Monday, June 27, 2011

Supreme Court On Personal Jurisdiction, Part II

In a second opinion on personal jurisdiction released today, the Supreme Court reversed an opinion from the Supreme Court of New Jersey that held jurisdiction was permissible based upon the "stream of commerce theory." The Court's judgment was joined by 6 Justices, however, only 4 (including the author) joined the majority opinion. The Court stated:
Here, the Supreme Court of New Jersey, relying in part on Asahi, held that New Jersey’s courts can exercise jurisdiction over a foreign manufacturer of a product so long as the manufacturer “knows or reasonably should know thatits products are distributed through a nationwide distribution system that might lead to those products being sold inany of the fifty states.” Nicastro v. McIntyre Machinery America, Ltd., 201 N. J. 48, 76, 77, 987 A. 2d 575, 591, 592 (2010)....
That decision cannot be sustained. Although the New Jersey Supreme Court issued an extensive opinion with care-ful attention to this Court’s cases and to its own precedent, the “stream of commerce” metaphor carried the decision far afield. Due process protects the defendant’s right not to be coerced except by lawful judicial power. As a general rule, the exercise of judicial power is not lawfulunless the defendant “purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U. S. 235, 253 (1958). There maybe exceptions, say, for instance, in cases involving an intentional tort. But the general rule is applicable in this products-liability case, and the so-called “stream-of-commerce” doctrine cannot displace it.
Based upon the analysis, which is only partially included above, the Court held:
Due process protects petitioner’s right to be subject only to lawful authority. At no time did petitioner engage in any activities in New Jersey that reveal an intent to invoke or benefit from the protection of its laws. New Jersey is without power to adjudge the rights and liabilities of J. McIntyre, and its exercise of jurisdiction would violate due process. The contrary judgment of the New Jersey Supreme Court is REVERSED.
The opinion in J. McIntyre Machinery, Ltd. v. Nicastro can be viewed HERE. Justice Kennedy wrote the opinion and was joined by  Chief Justice Roberts, Justice Scalia and Justice Thomas. Justice Breyer wrote an opinion concurring in the judgment which Justice Alito joined. Justice Ginsburg, who wrote the other personal jurisdiction opinion released today [see HERE], wrote a dissenting opinion and was joined by Justice Sotomayor and Justice Kagan.

Justice Breyer's opinion concurring in the judgment stated that "Because the incident at issue in this case does not implicate modern concerns, and because the factual record leaves many open questions, this is an unsuitable vehicle for making broad pronouncements that refashion basic jurisdictional rules." Therefore, in his view, "on the record present here, resolving thiscase requires no more than adhering to our precedents."

In her dissent, Justice Ginsburg states:
Under this Court’s pathmarking precedent in International Shoe Co. v. Washington, 326 U. S. 310 (1945), and subsequent decisions, one would expect the answer to be unequivocally, “No.” But instead, six Justices of this Court, in divergent opinions, tell us that the manufacturer has avoided the jurisdiction of our state courts, except perhaps in States where its products are sold in sizeable quantities. Inconceivable as it may have seemed yesterday, the splintered majority today “turn[s] the clock back to the days before modern long-arm statutes when a manufacturer, to avoid being haled into court where a user is injured, need only Pilate-like wash its hands of a product by having independent distributors market it.” Weintraub, A Map Out of the Personal Jurisdiction Labyrinth,28 U. C. Davis L. Rev. 531, 555 (1995).


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