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From Products Liability Law Daily, June 12, 2018

Maker of radio-controlled helicopter fails to convince High Court to hear jurisdiction issue

By Susan Lasser, J.D.

The U.S. Supreme Court has declined a request by a Taiwanese manufacturer of model helicopters to review a decision by the Colorado Supreme Court affirming a state appellate court ruling that the manufacturer had sufficient minimum contacts with the state of Colorado under a stream of commerce theory enunciated in the plurality U.S. Supreme Court opinions, Asahi Metal Industry Co. v. Superior Court and J. McIntyre Machinery, Ltd. v. Nicastro, such that it was subject to the jurisdiction of the Colorado courts. The appellate court’s decision had affirmed a state trial court's findings in an action by a consumer who was injured by one of the manufacturer’s helicopters. The Colorado Supreme Court held that World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), set out the controlling stream of commerce doctrine establishing that a forum state may assert jurisdiction when a plaintiff shows that a defendant placed goods into the stream of commerce with the expectation that the goods will be purchased in the forum state. Applying the doctrine to the case at bar, the state high court concluded that the consumer made a sufficient showing under the doctrine to withstand a motion to dismiss [see Products Liability Law Daily’s November 15, 2017 analysis] (Align Corp. Ltd. v. Boustred, petition filed February 27, 2018; cert. denied June 11, 2018).

In its petition for U.S. Supreme Court review, the manufacturer posed the following question for the High Court: "If a nonresident defendant places goods into the stream of commerce in the United States, is it subject to specific personal jurisdiction in any state where it allows its products to be sold by a distributor?" The manufacturer offered its reasons for granting the petition, including that the state and federal courts are divided about the proper test to apply to assertions of jurisdiction over foreign defendants under the Court’s "stream-of-commerce" doctrine. According to the manufacturer, the Due Process Clause requires more than mere distribution and sales in a state, and the "fractured opinions" in Asahi and Nicastro have led to years of uncertainty and inconsistency in the courts, both state and federal. The manufacturer also argued that the "expansive view of its own jurisdiction" as adopted by the Colorado Supreme Court could not be squared with precedent or Constitutional principles, and was contrary to the principles of fairness and predictability that the High Court has recognized support the Due Process Clause, and as such, should be rejected. The U.S. Supreme Court disagreed, however, and denied the manufacturer’s petition.

The case is Docket No. 17-1227.

Attorneys: Daniel Desmond Domenico (Kittredge LLC) for Align Corp. Ltd.; Agnes Brueckner (Public Justice) for Allister Mark Boustred; Conor Patrick Boyle (Hall & Evans, LLC) for Horizon Hobby, Inc.

Companies: Align Corp. Ltd.; Horizon Hobby, Inc.

MainStory: TopStory SupremeCtNews JurisdictionNews SportsandRecEquipmentNews ColoradoNews

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