A federal court in Mississippi has rejected the assertion of personal jurisdiction over a French medical device company. See Arnoult v. CL Med. Sarl, No. 14-00271 (S.D. Miss. 9/21/15).
In this product liability case. plaintiff (a Mississippi resident) alleged that the product, a mid-urethral sling for treatment of stress urinary incontinence, caused her to suffer injuries. The I-STOP was manufactured in France by defendant CLMS, a French corporation. CLMS exported the device to the United States, where it was distributed by defendant Uroplasty. Plaintiffs brought design and warning defect claims under the Mississippi Products Liability Act, as well as claims for negligence, breach of express and implied warranties, fraud, fraud by concealment, negligent misrepresentation, negligent infliction of emotional distress, and loss of consortium.
Various motions were filed, including a motion to dismiss by CLMS.
The court noted that when a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing the district court’s jurisdiction over the nonresident. A plaintiff must satisfy this burden by presenting a prima facie case for personal jurisdiction. E.g., Unified Brands, Inc. v. Teders, 868 F. Supp. 2d 572, 577 (S.D. Miss. 2012). The district court is not limited to consult only the assertions in the plaintiff’s complaint; rather, the district court may consider the contents of the record at the time of the motion, including affidavits.
The Due Process Clause, said the court, permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing minimum contacts with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice. Unified Brands, 868 F. Supp. 2d at 577. Plaintiffs argued that CLMS had enough contacts with Mississippi to confer specific jurisdiction. Specific jurisdiction exists when the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or sufficiently relate to those activities. Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010).
In this circuit, the court is to apply a three-step analysis to determine specific jurisdiction: (1) whether the defendant has minimum contacts with the forum state; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable. See Jackson v. Tanfoglio Guiseppe S.R.L., 615 F.3d 579, 585 (5th Cir. 2010). The court’s inquiry thus focuses on the relationship among the defendant, the forum, and the litigation. Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014). The relationship must arise out of contacts that the defendant himself creates with the forum state, and the contacts must be with the forum state itself, not the defendant’s contacts with persons who reside there. Further, a defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient basis for jurisdiction. Due process requires that a defendant be haled into court in a forum based on his own affiliation with the state, not based on the random, fortuitous, or attenuated contacts he makes by interacting with other persons affiliated with the state.
Plaintiffs here apparently relied on a stream-of-commerce theory of specific jurisdiction, the controversial and yet to be clarified branch of cases involving a product sold or manufactured by a foreign defendant, and plaintiffs argue that the minimum contacts requirement is met so long as the court finds that the defendant delivered the product into the stream of commerce with the expectation that it would be purchased by or used by consumers in the forum state. Not all courts accept this approach, and some part of the Supreme Court are skeptical. Even under this approach, the defendant’s contacts must be more than random, fortuitous, or attenuated, or of the unilateral activity of another party or third person.
Here, plaintiffs argued that it was foreseeable to CLMS that its products would end up in Mississippi because it entered into a distribution agreement with Uroplasty to market and sell those products in the United States. But plaintiffs failed to prove the terms of the actual distribution agreement between CLMS and Uroplasty – to show it provided the foreign manufacturer with adequate notice that its products were being marketed in the forum. Furthermore, there was no evidence here of a product specifically manufactured for an industry located in the state of Mississippi. Finally, plaintiffs alleged that only four of the devices were sold to patients in Mississippi.
For these reasons, the court found that plaintiffs’ allegations fell short of the mark. Plaintiffs' argument was more attenuated, relying on inference-upon-inference without sufficient evidence to connect CLMS to the state of Mississippi.
Since plaintiffs alleged that only four of the devices were sold to patients in Mississippi, this case was very close to – if not within – the category of cases governed by the plurality opinion in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011) (a single, isolated sale is not sufficient to confer personal jurisdiction, even if it was anticipated).
The court concluded that plaintiffs had not carried their burden.