WASHINGTON, D.C. - (Mealey's) A divided U.S. Supreme Court on June 27 reversed a New Jersey Supreme Court ruling that a foreign product manufacturer is subject to state court jurisdiction if it "knows or reasonably should know that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the fifty states" (J. McIntyre Machinery Ltd. v. Robert Nicastro, No. 09-1343, U.S. Sup.).
Robert Nicastro sued J. McIntyre Machinery Ltd. and McIntyre Machinery America Ltd. in the Bergen County Superior Court for injuries he sustained at work. On Oct. 11, 2001, Nicastro, an employee of Curcio Scrap Metal, was operating a McIntyre Model 640 Shear, a recycling machine used to cut metal.
Nicastro's right hand accidentally got caught in the machine's blades, severing four of his fingers. The Model 640 Shear was manufactured by J. McIntyre Machinery, a British company, and sold through its exclusive U.S. distributor, McIntyre Machinery America.
J. McIntyre and its American distributor were distinct corporate entities, independently operated and controlled, without any common ownership.
Nicastro alleged that the shear machine was defective because it did not have a safety guard that would have prevented the accident. The trial court granted J. McIntyre's motion to dismiss the action, ruling that the English manufacturer did not have sufficient minimum contacts with New Jersey to justify the state's exercise of personal jurisdiction.
The New Jersey Superior Court Appellate Division reversed, concluding that J. McIntyre not only "plac[ed] the shear machine that injured plaintiff into the stream of commerce by transferring it to its distributor, McIntyre America, with an awareness that its machine might end up in New Jersey [but] also engaged in additional conduct indicating an intent or purpose to serve the New Jersey market." The New Jersey Supreme Court affirmed.
J. McIntyre filed a petition for writ of certiorari on May 3, 2010. The U.S. Supreme Court granted the petition on Sept. 28.
The majority of the high court reversed the New Jersey Supreme Court decision, concluding that "because J. McIntyre never engaged in any activities in New Jersey that revealed an intent to invoke or benefit from the protection of the State's laws, New Jersey is without power to adjudge the company's rights and liabilities, and its exercise of jurisdiction would violate due process."
Writing for the majority, Justice Anthony M. Kennedy noted that Nicastro failed to establish that J. McIntyre engaged in conduct directed at New Jersey.
"Recall that respondent's claim of jurisdiction centers on three facts: The distributor agreed to sell J. McIntyre's machines in the United States; J. McIntyre officials attended trade shows in several States but not in New Jersey; and up to four machines ended up in New Jersey," Justice Kennedy wrote. "The British manufacturer had no office in New Jersey; it neither paid taxes nor owned property there; and it neither advertised in, nor sent any employees to, the State. Indeed, after discovery the trial court found that the 'defendant does not have a single contact with New Jersey short of the machine in question ending up in this state.' These facts may reveal an intent to serve the U.S. market, but they do not show that J. McIntyre purposefully availed itself of the New Jersey market."
Chief Justice John G. Roberts Jr. and Justices Antonin Scalia and Clarence Thomas joined in the opinion. Justice Stephen G. Breyer, joined by Justice Samuel Anthony Alito Jr., filed a concurring opinion.
Justice Ruth Bader Ginsburg wrote a dissenting opinion, stating that she would "hold McIntyre UK answerable in New Jersey for the harm Nicastro suffered at his workplace in that State using McIntyre UK's shearing machine." Justices Sonia Sotomayor and Elena Kegan joined in the dissent.
[Editor's Note: Full coverage will be in the July 11 issue of Mealey's Litigation Report: Personal Injury. In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #77-110711-002Z. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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