The World in U.S. Courts: Winter 2018 - Personal Jurisdiction/Forum Non Conveniens
October.16.2017
This product liability action arose out of an accident involving an allegedly defective all-terrain vehicle made by Suzuki Motor Corporation of Japan and sold through two of Suzuki’s US subsidiaries. Suzuki-Japan was sued and sought to dismiss the complaint on grounds that it was not subject to personal jurisdiction in the State of Missouri.
Personal jurisdiction was predicated on the “steam of commerce” theory, pursuant to which some courts have permitted cases to proceed consistent with the Due Process Clause of the US Constitution where the manufacturer-defendant’s only contact with the forum was some expectation that its products would be sold to consumers in the State where a product liability case was brought. The Court observed that the US Supreme Court, despite several attempts, had failed to describe definitively the circumstances where a “stream of commerce” theory might be viable, with the most notable point of contention whether some evidence of targeting a jurisdiction was required above and beyond a mere expectation that products would be sold there. The Court noted that it was bound by the law of the Eighth Circuit, which had accepted a version of the “targeting” requirement under which jurisdiction exists where a “foreign manufacturer . . . pours its products into a regional distributor with the expectation that the distributor will penetrate a discrete, multi-State trade area.”
The Court found this test to be met, relying on facts suggesting the direct involvement of Suzuki-Japan in the sale of ATVs in the US generally and Missouri specifically. The Court observed that Suzuki-Japan “created the distribution network that brought the subject ATV to Missouri”; that it employs one US distributor, which it owns; that the ATVs are assembled in the US “according to the design of” Suzuki-Japan; and that authorized dealerships (including in Missouri) were created, showing “intent to penetrate the Missouri market, and reap the benefit of sales from the Missouri market.” The Court also cited references to Suzuki-Japan as the copyright holder for the ATV’s owner’s manual, which would play a role in litigating the merits of the product liability claim. These facts persuaded the Court that the ATV involved in the accident did not “end up in Missouri on an attenuated, random, or fortuitous basis,” and that the assertion of jurisdiction was thus appropriate.