Opposition Brief — J. McIntyre Machinery, Ltd. v. Nicastro

‘ ~va Court, U.S.

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AUG 02 2010

No. 09-1343 OFFivc u. +t CLERK

IN THE

Supreme Court of the United States

J. MecINTYRE MACHINERY, LTD.,

Petitioner,

v.

ROBERT NICASTRO, et ux.,

Respondents.

ON PETITION FOR A Wrir or CERTIORARI TO THE

SUPREME Court OF NEW JERSEY

BRIEF IN OPPOSITION

ALEXANDER W. Ross, JR. JANICE L. HEINOLD

Counsel of Record RAKOSKI & Ross, P.C.

Rakxoski & Ross, P.C. 76 East Main Street

76 East Main Street Marlton, NJ 08053

Marlton, NJ 08053 (856) 988-0500

(856) 988-0500

aross@rakoskiross.com

Counsel for Respondents

231250 A

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

i

QUESTION PRESENTED

Whether a foreign manufacturer that places a

defective product in the stream-of-commerce through

a distribution scheme that targets a national market,

including New Jersey, may be subject to in personam

jurisdiction of a New Jersey court in a products liability

action when its product causes injury in that State.

ul

TABLE OF CONTENTS

Page

QUESTION PRESENTED .................. i

pp gs ys Se il

TABLE OF CITED AUTHORITIES ......... iv

PRELIMINARY STATEMENT ............. 1

Ee 3

STATEMENT OF FACTS ..................- 6

1. THIS CASE IS A POOR VEHICLE TO

EXPLORE THE QUESTION PRE-

SENTED BECAUSE THE PETITIONER

IS IN LIQUIDATION AND THE CASE

MAY BECOME MOOT. ............... 12

2. THE INTERLOCUTORY POSTURE OF

THIS CASE REQUIRES THAT REVIEW

ES “no dberasdecessondtessess 13

3. THE NEWJERSEY SUPREME COURT

DECISION DOES NOT CONFLICT

WITH THIS COURT'S DECISIONS .... — 16

iil

Contents

Page

4. THE DUE PROCESS CLAUSE OF THE

FOURTEENTH AMENDMENT OF THE

UNITED STATES CONSTITUTION IS

NOT VIOLATED BY THE STREAM OF

COMMERCE THEORY ............... 18

5. DEFENDINGA PRODUCT LIABILITY

ACTION IN NEW JERSEY WOULD NOT

OFFEND TRADITIONAL NOTIONS

OF FAIR PLAY AND SUBSTANTIAL

GUDEME sccccccsccusesseueeusunienee 23

CAFINUEAFETE sccvcccsscceniecs cueueeenae 26

Appendix Letter To Alexander W. Ross, Jr. From

Steven F. Gooby Dated March 2, 2010 ........ la

iv

TABLE OF CITED AUTHORITIES

Page

Cases:

A. Uberti & Co. v. Leonardo,

181 Ariz. 565, 892 P2d 1354 (Ariz.)

cert. denied, 516 U.S. 906,

116 S. Ct. 273, 133 L. Ed. 2d 194 (1995) ..... 17

American Constr. Co. v. Jacksonville, Tampa

and Key W. Ry Co.,

ED occ cccccccceccvccecec< 14

Asahi Metal Industry Co.

v. Superior Court of California,

480 U.S. 102, 107 S. Ct. 1026,

MCCS osccccccccscccceess passim

Bhd. Of Locomotive Firemen and Enginemen

v. Bangor & Aroostook RR,

TCD occésccccecccacescesess 13

Bruce v. Tobin,

dee kesesaececs 15

Burger King Corp. v. Rudzewicz,

471 U.S. 462, 105 S.Ct. 2174,

SE EE EP RROD oc ccc cccccscseccceces 21

Charles Gendler & Co.

v. Telecom Equipment Corp.,

102 N.J. 460, 508 A.2d 1127 (1986) ........ passim

Vv

Cited Authorities

Page

Hamilton-Brown Shoe Company v. Wolf Bros. Co.,

NEED ecdcdcdceuccueveccunss 14

Ivy Club v. Edwards,

943 F. 2d 270 (8d Cir. 1991), rehearing denied,

cert. denied, DelTufo v. Ivy Club,

ee EE. n.d vebucecdosdseunecoaes 13

Jefferson v. City of Tarrant,

I han c cncedwashendaaadues 14

Nicastro v. McIntyre Machinery America, Ltd.,

399 N.J. Super 539,

45 A2d 92 (App. Div. 2008) .............008. 17

Republic Natural Gas Co. v. Oklahoma,

oso accedkneecawkawecans 15

Robert Nicastro, et al.

v. McIntyre Machinery America, Ltd., et al.,

ee Pee PD ha bh oda0bdnseeseecanees passim

Tobin v. Astra Pharmaceutical Products, Inc.,

993 F.2d 528 (6th Cir.), cert. denied,

510 U.S. 914, 114 S. Ct. 304,

PR er 17

vi

Cited Authorities

Page

United States v. Virginia,

a I tae co in 15

Virginia Military Institute v. United States,

ee ee ce i ue ab easeeueese 15

United States Constitution:

Article III, Section 2, Clause 1 ............... 13

Fourteenth Amendment ..................05. 20

Statutes:

gd 14

Other:

Eugene Gresman, et al., Supreme Court Practice,

Section 4.18 (9 ed. BOOT) ....ccccccccccccce 14

Section 25 of the Judiciary Act of 1798 ........ 14

1

PRELIMINARY STATEMENT

Before it sought review in this Court, Petitioner, J.

McIntyre Machinery, Ltd. (hereinafter “J. McIntyre”),

filed liquidation proceedings the equivalent of

bankruptcy in the United Kingdom. Although there is

no automatic stay of litigation in Great Britain when a

company enters liquidation, J. McIntyre has insufficient

funds to satisfy any potential judgment. J. McIntyre has

sold off all of its assets and is no longer a viable company.

Therefore, this litigation may become moot. Moreover,

Petitioner’s insurer, Hampden Insurance NV, is also

insolvent and is in a run-off. See letter from Petitioner’s

counsel, attached as Appendix A hereto. Therefore, due

to the bankruptcy of the Petitioner, and the insolvency

of its insurer, this case is a poor vehicle to explore the

question presented.

In its brief, Petitioner advances two flawed

arguments on the merits. First, it argues that the New

Jersey Supreme Court has made a “sweeping departure

from this Court’s due process jurisprudence” with its

decision. Second, it argues that the New Jersey

Supreme Court has created a “new stream-of-commerce

theory,” described by the Petitioner as “an unqualified

and unexplained notion: the single ‘global marketplace.”

Petitioner’s Brief at pages 2 and 7.

Contrary to these arguments, the New Jersey

Supreme Court has simply re-affirmed the existing

stream-of-commerce theory as set forth in the New

Jersey case of Charles Gendler & Co. v. Telecom

Equipment Corp., 102 N.J. 460, 508 A.2d 1127 (1986),

and the United States Supreme Court case of Asahi

2

Metal Industry Co. v. Superior Court of California, 480

U.S. 102, 107S. Ct. 1026, 94 L. Ed. 2d 92 (1987) (plurality

opinion of Justice O’Connor). Under the facts of this

case, there is personal jurisdiction over the Petitioner

under any existing theory of stream-of-commerce

jurisdiction. Therefore, this case does not implicate any

division of authority, because jurisdiction would be

proper under any existing approach; the question

presented is purely academic.

Apart from the soundness of the decision below and

the absence of any conflict on an important issue of law,

certiorari is not warranted because the case is in an

interlocutory posture. The New Jersey Supreme Court

held that the trial court erred in dismissing the

Complaint and remanded the case for proceedings on

the merits. Should J. McIntyre prevail on the merits,

the question it now seeks to present will become

academic. Should Respondents prevail on the merits,

J. McIntyre will be able to present those issues to this

Court following entry of a final judgment. This Court

ordinarily awaits the entry of final judgment in a State

Court action before granting review, and there is no

reason to depart from that sound procedure in this case.

3

INTRODUCTION

Petitioner’s arguments have no merit. Both the

New Jersey Supreme Court and the United States

Supreme Court have embraced the stream-of-commerce

theory in one form or another for the last thirty (30)

years. In Robert Nicastro, et al. v. McIntyre Machinery

America, Ltd., et al., 201 N.J. 48 (2010), the New Jersey

Supreme Court simply found that the factual record

easily supports the exercise of jurisdiction over J.

McIntyre under the stream-of-commerce doctrine, as

articulated in Charles Gendler and Asahi, due to the

deliberate creation by a foreign manufacturer of a

nationwide distribution strategy, by use of an exclusive

American distributor, for selling its products to citizens

throughout all states, including New Jersey.

The New Jersey Supreme Court noted that J.

McIntyre, a company incorporated in the United

Kingdom, “targeted the United States market for the

sale of its recycling products.” Nicastro, 201 N.J. at 78.

It did so by forming McIntyre Machinery America, Ltd.

(hereinafter “MMA”), an Ohio-based company, to be its

exclusive United States agent and distributor for

approximately seven (7) years, ending in 2001 with

MMA’s bankruptcy and dissolution. J. MeIntyre knew

or reasonably should have known that the distribution

system it created and directed extended to the entire

United States. For years, J. McIntyre employees and

officers, together with MMA employees and officers,

attended scrap metal trade shows and national

conventions in various large American cities, where its

products were advertised and offered for sale to citizens

of all states. In fact, J. McIntyre and MMA used the

4

same booth at the Las Vegas trade convention where

plaintiff's employer first saw the McIntyre Model 640

Shear, which, due to its defective design, eventually

severed four (4) of plaintiff’s fingers. Nicastro, 201 N.J.

at 55. As concluded by the New Jersey Supreme Court,

J. Melntyre:

knew or reasonably should have known that

its machines were being sold in states other

than Ohio and in cities other than where the

trade conventions were held. J. McIntyre may

not have known the precise destination of a

purchased machine, but it clearly knew or

should have known that the products were

intended for sale and distribution to

customers located anywhere in the United

States.

Nicastro, 201 N.J. at 78-79.

J. McIntyre purposefully availed itself of the entire

American market, including New Jersey, by the creation,

control and direction of an exclusive American

distributor, and by appearing with regularity at national

trade shows and conventions, for the purpose of

marketing its products throughout the entire United

States.

Additionally, since J. MeIntyre employees and

officers had no difficulty traveling throughout the

United States to attend these trade shows and sell its

products, they cannot be heard to complain that it would

be a violation of traditional notions of fair play and

substantial justice for it to be subject to the jurisdiction

5

of New Jersey courts. Nicastro, 201 N.J. at 76. To allow

a different result would be to provide a road map to all

foreign corporations to shield themselves from liability

by hiring an exclusive American distributor, and

requiring any plaintiffs injured by its products in the

United States to travel to that American distributor’s

state in order to maintain an action against it, no matter

what hardship is created by such a draconian rule.

Contrary to the arguments of the Petitioner in its

brief, in Nicastro, the New Jersey Supreme Court

simply re-affirmed its prior decision in Charles Gendler,

supra, and meticulously articulated how its decision was

in strict conformity with the prevailing law throughout

the United States regarding foreign manufacturers,

including the decision of the United States Supreme

Court in Asahi, supra. The New Jersey Supreme Court

carefully integrated the existing stream-of-commerce

“plus” doctrine into the reality of today’s current global

marketplace, and did not create a “new test” or standard

for 1m personam jurisdiction.

Rather, the New Jersey Supreme Court specifically

held that its decision was indistinguishable from Justice

O’Connor’s stream-of-commerce plus theory in Asahi,

also espoused in Charles Gendler, to the effect that:

a manufacturer that knows or reasonably

should know that its products are distributed

through a nationwide distribution scheme that

might lead to those products being sold in any

of the 50 states must expect that it will be

6

subject to this state’s jurisdiction if one of its

defective products is sold to a New Jersey

consumer, causing injury.

Nicastro, 201 N.J. at 76-77.

The New Jersey Supreme Court noted: “The focus

is not on the ‘nanufacturer’s control of the distribution

scheme, but rather on the manufacturer’s knowledge

of the distribution scheme through which it is receiving

economic benefits in each state where its products are

sold.” Nicastro, 201 N.J. at 77.

In other words, by placing its product into the

stream the commerce, plus creating and managing a

nationwide distribution scheme intending for its

products to be distributed throughout the United

States, plus attending national trade shows where

consumers from all over the country can see their goods,

plus providing post-sale service to customers in the

United States, plus advertising in national trade

magazines, the foreign manufacturer has triggered

personal jurisdiction in any state in which its product

causes injury.

STATEMENT OF FACTS

In April 2009, Petitioner filed for liquidation (the

equivalent of bankruptcy) in Great Britain. Although the

Respondents have filed a Proof of Claim, the chances of

a full recovery are slim, due to the allegation by

Petitioner’s counsel that Petitioner’s insurance carrier,

who has directed this litigation for nearly seven

years and continues to direct it, is also in a “run-off” or

7

liquidation, and perhaps insolvent. See Letter from

Petitioner’s Counsel, attached hereto as Appendix A.

Although there is no equivalent of an “automatic stay”

of litigation following the filing of liquidation proceedings

in Great Britain, this case may be financially moot, and

therefore a poor vehicle for certiorari on the issue of

personal jurisdiction.

On October 11, 2001, plaintiff, Robert Nicastro, a

resident of New Jersey, suffered catastrophic injuries

while working on a metal shearing machine known as

an “alligator shear”, designed and manufactured by

J. Melntyre to cut scrap metal into smaller pieces, at

his employer’s business location in Saddle Brook, New

Jersey. Mr. Nicastro’s injuries include amputations and

attempted re-attachment of all four fingers on the right

hand of this working man. Mr. Nicastro had multiple

surgeries to repair his mangled hand, and has been on

and off disability since the date of the accident. His

employer’s New Jersey-based worker’s compensation

insurance has paid nearly one-half million dollars in

medical and other benefits.

Plaintiff’s liability expert, Dr. Wayne Nolte, PE.,

thoroughly inspected the shearing machine in question.

Dr. Nolte opined that the shearing machine was a

dangerous and defective product, which did not comply

with ANSI industry and OSHA standards applicable in

New Jersey or elsewhere in the United States for such

equipment.

J. McIntyre filed a motion to dismiss the Complaint

against it, contending that the Superior Court of New

Jersey did not have personal jurisdiction over it. Mr.

8

Nicastro argued that the Court did have specific

personal jurisdiction over J. McIntyre, due to its

“minimum contacts” with New Jersey by virtue of its

purposeful availment of the United States market,

including New Jersey, evidenced by its shipment of

goods there, its holding of US patents, its repeated

participation in national trade shows throughout the

United States, and its marketing strategy of using an

exclusive American agent and distributor, MMA (which

was bankrupt and dissolved prior to Mr. Nicasto’s

injury), to ship its products throughout the United

States, including New Jersey.

Defendant J. McIntyre was based in Nottingham,

England. The president of Mr. Nicastro’s employer,

Frank Curcio, ordered the J. MecIntyre-built machine

after seeing it at a trade show he attended in Las Vegas,

Nevada. J. McIntyre designed and custom built the

machine in England, and shipped the completed three-

ton machine to its exclusive American distributor and

admitted agent, MMA (formerly of Ohio, and now

dissolved through bankruptcy). MMA, in turn, shipped

the machine to plaintiff’s employer, Curcio Scrap Metal,

in Saddle Brook, New Jersey.

This is not a case of merely one component part

being sold outside of the United States, and then used

in a larger product manufactured outside of the United

States, which then randomly found its way into the

United States and eventually New Jersey, unknown to

its manufacturer, as was the case in Asahi, supra. Nor

is this a case of a used machine, manufactured overseas,

that was sold on the secondary market in the United

States, or purchased at auction, unknown to its

9

manufacturer. This large machine, weighing in excess

of three (3) tons, did not arrive in New Jersey by

accident, but. by deliberate marketing and sales design

of J. McIntyre, including personal attendance by senior

management at national trade shows intended to attract

customers from throughout the USA, including New

Jersey.

Jurisdictional discovery in this case revealed that

J. McIntyre directed MMA’s marketing plan, shared

booths with MMA at national trade shows in various

American cities, sent its employees to America to repair

its machines, and even included MMA on J. McIntyre’s

liability insurance. Discovery also revealed that Michael

Pownall, President of J. McIntyre, attended both the

1994 and 1995 trade shows in Las Vegas, which is where

Nicastro’s employer saw the machine he purchased.

Mr. Curcio, Nicastro’s employer, certified that if the

machine needed a replacement part, he would have

contacted the manufacturer in England. Indeed,

J. McIntyre’s pre-liquidation website stated that

“we supply equipment worldwide from our base in

Nottingham, England,” and encouraged customers to

call England for spare parts and service.

The documentation which accompanied the machine

was printed in England, but references USA standards,

in addition to UK standards. Therefore, it is obvious

that J. McIntyre was directing sales and intending to

sell its products specifically to United States customers.

Interestingly, it appears as though J. McIntyre not only

structured MMA’s advertising and sales efforts in the

United States, but also covered MMA under its liability

10

insurance policy until at least January 1, 2000. It

appears that a J. McIntyre employee named David was

in America to do on-site repairs to machines for United

States customers. Discovery has also revealed that J.

McIntyre considered MMA “partners” or at the very

least its “agent” in the United States. A fax dated

November 23, 1999, from Michael Pownall of J. McIntyre

to MMA stated: “All we wish to do is sell our products in

the United States - and get paid! If this isn’t possible

then the only other option open to us is for us to split

up in an amicable fashion as quickly as we can.” Another

faxed letter, dated January 13, 1999, from Sally Johnson

of J. McIntyre to Mary Gaither of MMA, states: “I have

spoken to the Boss regarding your last email, and we

both agree that it is time he and I came over to visit you

to see how we can get things back on an even keel and

move the business forwards [sic].” Another letter from

Sally Johnson to Mary Gaither of MMA, also dated

January 13, 1999, states: “sales in the States will start

to come in, as they have from the rest of the world, and

that McIntyre Machinery America can take over the

after-sales support, commissioning, service, etc... .” In

other words, J. McIntyre was an active partner in MMA,

controlling sales, service and support.

Additionally, two articles which appeared in a trade

publication called Recycling Today, one in May 2002 and

one on October 10, 2003, discuss J. McIntyre’s sales

efforts being directed towards the United States

market. The article in May 2002 contains statements

from Sally Johnson, J. McIntyre’s managing director,

including: “MeIntyre shears are well established in

America,” “Recycling Equipment Corp. (REC),

Souderton, Pa., [is] the exclusive North American

11

distributor of its complete line of metal cleaning shears,”

and “we sold a shear straight off the stand at an

American exhibition.” May 2002, Recycling Today

Article. Clearly, when its exclusive distributor was in

Souderton, Pennsylvania, less than an hour from the

New Jersey border, defendant J. McIntyre should have

and would have expected that its product may be

purchased and utilized in nearby New Jersey.

Plaintiffs also hired an investigator to find other

scrap metal dealers in New Jersey who own a machine

manufactured by J. McIntyre. According to Bob

Alexander of Strip-Tec, J. MeIntyre’s 2003 exclusive

dealer in the United States, at least four scrap metal

companies in New Jersey have J. McIntyre machines:

Raff Recycling in Cape May Court House, Max

Weinstein Scrap Metals in Union, Cinelli Scrap Metal

in Hackensack, and Curcio Scrap Metal in Saddlebrook

(Nicastro’s employer). Thus, J. MeIntyre actively sought

buyers in the state of New Jersey, through their

exclusive U.S. dealer, and via their website. See also J.

McIntyre’s October 10, 2003 article in Recyling Today,

encouraging “North American buyers” to purchase and

register their machines to “allow McIntyre and Strip-

Tec to offer full support” for their products. Not only

does J. McIntyre have minimum contacts with the

state of New Jersey, due to selling their machines

through their exclusive distributor to four New Jersey

customers, and having an exclusive agent at one time in

nearby Souderton, Pennsylvania, but they purposefully

availed themselves of the United States market, which

includes New Jersey.

12

In short, J. McIntyre directed its products to be

marketed and sold throughout the United States, and

yet claims immunity from suit almost anywhere,

including New Jersey, due to its strategy of using a

thinly-veiled, financially- irresponsible distributor (the

bankrupt and dissolved MMA), with a nearly identical

name, whose marketing and sales were directed by

J. McIntyre, and who was also included in J. MeIntyre’s

liability insurance.

J. MeIntyre is.a menace to American workers, such

as Mr. Nicastro, due to its dangerous and defective

product, which it deliberately caused to be marketed

and distributed throughout the United States with

impunity. J. MeIntyre is everywhere when it comes to

sales, and nowhere when it comes to liability, due to its

disingenuous “indenendent distributor” strategy, while

it not only firmly controlled MMA, it even provided

insurance coverage to MMA. This liability-evasion

technique is just the sort of activity that stream-of-

commerce-plus personal jurisdiction seeks to prevent.

REASONS FOR DENYING THE PETITION

1. THIS CASE IS A POOR VEHICLE TO EXPLORE

THE QUESTION PRESENTED BECAUSE THE

PETITIONER IS IN LIQUIDATION AND THE

CASE MAY BECOME MOOT.

In or about April 2009 the Petitioner, J. McIntyre

filed “liquidation” proceedings in Great Britain, which

is the equivalent of bankruptcy in the United States.

Furthermore, Petitioner’s insurer, Hampden Insurance

N.V. is also apparently insolvent and is in “run-off.”

13

See letter from Petitioner’s counsel dated March 2, 2010,

attached as Appendix A. As a consequence, for all

practical purposes, this case is or may become moot, due

to the absence of any funds to satisfy the Respondent,

or to continue with this litigation. Under these

circumstances, the case is simply not worthy of Supreme

Court review, as it may not constitute an actual, ongoing

“case or controversy” as required by the United States

Constitution, Article III, Section 2, Clause 1. vy Club

v. Edwards, 943 F. 2d 270, 275 (3d Cir. 1991), rehearing

denied, cert. denied, DelTufo v. Ivy Club, 503 U.S. 914

(1992).

2. THE INTERLOCUTORY POSTURE OF THIS

CASE REQUIRES THAT REVIEW BE DENIED.

In light of Petitioner’s bankruptcy and the

limitations on this Court’s jurisdiction to review

non-final state-court judgments, the interlocutory

nature of the ruling below also offers a compelling reason

to deny review. The New Jersey Supreme Court

remanded this case to the Law Division (trial court) for

proceedings on the merits. Should J. McIntyre prevail

on the merits, the issue of personal jurisdiction will

become academic. Should the Respondent prevail on the

merits, J. McIntyre will have an opportunity at that

time to present the issues of personal jurisdiction to this

Court, following entry of a final judgment. This Court

ordinarily awaits the entry of final judgment before

granting review, Bhd. Of Locomotive Firemen and

Enginemen v. Bangor & Aroostook RR, 389 U.S.

327, 328 (1967), and there is no reason to depart from

16

3. THK NEWJERSEY SUPREME COURT DECISION

DOES NOT CONFLICT WITH THIS COURT’S

DECISIONS

In Asahi, Justice O’Connor, writing for four

members of the Court, construed the facts of that case

under a test that has become known as stream-of-

commerce plus. 108-13, 107 S. Ct. at 1030-32 (plurality

opinion). Under that test, the actions of a defendant must

be “purposefully directed toward the forum State” for

a Court of that State to exercise personal jurisdiction.

As noted by the Nicastro Court, according to Justice

O’Connor, the stream-of-commerce plus test requires

that the defendant engage in “additional conduct . . .

indicat[ing] an intent or purpose to serve the market in

the forum State.” /bid. That “additional conduct” could

be “designing the product for the market in the forum

State, advertising in the forum State, establishing

channels for providing regular advice to customers in

the forum State, or marketing the product through a

distributor who has agreed to serve as the sales agent

in the forum State.” /d. at 68 (emphasis added). Justice

Brennan espoused a less vigorous view of the stream-

of-commerce doctrine, and saw no need for plaintiff to

present “additional conduct” to establish that the

defendant’s acts were “purposefully directed toward the

forum State.” Jd. at 69.

Even under Justice O’Connor’s more restrictive

view of “additional conduct” required in her stream-of-

commerce plus approach, the New Jersey Supreme

Court in Nicastro held that J. McIntyre satisfied the

stream-of-commerce plus doctrine, by virtue of its

17

targeting of the national market through a nationwide

distribution scheme, inclusive of New Jersey. The New

Jersey Appellate Division opinion in Nicastro v.

McIntyre Machinery America, Ltd., 399 N.J. Super 539,

45 A2d 92 (App. Div. 2008), quoted approvingly by the

New Jersey Supreme Court, concluded that

J. MeIntyre’s “conduct in establishing and operating

under this exclusive distributorship arrangement

constituted the necessary other conduct by which it

purposefully availed itself of the benefits and

protections of all fifty states, including New Jersey.”

Nicastro, 201 N.J. at 74.

As set forth in Tobin v. Astra Pharmaceutical

Products, Inc., 993 F.2d 528 (6 Cir.), cert. denied, 510

U.S. 914 (1993) and A. Uberti & Co. v. Leonardo,181

Ariz. 565, 892 P2d 1354 (Ariz.) cert. denied, 516 U.S.

906 (1995), a manufacturer that knows or reasonably

should know that its products are distributed through

a nationwide distribution system that might lead to

those products being sold in any of the 50 states, must

expect that it will be subject to any state’s jurisdiction

if one of its defective products caused injury.

The New Jersey Supreme Court further noted:

The focus is not on the manufacturer’s control

of the distribution scheme, but rather on the

manufacturer’s knowledge of the distribution

scheme through which it is receiving economic

benefits in each state where its products are

sold. A manufacturer cannot shield itself

merely by employing an independent

18

distributor a middle man knowing the

predictable route the product will take to

market.

Nicastro, 201 N.J. at 77 [citations omitted].

The decision of the New Jersey Supreme Court in

Nicastro merely comports with both long-standing New

Jersey Supreme Court and United States Supreme

Court opinions on this subject, specifically, Charles

Gendler and Asahi.

In shert, the facts of this case would satisfy personal

jurisdiction under any prevailing theory and does not

implicate any conflict requiring review by this Court.

4. THE DUE PROCESS CLAUSE OF THE

FOURTEENTH AMENDMENT OF THE

UNITED STATES CONSTITUTION IS NOT

VIOLATED BY THE STREAM OF COMMERCE

THEORY

In Nicastro, the New Jersey Supreme Court held

that “a foreign manufacturer that places a defective

product in the stream-of-commerce through a

distribution scheme that targets a national market,

which includes New Jersey, may be subject to

in personam jurisdiction of a New Jersey Court in a

product liability action.” 201 N.J. at 73.

The New Jersey Supreme Court noted that the

United States Supreme Court in Asahi “embraced the

stream-of-commerce theory in one form or another”.

Nicastro, 201 N.J. at 72. It further noted that in Asahi,

19

neither Justice O’Connor nor Justice Brennan “intended

that a foreign manufacturer seeking to capture a

national market through a nationwide distribution

scheme would be immune from suit in every state.” To

the contrary, by virtue of targeting the entire United

States as its potential market, the foreign manufacturer

cannot claim immunity when one of its products causes

damage or injury in any given state.

As set forth in Charles Gendler:

In today’s complex business world foreign

manufacturers rarely deliver products directly

to consumers in the United States. | Citation

omitted.] Instead, these manufacturers

employ middle men, many of whom are often

independent, to act as their distribution arms.

To allow a foreign manufacturer to shield itself

from liability for damages caused by its

products distributed by those middlemen

would be to permit “a legal technicality to

subvert justice and economic reality in the

worse sense.” |Citation omitted.| Foreign

manufacturers should not be allowed to

insulate themselves by using intermediaries

in a chain of distribution or by professing

ignorance of the ultimate destination of their

products. [Citations omitted.] Thus, the

stream-of-commerce theory supports personal

jurisdiction over foreign manufacturers that

derived benefits from the distribution and

sale of their products in the United States.

x #

20)

We believe, however, that a manufacturer

need not so control the distribution system to

place its products into the stream of commerce

and, therefore, control of that system is not

necessary to subject the manufacturer to the

jurisdiction of the forum state. [Citation

omitted.| The focus is on the manufacturer’s

actual or constructive awareness of the

system, not on control of the distribution of

its products.

Accordingly, a manufacturer that knows its

products are distributed through a

nationwide distribution system should

reasonably expect that those products would

be sold throughout the fifty states aid that it

will be subject to the jurisdiction of every

state.

102 N.J. at 479-481.

The “minimum contacts” necessary to satisfy the

Due Process Clause of the Fourteenth Amendment is

triggered by a nationwide distribution system which

targets customers in every state. As stated in Nicastro:

The preeminent issue is whether we will

read the Due Process Clause in a way that

renders a state, such as New Jersey,

powerless to provide relief to a resident who

suffers serious injuries from a product that

was sold and marketed by a manufacturer,

21

through an independent distributor, knowing

that the final destination might be a New

Jersey consumer.

201 N.J. at 74-75.

In this case, the British manufacturer of this large

industrial product deliberately created a national

marketing and distribution scheme throughout the

United States, with the intent to sell its products in all

fifty states, including New Jersey, with devastating

consequences for Mr. Nicastro.

The Nicastro court quoted from the United States

Supreme Court decision in Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 2182, 85

L.Ed. 2d 528, 541 (1985), in noting that every state has

a strong interest in protecting its citizens:

A state has a strong interest in prcvecting its

citizens from defective products, whether

those products are toys that endanger

children, tainted pharmaceutical drugs that

harm patients, or work place machinery that

causes disabling injuries to employees. A state

also has a paramount interest in insuring a

forum for its injured citizens who have

suffered catastrophic injuries due to allegedly

defective products in the workplace. See

Burger King Corp. v. Rudzewicz, 471 U.S.

462, 473, 105 S.Ct. 2174, 2182, 85 L.Ed. 2d 528,

541 (1985) (“A State generally has a manifest

interest in providing its residents with a

convenient forum for redressing injuries

22

inflicted by out-of-state actors.” (citation and

internal quotation marks omitted.)) See also

Charles Gendler, supra, 102 N.J. at 43, 508

A.2d 1127 (“A State’s interest in providing a

forum for its residents is more compelling in

a personal injury action than in commercial

litigation.”)

Nicastro, 201 N.J. at 75.

In Nicastro, the New Jersey Supreme Court noted

that it was simply re-affirming its holding in Charles

Gendler, to the extent that “a forum manufacturer will

be subject to this State’s jurisdiction if it knows or

reasonably should know that through its distribution

scheme its products are being sold in New Jersey.”

Nicastro, 201 N.J. at 73 and 77. The holding in Nicastro

is also in strict conformity with Justice O’Connor’s

plurality opinion in Asahi, which listed, among other

indicia of minimum contacts, “marketing the product

through a distributor who has agreed to serve as the

sales agent in the forum State,” the exact situation here,

wherein MMA was the exclusive distributor who agreed

to serve as J. McIntyre’s US agent for all 50 states,

including New Jersey, an “independent agent” which

was nonetheless under the frequent and direct control

of J. McIntyre. Nicastro, 201 N.J. at 76-77.

23

5. DEFENDING A PRODUCT LIABILITY ACTION

IN NEW JERSEY WOULD NOT OFFEND

TRADITIONAL NOTIONS OF FAIR PLAY AND

SUBSTANTIAL JUSTICE

The New Jersey Supreme Court in Nicastro noted

in detail that J. McIntyre, “cannot make out a case that

travel to New Jersey is onerous or an unfair burden for

it to bear.”

J. MclIntyre’s officials have visited various

cities throughout the United States to

promote its business interests, attending

trade conventions and meeting with

representatives of its exclusive distributor.

Certainly, defending the product liability

action in Ohio, where J. McIntyre’s now-

defunct exclusive distributor conducted

business, or in Nevada, the site of the 1994

and 1995 trade conventions, would be no more

convenient than in New Jersey. Indeed, New

Jersey is a shorter distance from England

than those locales, and neither the Ohio nor

Nevada Courts would seem to have an

interest in resolving a product-liability action

in which an English manufacturer’s product

injured a New Jersey resident in New Jersey.

Nicastro, 201 N.J. at 79-80.

Furthermore, defending a suit in one of the United

States is not as burdensome as it once might have been,

given that air transport can bring the principals of a

business here within hours and instantaneous

24

communication allows an ongoing dialogue with counsel

in this country.

If it is not inconvenient for the principals

of a company to attend trade conventions and

conduct business meetings with an

independent distributor in this country for the

purpose of marketing its products, then it

should not be too great a burden to defend a

lawsuit here when one of its defective

products causes serious bodily injury.

Nicastro, 201 N.J. at 76.

On the other hand, New Jersey has a strong interest

in exercising jurisdiction:

Plaintiff is a New Jersey resident; the

allegedly defective product was purchased by

a New Jersey consumer, plaintiff’s employer;

the injury occurred in a New Jersey

workplace; plaintiff was treated for his injuries

in the New Jersey regional area; the

evidence the shear machine and most of

the necessary witnesses, are located in New

Jersey; and last, the law of this State likely

will govern the action.

Nicastro, 201 N.J. at 80.

As concluded by the New Jersey Supreme Court:

It would be unreasonable to expect that

plaintiff’s only forum of relief is to be found

25

in the Courts of the United Kingdom, which

may not have the same protections provided

by this State’s product-liability law. Under all

the circumstances, New Jersey has a rightful

claim to resolve the dispute between the

parties and to assert jurisdiction over this

product liability action.

Nicastro, 201 N.J. at 80.

In sum, the foreign manufacturer has deliberately

visited the United States for marketing purposes at

national conventions throughout the country, seeking

customers from every state and actively promoting its

machines for sale all over the country, and selling it

through an exclusive distributor, and should not be

heard to complain that it represents an unreasonable

or disproportionate burden to litigate a case of

catastrophic personal injuries in New Jersey, contrary

to “traditional notions of fair play and substantial

justice.”

The hypothetical example given by Petitioner’s

counsel regarding a lone candlemaker in Alaska selling

a candle through a Seattle gift shop to a New Jersey

tourist is utterly inapposite to the case at bar. If the

hypothetical candlemaker attended national candle-

making trade shows throughout the United States,

seeking customers from all 50 states, manufactured

candles for industrial purposes, but with dangerous

defects such as exploding wax, and hired an

“independent” exclusive US distributor, but controlled

the distributor’s nationwide marketing and sales,

provided liability insurance to the distributor, and

26

boasted of its sales throughout the United States, the

candlemaker example would be closer to the reality of

this case.

CONCLUSION

For all of the foregoing reasons, the opinion of the

New Jersey Supreme Court in Nicastro simply re-

affirms the existing stream-of-commerce theory, which

has been in place for over twenty years in New Jersey

under Charles Gendler, and set forth in the United

States Supreme Court case of Asahi, and therefore, the

petition for a writ of certiorari should be denied.

Respectfully submitted,

ALEXANDER W. Ross, JR.

Counsel of Record

Rakosk! & Ross, P.C.

76 East Main Street

Marlton, NJ 08053

(856) 988-0500

aross@rakoskiross.com

JANICE L. HEINOLD

Rakosk! & Ross, P.C.

76 East Main Street

Marlton, NJ 08053

(856) 988-0500

Counsel for Respondent

APPENDIX

la

APPENDIX LETTER TO ALEXANDER W.

ROSS, JR. FROM STEVEN F. GOOBY

DATED MARCH 2, 2010

ANSA | ASSUNCAO LLP

March Z, 2010

VIA UPS OVERNIGHT DELIVERY

Alexander W. Ross, Jr., Esq.

Rakoski & Ross, PC.

76 East Main Street

Marlton, New Jersey 08053

Re: Nicastro v. McIntyre Machinery America, Lid.

Dear Mr. Ross:

Enclosed is a copy of correspondence received by

my former co-counsel, DLA Piper (UK) LLP from RSM

Tenon Recovery in Nottingham, England concerning J.

MeIntyre Machinery Ltd.’s (“JMM”) liquidation

proceedings in the United Kingdom. Included with the

Joint Liquidator’s correspondence is a copy of a “proof

of debt” form. Please be guided accordingly.

We are also advised that JMM’s insurer, Hampden

Insurance N.V, is insolvent and is in run-off. Enclosed

is a copy of the insurer’s most recent annual report for

your reference. We are further advised that as of

December 31, 2009, Hampden closed its London office

and its only remaining office is located in Rotterdam.

2a

Appendix

Please contact me at your convenience to discuss.

Very truly yours,

s/ Steven F. Gooby