Note
A GAP IN PERSONAL JURISDICTION REASONING: AN
ANALYSIS OF
J.McINTYRE
MACHINERY, LTD. V. NCASTRO
I. INTRODUCTION
Following the Supreme Court's recent decision in J. McIntyre
Machinery, Ltd. v. Nicastro,' a foreign corporation can now deliberately
target the United States market and sell products anywhere in the
country but escape personal jurisdiction in a state where one of its
products injures a customer as long as the corporation did not
"purposefully avail" itself of the market in that particular state. 2 This
"avail all states-avail no individual states" anomaly or "gap in
reasoning" is at the basis of the Supreme Court's decision in Nicastro.
In 2011, the Supreme Court sought to clarify personal jurisdiction
analysis by granting certiorari for two products liability cases, 3
Goodyear Dunlop Tires Operations, S.A. v. Brown4 and J. McIntyre
Machinery, Ltd. v. Nicastro. Both were argued on January 11, 2011, and
decided on June 27, 2011.5 In Goodyear, the Court reviewed the
modem doctrine of personal jurisdiction, explaining in particular the
distinction between specific and general jurisdiction.
Identifying
Goodyear as a general jurisdiction case, the Court found that jurisdiction
was not proper under the circumstances.
Unlike Goodyear, Nicastro is a specific jurisdiction case. In
Nicastro, the plurality held that jurisdiction could not properly be
1.
131 S. Ct. 2780 (2011).
2.
See id. at 2790.
3.
Todd David Peterson, The Timing of Minimum Contacts After Goodyear and
McIntyre, 80 GEO. WASH. L. REv. 202, 206 (2011).
4.
131 S. Ct. 2846 (2011).
5. Id.; J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2780 (2011) (plurality
opinion).
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exercised by New Jersey courts. 6 This result is problematic, however,
because the plurality applied the "stream of commerce" and "purposeful
availment" doctrines without considering that the defendant, J.
McIntyre, purposefully availed itself of the U.S. markets as a whole.'
There was no question that J. McIntyre purposefully availed itself of the
U.S. market: the company regularly attended trade shows where the
company sought to obtain American customers for its products, not
caring where those customers might be located, and it sold its products
through an American distributor to buyers throughout the country. 8 As a
result of this purposeful business structure and marketing scheme, a J.
McIntyre machine wound up in New Jersey, where it injured the
plaintiff. Yet the Supreme Court held that New Jersey lacked personal
jurisdiction to hear a resident's products liability claim against J.
McIntyre because the defendant did not "purposefully avail" itself of the
New Jersey market in particular. Given that this scenario is hardly
unique-J. McIntyre's business structure and marketing scheme are
common, and will only become more so in an era of increasing
globalization-the Nicastro decision seriously undermines personal
jurisdiction doctrine. The practical result is that plaintiffs who have
been injured by a product manufactured by a corporation with a business
and marketing scheme similar to J. McIntyre's may have difficulties
finding a forum in which to adjudicate their claims. 9 Consequently, a
defendant like J. McIntyre may now be able to either escape liability in
U.S. courts altogether,o or may be sued in only a vastly limited number
of states.
Part II of this note discusses relevant personal jurisdiction
doctrines, including minimum contacts, purposeful availment, and
stream of commerce. Part III offers an overview of the Nicastro
decision. Part IV analyzes Nicastro and the negative ramifications
stemming from the plurality decision. Part IV also argues that the
6.
7.
Nicastro, 131 S. Ct. at 2791.
Id. at 2790.
8. Id. at 2786.
9. Assuming the defendant corporation employed a similar business and marketing
structure as J. McIntyre, a plaintiff similarly situated to Nicastro may not be able to find a
forum because the defendant corporation would lack sufficient contacts with the state in
which the cause of action arose. In addition, a cause of action may not arise from the
corporation's contacts with other states if the contacts are not sufficient to establish general
jurisdiction.
10. See Brief of Law Professors as Amici Curiae in Support of Respondents at 3, J.
McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011) (No. 09-1343) [hereinafter Brief of
Law Professors].
A GAP IN PERSONAL
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dissenting justices took the proper approach to the case and shows how a
different construction of the facts could have led the plurality to decide
the case differently. Part V discusses the potential impact of the
Part VI suggests a remedy to the
Nicastro plurality decision.
problematic implications of Nicastro.
II. THE FOUNDATIONS OF PERSONAL JURISDICTION ANALYSIS
A. Minimum Contacts, Purposeful Availment, and Stream of
Commerce Doctrines
Personal jurisdiction is easily established when the defendant to a
dispute is a resident of the forum state, but becomes increasingly
complex when a court seeks to establish personal jurisdiction over a
defendant who does not reside in the forum state." The purposeful
availment and stream of commerce doctrines may, however, help satisfy
the minimum contacts requirement for personal jurisdiction. 12
International Shoe Co. v. Washington'3 is the "cornerstone of
modern personal jurisdiction analysis."1 4 In International Shoe, the
Court held that a state may exercise personal jurisdiction over a
nonresident defendant only if there exists "minimum contacts" between
the defendant and the forum state. 15 The Court concluded, however, that
the contacts with the forum state must be extensive enough that the
maintenance of the suit does not offend "traditional notions of fair play
and substantial justice." 16 Moreover, the relationship between the
defendant and the forum state must be such that it is "reasonable ... to
require the corporation to defend the particular suit which is brought
there." 1 7 InternationalShoe's minimum contacts requirement continues to
be at the heart of personal jurisdiction analysis.
World-Wide Volkswagen Corp. v. Woodson 8 and Asahi Metal
See generally 4 CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND
11.
PROCEDURE § 1067.5 (3d ed. 2012).
Id.
12.
13.
326 U.S. 310, 316 (1945).
Christopher D. Cameron & Kevin R. Johnson, Death of A Salesman? Forum
14.
Shopping and Outcome Determination Under InternationalShoe, 28 U.C. DAVIS L. REv. 769,
771 (1995).
15.
Id.at310.
16.
Id. at 316.
Id. at 317.
17.
18.
444 U.S. 286 (1980).
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Industry Co. v. Superior Court' 9 are two modem cases that discuss the
interplay between minimum contacts, purposeful availment, and stream
of commerce. In World- Wide Volkswagen, the plaintiffs were injured
while driving a car that was purchased from a dealership in New York
through Oklahoma. 20 Following their injuries, the plaintiffs filed suit in
Oklahoma state court, naming the New York dealership and a New York
distributor as defendants. 2 1 The Court held that jurisdiction was not
proper over the defendants because the defendants had not sought to
serve the forum state, either directly or indirectly.22 The Court,
however, found that personal jurisdiction would be proper if a defendant
corporation placed its products into the stream of commerce, while
expecting that customers in the forum state would purchase those
products 23:
[I]f the sale of a product of a manufacturer or distributor ... arises from the
efforts of the manufacturer or distributor to serve directly or indirectly, the
market for its product in other States, it is not unreasonable to subject it to suit
in one of those States if its allegedly defective merchandise has there been the
24
source of injury to its owner or to others.
Nevertheless, in World- Wide Volkswagen, the Court found that the
vehicle had made its way into Oklahoma only by the "unilateral
activity" 25 of the plaintiffs, and not because of the defendants'
purposeful efforts.26 The requirement that the defendant must engage in
purposeful activity directed toward the forum state reflects the Supreme
Court's earlier decision in Hanson v. Denckla.2 7
World- Wide Volkswagen also solidified a two-step approach to
personal jurisdiction analysis, 28 the foundation of which was laid by the
Court in InternationalShoe. First, the court must find that the defendant
established minimum contacts with the forum state through purposeful
19.
20.
480 U.S. 102 (1987).
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 288 (1980).
21.
22.
Id.
Adam N. Steinman, The Lay of the Land: Examining the Three Opinions in J.
McIntyre Machinery, Ltd. v. Nicastro, 63 S.C. L. REv. 481, 485 (2012) (discussing WorldWide Volkswagen, 444 U.S. at 298).
23.
Id. at 484.
24.
World-Wide Volkswagen, 444 U.S. at 297.
25.
Id. at 298 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
26.
Steinman, supra note 22 (discussing World- Wide Volkswagen, 444 U.S. at 298).
27.
28.
357 U.S.235 (1958).
See Steinman, supra note 22 at 485.
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conduct.2 9 Once the court finds that minimum contacts exist, the court
may then consider whether the contacts "comport with 'fair play and
substantial justice." 3 0 Factors that the court may consider for the
second inquiry include the following:
the burden on the defendant,. .. the forum State's interest in adjudicating the
dispute, . . . the plaintiff's interest in obtaining convenient and effective
relief, . . . the interstate judicial system's interest in obtaining the most efficient
resolution of controversies[,] and the shared interest of the several States in
3
furthering fundamental substantive social policies. 1
In Asahi, the Supreme Court considered whether the act of placing
a product in the stream of commerce was sufficient to trigger personal
Jurisdiction over the manufacturer in a state where an injury relating to
that product occurred.32 Although in Asahi a majority of the Court
agreed that the exercise of personal jurisdiction would be improper
under the circumstances, the Court could not agree as to how much
contact with the forum state the defendant must have before a court
could exercise personal jurisdiction.33 Unlike the other justices, Justice
Stevens would not have reached the purposeful availment doctrine on
these facts, but instead preferred to base the analysis on "the volume, the
value and the hazardous character of the components'
at issue." 34
Justices Brennan, White, Marshall and Blackmun, on the other hand,
applied the purposeful availment doctrine to these facts and argued that
the purposeful availment requirement is met when a defendant places a
product in the stream of commerce, knowing that the product will be
used in the forum state. In contrast, Justice O'Connor, joined by Chief
Justice Rehnquist and Justices Powell and Scalia, articulated what has
become known as "the stream of commerce plus" theory.36 According
to Justice O'Connor, the defendant's act of placing a product into the
stream of commerce, without more, was not enough to trigger personal
29. See World-Wide Volkswagen, 444 U.S. at 291; Burger King Corp. v. Rudzewicz,
471 U.S. 462, 474 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
30. Burger King, 471 U.S. at 476 (quoting Int'l Shoe, 326 U.S. at 320).
World-Wide Volkswagen, 444 U.S. at 292 (internal citations omitted).
31.
32.
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987). The facts of Asahi
are discussed infra notes 145-156 and accompanying text.
33. Id. at 112 (plurality opinion); id. atl 17 (Brennan, J., concurring).
34. Asahi, 480 U.S. at 121 (Stevens, J., concurring). See also id. at 112 (plurality
opinion); id. at 117 (Brennan, J., concurring).
35. Id. at 116-117.
36. Id. at 112 (plurality opinion); Steinman, supra note 22 at 487-88.
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jurisdiction. Justice O'Connor concluded that intent to serve the forum
state, not simply awareness that the product would end up in the forum
Therefore, Justice
state, was required to satisfy due process. 3 8
O'Connor's "stream of commerce plus" theory incorporates the Supreme
Court's requirement of personal availment in Hanson 39 and World- Wide
Volkswagen. 40 The split decision in Asahi ultimately produced
uncertainty regarding the stream of commerce doctrine.
B. Stream of Commerce Analysis in GeneralJurisdiction Cases
Years after World- Wide Volkswagen and Asahi were decided, the
Supreme Court was again confronted with two personal jurisdiction
cases, Nicastro and Goodyear, both of which involve the stream of
commerce doctrine. Goodyear, unlike Nicastro, is a general jurisdiction
case. 4 ' Goodyear reaffirms the distinction between specific and general
jurisdiction drawn by precedents.4 2 Additionally, Goodyear clarifies the
applicability of the stream of commerce doctrine in specific and general
jurisdiction cases. 43
The Supreme Court "explicitly recognized"44 the distinction
between specific and general jurisdiction in Helicopteros Nacionales de
Colombia, S.A. v. Hall.4 5 A court may assert specific jurisdiction over a
defendant when a plaintiffs claim arises from the defendant's contacts,
either isolated or sporadic, with the forum state.4 6 When the plaintiffs
cause of action has not directly resulted from the defendant's contacts
with the forum state, a court may assert general jurisdiction over a
defendant in a state where the defendant's continuous corporate
operations are sufficiently extensive.47 The premise behind general
jurisdiction is that because the defendant's contacts are so extensive and
37.
Matthew R. Huppert, Commercial Purpose As Constitutional Purpose:
Reevaluating Asahi Through the Lens ofInternationalPatent Litigation, 11I COLUM. L. REv.
624, 639 (2011) (discussing Asahi, 480 U.S. at 112).
38. Asahi, 480 U.S. at 112; see also Huppert, supra note 37, at 639.
39. Hanson v. Denckla, 357 U.S. 235, 253 (1958).
40. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
41.
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2850, 2851 (2011);
J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011).
42.
43.
44.
45.
46.
47.
Goodyear,131 S. Ct. at 2853-54.
Id. at 2855.
WRIGHT ET AL., supra note 11, at § 1067.5.
466 U.S. 408 (1984).
Id.
Id.
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continuous in the forum state, it is neither inconvenient nor unfair to
require the defendant to answer to any lawsuit in that state.48 Typically,
courts can assert general jurisdiction over a corporate defendant in either
the state where the defendant is incorporated or any state in which the
defendant has a principal place of business. 49
In Goodyear, because the lawsuit did not arise from any of the
petitioners' contacts with the forum state, the case involved general, not
specific, jurisdiction.5 0 The Goodyear case arose from an incident that
occurred on April 18, 2004, when a bus bound for Charles de Gaulle
Airport overturned on a road outside Paris, France. 5 Julian Brown and
Matthew Helms, two thirteen-year-old passengers who were beginning
their return trip home to North Carolina, were among those killed in the
accident.52 Believing that the accident was a result of a faulty bus tire,
the boys' parents filed a wrongful death action in the Superior Court of
Onslow County, North Carolina.5 3 The boys' parents alleged negligence
in the "design, construction, testing, and inspection" of the tire. 54 The
named defendants (petitioners here) included Goodyear Luxembourg
Tires, SA (Goodyear Luxembourg), Goodyear Lastikleri TAS
(Goodyear Turkey), Goodyear Dunlop Tires France, SA (Goodyear
France), which are all indirect subsidiaries of Goodyear USA, an Ohio
corporation. 5 Petitioners moved to dismiss the claims against them,
arguing that North Carolina courts could not assert personal jurisdiction
over them. Unlike Goodyear USA, the petitioners were not registered
to do business in North Carolina.57 In addition, the petitioners did not
have a place of business, employees, or bank accounts in the state and
did not design, manufacture, or solicit business from North Carolina. 8
Moreover, they did not sell or ship tires to North Carolina customers,
although "a small percentage of petitioners' tires . .. were distributed
within North Carolina by other Goodyear USA affiliates."' 9 While the
tires that entered North Carolina were generally custom-ordered, the tire
48.
49.
50.
Id.
4 WRIGHT ET AL., supra note 11, at § 1067.5.
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853 (2011).
51.
Id. at2851.
52.
53.
Id.
Id.
54.
55.
56.
Goodyear, 131 S. Ct. at2851.
Id. at 2851-52.
Id. at 2852.
57.
Id.
58.
59.
Goodyear, 131 S. Ct. at 2852.
Id.
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at issue was never distributed in North Carolina.o
Therefore, drawing on the reasoning of the two applicable general
jurisdiction precedent cases, Helicopteros and Perkins v. Benguet
ConsolidatedMining Co., 6 1 the Court reversed the appellate court ruling
and determined that jurisdiction over petitioners in North Carolina courts
was not proper.6 2 The Court concluded that the petitioners' attenuated
connections to the state of North Carolina fell short of the "continuous
and systematic general business contacts" standard articulated by
Helicopteros, which was necessary to allow for the exercise of general
63
jurisdiction by the North Carolina state courts.
In addition, the Court challenged the North Carolina appellate
court's analysis which led to the conclusion that jurisdiction over the
petitioners was proper.64 The North Carolina appellate court used a
stream of commerce analysis as justification for its decision.6 5 For
support, the court relied on products-liability cases involving specific
jurisdiction issues where a nonresident defendant acted outside the
forum to place a product into the stream of commerce, which then
carried the product inside the forum state. 66 The Supreme Court rejected
this reasoning:
The North Carolina court's stream-of-commerce analysis elided the essential
difference between case-specific and general jurisdiction. Flow of a
manufacturer's products into the forum, we have explained, may bolster an
affiliation germane to specific jurisdiction. . . . [b]ut ties serving to bolster the
exercise of specific jurisdiction do not warrant a determination that, based on
67
those ties, the forum has general jurisdiction over a defendant.
Therefore, while the Court recognized that the stream-of-commerce
analysis has a place in personal jurisdiction doctrine, the Court clarified
that the analysis is applicable to support a claim for specific, not general
jurisdiction. 8 Moreover, the Supreme Court stated that the defendant's
act of placing a product in the stream of commerce may serve to increase
60.
61.
62.
Id.
342 U.S. 437 (1952).
Goodyear, 131 S. Ct. at 2857.
63.
Id.
64.
65.
66.
67.
Id. at 2855-57.
Id. at 2854-55.
Goodyear, 131 S. Ct. at 2854-55.
Id. at 2855.
68.
Id.
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REASONING
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contacts with the forum state in a specific jurisdiction case. 6 9 Thus,
while Goodyear successfully clarified the role of stream of commerce in
a general jurisdiction case, the Court's decision in Nicastro created
future problems and confusion for stream-of-commerce analysis in
specific jurisdiction cases.
111. AN ANALYSIS OF J. MCINTYRE MACHINERY, LTD. V.NICASTRO
A. FactualHistory
On October 11, 2001, during the course of his employment with
Curcio Scrap Metal, Inc., Robert Nicastro severed four of his fingers
while using a three-ton metal-shear machine manufactured by J.
McIntyre Maclhinery ("J. McIntyre").7 0 Curcio Scrap Metal, Inc. was
located in Saddle Brook, New Jersey.' J. McIntyre manufactured the
machine in Nottingham, England, where J. McIntyre operates and is
incorporated.7 2
J. McIntyre then sent the machine to McIntyre
Machinery America, Inc. ("McIntyre America"), 73 an Ohio-based
company that had been retained to act as J. McIntyre's exclusive
distributor.74 At the time of the lawsuit, J. McIntyre had never
established an office in New Jersey, had never paid taxes or owned
property there, and had never directly advertised or sent employees to
the state.75
While J. McIntyre did not sell any of its machines directly to U.S.
buyers, over the years McIntyre America distributed J. McIntyre
products in the U.S. and promoted products at conventions and
demonstration sites, and in trade journals. 76 Through this distribution
system, J. McIntyre sought to reach "anyone interested in the machine[s]
from anywhere in the United States."77 While McIntyre America was a
separate and distinct entity and did not share any common ownership
69.
See id. at 2855-57.
70.
Petition for a Writ of Certiorari at 3, J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct.
2780 (2011) (No. 09-1343), 2010 WL 1789706, at *3.
71.
Id.
72.
J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011).
73.
Petition for a Writ of Certiorari at 3-4, J. McIntyre Mach., Ltd. v. Nicastro, 131 S.
Ct. 2780 (2011) (No. 09-1343), 2010 WL 1789706, at *3-4.
74.
Nicastro, 131 S. Ct. at 2796 (Ginsburg, J., dissenting).
75.
Id. at 2790 (plurality opinion).
76.
Id. at 2797 (Ginsburg, J., dissenting).
77.
Id. at 2796 (quoting Joint Appendix at 161a, J. McIntyre Mach., Ltd., v. Nicastro,
131 S. Ct. 2780 (2011) (No. 09-1343), 2010 WL 4642529 at *161a).
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with J. McIntyre, 7 8 both companies worked in close concert to achieve J.
McIntyre's goals.79 J. McIntyre's main goal was to "sell its machines to
customers throughout the United States" and "get paid!"80 Additionally,
McIntyre America "'structured [its] advertising and sales efforts in
accordance with' J. McIntyre's 'direction and guidance whenever
possible.'"s J. McIntyre did attend annual conventions in the U.S. from
1990 through 2005 for the scrap recycling industry where more than
3,000 potential buyers were present.82 J. McIntyre attended such
conventions in New Orleans, Orlando, San Antonio, and San
Francisco, 83 though never in New Jersey. 84 Nevertheless, New Jersey
processes more scrap iron, steel, aluminum and other metals than any
other state (thirty percent more than Kentucky, its nearest competitor).85
"[U]p to four"86 of J. McIntyre machines were sold in New Jersey,
including the one that injured Nicastro.8 7 Curcio Scrap Metal, Inc.,
Nicastro's employer, purchased the machine at issue for about
$24,900."
ProceduralHistory
B.
On September 22, 2003, Nicastro filed a products liability suit
against J. McIntyre and McIntyre America in the Superior Court of New
Jersey. 89 Soon after, J. McIntyre filed a motion to dismiss due to want
of personal jurisdiction. 90 On March 5, 2004, the trial court granted J.
McIntyre's motion and found that J. McIntyre did not have the requisite
contacts with New Jersey necessary for the court to justify the exercise
ofjurisdiction.9 ' Nicastro appealed to the Superior Court of New Jersey,
Appellate Division, but the court refused to decide the issue of personal
78.
79.
Petition for a Writ of Certiorari, supra note 70, at 3-4.
Nicastro, 131 S. Ct. at 2797 (Ginsburg, J., dissenting) (quoting Nicastro v.
McIntyre Mach. Am., Ltd., 945 A.2d 92, 97 (N.J. Super. Ct. App. Div. 2008)).
80. Id. at 2796.
Id. at 2786 (plurality opinion) (quoting Nicastro v. McIntyre Mach. Am., Ltd., 987
81.
A.2d 575, 579 (N.J. 2010)).
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
Id. at 2796 (Ginsburg, J., dissenting).
Nicastro, 131 S. Ct. at 2796 (Ginsburg, J., dissenting).
Id. at 2786 (plurality opinion).
Id. at 2795 (Ginsburg, J., dissenting).
Id. at 2790. (plurality opinion).
Nicastro, 131 S. Ct. at 2790.
Id. at 2795 (Ginsburg, J., dissenting).
Petition for a Writ of Certiorari, supra note 70, at 3.
Id.
Idat4.
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jurisdiction on the merits and instead remanded the case for additional
jurisdictional discovery. 9 2 On September 11, 2006, J. McIntyre moved
to dismiss the case for a second time and the trial court again granted the
motion.93 Nicastro appealed, and this time the appellate court found that
the exercise of jurisdiction over J. McIntyre was proper under the
"stream of commerce plus" standard, articulated by Justice O'Connor in
Asahi. 94 The Supreme Court of New Jersey affirmed, finding that the
exercise of jurisdiction was proper because J. McIntyre "knew or
reasonably should have known that 'its products [were] distributed
through a nationwide distribution system that might lead to those
products being sold in any of the fifty states' and failed to prevent the
distribution from occurring.9 5 J. McIntyre filed a Petition for Writ of
Certiorari by the Supreme Court, 96 and the Court granted the Petition.97
C.
The Plurality Opinion
1. Kennedy's Plurality
The Supreme Court reversed the New Jersey Supreme Court's
decision by a vote of 6-3.98 The Court, however, was unable to form a
majority opinion.99 Justice Kennedy instead announced the judgment of
the Court and wrote an opinion joined by a plurality of Justices: Chief
Justice Roberts, Justice Scalia, and Justice Thomas.' 00 The plurality
found that the exercise of personal jurisdiction over J. McIntyre by the
New Jersey state courts was not proper, thereby rejecting the Supreme
Court of New Jersey's holding. 101
First, the plurality noted that the New Jersey Supreme Court relied
on an erroneous application of the stream-of-commerce analysis, which
allowed the court to uphold jurisdiction.10 2 The Supreme Court of New
92.
Id.
93.
Petition for a Writ of Certiorari, supra note 70, at 4-5.
94.
Id. at 5.
J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011) (plurality
95.
opinion) (quoting Nicastro v. McIntyre Mach. Am., Ltd., 987 A.2d 575, 592 (N.J. 2010)).
96.
See generally Petition for a Writ of Certiorari, supra note 70.
J. Mcintyre Mach., Ltd. v. Nicastro, 131 S. Ct. 62 (2010) (granting petition for
97.
certiorari).
98.
See Nicastro, 131 S. Ct. at 2785 (plurality opinion).
99.
Id.
100.
Id.
Id. at 2785, 2791.
101.
See Nicastro, 131 S. Ct. at 2786.
102.
206
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Jersey found that J. McIntyre knew or should have known that J.
McIntyre products would be sold in New Jersey and failed to prevent the
distribution in that state, although the manufacturer could have.10 3 The
plurality held, however, that this was not enough to allow the court to
properly exercise jurisdiction over J. McIntyre." Instead, the plurality
stated that the stream-of-commerce analysis turns on a finding of
purposeful availment, a doctrine which emerged in Hanson.'s The
Court explained that World-Wide Volkswagen held that if a defendant
placed goods in the stream of conmmierce with the expectation and hope
that they would be purchased by consumers in the forum state, such
behavior may indicate purposeful availment. World- Wide Volkswagen's
holding, however, "does not amend the general rule of personal
jurisdiction." 06 Rather, jurisdiction would be proper if the defendant
placed goods in the stream of commerce with the intent to purposefully
avail itself of the forum state. 107 In other words, the principal inquiry for
a stream-of-commerce analysis is "whether the defendant's activities
manifest an intention to submit to the power of a sovereign [state]."'0
Thus, consistent with Justice O'Connor's opinion in Asahi, the plurality
maintained that there is interplay between the stream of commerce and
purposeful availment analyses when evaluating whether a court should
exercise personal jurisdiction.
The plurality also rejected the New Jersey Supreme Court's
reliance on policy concerns to bolster its claim that jurisdiction in the
forum state was proper over J. McIntyre.109 In response to the New
Jersey Supreme Court, the plurality explained that while a state's interest
in the protection of its citizens from defective products is important,
such interest cannot override judicial authority limitations put in place
by the Constitution.( 0
The plurality held, therefore, that because Nicastro did not establish
that J. McIntyre engaged in conduct purposefully directed toward the
state of New Jersey, the attempt by the state to exercise personal
In arriving at its
jurisdiction over J. McIntyre was improper."'
103.
104.
105.
106.
107.
108.
109.
110.
111.
Id.
See id. at 2791.
See id. at 2787.
Nicastro, 131 S. Ct. at 2788.
Id.
Id.
Nicastro, 131 S. Ct. at 2791.
Id.
See id. at 2790.
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conclusion, the plurality focused on the following facts: J. McIntyre sold
its products through its distribution subsidiary, McIntyre America;
McIntyre America distributed no more than four machines in New
Jersey; J. McIntyre attended trade shows within the U.S., but never one
in New Jersey; and J. McIntyre had no property, offices or employees in
New Jersey, and never advertised or paid taxes there." 2 Therefore, the
plurality concluded that while these facts show intent to serve the U.S.
market as a whole, they did not show that J. McIntyre intended to
purposefully avail itself of the New Jersey market in particular." 3
2. Breyer's Concurrence
Justice Breyer, joined by Justice Alito, concurred in the judgment
of the Court. 14 Justice Breyer and Justice Alito understood the outcome
of the plurality opinion to be determined by precedent.i5 First, Justice
Breyer articulated that none of the precedent cases held that a single
isolated sale of goods is sufficient to produce jurisdiction over a
defendant." 6
Additionally, Breyer maintained that Asahi strongly
suggested that a single isolated sale is insufficient to support the exercise
personal jurisdiction over an out-of-state defendant even if "that
defendant places his goods in the stream of commerce, fully aware (and
hoping) that such a sale will take place."" 7 The concurrence concluded
that Nicastro had failed to prove that J. McIntyre made any effort
whatsoever to sell J. McIntyre products in New Jersey." 8 Nicastro did
not produce a list of potential New Jersey purchasers of J. McIntyre
products who regularly attended trade shows and did not provide any
other information which showed that J. McIntyre purposefully availed
itself of the market of the forum state. 19
The concurrence, however, took issue with the seemingly "strict
rules" that the plurality articulated.120 Justice Breyer noted that the
application of the strict rules to personal jurisdiction reasoning would
deny jurisdiction "where a defendant does not 'inten[d] to submit to the
112.
113.
114.
115.
116.
117.
118.
Id. at 2790.
Id.
Nicastro, 131 S. Ct. at 2791 (Breyer, J., concurring in the judgment).
Id.
Id. at 2792.
Id.
Nicastro, 131 S. Ct. at 2792 (Breyer, J. concurring in the judgment).
119.
Id.
120.
Id. at 2793.
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power of a sovereign' and cannot 'be said to have targeted the
forum."'l21 Justice Breyer stated that such a limitation may present
difficulties for personal jurisdiction analysis in our modem world.122
One example that Justice Breyer targeted as potentially problematic
under the plurality's strict "no jurisdiction" analysis is a situation in
which a company targets the world markets by selling products from a
website or dispatches the products through an intermediary company,
such as Amazon.com, to its customers. 123
In his concluding remarks, Justice Breyer refused to adopt the
change that either the plurality (the "strict" jurisdiction analysis) or the
New Jersey Supreme Court (the "knowledge-based" analysis) suggested
in the absence of a better understanding of modem "commercial
circumstances."l 2 4 In fact, Justice Breyer would make no change at all
to the current personal jurisdiction doctrine on the facts of Nicastro,
because in his opinion, the case presented no such modem commercial
circumstances upon which the court should adopt a change in
jurisdictional law.12 5
3.
Ginsburg'sDissent
Justice Ginsburg, joined by Justice Sotomayor and Justice Kagan,
dissented from the judgment of the Court. 126 Justice Ginsburg believed
that International Shoe supported the exercise of personal jurisdiction
over a defendant, such as J. McIntyre, whose goal was "to sell as much
as it can, wherever it can" in the U.S. and who engages a U.S. distributor
to this end.12 7 Justice Ginsburg noted that J. McIntyre did in fact take
purposeful steps to reach customers by its regular attendance and
exhibitions at U.S. conventions, and also by its retention of McIntyre
America for purposes of distributing J. McIntyre products throughout the
country. 128 Moreover, the dissent stated that under the plurality opinion,
such a defendant will succeed in avoiding the jurisdiction of state courts,
"except perhaps in States where its products are sold in sizeable
121.
122.
123.
124.
125.
126.
127.
128.
Id. (quotingNicastro, 131 U.S. at 2788 (plurality opinion)).
See Nicastro, 131 U.S. at 2793 (Breyer, J., concurring in the judgment).
Id. at 2793.
Id. at 2794.
Id.
Nicastro, 131 S. Ct. at 2794 (Ginsburg, J., dissenting).
Id.
Id. at 2797.
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quantities."l29 Therefore, the dissent believed that J. McIntyre's actions
fell within the purposeful availment standard of Asahi.
Also central to the dissent's analysis was that the machine in
question did not end up in New Jersey "randomly or fortuitously."1 30
Instead, according to Justice Ginsburg, J. McIntyre deliberately created a
distribution scheme which allowed the company to sell its products to
U.S. customers. 13 1 In footnote three, Justice Ginsburg noted that J.
McIntyre resisted any efforts by Nicastro to determine how many
machines had been sold to New Jersey customers.1 32 J. McIntyre did
acknowledge, however, that McIntyre America may have bought some
machinery from J. McIntyre and resold it in New Jersey. 133 Justice
Ginsburg argued that J. McIntyre had the requisite minimum contacts
needed for the New Jersey state courts to properly exercise personal
jurisdiction over the company.134
Justice Ginsburg maintained,
furthermore, that the sales scheme employed by J. McIntyre is
5
illustrative of marketing arrangements in our commercial world today.13
Finally, Justice Ginsburg noted that, as a practical matter, lower courts
faced with defendants similar to J. McIntyre do not allow such
defendants to escape jurisdiction in state and federal courts. 36
Essentially, Justice Ginsburg's argument was one of fairness.
International Shoe and its progeny focused the personal jurisdiction
analysis largely on reason and fairness. Under such considerations,
Justice Ginsburg contended that the Court could have found that J.
137
McIntyre was subject to jurisdiction in New Jersey state courts.
Justice Ginsburg argued that the plurality's conclusion placed American
plaintiffs at a disadvantage as compared to plaintiffs seeking remedies
from courts overseas. 38 For support, she cited the European Regulation
on Jurisdiction and the Recognition and Enforcement of Judgments,
which has been interpreted by courts to allow for jurisdiction where the
act or injury occurred.1 39
129.
130.
131.
131.
132.
133.
134.
135.
136.
137.
138.
139.
Id. at 2795.
Nicastro, 131 S. Ct. at 2797.
See id. at 2797.
Id.
Id. at 2797 n. 3.
Id.
See Nicastro, 131 S. Ct. at 2797 (Ginsburg, J., dissenting).
Id. at 2799.
Id. at 2801.
See. id. at 2800.
Nicastro, 131 S. Ct. at 2803 (Ginsburg, J., dissenting).
Id. at 2803-04.
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Justice Ginsburg also questioned whether the plurality correctly
gave weight to the fact that only a few J. McIntyre-produced machines
were sold in the state of New Jersey.140 In footnote 15, the dissent stated
that while J. McIntyre did not sell many machines in the forum state,
each machine had an approximate value of $24,900, and by dollar value,
each represented a major sale.141 Citing to lower court decisions, Justice
Ginsburg argued that the Supreme Court would have likely found that a
corporation that sold $24,900 in flannel shirts in the forum state would
be subject to a lawsuit in that state. 142
Finally, Justice Ginsburg distinguished the facts of Nicastro from
those underlying Asahi, specifically pointing to J. McIntyre's
engagement of a distributor and the control over distribution that this
business decision gave the corporation.14 3 Thus, Justice Ginsburg
argued that the application of the reasoning of Asahi to the factual
scenario presented in Nicastro would be "dead wrong." 4 4
IV. ANALYSIS OF J. MCINTYRE MACHINERY, LTD. V. NICASTRO
A. The Application of the Stream of Commerce Doctrine
Central to Nicastro is the application of the stream of commerce
doctrine, which was last addressed by the Supreme Court in the Asahi
decision. In Asahi, Gary Zurcher brought suit in California state court
following an accident that occurred while Zurcher was riding a
motorcycle in California.145 Zurcher alleged that the accident was
caused by an explosion in the rear tire due to a defective tire, tube, and
sealant.146 At issue in Asahi was whether the California courts could
properly exercise personal jurisdiction over Asahi, a Japanese company,
which manufactured tire valve assemblies in Japan and sold them to
Cheng Shin, a Taiwanese tube manufacturer. 147 Using a stream-ofcommerce analysis, the Court unanimously held that jurisdiction over
Asahi was not proper because the facts of the case did not establish
140.
See id. at 2803 n.15.
141.
Id.
142.
143.
144.
145.
146.
147.
Id.
Id. at 2803.
Nicastro, 131 S. Ct. 2803 (Ginsburg, J., dissenting).
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 106 (1987).
Id.
Id. at 103-04, 106.
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minimum contacts. 148 However, the Court was "deeply divided" on the
question of whether Asahi had purposefully availed itself of the
California marketplace. 149
In Nicastro, the plurality endorsed Justice O'Connor's "stream of
commerce plus" theory that emerged from Asahi.150 In Asahi, Justice
O'Connor, joined by Chief Justice Rehnquist, and Justices Powell and
Scalia, argued that "[t]he placement of a product into the stream of
commerce, without more, is not an act of the defendant purposefully
directed toward the forum State."151 Thus, Justice O'Connor determined
that recognition by a corporation of the possibility that its products may
enter the forum state, without more, does not give rise to personal
jurisdiction. 152
Justice O'Connor acknowledged, however, that
"[a]dditional conduct" of the defendant [corporation] may "indicate an
intent or purpose to servc the market in the forum State.
. .
.
Such
conduct would include marketing its products through a distributor that
has agreed to act as a sales agent, advertising in the forum state, and
designing its products for marketing in the forum state.15 4 Applying this
standard in Asahi, Justice O'Connor found that jurisdiction was not
proper over Asahi in California state court because Asahi's actions did
not manifest purposeful availment of the State of California.15 5 Justice
O'Connor supported her conclusion by noting that Asahi had not done
any business within the state, had no office, agents, employees or
property there, and had never created or controlled a distribution system
that brought its products into the forum state. 156
In addition, the Nicastro plurality appeared to approve of dicta in
Justice O'Connor's opinion. The dicta suggested that a defendant
company whose products injure a consumer should not be subject to
jurisdiction in the state where the injury occurred, if the defendant
company had previously sold its products to a distribution company and
had also relinquished all control over further distribution of the
148.
Id. at 116. See also Earl M. Maltz, Unraveling the Conundrum of the Law of
Personal Jurisdiction: A Comment on Asahi Metal Industry Co. v. Superior Court of
California,1987 DUKE L.J. 669, 677 (1987).
149.
Maltz, supra note 148, at 677.
150.
See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2789 (2011) (plurality
opinion).
151.
Asahi, 480 U.S. at 112.
152.
See id.
Id.
153.
Id.
154.
155.
Asahi, 480 U.S. at 112.
156.
Id.
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products. 5 7
At first blush, the factual background of Nicastro is quite similar to
that of Asahi, and therefore, it would seem appropriate for the Kennedy
plurality to apply a similar analysis. Both cases involved indirect
contacts with the forum state. Justice Kennedy even seized upon similar
facts to determine that New Jersey courts could not properly exercise
jurisdiction over J. McIntyre.' 58 For example, Justice Kennedy found
that J. McIntyre had no offices in New Jersey, paid no taxes, held no
property and sent no employees to the forum state.159 J. McIntyre also
did not advertise directly to consumers in New Jersey.160
There are, however, salient factual differences between Asahi and
McIntyre, which makes analogizing the two cases quite problematic. In
effect, because of the factual dissimilarities, a strict application of
Asahi's standard to Nicastro is impossible to do without altering the
purposeful availment component of the stream of commerce doctrine.
First, J. McIntyre utilized a distribution scheme to sell its products.' 6 '
Second, J. McIntyre sought to serve the U.S. market as a whole through
that scheme.162
Nicastro is not a case where a manufacturer sold its
products to a company unconnected with its own business for
distribution in the U.S. Instead, J. McIntyre was intimately connected
with its distribution subsidiary, even sharing a coherent business vision
with McIntyre America and directing McIntyre America's actions.' 63
Through this scheme J. McIntyre effectively sought to purposefully avail
itself of the nation's market as a whole, targeting U.S. consumers
nationwide in order to increase profitability.164
J. McIntyre's business structure and goal was in no way like
Asahi's.16 5 Asahi sold its valve assemblies to Cheng Shin, a company
wholly unconnected with Asahi.16 6 The only connection between the
157.
See id at 2788-90; see also JOSEPH W. GLANNON, THE GLANNON GUIDE TO CIVIL
PROCEDURE 84-85 (2d ed. 2009) (discussing whether the Court today would endorse the dicta
from Justice O'Connor's Asahi opinion or the dicta from the concurring opinions).
158. Nicastro, 131 S. Ct. at 2786, 2790.
159. Id. at 2790.
160. Id.
161. Id. at 2786.
162. Nicastro, 131 S. Ct. at 2790.
163. Peterson, supra note 3, at 220 (discussing Asahi Metal Industry Co. v. Superior
Court, 480 U.S. 102, 106 (1987) and Nicastro, 131 S. Ct. at 2794, 2803 (Ginsburg J.,
dissenting)).
164. Brief of Law Professors, supra note 10, at 2.
165. Peterson, supra note 3, at 220.
166. See Asahi, 480 U.S. at 106.
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A GAP IN PERSONAL JURISDICTION REASONING
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Cheng Shin and Asahi was that they each manufactured small parts
which would be placed on the same motorcycle tire. 167 Yet, despite
these differences and J. McIntyre's clearly intentional conduct, the
plurality applied the Justice O'Connor's stream of commerce standard
and found that New Jersey courts could not properly exercise personal
jurisdiction over J. McIntyre.16 s By applying the reasoning of Justice
O'Connor in Asahi to the facts of Nicastro, the plurality opinion
significantly restricted the personal jurisdiction doctrine because J.
McIntyre purposefully availed itself of the American market in a much
more direct fashion than Asahi. The plurality, therefore, eliminated the
possibility that purposeful actions directed toward the nation as a whole
could fulfill the requirement that a defendant purposefully availed itself
of the forum state. This creates an unnecessary and restrictive
distinction, because a defendant that purposefilly avails itself of the
entire U.S. market also necessarily avails itself of each individual state's
markets. 169
One could make a strong argument that the Nicastro plurality could
have decided this case in favor of the plaintiff without altering the
purposeful availment standard for stream of commerce cases. The Asahi
decision did not absolutely foreclose the possibility that aggregate
national contacts may serve as an important and controlling factor for
personal jurisdiction analysis. 70 The Asahi plurality acknowledged in a
footnote that the Court did not have an opportunity at that time "to
determine whether Congress could, consistent with the Due Process
Clause of the Fifth Amendment, authorize federal court personal
jurisdiction over alien defendants based on the aggregate of national
contacts, rather than on the contacts between the defendant and the State
in which the federal court sits."' 7 ' While the footnote speaks only to the
jurisdiction of federal courts, the language does not explicitly prohibit
jurisdiction in state courts in a case where an aggregate of national
contacts are found. 172 The Supreme Court, therefore, had an opportunity
to use the language of Asahi to conclude that national aggregate contacts
of a defendant corporation is a significant factor which state courts may
167.
See id.
168.
169.
See Nicastro, 131 S. Ct. at 2791 (plurality opinion).
See Brief of Law Professors, supra note 10, at 3. For further discussion, see infra
Part IV.B. and accompanying footnotes.
170.
171.
See Asahi, 480 U.S. at 113 n*.
Id.
172.
See Asahi, 480 U.S. at 113.
214
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consider when deciding whether to exercise personal jurisdiction over a
defendant.
In the alternative, the Court could have found purposeful availment
of the New Jersey market on the very facts of the case,17 3 as the dissent
contended. 174 First, J. McIntyre created and regulated a distribution
scheme designed to target both the U.S. market as a whole and the scrap
metal industry in particular (much of which is concentrated in New
Jersey).' 75 Second, J. McIntyre attended conventions and distributed
literature within the U.S., 176 which advertised that J. McIntyre
machinery conformed to American safety requirements.17 7 Third, and
most importantly, J. McIntyre must have sought to serve the New Jersey
Market, albeit indirectly, by taking purposeful steps to avail itself of the
U.S. market as a whole.178 In Nicastro, therefore, the Court could have
expanded purposeful availment analysis to include the purposeful
availment of the U.S. market, which would allow the Court to find that
jurisdiction was proper in New Jersey. Had the Court construed the
purposeful availment doctrine in this way, personal jurisdiction in the
desired forum would have been available in Nicastro, but not in Asahi
because there was no similar purposeful availment of the U.S. market.
Thus, the Supreme Court would have allowed New Jersey courts to
exercise jurisdiction over J. McIntyre without overturning Asahi.
B.
The Result: A Gap in PersonalJurisdictionReasoning
Since the plurality held that the reasoning of Asahi summarily leads
to a rejection of personal jurisdiction in Nicastro,179 the result of the
plurality opinion is severe; there is now a gaping hole in personal
jurisdiction analysis. The plurality embraced a line of reasoning under
which it is possible for a foreign corporation to purposefully avail itself
of the U.S. commercial market as a whole, without purposefully availing
itself of the individual states which constitute the nation.' 80 This "avail
all states-avail no individual states" anomaly or "gap in reasoning"
could potentially allow corporations to escape liability in U.S. courts
173.
174.
175.
176.
177.
178.
179.
180.
See Brief of Law Professors, supra note 10, at 10-11.
Nicastro, 131 S. Ct. at 2801 (Ginsburg, J., dissenting).
See id. at 2803.
See id.
Brief of Law Professors, supra note 10 at 10-11.
Id. at 11.
See Nicastro, 131 S. Ct. at 2791 (plurality opinion).
See Brief of Law Professors, supra note 10, at 12.
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A GAP IN PERSONAL JURISDICTION REASONING
215
altogether. 8 1
Apparently this result was the lesser of two evils for the plurality.
Throughout the course of the plurality's analysis, two extremes of
personal jurisdiction thought emerge: on the one hand, a knowledgebased standard advocated by the New Jersey Supreme Court but
ultimately rejected by the plurality;' 8 2 and on the other, the plurality's
accepted version of the purposeful availment standard applied to the
facts of Nicastro.'83 The former is an extreme because that standard
would allow a court to have jurisdiction over a defendant that simply
knew or should have known that its products would end up in the forum
state. The New Jersey Supreme Court's standard could lead to a
situation in which a defendant could be hauled into court in any state and
jurisdiction would likely be proper. Such reasoning is very similar to a
a
stndard. of which the plurality is rightly
reasonable f
wary.184 Under World-Wide Volkswagen, knowledge or foreseeability
that a product would wind up in the forum state, without more, would
In World- Wide
probably not satisfy due process standards.'18
Volkswagen, the Court stated that foreseeability is relevant to personal
jurisdiction analysis when "the defendant's conduct and connection with
the forum State are such that he should reasonably anticipate being
haled into court there."' 86
While the New Jersey Supreme Court's reasoning is problematic,
the plurality's embraced standard is a stricter version of the purposeful
availment requirement for stream-of-commerce analysis, which
constrains personal jurisdiction doctrine. Thus, the plurality's standard
no longer appears to be the lesser of two evils when the consequences
are fully fleshed out. The most troubling ramification stems from the
plurality's strong suggestion that the intent to serve a particular state's
market differs entirely from the intent to serve a nation's commercial
market as a whole. The Brief of Law Professors describes this as a
"logical impossibility."' 8 7 To say that a foreign corporation can
purposefully avail itself of the U.S. market as a whole without
purposefully availing itself of any of the states that constitute the U.S.
181.
182.
183.
184.
185.
186.
added).
187.
Id. at 3.
See Nicastro, 131
S. Ct. at 2785.
See id. at 2788.
Id. at 2790.
See GLANNON, supra note 157, at 77.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (emphasis
Brief of Law Professors, supra note 10, at 3.
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nation, is both logically inconsistent and virtually impossible. 8 8
Moreover, as the Brief of Law Professors argues, "[t]o reject jurisdiction
in this case would be to embrace the strange principle that the whole (the
United States) is somehow less than the sum of its parts (the individual
states)."l 8 9 The plurality's analysis that a defendant can purposefully
avail itself of the nation's market as a whole, without also purposefully
availing itself of New Jersey is analogous to the erroneous view that a
company that advertises its products in every county in the State of
Connecticut does not also advertise in each town in Connecticut. Both
are simply matters of logical impossibility and represent a gap in the
plurality's reasoning. Because of the plurality's strange principle, a
foreign corporation that targets U.S. markets as a whole, but does not
purposefully avail itself of any state in particular, can theoretically
escape jurisdiction in any U.S. state court. Especially with online
advertising, it is likely possible for a company to target U.S. markets
without having a presence in any state. On a lesser scale, if the
corporation is able to be sued in U.S. courts, adjudication may only
occur in a state other than where the plaintiff s injury occurred, at a great
inconvenience to the plaintiff. Otherwise, plaintiffs may be forced to
adjudicate a claim that arose in the U.S. overseas.' 90
To make matters worse, the plurality decision largely divorces
reasonable foreseeability that a defendant will be hauled into court in the
forum state from purposeful availment analysis 191 in cases that involve
facts similar to Nicastro. The plurality recognizes that a defendant may
be subject to personal jurisdiction when it "'seeks to serve' a given
state's market," 192 which does not require the defendant to actually enter
into the forum state. 193 Given that the plurality makes a distinction
between "a given state's market" 9 4 and the U.S. market as a whole, the
practical application of this principle seems to be extremely limited, or
nonexistent, when a defendant purposefully targets an entire nation's
market.
There are few cases in which the "intent factor" would be more
readily and equitably applicable than the Nicastro case presented before
188.
189.
190.
191.
opinion).
192.
Id. at 12.
Id.
For further discussion, see infra Part IV.D. and accompanying foonotes.
See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2789 (2011) (plurality
Id.
193.
See id. at 2788.
194.
Id. at 2789.
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A GAP IN PERSONAL JURISDICTION REASONING
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the Supreme Court. As stated earlier, one can provide a very strong
factual argument that there are adequate minimum contacts with the
forum state so that InternationalShoe's "traditional notions of fair play
and substantial justice"19 s would not be offended by a finding of
jurisdiction. 196 J. McIntyre's intent to sell products to the U.S. as a
whole, which logically includes the State of New Jersey, should have
been an additional factor available to the Court under a purposeful
availment analysis. Such intent would support a finding of jurisdiction.
Instead, the plurality in Nicastro viewed J. McIntyre's intent to target the
U.S. nationwide market as supporting its conclusion that the state courts'
assertion ofjurisdiction over J. McIntyre was improper. 197
Without giving any thought to personal jurisdiction analysis, a
corporation that deliberately carries out a scheme to market to a whole
nation should be answerable to claims brought by injured customers in
the nation's courts, arguably even in any of the courts. There is nothing
inherently unfair about this notion. But this is contrary to the plurality's
decision in McIntyre. 98 Nevertheless, the Supreme Court has repeatedly
held that a "manufacturer establishes minimum contacts with a state
when it seeks to serve the market in that state and its product thereby
causes injury in that state." 99 This principle has been judicially
accepted since InternationalShoe. 200 Clearly J. McIntyre had a general
policy of marketing and selling to the nation as a whole. 201 Thus, not
only did J. McIntyre seek to serve the New Jersey market, it was indeed
successful in doing so. J. McIntyre's success is evident in the fact that
Nicastro was injured in New Jersey by one of J. McIntyre's machines.20 2
It is equally apparent that the corporation hoped to sell its products to
customers in any state that it could. The sale of machinery in New
Jersey was pursuant to J. McIntyre's business scheme to peddle J.
McIntyre products to the U.S. market.203 This analysis certainly could
have, and arguably should have, led the Court to hold that New Jersey
195.
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v.
Meyer, 311 U.S. 457, 463 (1940)).
196.
See discussionsupra Part IV.A. and accompanying foonotes.
197.
198.
See Nicastro, 131 S. Ct. at 2790.
Id. at 2791.
199. Brief of Law Professors, supra note 10, at 6.
200. See id. (stating "this principle has never been questioned by even a single Justice in
the six-and-a-half decades since InternationalShoe").
201.
Id. at 10.
202. See Nicastro, 131 S. Ct. at 2786.
203. Id. at 2790.
218
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courts could exercise jurisdiction over J. McIntyre.
Writing for the plurality, Justice Kennedy provided only a hint as to
why the Court drew a line between national aggregate contacts and state
contacts. Justice Kennedy stated that since the U.S. is a "distinct
sovereign," a defendant may be subject to the jurisdiction of the United
States, but not any particular state.204 Citing his own concurrence in
U.S. Term Limits v. Thornton,20 5 he stated, "[o]urs is a "'legal system
unprecedented in form and design, establishing two orders of
government, each with its own direct relationship, its own privity, its
own set of mutual rights and obligations to the people who sustain it and
are governed by it."' 20 6 Therefore, he concluded that a defendant may
have the appropriate relationship with the U.S. to give rise to
207
jurisdiction, but may not have a similar relationship with any state.
Yet, Justice Kennedy continued, "if another State were to assert
jurisdiction in an inappropriate case, it would upset the federal balance,
which posits that each State has a sovereignty that is not subject to
unlawful intrusion by other States."2 08
With this statement, Justice Kennedy suggested that the
inappropriate exercise of personal jurisdiction would offend a state's
rights, rather than a defendant's rights.209 Since due process guarantees
individual rights rather than the sovereignty rights of a state, Justice
Kennedy's comment was inappropriate in personal jurisdiction
reasoning. 2 10 This comment compromised any attempt by Justice
Kennedy to explain the dichotomy between contacts with the nation and
the state which stems from the plurality's line of reasoning.211
C. The Plurality'sMinimum Contacts Analysis
A valid disagreement exists as to whether J. McIntyre's contacts
with New Jersey were sufficient under a minimum contacts analysis.
Unlike the dissent, the plurality found that the sale of no more than four
machines in New Jersey failed to constitute sufficient minimum contacts
204.
Id. at 2789.
205.
514 U.S. 779 (1995).
206. Nicastro, 131 S. Ct. at 2789 (quoting Thornton, 514 U.S. at 838 (Kennedy, J.,
concurring)).
207.
Id.
208.
Id.
209.
Peterson, supra note 3, at 232.
210.
Id.
211.
See id.
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to justify the exercise of personal jurisdiction over J. McIntyre.212
Despite the fact that the volume of sales in New Jersey was low, Justice
Ginsburg noted that each machine sold for $24,900, and by dollar value,
213
Additionally, given the price of the
each sale was quite significant.
machinery, J. McIntyre probably would not have sold in bulk in any
individual state.214 Under the plurality's reasoning, therefore, J.
McIntyre's sales alone would probably not have been enough to
establish minimum contacts in any state.
The facts surrounding J. McIntyre's sales and the inferences drawn
by both the plurality and dissent raise questions regarding minimum
contacts analysis in general. What quantity of products must a company
sell in a state for the minimum contacts requirement to be met? More
The plurality
importantly, how should "quantity" be measured?
endorsed a test which is based on the number of individual sales.215 The
dissent introduced an alternate test based on dollar amounts ("value
test").2 16 There is a significant difference in outcomes under each test.
Applying her "value test," Justice Ginsburg would find that New Jersey
courts could exercise jurisdiction over J. McIntyre.2 17 The plurality's
analysis, which was based on the number of machines J. McIntyre sold,
did not yield a similar conclusion.2 18
A simple example may help underscore the difference in outcomes.
Consider if J. McIntyre were in the pencil-selling business and sold
24,900 pencils in New Jersey priced at one dollar apiece. The pencil
sales yielded the same dollar amount as a single sale of a J. McIntyre
metal-shearing machine. Perhaps in the case involving pencils, the
plurality would have found that J. McIntyre had minimum contacts with
New Jersey because J. McIntyre sold a large quantity of pencils in the
state. In her dissent, Justice Ginsburg cited three cases in which courts
have found that personal jurisdiction was proper over defendants who
sold $24,900 worth of flannel shirts, $24,900 of cigarette lighters, and
212.
213.
214.
215.
Nicastro, 131 S. Ct. at 2790.
Id. at 2803 n.15 (Ginsburg, J., dissenting).
Id.
See id. at 2790 (plurality opinion).
216.
See Nicastro, 131 S. Ct. at 2803 n.15 (Ginsburg, J., dissenting). I will refer to
Justice Ginsburg's test for minimum contacts as the "value test," in order to more easily refer
to her analysis in further discussion. The "value test" recognizes that a minimum contacts
analysis should take into consideration not just the quantity of the products sold in the forum
state, but also the value of the individual product. This is especially true when the product has
a high price-tag, and would constitute a significant sale for the company.
217.
See id.
at 2804.
218.
See id. at 2790 (plurality opinion).
220
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$24,900 of wire-rope splices respectively. 219 While the number of sales
was high, the aggregate amount was equal to a single sale in the Nicastro
case, where a $24,900 sale failed to satisfy the requirement for minimum
contacts. If a dollar amount of $24,900 does not constitute minimum
contacts as the Nicastro plurality seemed to indicate, then one could
argue that there should be no minimum contacts found in any of the
cases involving the flannel shirts, cigarette lighters, or wire-rope slices.
Of course, if the number of sales is the single controlling factor, then
jurisdiction would be proper. Thus, even on the same facts, different
characterizations and outcomes can arise. Arguably, then, the Court had
some support for finding that minimum contacts did exist between J.
McIntyre and New Jersey. Nevertheless, absent a clear, judicially
accepted test for determining minimum contacts, there is a danger of
inconsistent results.
Perhaps for personal jurisdiction analysis,
minimum contacts should be based on the amount of sales made in
dollar amounts, rather than the number of items sold. Otherwise, a
significant sale such as a sale of a single large piece of machinery will be
given no more weight for minimum contacts analysis than the single sale
of a pencil, although a sale of one piece of machinery impacts a
company's profit margin much more significantly. Thus, this decision
not only creates a gap in stream of commerce reasoning, but exposes a
concern regarding the establishment of minimum contacts as well.
Additionally, contrary to the Nicastro plurality, the Supreme Court
in McGee v. InternationalLife Insurance Co. 22 0 specifically allowed the
exercise of personal jurisdiction even though the case involved just a
single sale in the forum state.22 1 In McGee, a California citizen
purchased a life insurance policy from an Arizona insurance company,
which was later acquired by a Texas company.222 The Texas insurance
company mailed McGee a reinsurance certificate to his California
residence.223 When McGee sued the Texas insurance company in
California state court, the court held that personal jurisdiction was
224
Nevertheless, the court also found that no evidence existed
proper.224
which indicated that the Texas insurance company had ever sold any
219.
Id. at 2803 n.15 (Ginsburg, J., dissenting) (discussing Nelson v. Park Indus., Inc.,
717 F.2d 1120 (7th Cir. 1983); Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir 1980); and
Hedrick v. Daiko Shoji Co., 715 F.2d 1355 (9th Cir. 1983)).
220.
355 U.S. 220 (1957).
Id. at 221-22.
221.
Id. at 221.
222.
223.
Id.
224.
McGee, 355 U.S. at 221.
A GAP IN PERSONAL JURISDICTION REASONING
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221 .
other insurance policies in California.225 In his article entitled The
Timing of Minimum Contacts after Goodyear and McIntyre, Todd David
Peterson stated that the McGee decision makes perfect sense in light of
the Supreme Court's theory regarding personal jurisdiction doctrine.226
The Court's theory is based on the idea that a manufacturer that sells its
products in a state has derived certain benefits from that state's legal
Consequently, the benefits that the manufacturer receives
framework.2
should be proportional to the burdens imposed on the company through
the personal jurisdiction doctrine 228:
[i]f a manufacturer sells a million products into the forum state, it is potentially
subject to a million lawsuits if all of them prove to be defective. On the other
hand, if a manufacturer sells only one item in the forum state, it is potentially
229
subject to only one lawsuit.
Peterson concluded that because J. McIntyre's metal-shearing machine
was expensive and cost $24,900, J. McIntyre's connection to the forum
state should be considered all the more significant.2 30 Peterson's
analysis provides more support for the proposition that the exercise of
jurisdiction over J. McIntyre by New Jersey state courts was both proper
and judicially permissible based upon the facts in Nicastro.2 3 1
D. The FairnessConsiderationsUnderlying the McIntyre Decision
The Nicastro case also involved several fairness concerns that
underlie the personal jurisdiction doctrine. Specifically, the analysis in
this case touched upon fairness considerations favoring both the plaintiff
and defendant in a products liability suit. 2 32 Some of these concerns
were more tenable than others.
Unlike the dissent, the plurality focused more on the fairness
implications that a finding of personal jurisdiction would have on the
225.
226.
227.
228.
229.
Id. at 222.
Peterson, supra note 3, at 227.
Id.
Id.
Id.
229.
Peterson, supra note 3, at 227.
230.
Id.
231.
See id. at 227-28.
232.
See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2793-94 (2011) (plurality
opinion).
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defendant.233 The plurality seemed to believe that the exercise of
jurisdiction over J. McIntyre was not only judicially impermissible, but
also unfair. Yet if the Court had held that J. McIntyre's contacts with
the nation as a whole were sufficient for courts in New Jersey to
establish personal jurisdiction over J. McIntyre, the decision would not
have opened up Pandora's Box and led to defendant corporations having
to defend claims all over the country. Although one can properly
conclude that a corporation that targets a nation as a whole also targets
the individual states that comprise the nation, one would be incorrect to
conclude that a corporation which purposefully avails itself of a single
234
state's market would be answerable in courts all over the nation.
Thus, any concern that a result adverse to J. McIntyre would have bound
all defendant manufacturers serving U.S. states is unfounded. The
decision would simply apply to defendants who were specifically found
to target the U.S. nation and its consumers in the aggregate. Such a
decision, therefore, likely would not have created a disincentive for
foreign corporations to sell products in the U.S.
In addition, World- Wide Volkswagen provides defendants with
some protection through the "traditional notions of "'fair play and
substantial justice,"' 2 3 5 making the Court's fear that defendants may be
answerable to claims in multiple states all the more unwarranted.23 6
"Fair play and substantial justice," as articulated by InternationalShoe,
serve as a dual check on a court's power to assert personal jurisdiction
over a defendant and haul him into a particular forum. So even if
minimum contacts exist, jurisdiction is not proper unless it comports
with traditional notions of "fair play and substantial justice."237 "Fair
play and substantial justice" therefore allow courts to inject notions of
fairness and equity into the personal jurisdiction doctrine. 3
Although World- Wide Volkswagen 's fairness factors were not
discussed by Justice O'Connor in Asahi because she found that the
defendant did not have minimum contacts with the forum state,239 they
233.
See id. at 2787.
234. Brief of Law Professors, supra note 10, at 20.
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v.
235.
Meyer, 311 U.S. 457,463 (1940).
236. See Nicastro, 131 S. Ct. at 2790.
Jennifer A. Schwartz, Piercing the Corporate Veil of an Alien Parent for
237.
JurisdictionalPurposes: A Proposalfor A Standard That Comports with Due Process, 96
CAL. L. REv. 731, 739 (2008).
See Int'l Shoe, 326 U.S. at 319.
238.
239.
In order for a court to invoke International Shoe's fairness factors, a court must first
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A GAP IN PERSONAL JURISDICTION REASONING
223
are still applicable in an appropriate case. 240 Since Nicastro was not as
close of an analog to Asahi as the plurality seemed to assume, a
consideration of World- Wide Volkswagen 's fairness factors would have
been well-placed. While the Kennedy plurality begrudgingly admitted
241
in Nicastro that J. McIntyre did have some contacts with New Jersey,
the Court did not recognize that this likely qualified the case for an
analysis of fairness factors.242 Richard D. Freer, however, argues that if
there is any slight chance that minimum contacts exist, the sliding scale
approach to fairness in World- Wide Volkswagen makes it quite difficult
for a court to dismiss a personal jurisdiction case without giving at least
a nod to fairness considerations.24 3 Then, Freer states, if fairness
considerations are strong, personal jurisdiction may be upheld on lesser
contacts.24 4 Had the Court considered fairness factors, it should have
been clear that the New Jersey courts could exercise jurisdiction over J.
McIntyre because of the strong state interests that existed.'
Thus, the plurality's strict adherence to the judicially-constructed
rules of personal jurisdiction has led jurisprudence too far afield. The
overarching principles of fairness, which are central to personal
jurisdiction doctrine, were by and large forgotten when this decision was
rendered. Yet the "minimum contacts" standard is really all about
fairness: the idea that it is simply not fair to haul a defendant into the
forum state and force that defendant to defend a claim absent certain
contacts with that state.246 But there is a flip side to this concept of
fairness, which the plurality disregarded. Personal jurisdiction not only
limits the forums in which a defendant may be sued, but also
procedurally enables a plaintiff to bring a claim against a defendant. A
court that lacks personal jurisdiction over a given defendant is
powerless. And a plaintiff who can find no forum that can assert
personal jurisdiction over a defendant is equally powerless since he may
determine that the minimum contacts requirement is met. See Craig Peyton Gaumer, The
Minimum
Cyber-Contacts Test: An
Emerging Standard of Constitutional Personal
Jurisdiction,85 ILL. B.J. 58, 60 (1997) (discussing InternationalShoe, 326 U.S. at 317).
240. Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 115 (1986).
241.
See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2786 (2011) (plurality
opinion).
242.
See Richard D. Freer, Personal Jurisdiction in the Twenty-First Century: The
Ironic Legacy ofJusticeBrennan, 63 S.C. L. REV. 551, 553-54 (2012).
243.
Id. at 570.
244.
Id. at 57(-71.
245. See Nicastro, 131 S. Ct. at 2791.
246. See Freer, supra note 242, at 570 (quoting Burger King Corp. v. Rudzewicz, 471
U.S. 462,477 (1985)).
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not be able to seek any remedy from the courts. For a plaintiff who has
a substantive case with merits, a procedural roadblock of this nature is a
devastating blow to the ability to adjudicate, and contrary to the innate
concept of fairness.
Depending on the facts of the case, Nicastro may still be able to file
suit against the defendant manufacturer, but not in the state where his
injury occurred. Looking to the facts, Nicastro may be able to sue J.
McIntyre in a state where J. McIntyre attended annual conventions for
the scrap recycling industry to advertise its machines, such as Nevada,
Florida, Texas, or California.247 Such a finding, however, would be
determined by general jurisdiction analysis.248 Assuming arguendo that
jurisdiction would be proper over J. McIntyre in those states, the
problem with adjudicating in any of those fora is that Nicastro lives in
New Jersey. 249 The costs to Nicastro would undoubtedly increase if he
adjudicated in any forum other than New Jersey. He may have to seek
new counsel who is licensed to practice in that state (and likely pay
additional attorneys' fees so that his new counsel can become familiar
with the facts and legal theories), and would certainly incur travel
expenses if he is required to be present for settlement conferences or
court proceedings. Therefore, even if Nicastro were victorious with his
claims and recovered a monetary damages award, the amount that he
would net after all expenses are paid off would likely be less than if he
had been able to adjudicate in New Jersey.
In addition, the intangible expenses to Nicastro's case may be just
as costly. For example, a jury that sits in a state other than Nicastro's
home state may be less sympathetic to his plight, which may be a
strategic disadvantage for him. If Nicastro must now retain new
counsel, there is a risk that his new attorney may be less familiar with
his case. Similarly, if a court were to find that no state can exercise
jurisdiction over J. McIntyre, Nicastro will potentially have to adjudicate
in England in order to bring a suit against J. McIntyre.
The
aforementioned concerns would simply be amplified in such a scenario.
The assumption in the above analysis is that Nicastro (or a plaintiff
See Nicastro, 131 S. Ct. at 2796 (Ginsburg, J., dissenting).
247.
248.
C.f Freer,supra note 242, at 585 (quoting Goodyear Dunlop Tires Operations, S.A.
v. Brown, 131 S. Ct. 2846, 2851 (2011) (internal citations omitted)) (noting that the Court's
decision Goodyear might "limit[] general jurisdiction to states in which a corporation can be
considered 'essentially at home."').
249.
See Nicastro v. McIntyre Mach. Am., Ltd., 945 A.2d 92, 96 (N.J. Super. Ct. App.
Div. 2008).
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A GAP IN PERSONAL JURISDICTION
REASONING
225
in his situation) would still be willing and able to bring his claim in the
new forum where a court does in fact have personal jurisdiction over the
desired defendant. Yet possibly such adjudication would be so cost
prohibitive as to force Nicastro to drop his claim altogether. One can
easily imagine a situation where a plaintiff such as Nicastro simply
would not have the finances to allow him to continue with his caseperhaps he had no savings, and his only source of income was his job
working with the metal-shearing machine.
Additionally, perhaps
because of his injury, Nicastro has been unable to work while the lawsuit
was pending. Thus, Nicastro may not be able to bear the additional costs
associated with adjudication. Or even if Nicastro did have the resources
to pursue it, he simply might decide that adjudication is not economical
if the amount he expects to recover is just not worth the added time and
effort. This, of course, leads back to the concepts of fairness and equity.
The "strict" purposeful availment standard selected by the plurality on
these facts will create the biggest injustice of all - the plaintiff is forced
to bear the burden of additional costs to adjudicate in a forum that is less
convenient for him despite the intentional conduct of the defendant
directed toward U.S. markets. Following the Nicastro decision, the
interests of the aggrieved plaintiffs in obtaining a fair judgment are
diminished. This is unfortunate because the court system should
facilitate the filing of valid lawsuits by U.S. citizens who are truly
injured by faulty products.250
To that end, when balancing the interests of plaintiffs and
defendants in a products liability case, the greater burden should fall on
the defendant. This is not to say that the burden placed on the defendant
should be so excessive as to eviscerate the concept of fairness altogether.
However, court policies and rulings surrounding personal jurisdiction in
products liability cases should first and foremost seek to protect
plaintiffs' rights. The reason for advocating such a policy is that the
balance of power between plaintiffs and defendants in products liability
cases is unequal. Generally, individual plaintiffs lack the resources,
finances, and influence that defendant corporations often have at their
disposal. Policy considerations and efficiency arguments bolster this
claim. It is simply more efficient to have defendant corporations bear a
larger portion of the burdens associated with adjudication than to have
individual plaintiffs absorb those costs. Parties with the greatest
resources should bear the biggest burdens. If a plaintiff is unable to sue
250.
See Nicastro, 131 S. Ct. at 2803-04.
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a foreign defendant in the U.S., the plaintiff may still be able to sue in a
court overseas. The costs associated with travel, large expenditures of
time, and legal fees overseas may render litigation impracticable for the
plaintiff. If a foreign defendant must litigate in the U.S., the defendant
will certainly incur additional costs. Corporations, however, often have
greater resources and thus are better able to absorb the increased costs
than the plaintiff. The effect of adjudicating a case in a place
inconvenient to the individual plaintiff may have catastrophic
consequences for the case, whereas it is much less likely that similar
consequences would occur if the defendant is forced to adjudicate in an
inconvenient forum. 25 1 Therefore, U.S. courts should be mindful of the
impact that litigation costs may have on a plaintiff in a products liability
suit.
Moreover, allowing U.S. courts to hear products liability cases
involving a foreign defendant will facilitate the protection of the health
and safety of U.S. citizens, together with their rights and liberties, by
providing a convenient and affordable forum. The law must strike a
balance between allowing the initiation of lawsuits with too much ease
and inhibiting the adjudication of plaintiffs' valid claims. Technicalities
such as the targeting of a single state versus the targeting of the nation as
a whole should not, however, serve to constrain a plaintiffs ability to
seek redress.
The above analysis leads to the conclusion that the Nicastro
decision is undoubtedly most favorable to foreign manufacturers. This
opinion could conceivably encourage foreign corporations to seek
distribution of their products in U.S. markets, because there may be less
exposure to lawsuits than in European markets.252 While this may also
have a positive impact on the flow of commerce in the U.S. and may
even reduce the costs of products for the consumer,2 5 3 ultimately it is
U.S. consumers who would bear the risks associated with the purchase
of such goods. The Nicastro decision also places U.S. plaintiffs at a
disadvantage when compared with similarly situated plaintiffs in other
251. Personal jurisdiction doctrine has substantive consequences that impact a plaintiffs
case. In addition to personal jurisdiction, other doctrines including subject matter jurisdiction
and substantive law will affect the balance between plaintiffs and defendants in products
liability cases.
252.
See generally Nicastro, 131 S. Ct. at 2799 nn.5-6.
253. The added competition from foreign companies may lead to a reduction of prices.
Additionally, a U.S. consumer may be able to obtain goods that were previously only
available in foreign markets. This would likely decrease the costs associated with shipping
that the consumer would otherwise bear.
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A GAP IN PERSONAL JURISDICTION REASONING
227
countries.2 54 As the dissent stated, the European Court of Justice
interpreted The European Regulation on Jurisdiction and the
Recognition and Enforcement of Judgments to authorize jurisdiction
either where the harmful act occurred or where the injury occurred.2 55
Thus, the courts of a member state of the European Union would have
authorized jurisdiction over J. McIntyre in New Jersey.256 Essentially,
Nicastro may allow foreign manufacturers to "seek out U.S. customers
for its products but then evade accountability in U.S. courts when those
products cause injuries" within the nation.257
V.
THE IMPACT OF THE MCINTYRE PLURALITY DECISION
Unfortunately, the Nicastro plurality issued a decision based on the
facts of a more "typical" personal jurisdiction case, where the defendant
manufacturer seeks only to purposefully avail a state's market directly,
rather than a nation's market as a whole.258 The Court looked to the
nature and extent of the contacts that J. McIntyre had directly with the
State of New Jersey, and determined that there were very few.25 9 In a
personal jurisdiction case where a foreign defendant more directly
targets consumers in one or more states, the plurality's analysis would
contain on its face none of the problems inherent in Nicastro. Courts
should pay careful attention not only to personal jurisdiction precedents,
but also to the specific facts of the case and the peculiar ramifications
that such strict adherence to doctrines may have in the future.
In the wake of Nicastro, plaintiffs seeking to bring a products
liability suit against foreign manufacturers may face obstacles finding a
court in the U.S. that could properly exercise jurisdiction over the
defendant.2 60
This problem will only intensify with increased
globalization. In his concurrence, Justice Breyer agreed that "modem
concerns" may make alteration of personal jurisdiction necessary.261 He
stated, however, that Nicastro presented no such facts that were
254. Nicastro, 131 S. Ct. at 2803-04.
255. Id. at 2803-04.
256. See id.
257.
Brief of Law Professors, supra note 10, at 18-19.
258. See Nicastro, 131 S. Ct. at 2801 (Ginsburg, J., dissenting).
259.
See id. at 2786 (plurality opinion).
260.
See supra Part IV.D. and accompanying foonotes.
261.
J. McIntyre Mach., Ltd. v. Nicastro 131 S. Ct. 2780, 2792-93 (2011) (Breyer, J.,
concurring).
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indicative of these modem changes.262 I disagree. The distribution
system employed by J. McIntyre is a product of modem changes in the
global economic makeup and reflects the way many businesses are
currently conducted.26 3 J. McIntyre's business and marketing scheme is
also indicative of the way that many international companies target U.S.
consumers and have little to no contact with U.S. customers.264 The
evolution of technology and the Internet facilitates this process as
well. 2 65 For example, online shopping allows customers to buy goods
from around the world with no more than a click of the mouse. The
Internet has also altered advertising, which is a concept related to
personal jurisdiction analysis since the presence of advertising may be a
factor that leads to the establishment of personal jurisdiction.26 6
Furthermore, the Internet allows companies to easily target groups of
people, in addition to localities. These changes affect companies'
business structures and their goals. With increasing frequency, products
liability claims may involve international parties, which will likely
present more difficult personal jurisdiction issues. Consequently,
globalization has a significant impact on personal jurisdiction
doctrine.267 Personal jurisdiction reasoning will have to change to
accommodate this, beginning with decisions rendered in cases that
present facts indicative of such globalization.
Another likely result of Nicastro is that lower courts and litigants
may be confused about the application of Nicastro. First, the plurality's
analysis builds off of Asahi, a case that has brought confusion to courts,
litigants, and practitioners for years.268 Second, like Asahi, Nicastro
failed to generate a majority opinion. 2 69 As Megan M. La Belle
explained in her article The Future of Internet-Related Personal
JurisdictionAfter Goodyear Dunlap Tires v. Brown and J. McIntyre v.
Nicastro, courts may respond differently to the opinion because Nicastro
262.
263.
264.
Id.
Id. at 2799. (Ginsburg, J., dissenting).
See Mark F. Murray, The Nuts and Bolts of International Product Distribution,
Prac. Law., January 1994, at 33-35.
265.
Megan M. La Belle, The Future of Internet-Related Personal Jurisdiction After
Goodyear Dunlap Tires v. Brown and J.McIntyre v. Nicastro, J. INTERNET L., Jan. 2012, at 3.
266. See id., (citing Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1120
(W.D. Pa. 1997) as an example of an opinion utilizing a "new test" to accommodate
technological advances).
267. See, e.g., La Belle, supra note 265 at 3, 8.
268. See Freer,supra note 242, at 584.
269.
Nicastro, 131 S. Ct. at 2785 (plurality opinion).
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A GAP IN PERSONAL JURISDICTION REASONING
229
is a split decision.2 70 In the absence of a full majority opinion, some
courts will simply continue to rely on earlier cases articulating personal
jurisdiction doctrine.
Others may follow Marks v. United States,272
which held that "' [w]hen a fragmented Court decides a case and no
single rationale explaining the result enjoys the assent of five Justices,
'the holding of the Court may be viewed as the position taken by those
Members who concurred in the judgments on the narrowest
grounds . . . ."'27
"Applying this test, "one court recently decided that
[Nicastro] stands for the proposition that "'specific jurisdiction must
arise from a defendant's deliberate connection with the forum state,'
rather than with the United States as a whole."274 Still others may give
more weight to Nicastro than necessary, applying Nicastro as if it were a
majority opinion. 275
VI. PROPOSED REMEDY
A remedy is necessary to address the problems created by the
plurality's alteration of the purposeful availment standard, which will
cause only difficulty and confusion for litigants and courts. The problem
that has been created by the Court's decision in Nicastro will not
disappear; in fact, the consequences are likely to become more
prominent with the increase of technology and globalization.
J.
McIntyre's business structure is not unique. Many foreign companies
are similarly structured and seek to promote and distribute products in
all U.S. states, without distinction.276 Thus, the Court's decision in
Nicastro has created a loophole in which many defendant manufacturers
can receive immunity from liability, placing individual consumers at a
severe disadvantage.
According to my proposed remedy, courts should adopt the
following approach: for products-liability cases that involve foreign
manufacturers which are found to target the U.S. as a whole, either
270.
271.
La Belle, supra note 265, at 3, 8.
See id. at 9 n.55.
272. 430 U.S. 188 (1977).
273. La Belle, supra note 265, at 8 (quoting Marks v. United States, 430 U.S. 188, 193
(1977)).
274. Id. (quoting Windsor v. Spinner Indus. Co., Ltd., 825 F. Supp.2d 632, 638 (D. Md.
2011).
275. Id.
276. J. McIntyre Mach., Ltd. v. Nicastro 131 S. Ct. 2780, at 2799 (Ginsburg, J.,
dissenting).
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through the use of distribution subsidiaries or other means, jurisdiction
would simply lie in the forum in which the plaintiff was injured by the
faulty product. For all other foreign manufacturers that clearly target
particular states, the current purposeful availment standard would apply
to determine where jurisdiction can properly be exercised. While such a
solution may be viewed as simplistic, it solves the Nicastro problem
because companies such as J. McIntyre would no longer be immune
from products liability lawsuits brought by injured customers.
Moreover, it involves a fact-intensive inquiry into the exact nature of the
defendant company's contacts with the state where the plaintiff was
injured and the nation as a whole. A defendant company's business
structure, goals, and system of distribution are all relevant factors that
the court would take into consideration during this inquiry. This aligns
very much with the Supreme Court's factual inquiry of J. McIntyre, and
therefore imposes no new burdens on courts. Yet rather than dismissing
the intent to target a whole nation as irrelevant to the exercise of
personal jurisdiction, this inquiry recognizes the import of that fact.
Additionally, this solution is supported by the well-worn principle
of lex loci delicti. Lex loci delicti is a long-established conflict of laws
rule, which was traditionally used to determine which state law applied
in a multistate tort action.277 Under lex loci delicti, the law that governs
an action is the "law of the place of the wrong." 2 78 Thus, the laws of the
state where the injury took place "govern[] the substantive rights of the
parties to a tort action." 2 79 While Nicastro does not involve a conflict of
laws issue and lex loci delicti has largely been discarded in the conflict
of laws context, 280 the benefits and policies behind the principle are
nevertheless applicable to my proposed solution. Lex loci delicti is a
clear, bright-line rule so the benefits include consistency, ease of
application, and predictability. 281 Lex loci delicti is also favorable to the
plaintiff in a torts action because it is based on a general policy of
Jean F. Rydstrom, Annotation, Modern Status of Rule That Substantive Rights of
277.
Parties to a Tort Action are Governed by the Law of the Place of the Wrong, 29 A.L.R. 3D
603, 613 (1970).
Id. at 613.
278.
Id. at 613-14.
279.
280. Rydstrom, supra note 277, at 623. Several courts instead opt to apply a rule that
looks at all the facts and factors of the case to "determine what 'law is most appropriate, under
the particular analytical theory or process employed, to govern the parties' rights and
liabilities with respect to any issue in tort." Id.
281.
See id. at 608.
2013]
A GAP IN PERSONAL JURISDICTION REASONING
231
Similarly, my solution seeks to bring
facilitating tort suits. 2 82
consistency to cases which involve facts like Nicastro, so that U.S.
plaintiffs in such cases can more readily be redressed for injuries as a
result of intentional marketing schemes by foreign defendants. After
weighing the potential solutions, a resolution which assigns jurisdiction
to the place where the plaintiff was injured is most beneficial because it
is easily applied and is grounded in existing legal principles.
VII. CONCLUSION
Despite high hopes that the Supreme Court would resolve
longstanding disagreements about personal jurisdiction doctrine,
especially with regard to the applicability of Asahi's stream of
commerce theory, the Supreme Court failed to do so. 2 83 Instead of
clarifying past issues, the Court created new ones. * Specifically, a
defendant corporation may market and distribute its products to the U.S.
as a whole thereby purposefully availing itself of nationwide markets,
without actually purposefully availing itself of the state in which a
consumer acquired the products and sustained injury. This "avail all
states-avail no individual states" anomaly or "gap in reasoning" is not
easily reconciled.
Additionally, the plurality has created a stricter version of the
purposeful availment standard in stream of commerce cases so that now
the principal inquiry for purposeful availment is limited only to those
purposeful actions that are directed toward the forum state.
Consequently, courts and plaintiffs alike will have to grapple with the
reasoning of the plurality decision for years to come. This is precisely
why an immediate remedy is necessary to close the gap in personal
jurisdiction reasoning.
KristiannaL. Sciarra*
282. See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2800 nn.10, 11 (Ginsburg,
J., dissenting).
283. Peterson, supra note 3, at 224.
284. Id.
* J.D., Quinnipiac University School of Law, expected May 2013; B.A., English,
Fairfield University, 2009. Many thanks to Professor Neal Feigenson, Professor Jennifer
Brown, and Professor Susan Dailey for their advice throughout the writing process. Thanks
also to the QuinnipiacLaw Review staff members for their continual support and guidance.
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