Amicus Curiae Brief — J. McIntyre Machinery, Ltd. v. Nicastro

Supreme Court brief2011

Ask Donna

What actually matters in this document.

Text

! |

No. 09-1343 Lomey ny ep. J

IN THE

Supreme Court of the Anited States

J. MCINTYRE MACHINERY LTD.,

Petitioner,

Vv.

ROBERT NICASTRO, et ux.,

Respondents.

On Writ of Certiorari to the

Supreme Court of New Jersey

BRIEF OF AMICUS CURIAE PUBLIC CITIZEN,

INC., INSUPPORT OF RESPONDENTS

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZLEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

Attorneys for Amicus Curiae

December 2010

QUESTION PRESENTED

Whether the Due Process Clause permits a state

court to exercise personal jurisdiction over an alien

corporation that has aimed the marketing of its prod-

uct equally at that state and other states, where the

alien corporation’s actions have resulted in injury

within the state.

TABLE OF CONTENTS

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

TABLE OF AUTHORITIES ....00000.......... ce cccecsssseeeseees ill

INTEREST OF AMICUS CURIAE ............00..0.00 ]

SET i Lib ndtiia an clanicsnsabasingescdbeiapebenabionemenesiaits 2

SUMMARY OF ARGUMENT ......0000000....c cece ecceeeee eee 3

TTT scilasicciiccilesiissiiidinsthiiadsinleceisineiniiiannintansnidieibiedeniach 5

I. States Have Strong Interests in Exercis-

ing Jurisdiction Over Alien Corporations

Whose Business Activities Cause Injuries

to The States’ Residents and Workers. ................ 5

II. An Alien Corporation That Has Marketed

Its Products Nationwide Has No Signifi-

cant Liberty Interest in Avoiding Juris-

diction in a State Where Its Actions Have

ea scenes sdndetoennits )

IJI. New Jersey’s Assertion of Personal Ju-

risdiction Over McIntyre Accords With

This Court’s Jurisprudence. .......................... “ae

IV. Limiting the States’ Exercise of Personal

Jurisdiction Over Cases Such as This One

Would Have Significant Adverse Conse-

TR TEESE eNO” AAS DEER ne oe 19

IT iscnsiontnecinuninsionninaiindecndistbuselinunionenimenisit 22

TABLE OF AUTHORITIES

Page(s)

Cases:

Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981) .......... 8

Asahi Metal Indus. Co. v. Super. Ct. of Calif.,

Ss Se ED sscnsedcccsesascvevescccssens 10, 14, 15, 16

Barone v. Rich Bros. Interstate Display Fire-

works Co., 25 F.3d 610 (8th Cir.), cert. de-

nied sub nom. Hosoya Fireworks Co. v.

Barone, 513 U.S. 948 (1994)... ee 16, 17

Beverly Hills Fan Co. v. Royal Sovereign

Corp., 21 F.3d 1558 (Fed. Cir.), cert.

dism’d sub nom. Royal Sovereign Corp. v.

Beverly Hills Fan Co., 512 U.S. 1273

SII saad Sceensuatbslasapdancniesneisensacaeitmanerenenitsnaleniitasia 16

Burger King Corp. v. Rudzewicz, 471 U.S. 462

Terre =H A

Calder v. Jones, 465 U.S. 783 (1984)...........0..00.008. 7,8

Clune v. Alumak AB, 233 F.3d 538 (8th Cir.

2000), cert. denied sub nom. Industrivar-

den Serv. AB v. Clune, 533 U.S. 929 (2001)......... 16

Etchieson v. Central Purchasing, LLC, 232

P.3d 301 (Colo. Ct. App. 2010) ...............000000.. 17, 19

Felty v. Conaway Processing Equip. Co., ‘738

FP. Sump. O17 (B.D. Pa. TDDB) .....00.ccccccsccccccoscceceese 16

Giotis v. Apollo of the Ozarks, Inc., 800 F.2d

660 (7th Cir.1986), cert. denied, 499 U.S.

EE clips saesek = unrnicic eeakvinamnaiadenaiadasicitadete 16

GSK Technologies, Inc. v. Schneider Elec.,

S.A., 2007 WL 788343 (E.D. Tex. March

i __SRRRREEE,._RSPER RAP nn er PETE baer ~—

Hanson v. Denckla, 357 U.S. 235 (1958) ....0.......... 5, 10

Hicks v. Kawasaki Heavy Indus., 452 ¥. Supp.

Pe IN IEEE vcsuicecsnisiniscsinssosaibesnaubanpidcoovinenice: 16

Ins. Corp. of Ireland v. Compagnie des Baux-

ites de Guinee, 456 U.S. 694 (1982) 000000. i)

Int’l Shoe Co. v. Washington, 326 U.S. 310

(1945)... cccceccceceesessescesseeseseeveeeveseeeeerseseee 8, 5, 6, 7, 22

Kaplan v. DaimlerChrysler, A.G., 99 F. Supp.

2d 1348 (M.D. Fla. 2000) .........0......cccce cece 16

Keeton v. Hustler Magazine, 465 U.S. 770

Da Rea re ue eet ater tf 7, 8, 16, 18, 22

Kernan v. Kurz-Hastings, Inc., 175 F.3d 236

I ccc Giceeas lisa ance duletuiied es 16

Kulko v. Super. Ct. of Calif., 436 U.S. 84

SEIN nun sencussndavina’- Calatunauateabescnidedeieasaarioecs 6,10

Le Manufacture Francaise des Pneumatiques

Michelin v. Dist. Ct., 620 P.2d 1040 (Colo.

I ati tare eer eee eee Ld 16

McGee v. Int'l Life Ins. Co., 355 U.S. 220

(RET ERAN ER Ok Se at ER RR 6, 7,8, 12

Itush v. Sauvchuk, 444 U.S. 320 (A980) ooo... 5, 10

Shaffer v. Heitner, 433 U.S. 186 (1977)............... 4,5,6

Stokes v. L. Geismar, S.A., 815 F. Supp. 904

(E.D. Va. 1993), aff'd mem., 16 F.3d 411

I ee a on: 16

Thompson v. Nishimoto Trading Co., 689

Pe a ee A, GBs BI he necestssrcsenessniiensassios 17

uBID, Inc. v. GoDaddy Group, Inc., 623 F.3d

Is HIT coccenacstncesnesiawicnsunndsentoncnianeys 17, 18

Vandelune v. 4B Elevator Components Unili-

mited, 148 F.3d 943 (8th Cir.), cert. denied

sub nom. Synatel Instrumentation Ltd. v.

Vandelune, 525 U.S. 1018 (1998) ............... eee 16

Vermeulen v. Renault, U.S.A., Inc., 985 F.2d

1534 (11th Cir.), cert. denied sub nom.

Regie Nationale des Usines Renault S.A. v.

Vermeulen, 508 U.S. 907 (1998) ..................002.. ae

World-Wide Volkswagen Corp. v. Woodson,

444 US. 286 (1980)... 6, 7, 8, 10, 11, 14, 16

Young v. New Haven Advocate, 315 F.3d 256

(4th Cir. 2002), cert. denied, 538 U.S. 1035

Na nia oa cigbehaeetiaccaakedeacieaicdinedsciciadintode macumabassiateeiil 18

Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.

Supp. 1119 (W.D. Pa. 1997)................... sengenl 20

Other:

Ronan E. Degnan & Mary Kay Kane, The Ex-

ercise of Jurisdiction Over and Enforce-

ment of Judgments Against Alien Defen-

dants, 39 Hastings L.J. 799 (1988)............000.0... 13

Austen L. Parrish, Sovereignty, Not Due

Process: Personal Jurisdiction Over Non-

resident Alien Defendants, 41 Wake Forest

a NO Be IE Sas enicit uccsiscaics sash acdc meni diiaddddmacd bail 13

Christopher A. Whytock, The Evolving Forum

Shopping System, 96 Cornell L. Rev.

(forthcoming), available at

http://papers.ssrn.com/sol3/papers.cfm?abs

I EEE En

INTEREST OF AMICUS CURIAE'

Public Citizen, Inc., a national consumer-advocacy

organization founded in 1971, appears on behalf of its

approximately 225,000 members and supporters be-

fore Congress, administrative agencies, and courts on

a wide range of issues, and works for enactment and

enforcement of laws protecting consumers, workers,

and the public. Public Citizen often represents the in-

terests of its members in litigation and as amicus cu-

riae.

Public Citizen has long worked to maintain the

availability of the courts to provide remedies to indi-

viduals who suffer injuries caused by defective prod-

ucts. The ability of the courts to provide such reme-

dies may be thwarted by unduly narrow conceptions

of the circumstances in which courts may exercise au-

thority over those who cause injuries within their ter-

ritorial jurisdiction. In this case, the contention of pe-

titioner J. McIntrye Machinery, Ltd. (McIntyre) that

an alien corporation may engage in a concerted pro-

gram of marketing directed at all fifty states without

being subject to jurisdiction in any state (or at least

not in 49 of them) when its products cause injury re-

flects precisely such a crabbed view of the scope of ju-

risdiction, and fails to give effect to the substantial

interests of plaintiffs in having a forum in which to

vindicate their rights under applicable law. Public Cit-

' Written consents from both parties to the filing of amicus

curiae briefs in support of either party are on file with the Clerk.

This brief was not authored in whole or 1n part by counse! for a

party. No person or entity other than amicus curiae or its coun-

sel made a monetary contribution to preparation or submission

of this brief.

izen therefore submits this brief to urge the Court to

ensure that injured parties’ interests in reasonable

access to judicial remedies and the states’ interests in

providing such remedies are not sacrificed on the ba-

sis of unwarranted claims of unfairness to defendants

who do business throughout the country.

STATEMENT

The briefs of the parties and the opinions below

show that the dispositive facts are clear and undis-

puted, whatever disputes may remain around the

margins. McIntyre is in the business of manufactur-

ing and selling equipment for a specialized market,

the metal recycling industry, including shearing ma-

chines for which it charges tens of thousands of dol-

lars each. To serve the market for its products in the

United States, McIntyre over time designated a series

of exclusive distributors who, with McIntyre’s assis-

tance, sought to promote sales throughout the coun-

try—including New Jersey, where several of MclIn-

tyre’s machines were sold.

At the relevant time here, McIntyre’s U.S. distrib-

utor was McIntyre Machinery America, Ltd., a com-

pany that happened to be located in Ohio. A buyer in

New Jersey ordered one of MclIntyre’s machines,

which McIntyre shipped to the United States in re-

sponse to the order as relayed by the distributor. The

price of the machine was approximately $25,000,

which McIntyre received (less the distributor’s com-

mission). As a result of the New Jersey customer’s use

of the machine for its intended purpose in the location

to which MclIntyre’s U.S. distributor sent it, a citizen

of New Jersey was seriously injured, allegedly because

of the machine’s defective design.

SUMMARY OF ARGUMENT

Sustaining the New Jersey courts’ assertion of ju-

risdiction over Mcintyre in this case is fully consistent

with the principles that have governed this Court’s

personal jurisdiction doctrine since its decision in /[n-

ternational Shoe Co. v. Washington, 326 U.S. 310

(1945). International Shoe’s core requirement that a

defendant have the minimum degree of contact with

the forum state necessary to render the assertion of

jurisdiction over it consistent with “traditional no-

tions of fair play and substantial justice,” id. at 316, is

amply satisfied when, as in this case, an alien defen-

dant has engaged in commercial conduct directed at

creating a market for its products nationally, and that

conduct has given rise to an injury within the bounds

of the forum state.

This Court’s decisions have emphasized that the

consideration of “minimum contacts” is not a purely

mechanical or quantitative analysis, but one that

looks to whether the defendant’s forum-directed activ-

ities are sufficient, in light of the state’s legitimate

interests in subjecting the defendant to jurisdiction.

In other words, the minimum contacts analysis is not

purely defendant-centric: its focus is on fairness to the

defendant in relation to the forum state’s interests,

including its interests in protecting its residents.

Here, and in similar cases involving alien corporations

that market their products throughout the United

States, the states have powerful interests in regulat-

ing the safety of those products and in providing re-

medies to residents whose injuries are the direct re-

sult of the corporations’ forum-directed conduct. By

contrast, an alien corporation has little or no legiti-

mate liberty interest in not having to appear in any

particular state where its efforts to serve the national

market have resulted in injury.

Accordingly, subjecting an alien corporation to

personal jurisdiction in the circumstances here fully

accords with notions of fair play and substantial jus-

tice. McIntyre embarked on a course of conduct aimed

at serving the market for scrap-metal shearing

equipment throughout the United States; it shipped a

large and expensive piece of equipment for which it

received a substantial payment in response to an or-

der from a New Jersey buyer who responded to its na-

tional marketing efforts; and the use of the equipment

by the New Jersey customer resulted in substantial

injuries to a worker in New Jersey, allegedly as a re-

sult of McIntyre’s defective design. These circums-

tances create a “relationship among the defendant,

the forum, and the litigation,” Shaffer v. Heitner, 433

U.S. 186, 204 (1977), that is ample to support the ex-

ercise of jurisdiction. Similar circumstances, moreo-

ver, are generally held to support jurisdiction in the

emerging field of e-commerce. Of course, concerns of

fairness and due process may preclude the assertion of

personal jurisdiction in cases in which the occurrence

of injury within the forum state is, from the defen-

dant’s standpoint, a fortuity unrelated to any actions

that it could reasonably have understood would sub-

ject it to jurisdiction in that state. But this is not such

a case.

ARGUMENT

I. States Have Strong Interests in Exercising

Jurisdiction Over Alien Corporations

Whose Business Activities Cause Injuries

to The States’ Residents and Workers.

Since this Court’s decision in International Shoe, it

has been settled that personal jurisdiction does not

turn on the physical presence of a defendant in the

forum state: “Jurisdiction ... may not be avoided

merely because the defendant did not physically enter

the forum State.” Burger King Corp. v. Rudzewicz,

471 U.S. 462, 476 (1985). Rather, as the Court has re-

peatedly stated, the limits on the power of a state

court to exercise personal jurisdiction over an out-of-

state defendant are supplied by considerations of due

process, under which a defendant must “have certain

minimum contacts with [the forum State] such that

the maintenance of the suit does not offend ‘tradi-

tional notions of fair play and substantial justice.’”

Int’l Shoe, 326 U.S. at 316 (citation omitted). Put

another way, there must be “such contacts of the [de-

fendant] corporation with the state of the forum as

make it reasonable, in the context of our federal sys-

tem of government, to require the corporation to de-

fend the particular suit which is brought there.” Jd. at

317.

Although the requisite contacts must be the result

of each defendant’s own conduct, see, e.g., Rush uv.

Savehuk, 444 U.S. 320, 331-32 (1980), Hanson uv.

Denckhla, 357 U.S. 235, 253 (1958), minimum contacts

analysis does not focus on only the defendant’s inter-

ests. Nor is the determination of minimum contacts a

matter of “[mJechanical or quantitative evaluations of

the defendant’s activities in the forum.” Shaffer v.

Heitner, 433 U.S. at 204. Rather, because the question

is whether the defendant’s activities are such as to

make the exercise of jurisdiction over it reasonable,

those activities must be considered in relation to the

relevant interests of the forum state. As the Court put

it in International Shoe, “Whether due process is sa-

tisfied must depend ... upon the quality and nature of

the activity in relation to the fair and orderly adminis-

tration of the laws which it was the purpose of the due

process clause to insure.” 326 U.S. at 319.

The Court elaborated on the significance of forum

interests in determining whether a defendant’s con-

tacts suffice to render the exercise of jurisdiction fair

and reasonable in World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 292 (1980):

Implicit in this emphasis on reasonableness is

the understanding that the burden on the defen-

dant, while always a primary concern, will in an

appropriate case be considered in light of other

relevant factors, including the forum State’s in-

terest in adjudicating the dispute, see McGee uv.

International Life Ins. Co., 355 U.S. 220, 223

(1957); the plaintiff's interest in obtaining con-

venient and effective relief, see Kulko v. Califor-

nia Supertor Court, ... 436 U.S. [84,] 92 [(1978)],

at least when that interest is not adequately pro-

tected by the plaintiffs power to choose the fo-

rum, ef. Shaffer v. Heitner, 433 U.S. [at] 211,

n.37 ...; the interstate judicial system’s interest

in obtaining the most efficient resolution of con-

troversies; and the shared interest of the several

States in furthering fundamental substantive so-

cial policies, see Kulko v. California Superior

Court, supra, 436 U.S., at 93, 98.

As the Court’s citations in World-Wide Volkswagen

indicate, consideration of state interests in determin-

ing whether a defendant’s contacts are sufficient to

make it fair to subject it to jurisdiction has been a

persistent theme in the Court’s personal jurisdiction

decisions. Subsequent decisions have reinforced the

theme. For example, in Keeton v. Hustler Magazine,

465 U.S. 770 (1984), the Court observed that “the

‘fairness’ of haling respondent into a New Hampshire

court depends to some extent on whether respon-

dent’s activities relating to New Hampshire are such

as to give that State a legitimate interest in holding

respondent answerable on a claim related to those ac-

tivities.” Id. at 775-76 (citing World-Wide Volkswa-

gen, 444 U.S. at 292, and McGee, 355 U.S. at 223).

Similarly, in Burger King, the Court emphasized the

importance of the state’s interests in determining

whether the defendants’ actions satisfied Jnternation-

al Shoe’s “minimum contacts” criterion, see 471 U.S.

at 473-74, and it explicitly stated that consideration of

such interests may “serve to establish the reasonable-

ness of jurisdiction upon a lesser showing of minimum

contacts than would otherwise be required.” Jd. at

477 (citing Keeton, 465 U.S. at 780, Calder v. Jones,

465 U.S. 783, 788-789 (1984), and McGee, 355 U.S. at

223-23).

The state interests implicated by the type of con-

tact at issue here—where the defendant has targeted

its sales of an allegedly defective piece of equipment at

a national market including the forum state, and

where injury has resulted in that state—are interests

that this Court has traditionally recognized as very

powerful. To begin with, a state has an undoubted in-

terest in protecting both its residents and its work-

force against serious injury. See, e.g., Allstate Ins. Co.

vu. Hague, 449 U.S. 302, 313-14 (1981). Tort actions

such as the one at issue here serve that interest by

imposing standards of care (including, for example,

the duty not to design or manufacture a defective

product) on those who supply equipment used by

workers within the state.

This Court has also recognized that states have a

powerful interest in providing their residents compen-

sation for injuries that they have suffered, and a cor-

responding interest in providing a forum in which res-

idents may seek such remedies. As the Court stated in

McGee, “It cannot be denied that [a state] has a ma-

nifest interest in providing effective means of redress

for its residents .... These residents would be at a se-

vere disadvantage if they were forced to follow [a de-

fendant] to a distant State in order to hold it legally

accountable.” 355 U.S. at 223. Similarly, the Court

has said it is “beyond dispute” that a state “has a sig-

nificant interest in redressing injuries that actually

occur within the State.” Keeton, 465 U.S. at 776. In

Calder, the Court found that the forum state’s inter-

est in remedying the “effects” of torts directed at its

residents supported a finding that the defendant had

sufficient minimum contacts. See 465 U.S. at 789. And

in Burger King, the Court said that “[a] State general-

ly has a ‘manifest interest’ in providing its residents

with a convenient forum for redressing injuries in-

flicted by out-of-state actors.” 471 U.S. at 473.

Moreover, the Court recognized in World-Wide

Volkswagen that the states have a “shared interest”

in “furthering fundamental substantive social poli-

cies,” and that the “interstate judicial system” as a

whole has interests in the proper resolution of contro-

versies. 444 U.S. at 286. Among those shared, inter-

state concerns is the common interest of the states in

not allowing an alien corporation that has directed its

actions toward an interstate market to evade respon-

sibility for its actions in any of the states that make

up that market. As the Court put it in Burger King,

“where individuals ‘purposefully derive benefit’ from

their interstate activities, ... it may well be unfair to

allow them to escape having to account in other

States for consequences that arise proximately from

such activities; the Due Process Clause may not readi-

ly be wielded as a territorial shield to avoid interstate

obligations that have been voluntarily assumed.” 471

U.S. at 474. The states thus have a powerful, shared

interest in preventing a defendant from, as in this

case, directing contact at all of them, but seeking to

avoid being held accountable for its actions in any of

them.

II. An Alien Corporation That Has Marketed

Its Products Nationwide Has No Signifi-

cant Liberty Interest in Avoiding Jurisdic-

tion in a State Where Its Actions Have Re-

sulted in Injury.

As this Court has explained, the due process re-

quirement of minimum contacts to sustain the exer-

cise of personal jurisdiction over a nonresident defen-

dant exists to protect “individual liberty.” Jns. Corp.

of Ireland v. Compagnie des Bauxites de Guinee, 456

U.S. 694, 702 (1982). As against the substantial inter-

ests supporting the exercise of personal jurisdiction

over an alien corporation whose targeting of an inter-

state market including the forum state has caused in-

jury within the state to a resident of the state, the

alien corporation has relatively insubstantial (if any)

legitimate “liberty interests” in avoiding suit.

To be sure, this Court has recognized that a defen-

dant has an interest in not being subjected to personal

jurisdiction “solely as a result of ‘random,’ ‘fortuit-

ous,’ or ‘attenuated’ contacts.” Burger King, 471 U.S.

at 475. Thus, the Court held in World-Wide Volkswa-

gen that a corporate defendant who took no action

aimed at serving the market in a state could not be

subjected to jurisdiction there based on a consumer’s

isolated, unilateral action in moving the defendant’s

product there. 444 U.S. at 295-96; accord Asahi Metal

Indus. Co. v. Super. Ct. of Calif., 480 U.S. 102, 110-12

(1987) (opinion of O’Connor, J.). Similarly, the Court

has stated that “(t]he unilateral activity of those who

claim some relationship with a nonresident defendant

cannot satisfy the requirement of contact with the fo-

rum State.’” Kulko, 436 U.S. at 93-94 (quoting Han-

son vu. Denckla, 357 U.S. at 253).

Cases such as this one, however, do not involve

contacts with the forum state that are merely “for-

tuitous” and thus not properly attributable to the de-

fendant’s own conduct and choices. Rather, in the

words of this Court in Hanson v. Denckla, 357 U.S. at

253, McIntyre “purposefully availled]” itself of the

“privilege” of doing business with the forum state

when it chose to sell its products through a distributor

that targeted a national marketplace including New

Jersey. That those activities resulted in a sale to a

New Jersey customer (which in turn led to the injury

giving rise to the action) was by no means “completely

adventitious as far as [the defendant] was concerned.”

Rush v. Savchuk, 444 U.S. at 329. Rather, it was ex-

actly the type of transaction that McIntyre intended

to foster, in a jurisdiction that fell within the bounds

of the market McIntyre sought to serve. No decision

of this Court holds that a corporation has a “liberty

interest” in avoiding jurisdiction in such circums-

tances.

Moreover, the assertion of jurisdiction in such cir-

cumstances is entirely consistent with this Court’s

view that the rules governing personal jurisdiction

provide “a degree of predictability .... that allows po-

tential defendants to structure their primary conduct

with some minimum assurance as to where that con-

duct wil! and will not render them liable to suit.”

World-Wide Volkswagen, 1441 U.S. at 297. A company

that chooses to designate a distributor to serve a mar-

ket that includes some or all of the states of the Union

can easily anticipate that it will be liable to suit in one

of those states if its products cause injury there, and it

can structure its conduct accordingly. Among other

things, it can, as this Court suggested in World-Wide

Volkswagen, “act to alleviate the risk of burdensome

litigation by procuring insurance,” id.~ a step that

Mcintyre in fact took with respect to its American

market, see Resp. Br. 4-5—and it can “pass|]| the ex-

pected costs on to customers, or, if the risks are too

great, sever|| its connection with the State.” World-

Wide Volkswagen, 444 U.S. at 297.

Moreover, any assertion that McIntyre or similarly

situated alien corporations have a significant interest

in avoiding the burdens of defending in one particular

stale as opposed to another is unconvincing. For more

than half a century, this Court has acknowledged that

“because ‘modern transportation and communications

have made it much less burdensome for a party sued

to defend himself in a State where he engages in eco-

nomic activity,’ it usually will not be unfair to subject

him to the burdens of litigating in another forum for

disputes relating to such activity.” Burger King, 471

U.S. at 474 (quoting McGee, 355 US. at 223).

From the standpoint of an alien corporation,

moreover, it is difficult to see a difference of constitu-

tional magnitude between the inconveniences of liti

yating in one American jurisdiction as opposed to

another. To put it more concretely, New Jersey is no

more or less convement for McIntyre than Ohio, a ju

risdiction where it could hardly proffer a reasonable

claim that it lacked sufficient contacts to support per

sonal jurisdiction in a lawsuit arising out of its sales of

equipment to the American market. (Of course, it

does not appear that McIntyre has admitted in this

Court that it would even be amenable to suit in Ohio,

where its American distributor was located. But if

Mclntyre’s position is that it could not be sued even

there, its claim would be still more untenable,

amounting to the assertion that it had a liberty inter

est in avoiding litigation anywhere in the United

States despite its substantial activities directed at

maximizing its sales here.)

Indeed, as some scholars have observed, from the

international perspective of an alien defendant, our

nation’s political subdivisions are laryely irrelevant:

In the international order, there is no such thing

as Oklahoma. Oklahoma is an address, not a

state. It is a fabled land in musical comedy,

where the corn grows as high as an elephant’s

eye and wind goes sweeping across the plain. But

it is just as mythical as Ruritania. It fields no

army, sails no navy, prints no stamps and coins

no money. Most important of all, it has no diplo-

matic relations and can conclude no treaties. In

short, it lacks every single attribute of a ‘state’

for international purposes.

Ronan E. Degnan & Mary Kay Kane, 7’he Exercise of

Jurisdiction Over and Enforcement of Judgments

Against Alien Defendants, 39 Hastings L.J. 799, 813

(1988).* Thus, “[h]ow we choose to distribute our judi-

cial business by either geography or by subject matter

is our own business and, further, is a matter as to

which Germany and Japan are profoundly disinte-

rested.” Id.

This is not to suggest, as some have, that the due-

process-based minimum contacts doctrine be replaced

with respect to alien defendants either by a doctrine

focusing entirely on national contacts, see id., or by

some other construct altogether, see, e.g., Austen L.

Parrish, Sovereignty, Not Due Process: Personal Ju-

risdiction Over Nonresident Alien Defendants, 41

Wake Forest L. Rev. 1 (2006).° It is simply to recog-

nize that an alien corporation has a minimal liberty

interest, if any, in being subject to jurisdiction in one

state rather than another when its commercial con-

duct has been directed without distinction towards

both or, as here, towards all.

? New Jersey may be less fabled in song than Oklahoma (but

cf. Bruce Springsteen, Atlantic City (1982)), but it 1s no more or

less distinct from the United States as a whole from the stand-

point of aliens and foreign states.

* A true “national contacts” approach would allow contacts

specifically confined to, say, Alaska to support personal jurisdic.

tion in Florida. The Court need not go so far to find that an ef-

fort to serve a national or multistate market that includes the

forum state establishes minimum contacts with that state in a

case arising out of an injury that occurs 1n the state as a result of

the defendant’s commercial activity.

Ill. New Jersey’s Assertion of Personal Juris-

diction Over McIntyre Accords With This

Court's Jurisprudence.

A realistic consideration of the interests at issue

within the framework of this Court’s minimum con-

tacts jurisprudence can lead to only one result: When,

as in this case, an alien corporation has, either direct-

ly or through a distributor, sought to serve a market

that includes a particular state, it is properly subject

to personal jurisdiction in that state when its com-

mercial activity causes injury there. Personal jurisdic-

tion is proper regardless of whether the alien corpora-

tion has singled that state out for particularly tar-

geted marketing efforts; activity directed at a multis-

tate market that includes the forum state is sufficient.

Given that this result follows so naturally from the

general principles articulated in the Court’s decisions

and from the interests that the Court has recognized

on both sides of the equation, it is not surprising that

the Court has, more than once, explicitly stated that

activity such as that involved here satisfies the mini-

mum contacts standard. In World-Wide Volkswagen,

for example, the Court stated straightforwardly that

“if the sale of a product of a manufacturer or distribu-

tor such as Audi or Volkswagen is not simply an iso-

lated occurrence, but arises from the efforts of the

manufacturer or distributor to serve directly or indi-

rectly, 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 source of injury to its owner or to others.”

444 U.S. at 297 (emphasis added).

Similarly, in Asahi, Justice O’Connor’s opinion ac-

knowledged that minimum contacts are present

where an alien manufacturer has engaged in “conduct

... indicat[ing] an intent or purpose to serve the mar-

ket in the forum State,” including “marketing the

product through a distributor who has agreed to serve

as the sales agent in the forum State.” 480 US. at

112. Nothing either in Justice O’Connor’s opinion or

in logic suggests that the defendant’s undertaking

with its distributor to “serve the market in the forum

State” must specifically identify each state served, as

opposed to a broader multistate or national market

including the forum state. Justice Brennan’s opinion

in Asahi similarly would find the minimum contacts

standard satisfied under these circumstances by “the

regular and anticipated flow of products from manu-

facture to distribution to ... sale,” id. at 117, as would

Justice Stevens’ opinion, see id. at 122.

Likewise, in Keeton, the Court emphasized that

the defendant had developed a product (there, a publi-

‘It is therefore not necessary for the Court in this case to

choose between the so-called “stream of commerce plus” stan-

dard that some have derived from Justice O’Connor’s opinion

and the standard set forth in Justice Brennan's opinion. Indeed,

the label “stream of commerce” does not seem particularly apt or

helpful as apphed to this case, insofar as it conjures up an image

of a defendant simply casting a product adrift and relying on

chance to determine where im the global economy it may wash

ashore ‘The conduct at issue in this case is much more directed:

The defendant, far from simply releasing its product into an un-

differentiated stream of commerce (or, as in Asahi, selling it to

someone to be incorporated in another product that. will be mar-

keted at the sole discretion of the second manufacturer), has de-

legated a distributor to develop, and act as its exclusive sales

agent in, a designated market to which the defendant then ships

its product in response to orders generated as a result of this

concerted plan to serve the relevant market.

cation) “aimed at a nationwide audience.” 465 U.S. at

781. The Court found “no unfairness in calling [the

defendant] to answer” for its conduct wherever in

that nationwide market a substantial sale of its prod-

uct caused an injury. Jd. So, here, where MclIntyre’s

efforts to serve a nationwide market led to a lucrative

sale of its product to New Jersey, which in turn re-

sulted in a serious injury there, there is no unfairness

in calling it to answer for its conduct in a New Jersey

court.

Applying the principles of this Court’s decisions,

lower state and federal courts have regularly held that

a state may (consistently with both World-Wide

Volkswagen and each of the opinions in Asahi) exer-

cise personal jurisdiction over an alien or out-of-state

corporation that, through a distributor, targets a mul-

ti-state or national market including the forum state,

when that commercial activity has resulted in injury

within the forum state.° As the Eighth Circuit put it

* A by no means exhaustive list of decisions fitting this pat-

tern (many of which cite other, similar decisions) includes. Clune

v. Alumak AB, 233 F.3d 538 (8th Cir 2000); Kernan v. Kurz-

Hastings, Inc., 175 F.3d 236 (2d Cir. 1999); Vandelune v. 4B Ele-

vator Components Uniimited, 148 F.3d 943 (8th Cir. 1998); Ba-

rone v. Rich Bros. Interstate Display Frreworks Co., 25 F.3d 610

(8th Cir. 1994), Beverly Hills Fan Co. v. Royal Sovereign Corp.,

21 F.3d 1558 (Fed Cir 1994); Vermeulen v. Renault, U.S.A., Inc.,

985 F 2d 1534 (11th Cir. 1993); Giotis v. Apollo of the Ozarks,

Inec., 800 F.2d 660 (7th Cir. 1986); GSK Technologies, Inc. v.

Schneider Elec., S.A., 2007 WL 788343 (E.D. Tex March 14,

2007); Kaplan v. DaimlerChrysler, A.G., 99 F. Supp. 2d 1348

(M.D. Fla. 2000); Stokes v. L. Geismar, S.A., 815 F. Supp. 904

(E.D. Va. 1993); Felty v Conaway Processing Equip. Co., 738 F

Supp. 917 (E.D. Pa. 1993); Hicks v. Kawasaki Heavy Indus., 452

F. Supp. 130 (MD. Pa. 1978); Le Manufacture Francaise des

Pneumatiques Michelin v. Dist. Ct., 620 P.2d 1040 (Colo 1980),

(Footnote continued)

in one such opinion, “it is only reasonable for compa-

nies that distribute allegedly defective products

through regional distributors in this country to antic-

ipate being haled into court by plaintiffs in [the plain-

tiffs’] home states.” Barone, 25 F.3d at 615.

Recent cases involving the emerging field of e-

commerce reflect a similar approach to the jurisdic-

tional consequences of deliberate efforts by out-of-

state corporations to serve national or multi-state

markets. As the Seventh Circuit recently concluded in

one such case, “due process is not violated when a de-

fendant is called to account for the alleged conse-

quences of its deliberate exploitation of the market in

the forum state.” uBID, Inc. v. GoDaddy Group, Inc.,

623 F.3d 421, 423 (7th Cir. 2010). There, the court

found that an internet company that had intentional-

ly limited its physical presence to Arizona had mini-

mum contacts with Illinois because of its targeting of

a national market, including Illinois. See id. at 427.

As the GoDaddy decision illustrates, the “exploita-

tion of the market in the forum state” that makes the

exercise of personal] jurisdiction fair and reasonable is

not limited to circumstances where the defendant spe-

cifically targets its marketing at a particular state.

Although there was “no evidence that GoDaddy spe-

cifically targets Illinois customers in its advertising,”

the court held that “what mattered,” as in this

Court’s decision in Keeton, was that the defendant

“purposefully directed its business activities toward

[the forum state] just as it had toward all other

Etchieson v Central Purchasing, LLC, 232 P.3d 301 (Colo. Ct.

App. 2010); Thompson v. Nishimoto Trading Co., 689 N.Y.S.2d

858 (Sup. Ct. 1999).

states.” Id. at 428. That the forum state was “a place

of no particular interest” to the defendant, id. (em-

phasis added), the court held, did not make it unfair

to hale the defendant into court there because the

claim was related to the forum-targeted activity,

which provided the necessary minimum contacts. See

id. at 429-31.°

The GoDaddy case also illustrates that where a de-

fendant has sought to serve a commercial market that

includes the forum state, the defendant’s lack of con-

trol over (or even interest in) the location of particu-

lar customers who respond to its marketing efforts

does not mean that the forum state’s effort to exercise

jurisdiction is contrary to this Court’s condemnation

of jurisdiction based on “unilateral” actions of persons

other than the defendant. See id. at 428-29. The con-

duct of the defendant itself that is essential to the ex-

ercise of personal jurisdiction can be found in its es-

tablishment of a mechanism to distribute its products

in a market including the forum state. Even when it

exercises no further choice about what particular cus-

tomers within that market it will serve, its contacts

with the forum “cannot fairly be described as random,

fortuitous, or attenuated.” Jd. at 429.

* As courts have recognized, the matter is different when a

defendant’s internet activity is limited to specch that, while it

may be accessible anywhere in the nation (or the world) is not

accompanied by efforts by the defendant to avail itself, directly

or indirectly, of the benefits of the commercial marketplace in

the forum state and 1s not otherwise targeted at that state. See,

e.g., Young v. New Haven Advocate, 315 F.3d 256 (4th Cir. 2002).

IV. Limiting the States’ Exercise of Personal

Jurisdiction Over Cases Such as This One

Would Have Significant Adverse Conse-

quences.

Declining to permit the exercise of jurisdiction

over an alien or out-of-state corporation that has tar-

geted the forum state as part of a nationwide or multi-

state market would have severe negative conse-

quences for the administration of justice. It would re-

ward artifices designed to allow exploitation of the

benefits of doing business with residents of the state,

while avoiding the consequence of being called to an-

swer there for any wrongs arising out of that forum-

directed conduct. As one court recently explained,

holding that the use by alien corporations of distribu-

tion chains aimed at regions or the entire nation ra-

ther than at particular states did not establish mini-

mum contacts with any of the targeted states “could

allow any foreign-nation manufacturer that marketed

and sold its products throughout the United States to

avoid being haled into a state court anywhere in the

country, thus impairing the states’ ability to protect

their respective citizens from injury from defective

products, simply by refusing to tailor its product spe-

cifically to any state.” Etchieson v. Central Purchas-

ing, LLC, 232 P.3d at 307.

Denying personal jurisdiction here would also un-

fairly relegate the plaintiffs in this case, and potential-

ly large numbers of other cases, to the choice of suing

in a distant and inconvenient domestic forum (assum-

ing that the alien corporation’s contacts with the state

where its domestic distributor was located would sub-

ject it to jurisdiction there), or to the daunting and

doubtful prospect of pursuing litigation overseas. The

problem would be magnified if, as in this case, the

alien corporation used a thinly capitalized and ulti-

mately insolvent domestic corporation as its distribu-

tor, thus impairing the ability of potential plaintiffs to

find a domestic defendant who could satisfy their

claims in a more accessible forum.

Holding that a physically absent defendant’s suc-

cessful effort to serve a nationwide marketplace does

not suffice to establish personal jurisdiction in partic-

ular states where customers have responded to the

defendants’ marketing efforts could also impair ef-

forts to provide reasonable remedies for consumers in

the burgeoning area of e-commerce. In that arena,

many defendants could claim (as does McIntyre) that

they neither knew nor cared which states particular

customers hailed from, even though (like McIntyre)

they set up a marketing method calculated to reach a

national market.’ The Court should not develop new

limitations on personal jurisdiction that encourage

efforts to evade legal accountability.

On the other side of the coin, nothing in a decision

recognizing the availability of personal jurisdiction

over an alien corporation in the circumstances of this

’ Narrowing personal jurisdiction doctrine to preclude juris-

diction based on a defendant’s effort to serve a multistate market

including the forum state would call into question the emerging

consensus in the e-commerce realm that commercially interac-

tive websites generally support the exercise of personal jurisdic-

tion in the plaintiffs home state if that state was part of the

market served by the site. By contrast, mere internet speech not

aimed at availment of the benefits of commercial activity in the

forum state generally does not support personal jurisdiction. See

Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124

(W.D. Pa. 1997); see also supra, n.6.

case threatens to lead to unfair or burdensome forum-

shopping by plaintiffs. Absent the more extensive con-

tacts necessary to give rise to general personal juris-

diction, the availability of personal jurisdiction will

remain limited to circumstances where the defendant

took actions aimed at serving a market including the

forum state and the claim at issue has a relationship

to the forum-directed activity. Here, for example, the

claim involves the occurrence in the forum state of an

injury to a resident of that state—an injury that, in

turn, was the result of the sale of the defendant’s

product to a company residing in the forum state.® A

lawsuit brought in the plaintiffs’ home state on the

basis of an injury that occurred there can hardly be

described as forum-shopping. And in any event, de-

spite the widespread acceptance among the lower

courts of the availability of personal jurisdiction in

similar suits over the past several decades, newly re-

ported data shows that the number of claims brought

by domestic plaintiffs against alien defendants in the

federal courts has (in striking contrast to the total

number of lawsuits), declined in recent years—hardly

evidence of a rash of forum-shopping. See Christopher

A. Whytock, The Evolving Forum Shopping System,

96 Cornell L. Rev. (forthcoming), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1

596280# F.

In the end, plaintiffs here seek to hold a defendant

who successfully targeted a market including the fo-

* In this respect, the exercise of specific personal jurisdiction

here is entirely unlike the North Carolina courts’ exercise of

general personal jurisdiction in Goodyear Luxembourg Tires,

S.A. v. Brown, No. 10-76.

rum state accountable in the courts of that state for

an injury that occurred there as a direct result of the

sale of the defendant’s product there. As this Court

said in Keeton, there is nothing unfair about that. 465

U.S. at 781. The “traditional notions of fair play and

substantial justice” that have animated this Court’s

personal jurisdiction decisions since International

Shoe, 326 U.S. at 316, strongly support permitting the

plaintiffs to sue in their chosen forum.

CONCLUSION

For the foregoing reasons, the judgment of the Su-

preme Court of New Jersey should be affirmed, and

the case remanded for further proceedings on the me-

rits.

Respectfully submitted,

ScoTtT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN LITIGATION

GROUP