Thursday, February 4, 2010

Stream of Commerce Alive and Well in New Jersey

On Tuesday the New Jersey Supreme Court issued a decision exercising broad personal jurisdiction over a UK Manufacturer who distributed goods through an independent Ohio distributor sued by a resident of New Jersey.

The decision is Nicastro v. McIntyre Machinery, 2010 WL 343563 (NJ, Feb. 2, 2010).  The Court (a 5 justice majority) explained:

“Today, all the world is a market. In our contemporary international economy, trade knows few boundaries, and it is now commonplace that dangerous products will find their way, through purposeful marketing, to our nation's shores and into our State. The question before us is whether the jurisdictional law of this State will reflect this new reality. .... Due process permits this State to provide a judicial forum for its citizens who are injured by dangerous and defective products placed in the stream of commerce by a foreign manufacturer that has targeted a geographical market that includes New Jersey. See id. at 480-83, 508 A.2d 1127. The exercise of jurisdiction in this case comports with traditional notions of fair play and substantial justice.”

The Court articulated the rule that "A foreign manufacturer will be subject to this State's jurisdiction if it knows or reasonably should know that through its distribution scheme its products are being sold in New Jersey."

What were defendant's contacts with New Jersey?  It targeted the U.S. market.  The Court explains:

It did so by engaging McIntyre America, an Ohio-based company, as its exclusive United States distributor for an approximately seven-year period ending in 2001. J. McIntyre knew or reasonably should have known that the distribution system extended to the entire United States, because its company officials, along with McIntyre America officials, attended scrap metal trade shows and conventions in various American cities where its products were advertised. Indeed, J. McIntyre's president was present at the Las Vegas trade convention where his exclusive distributor introduced plaintiff's employer to the allegedly defective McIntyre Model 640 Shear that severed four of plaintiff's fingers.”

There were two forceful dissents in the case.  Here is a taste: 

“Repeated quotations and soaring language about the realities of the global marketplace might compel the casual reader to follow what appears to be the majority's relentless logic. But those rhetorical techniques cannot mask the fact that the majority today embarks on a path that stretches our notions about due process, and about what is fundamentally fair, beyond the breaking point.”

(h/t Mike Martin (Fordham)) 


(ETA: You can find the decision on the Rutgers-Camden Law Library website) (h/t John Beckerman (Rutgers)).

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