By Eric D. Miller, Partner, Perkins Coie LLP*
A pending petition for a writ of certiorari presents the United States Supreme Court with an opportunity to clarify whether a state may exercise personal jurisdiction over a nonresident defendant based solely on the defendant’s sale of components to third parties who incorporate those parts into finished products that are then sold in the forum State.
That question has divided the lower courts since Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987). In that case, Asahi, a Japanese manufacturer, had delivered tire-valve assemblies to a Taiwanese tire manufacturer that sold tires throughout the world, including in California. After a California resident was injured in an accident caused by a defective valve, he sued Asahi in California state court. The Supreme Court held that Asahi was not subject to personal jurisdiction in California, but no rationale commanded a majority of the Court. Justice O’Connor, writing for four justices, concluded that the connection between the defendant and the forum state necessary to establish specific personal jurisdiction “must come about by an action of the defendant purposefully directed toward the forum state.” In her view, placing a product “into the stream of commerce, without more,” is not such an act. Justice Brennan, on the other hand, wrote for four justices who believed that placement of goods into the stream of commerce, with the knowledge that they will ultimately be sold in a state, can be sufficient for jurisdiction in that state. Continue reading
Prior to the US Supreme Court’s 2014 decision in Daimler AG v. Bauman, general jurisdiction existed over a business defendant in any state where it was incorporated, had its principal place of business, or its contacts were so “continuous and systematic” as to render them essentially at home in the forum state. Under this expansive interpretation, corporations could be subject to lawsuits in unpredictable and often remote jurisdictions.
Daimler significantly narrowed the reach of general jurisdiction by holding that because Daimler and MBUSA were neither incorporated nor had their principal place of business in California, Daimler’s contacts with California were not enough to render it at home in the state. Continue reading
Marissa S. Ronk, an Associate with Wheeler Trigg O’Donnell LLP*
The Colorado Supreme Court recently granted Ford Motor Co. “extraordinary relief” in overturning a trial court’s finding of general jurisdiction over Ford in Colorado. Magill v. Ford.
In 2013, Plaintiff John Scott Magill was driving a Ford vehicle when he was hit by another Colorado resident. In 2015, Mr. Magill and his wife filed a lawsuit in Colorado against the Colorado driver and Ford to recover for their injuries. Ford moved to dismiss the case for lack of personal jurisdiction. Ford is incorporated in Delaware with its principal place of business in Dearborn, Michigan. The company argued that it is not subject to general jurisdiction in Colorado because it is not “at home” there, as required under the U.S. Supreme Court’s 2014 ruling in Daimler AG v. Bauman. Ford also argued it was not subject to specific jurisdiction in Colorado because the car accident did not arise out of its contacts with Colorado. Continue reading
In its seminal 2014 decision, Daimler AG v. Bauman, the U.S. Supreme Court imposed strict limits on the authority of courts to exercise personal jurisdiction over out-of-state corporate defendants. It condemned as “grasping” and “exorbitant” a California court’s efforts to exercise jurisdiction over claims lacking any connection with the State based solely on a corporate defendant’s regular conduct of business there. But apparently the California Supreme Court did not get the message. This week it ruled 4-3 that out-of-state plaintiffs whose tort claims arose outside the State could sue an out-of-state corporation in California courts simply because other plaintiffs who live in California have filed similar claims against the corporation. Bristol-Myers Squibb Co. v. Superior Court (BMS). That decision conflicts both with Daimler and basic notions of due process. The U.S. Supreme Court ought to reverse it in short order. Continue reading
On June 20, 2016, the US Court of Appeals for the Federal Circuit declined to rehear en banc a panel’s decision in Acorda Therapeutics v. Mylan Pharmaceuticals from this past March. The panel in Acorda ruled that when a generic drug manufacturer files with the FDA an Abbreviated New Drug Application (ANDA) for approval to market a generic drug, that manufacturer is subject to personal jurisdiction in any jurisdiction in which it plans to direct sales of that drug if and once FDA approves its ANDA. Since then, three district courts in four separate decisions have applied Acorda to deny a generic manufacturer’s Federal Rule of Civil Procedure 12(b)(2) motion based, at least in large part, on the ANDA filing. Continue reading
Fairfield Inn, Tyler, Texas
This afternoon, the U.S. Court of Appeals for the Federal Circuit will hear oral arguments in In re: TC Heartland, LLC. The case implicates the fundamental issue of where plaintiffs alleging patent infringement can file suit. Washington Legal Foundation was one of only two institutions to file an amicus brief in support of TC Heartland’s mandamus petition. WLF agrees that the patent venue statute does not permit TC Heartland to be sued in the District of Delaware. But our brief asks the Federal Circuit to also overrule its 1994 Beverly Hills Fan Co. v. Royal Sovereign Corp. decision. That decision, which allows nationwide corporations to be sued in any federal district where it does business, has precipitated the current epidemic of forum shopping by patent trolls. The availability of forum shopping inspires frivolous litigation that diverts businesses’ resources from innovation. Continue reading
The battle over general jurisdiction in a post-Daimler AG v. Bauman world continued as 2015 drew to a close, with lingering inconsistency. Two recent trial court decisions, Cahen v. Toyota Motor Corp. and Jeffs v. Anco Insulations, demonstrate how judges in different jurisdictions with different interests apply general jurisdiction differently, and in these cases, to the very same defendant. While a federal district court judge held that California could not exercise general jurisdiction over Ford Motor Co.—a company incorporated in Delaware and headquartered in Michigan—Circuit Judge Stephen Stobbs of Madison County, a perennial magnet jurisdiction for plaintiffs, found that his Illinois court could. Continue reading