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Practice Tip: Personal Jurisdiction from Abroad

BY Thomas E. Riley
February 27, 2014

Manufacturers based outside the United States often sell goods through a U.S.-based distributor, rather than selling products directly to consumers. Thus, the manufacturer's only connection in the United States may be with a single American distributor, located in a single state, which sells the manufacturer's goods throughout the country.'When a consumer is injured and seeks to recover damages from the manufacturer, can the consumer's home state exercise jurisdiction over the manufacturer?'

The answer is unsettled, and U.S. courts have adopted divergent analyses on this basic question. Some U.S. courts have exercised jurisdiction over a foreign manufacturer based on its introduction of the product into the “stream of commerce,” but others have refused to do so unless the manufacturer is engaged in activity specifically targeted at the forum state. (See James Rotondo, “Daimler AG v. Bauman,” http://bit.ly/1jbHyQz.) Far from helping to clarify the standards to be applied, the U.S. Supreme Court's decisions have added to this uncertainty, prompting one court to comment recently that this “particular theory of personal jurisdiction has been the subject of much debate, and little consensus, throughout the United States, including in the Supreme Court.” Trustees of Boston University v. Everlight Electronics Co., Ltd., 2013 WL 2367809 (D. Mass. May 28, 2013).

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