E-Alert Case Updates

No Personal Jurisdiction Under the Foreseeability Test

Windsor v. Spinner Indus. Co.
Civil No. JKB-10-114 (D. MD. 12/15/11)
by Gregory L. Arbogast, Associate
Semmes, Bowen & Semmes (www.semmes.com)

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.