Commercial Litigation and Arbitration

Personal Jurisdiction — Circuit Split on the Significance of Foreseeability that a Product Will Reach a State — Only Concurrence Binding when Supreme Court Issues Plurality Opinion

Graham v. Hamilton, , 2012 U.S. Dist. LEXIS 35322 (W.D. La. Mar. 15, 2012):

In Asahi Metal Industry Co. v. Superior Court of California, a fractured Court addressed minimum contacts. There, Justice O'Conn[o]r, writing for four justices, determined that foreseeability that a defendant's product would end up in a forum state, without more, was insufficient to find minimum contacts. Id. at 112-13 (plurality opinion). Justice Brennan, also writing for four Justices, determined that such foreseeability would be sufficient. Id. at 116-17 (Brennan, J., concurring). The Asahi decision has resulted in a split among the circuits. As the Fifth Circuit has noted, "Some circuits follow Justice O'Connor's analysis while other circuits follow Justice Brennan's analysis." Choice Healthcare, Inc. v. Kaiser Found. Health Plan, 615 F.3d 364, 373 (5th Cir. 2010 (citations omitted). The Fifth Circuit, however, has adopted Justice Brennan's analysis. Id. In the Fifth Circuit, a defendant has minimum contacts with the forum state when a defendant "knowingly benefits from the availability of a particular state's market for its products . . . ." Luv N' Care, 438 F.3d 465, 470 (5th Cir. 2006) (citing Oswalt v. Scripto, Inc., 616 F.2d 191, 199-200 (5th Cir. 1980)); see also Jackson v. Tanfoglio Giuseppe S.R.L., 615 F.3d 579, 584 (5th Cir. 2010) ("Under this 'relatively expansive' theory, only 'mere foreseeability' that a defendant might be haled into court because it purposely availed itself of the benefits of the forum state is required. A defendant need not have 'purposely direct[ed]' its activities to the forum." (citations omitted)).

In J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011), the Supreme Court again evaluated the requirements for minimum contacts. McIntyre considered a challenge to a decision of the New Jersey Supreme Court that found personal jurisdiction over a British manufacturer which sold its products in the United States through an intermediary. Id. at 2786. The plaintiffs could only demonstrate that one of the products reached the forum state, and, in the view of the Court, they did not adduce any additional evidence indicating the manufacturer should have reasonably anticipated being haled into court in New Jersey. Id. at 2792. The plurality opinion in McIntyre would have required that a defendant target a forum state before a court could find minimum contacts, which would overrule the Fifth Circuit's specific jurisdiction precedent. Id. at 2788 (plurality opinion). This opinion, however, did not command a majority of the justices and is not binding on this Court. See Marks v. United States, 430 U.S. 188, 193 (1977) ("When a fragmented Court decides a case . . ., 'the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds . . . .' (quoting Gregg v. Georgia, 428 U.S. 153, 169 n.15 (1976))). Justice Breyer's concurrence, which is binding, ruled that the New Jersey court did not have specific jurisdiction over the foreign manufacturer under existing precedent and declined to adopt a new rule. Id. at 2792-93; see also Ainsworth v. Cargotec USA, Inc., No. 2:10-CV-236, 2011 U.S. Dist. LEXIS 109255, at *19 (S.D. Miss. 2011) ("As Justice Breyer declined to choose between the Asahi plurality opinions, McIntyre is rather limited in its applicability. It does not provide the Court with grounds to depart from the Fifth Circuit precedents." (citations omitted)). ***

Further, although Justice Breyer's concurrence in McIntyre is binding on this Court, the instant case is factually distinguishable from McIntyre. In McIntyre, Justice Breyer emphasized that "[n]one of our precedents finds that a single isolated sale, even if accompanied by the kind of sales effort indicated here, is sufficient [to find minimum contacts]." McIntyre, 131 S. Ct. at 2792 (Breyer, J., concurring). There, the British defendant likely sold only a single machine that ended up in New Jersey. Id. at 2786. Here, Plaintiffs have offered evidence demonstrating that GM Canada places over 800,000 vehicles into the U.S. market each year, indicating that many of GM Canada's vehicles would likely be sold in Louisiana. See also Bean Dredging Corp. v. Dredge Tech. Corp., 744 F.2d 1081, 1085 (5th Cir. 1984) (ruling in favor of jurisdiction based in part on the foreign manufacturer's decision to place thousands of its component parts into the U.S. market without any "attempt to limit the states in which its [components] would be sold and used . . . ."); Oswalt v. Scripto, Inc., 616 F.2d 191, 199-200 (5th Cir. 1980) (exercising jurisdiction based in part on the foreign manufacturer delivering millions of its products to a distributor with the intention that the distributor would place the products into national retail outlets). Therefore, the Court finds that the McIntyre concurrence does not govern the facts of this case.

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