Wednesday, July 27, 2011

Buehler on Nicastro

Professor Dustin Buehler (Arkansas-Fayetteville) has posted on SSRN a draft of his article, Economic Evolution, Jurisdictional Revolution. Here’s the abstract:

In June 2011, the Supreme Court issued its first personal jurisdiction decision in two decades. In J.McIntyre Machinery, Ltd. v. Nicastro, the Court considered whether the placement of a product in the “stream of commerce” subjects a nonresident manufacturer to personal jurisdiction in states where the product is distributed. The Court issued a fractured opinion with no majority rule, with some justices expressing reluctance to “refashion basic jurisdictional rules” without additional information on “modern-day consequences.” This Article explores the consequences of these rules by providing the first law-and-economics analysis of personal jurisdiction. A descriptive analysis of the effect that jurisdictional rules have on litigation incentives demonstrates that rules restricting personal jurisdiction decrease the number of lawsuits, and increase the likelihood that injurers will escape liability and be inadequately deterred. Additionally, a normative analysis of the stream of commerce doctrine shows that a broad version of that doctrine best aligns the private and social incentives of litigation. Based on these conclusions, the Article argues that it is time for a revolution in personal jurisdiction: the Supreme Court should allow expansive jurisdiction over nonresident manufacturers in product liability cases.


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