The World in U.S. Courts: Spring 2016 - Personal Jurisdiction/Foreign Sovereign Immunities Act (FSIA)/Forum Non Conveniens
February.25.2016
Conejo brought an action against Coleman for injuries from a house fire which was allegedly caused by a defective extension cord sold by Coleman. Conejo later added defendant HW-Genting, the company which allegedly manufactured the extension cord. HW-Genting, a corporation organized under Indonesian law and headquartered in Malaysia, moved to dismiss for lack of personal jurisdiction. The District Court in Kansas recited that the company delivers goods Free on Board ("FOB") Singapore, meaning that its obligations end when the goods are delivered into the transporter's possession. Once the goods are shipped FOB Singapore, further handling and distribution of those goods is carried out independently and unilaterally by parties other than HW-Genting. The company does not market or sell any products in the U.S., it does not have any customers or distributors in Kansas, and it does not use any Kansas-based vendors or suppliers.
The Court observed that it may exercise personal jurisdiction over a nonresident defendant if it has minimum contacts with the forum State such that it should reasonably anticipate being sued there, and such jurisdiction will not offend traditional notions of fair play and substantial justice. The Court focused on "specific personal jurisdiction," which arises when the defendant has "purposefully availed" itself of the privilege of conducting business within the forum state such that being sued there would be a foreseeable event. The plaintiff has the burden of demonstrating, by affidavit or other documentary materials, the existence of personal jurisdiction over a defendant.
Conejo argued that HW-Genting's actions were more extensive than cited in its motion to dismiss, based on information available on its website that it exports 60% of its cables to the U.S. Conejo also argued that the company is subject to personal jurisdiction in Kansas because it sent the extension cord into a stream of commerce which found its way to the State. The Court found, however, that Conejo misstated the information on the website, which actually indicated that the company exports 60% of all of its products to the U.S. and Canada combined. Additionally, the Court stated that the "stream of commerce" theory of jurisdiction has been implicitly rejected by the Supreme Court; personal jurisdiction will not arise simply from a defendant's use of a national distributor who happens to direct product of any quantity to the forum. Rather, additional minimum contacts must exist, reflecting (1) the defendant's direction or control over the flow of product into the forum, (2) the quantity of the defendant's particular product regularly flowing into the forum, and the distinctive features of the forum that connect it with the product in question. HW-Genting had no direction or control over its products after they were sold in Singapore. There was no evidence as to the number of the company's extension cords flowing into Kansas. And Conejo showed nothing distinctive about Kansas in relation to the sales of the extension cords.
The Court concluded that "purposeful availment" exists if a non-U.S. manufacturer purposefully directed actions toward the forum or was otherwise actively aware that the final product was being marketed in the forum state. However, the mere fact that some manufactured products have ended up in the District through the unilateral actions of third parties is insufficient to support jurisdiction. For these reasons, HW-Genting was dismissed from the case.