The U.S. Supreme Court has added to its 2010-2011 docket two products liability cases that raise the issue of state-court jurisdiction over foreign manufacturers selling allegedly defective products in the United States. J. McIntyre Machinery, Ltd. v. Nicastro, No. 09-1343, Goodyear Luxembourg Tires, S.A. v. Brown, No. 10-76 (U.S., certiorari petitions granted September 24, 2010). In both cases, the lower courts determined that these manufacturers could be sued in their states’ courts.
In New Jersey, Robert Nicastro sued the U.K.-based company that made the metal-cutting machine that allegedly amputated his fingers. The company, which sold the machine through its exclusive U.S. distributor, asks the Court to consider whether “a ‘new reality’ of ‘a contemporary international economy’ permit[s] a state to exercise, consonant with due process under the United States Constitution, in personam jurisdiction over a foreign manufacturer pursuant to the stream-of-commerce theory solely because the manufacturer targets the United States market for the sale of its product and the product is purchased by a forum state consumer.”
In North Carolina, the families of two 13-year-old boys who died in a car crash in France filed suit against a tire manufacturer and its foreign affiliates, alleging that a defective tire made in Turkey and sold in the state caused the accident. The defendant presents the following question to the Court: “Whether a foreign corporation is subject to general personal jurisdiction, on causes of action not arising out of or related to any contacts between it and the forum state, merely because other entities distribute in the forum state products placed in the stream of commerce by the defendant.”
Manufacturing interests reportedly contend that if state courts are allowed to exercise jurisdiction over foreign companies, they may be reluctant to do business in the United States and U.S. companies may be at risk of similar litigation in other countries. Plaintiffs apparently counter that U.S. consumers will have no recourse if they cannot sue foreign companies in U.S. courts. Legislation (H.R. 4678, S. 1606) that would require foreign manufacturers to submit to the jurisdiction of domestic judicial and regulatory authorities by mandating that they designate a registered agent to accept service of process is currently languishing in Congress. See Product Liability Law 360, September 28, 2010.