.
No. JKB-10-114 (U.S. District Court for D. Md., October 19, 2011)
by Colleen K. O’Brien, Associate
Semmes, Bowen & Semmes (www.semmes.com)

The Windsors (“Plaintiffs”) brought a products liability suit against Spinner Industry Co. Ltd., Raleigh America, Inc., Dick’s Sporting Goods, Inc., J & B Importers, Inc., and Joy Industrial Co., Ltd. (“Defendants”) for injuries in connection with a bicycle accident. Defendant Joy Industrial Co. moved to dismiss all claims against it for lack of personal jurisdiction.

Joy is a Taiwanese corporation that designs and manufactures bicycle components, including a mechanism called a “quick release skewer,” which is used to hold wheels in place. Plaintiffs alleged that their bicycle contained one of Joy’s quick release skewers and that a defect in the skewer contributed to the cause of their accident. The parties agreed that Joy sold its products to distributors, manufacturers, and trading companies who then marketed them in every state in the U.S., but that Joy had no direct contacts with the State of Maryland. Plaintiffs contended that the nationwide marketing of Joy’s products by intermediaries created sufficient minimum contacts between Joy and Maryland to subject Joy to specific jurisdiction here. Joy contended that it does not.

Due process constrains a state from exercising jurisdiction over non-resident defendants, and requires “minimum contacts” with the forum state. Specific jurisdiction arises where a non-resident lacks continuous and systematic contacts with the forum, but has nonetheless purposefully availed itself of the privilege of conducting activities within the forum state and thereby invoked the benefits and protections of its laws. Under these circumstances, courts of the forum state may exercise jurisdiction over the defendant with respect to claims that arise out of the defendant’s activities in the forum. The issue presented in this motion was the extent to which a state may exercise specific jurisdiction over a nonresident manufacturer whose only connection to the forum is that its products are sold there by third-party distributors.

The Court noted that the factual record failed to sustain a prima facie case of personal jurisdiction over Joy, as Plaintiffs devoted nearly their entire brief to describing the conduct of third-party distributors and manufacturers, who had “no connection whatever” to the case, apparently believing that those parties’ contacts with Maryland could be attributed, vicariously, to Joy. However, the Court gave the Plaintiffs another bite of the apple, issuing an order holding in abeyance Defendant’s Motion to Dismiss and scheduled an evidentiary hearing on the issue of Defendant’s contacts with the forum. The Court steered the Plaintiffs toward producing evidence of the chain of distribution that brought the allegedly defective skewer to Raleigh and then to Dick’s Sporting Goods and “additional conduct” that would evince an intent to serve the Maryland bicycle market in particular, to sustain its claim of personal jurisdiction as to Joy.