According to the Fifth Circuit Court of Appeals, its “stream-of-commerce” approach to personal jurisdiction remains valid following J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011), a ruling that failed to generate a single rationale for the U.S. Supreme Court’s conclusion that a foreign manufacturer could not be sued in a New Jersey state court for injury allegedly caused by a defective product. Ainsworth v. Moffett Eng’g, No. 12-60155 (5th Cir., decided May 9, 2013). Applying that approach, the Fifth Circuit affirmed a lower court determination that it had jurisdiction over the defendant, a forklift manufacturer with its principal place of business in Ireland, in a product-liability and wrongful-death action brought by the widow of a man killed while working at a Mississippi farm after he was run over by the defendant’s allegedly defective forklift.
The Fifth Circuit acknowledged that its stream-of-commerce approach—under which the minimum contacts requirement of personal jurisdiction is met if 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”—conflicts with the J. McIntyre plurality opinion, which would permit the exercise of jurisdiction “only where the defendant can be said to have targeted the forum.” But where “no single rationale explaining the result enjoys the assent of five Justices, ‘the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.’” According to the Fifth Circuit, the narrowest grounds were provided by Justice Stephen Breyer’s concurring opinion, resolving the issue by adhering to existing precedent. A single sale in New Jersey was not, in Justice Breyer’s view, an adequate basis for personal jurisdiction.
In contrast, the Fifth Circuit observed that the Irish manufacturer, through an exclusive agreement with a U.S.-based distributor, sold 203 forklifts to customers in Mississippi from 2000 to 2010. The court further noted that the distributor sells or markets the manufacturer’s products in all 50 states, “and Moffett makes no attempt to limit the territory in which [the distributor] sells its products.” During that period, Moffett sold more than 13,000 forklifts to its distributor. The Mississippi sales accounted for some 1.55 percent of the defendant’s U.S. sales, and, the court said, “[T]he record indicates that Moffett designed and manufactures a forklift for poultry-related uses. Thus, even though Moffett did not have specific knowledge of sales by [its distributor] in Mississippi, it reasonably could have expected that such sales would be made, given the fact that Mississippi is the fourth largest poultryproducing state in the United States.”