From Products Liability Law Daily, September 17, 2013

Irish forklift maker challenges long reach of Mississippi federal court

By Pamela C. Maloney, J.D.

An Irish corporation that designed and manufactured forklifts, but never maintained a physical presence in Mississippi, has asked the U.S. Supreme Court to review a determination by the U.S. Court of Appeals for the Fifth Circuit (sub nom. Ainsworth v. Moffett Engineering, Ltd.) that a federal court in Mississippi could exercise jurisdiction over the Irish company in a products liability action filed against the foreign company by the estate of a Mississippi worker (Moffett Engineering, Ltd. v. Ainsworth, Dkt. No. 13-329, filed September 11, 2013).

Fifth Circuit Court of Appeals opinion. In its decision, the Fifth Circuit declared that its application of the stream-of-commerce approach, as applied by the district court, did not “run afoul” of the U.S. Supreme Court’s narrow holding in J. McIntyre Machinery, Ltd. v. Nicastro (131 S. Ct. 2780 (2011)). Although the Fifth Circuit recognized that its stream-of-commerce test, in not requiring that a manufacturer target the forum, was in conflict with the McIntyre decision, it concluded that because the High Court’s decision did not garner a majority vote, it was not binding. Instead, the High Court’s holding could be viewed as that position taken by those Justices who concurred in the judgment on the narrowest of grounds. Based on that maxim, the Fifth Circuit concluded that Justice Breyer’s concurring opinion controlled and noted that Justice Breyer had made it clear that his decision adhered to court precedents and was based on the facts of the case which involved a single sale in New Jersey, the forum state. The Fifth Circuit went on to decide that this case fell outside the limited scope of Breyer’s decision. The facts in the case established that Moffett could have reasonably anticipated being haled into court in Mississippi because its U.S. distributor, Cargotec, “sells or markets Moffett products in all fifty states, and Moffett makes no attempt to limit the territory in which Cargotec sells its products.” In fact, Cargotec sold 203 forklifts to customers in Mississippi. Also, Moffett designed and manufactured a forklift for poultry-related uses and, thus, could reasonably have expected that sales would be made in Mississippi because it was the fourth largest poultry-producing state in the country.

Petition for certiorari. In its petition, the Irish corporation argued that by ignoring the Supreme Court’s holding in McIntrye, the Fifth Circuit’s decision demonstrated that there was a conflict over the proper test for personal jurisdiction that will continue to cause confusion and conflicting results among the federal circuits. The corporation pointed to a similar case filed against it in Kentucky pre-McIntyre, which had been dismissed for lack of personal jurisdiction, and noted that in another case filed against it in Missouri since McIntyre, the company was subjected to personal jurisdiction in a state court case. The corporation argued that as a company which sells and ships its products to a single customer located in a single state, these decisions left it with no clear understanding of where it may be required to appear in response to a lawsuit. Until the High Court resolved the disagreement over the proper test for personal jurisdiction, the corporation claimed that it and other foreign manufacturers would continue to be subjected to conflicting results depending solely on the jurisdiction in which they were sued.

Question presented. The Irish company asked the U.S. Supreme Court to decide whether the U.S. Constitution allows the Fifth Circuit to submit the company to personal jurisdiction under that Circuit’s “mere foreseeability” test when the High Court had concluded in McIntyre, and a majority of the Circuit Courts have held since McIntyre, that “something more” is required for personal jurisdiction over a foreign defendant.

The case number is: Docket No. 13-329.

Attorneys: Allen C. Schlinsog, Jr. and James P. Denis III (Reinhart Boerner Van Deuren, s.c.) for Moffett Engineering, Ltd.

Companies: Moffett Engineering, Ltd.

MainStory: TopStory JurisdictionNews IndustrialCommercialEquipNews