Stream of Commerce Alive and Well in New Jersey

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

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

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

TheCourt articulated the rule that “A foreign manufacturer will besubject to this State’s jurisdiction if it knows or reasonably should know thatthrough its distribution scheme its products are being sold in NewJersey.”

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

“It did so by engaging McIntyre America, an Ohio-basedcompany, as its exclusive United States distributor for an approximately seven-yearperiod ending in 2001. J. McIntyre knew or reasonably should have known thatthe distribution system extended to the entire United States, because itscompany officials, along with McIntyre America officials, attended scrap metaltrade shows and conventions in various American cities where its products wereadvertised. Indeed, J. McIntyre’s president was present at the Las Vegas tradeconvention where his exclusive distributor introduced plaintiff’s employer tothe allegedly defective McIntyre Model 640 Shear that severed four ofplaintiff’s fingers.”

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

“Repeatedquotations and soaring language about the realities of the global marketplacemight compel the casual reader to follow what appears to be the majority’srelentless logic. But those rhetorical techniques cannot mask the fact that themajority today embarks on a path that stretches our notions about due process,and about what is fundamentally fair, beyond the breaking point.”

(h/t Mike Martin (Fordham)) 

ADL

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