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Product Liability Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

Jurisdictional Expansion: Specific Personal Jurisdiction Just Got Broader

March 31, 2021 | John McLeod

Courts around the country have held a defendant is not subject to specific personal jurisdiction in a forum unless the claims asserted arose out of the defendant’s contacts with the forum. In product liability cases, typically unless the product arrived in the forum through the defendant’s actions, the courts found no specific personal jurisdiction existed.  However, the United States Supreme Court has broadened the scope of contacts sufficient for a court to exercise personal jurisdiction over a defendant.  In doing so, it has weakened a powerful defense. 

There are two types of personal jurisdiction—general and specific.  Where general personal jurisdiction applies, a court may hear any claims against a defendant, even those unrelated to the forum.  Barring an exceptional case, corporations are subject to general personal jurisdiction in any state in which they are incorporated or their principal place of business is located.  Specific personal jurisdiction is more limited.  A court may only exercise specific personal jurisdiction if the claims brought arise out of or relate to a defendant’s contacts with the forum.  The new decision focuses on specific personal jurisdiction. 

In two related cases - Ford Motor Co. v. Montana Eighth Judicial District Court, et al. and Ford Motor Co. v. Bandemer -the plaintiffs brought product liability claims against Ford arising from auto accidents that occurred in Montana and Minnesota respectively.  The plaintiffs were residents of those states.  However, the vehicles at issue were not originally sold by Ford in Montana or Minnesota.  The cars were designed in Michigan, manufactured in Kentucky and Canada, and first sold in Washington and North Dakota.  The cars arrived in the forum states through the actions of third-parties.

Ford argued the states lacked personal jurisdiction over it because Ford did not first sell the vehicles in the forums.  Ford claimed there must be a causal link between the contacts and the claims. The plaintiffs asserted that Ford’s vast connections with the states, including dealerships, advertising and repair shops, provided a sufficient connection to the forums establishing that Ford purposefully availed itself of the privilege of conducting business there.

In a majority opinion authored by Justice Kagan, the Supreme Court rejected Ford’s causal link argument.  The Court held the case law did not require solely a causal link but also allowed jurisdiction when the claims “relate to the defendant’s contacts with the forum.” The Court noted the significant advertisements used by Ford to urge residents of Montana and Minnesota to buy its products, including the same type of vehicles at issue.  Similarly, the number of authorized dealers in the states along with Ford sending replacement parts to those dealerships and independent repair shops throughout the forums demonstrated Ford had purposefully availed itself of benefits of doing business there. 

Justices Alito, Gorsuch and Thomas concurred in the judgment with Justice Barrett taking no part in the consideration or decision of the case.  Justice Gorsuch, joined by Justice Thomas, lamented the majority opinion’s failure to provide adequate guidance to lower courts regarding what amount of contacts would support a forum exercising personal jurisdiction over a defendant, and a lack of clarity as to whether any causal link is necessary. 

Justice Gorsuch further questions why national corporations would not be subject to personal jurisdiction in every state in which they do business.  He notes “the Constitution has always allowed suits against individuals on any issues in any State where they set foot.”  Id. n.5.  He posits, why should corporations receive more jurisdictional protections than individuals?

So, how will this decision impact cases?  First, the decision reaffirms that a nonresident plaintiff may only file suit in a forum in which there is a connection to the claims asserted.  The majority suggests that had plaintiffs tried to file suit in some other state unrelated to the incident or the vehicles in question, personal jurisdiction would be improper.  This reaffirmation should continue to help limit forum shopping by plaintiffs.  However, nonresident plaintiffs may still file suit in a corporation’s home states where it is subject to general personal jurisdiction.

Second, regional companies would still be protected from suits in other jurisdictions in which they do not conduct their businesses.  However, the decision will likely expand the scope of permissible jurisdictional discovery allowed by trial courts particularly in those states where plaintiff bears the burden of proving personal jurisdiction exists.

Third, national companies may essentially be subject to personal jurisdiction in any state in which a resident plaintiff is injured.  However, it is unclear from the opinions what limitations, if any, exist.  For example, if a manufacturer sells its products through a national retailer, does this fact mean the manufacturer is subject to personal jurisdiction everywhere the national retailer is?  Would the exercise of personal jurisdiction depend on how the product gets to the retailer—i.e. does the manufacturer send the product to a third-party distributor who then sends it to the individual stores or does the manufacturer deliver the products to the stores directly? 

Similarly, how much advertisement is sufficient? Will it matter if the advertisement is directed to the state or nation as a whole—such as television commercials or billboards—or if it is narrowly tailored to a specific type of audience such as sponsorship signs on team uniforms, at a ballpark, or in a trade magazine?  What if the advertising is purchased in a national magazine rather than a local newspaper? 

Finally, there was no guidance issued for e-commerce sales.  Will a single sale to a forum be sufficient? Is it a number of sales or the percentage of the overall business’s sales that are relevant? Will a critical factor be whether the website accessed was the manufacturer’s or a third-party’s?

Unfortunately, the opinion leaves these questions to be sorted out in future cases with little guidance to the lower courts.  As a result, this will not be the last time we hear from the Supreme Court on personal jurisdiction.  

Evidence surrounding an earlier sale of equipment is relevant to a later purchaser's claim for punitive damages in a product liability action

January 15, 2021 | Richard Woolf and Gregorio Silva

Missouri manufacturers, distributors, sellers, and resellers of equipment have scored an important victory in the Missouri Court of Appeals. In Ormsby v. Central Mine Equipment Co, the Missouri Court of Appeals, Southern District, affirmed admission of evidence regarding the design, manufacture, and first sale of a commercial drilling rig as relevant to the defense of a strict liability claim arising from a subsequent sale when punitive damages are claimed. 

Generally, a plaintiff can recover under a strict product liability claim if he can prove the product was inherently defective when sold and that the defect in the product caused the injury or damage, regardless of whether the defendant did everything possible to prevent the defect. In Ormsby, the Plaintiff sought to preclude evidence of the initial design, manufacture, and sale of a commercial drilling rig as irrelevant to whether the rig had an inherent defect when the second sale occurred. The trial court admitted the evidence as relevant to the defense, primarily because Plaintiff sought punitive damages on the strict liability claim. 

Plaintiff lost fingers and mangled his hand after reaching into a running drill rig. The incident occurred, and the underlying lawsuit arose, after a subsequent second sale of the mining drill by the CME.

Central Mine Equipment Company (“CME”) built and sold a commercial drilling rig to the U.S. Army Corp of Engineers in 1976. CME built the drill to design specifications provided by the Corps, and the Corps inspected and accepted the drilling rig pursuant to the Corps’ quality-assurance procedures. After using the drill for 25 years, the Corps traded the drilling rig back to CME for a credit on a replacement.  CME then sold it to Plaintiff’s employer, who inspected, purchased and relocated the pre-owned unit in 2001, without CME ever seeing, inspecting, or taking possession of the used unit.

In 2013, Plaintiff and a helper picked up the drill rig from a mechanic who had repaired the rig’s throttle cable. After starting the engine to check the mechanic’s work, Plaintiff could not shut the rig off. Plaintiff reached into the motor compartment in an attempt to maneuver the throttle linkage and governor to idle the engine to a stop. Before Plaintiff’s helper could get the motor shut down, Plaintiff caught his hand in the mechanism causing the loss of multiple fingers. 

Plaintiff filed a lawsuit against CME alleging claims for negligence and strict liability, and requesting a punitive damages award under both theories. On the eve of trial, hoping to preclude evidence regarding design, manufacture and first sale of the drill, Plaintiff dismissed his negligence claim, but did not withdraw his request for punitive damages. Nevertheless, Plaintiff sought to preclude evidence that CME designed the drill pursuant to specifications provided by the Corps, and that the Corps inspected the drill to ensure it passed quality assurance standards before taking possession.

Plaintiff sought to preclude the evidence as irrelevant to the litigation, claiming that because strict liability claims do not require proof of knowledge as an element to recovery. But the trial court allowed CME to present evidence of the original design, manufacture, and sale because compliance with an industry standard evidences that a party did not act with a culpable state of mind, which is required to support punitive damages.

The Missouri Court of Appeals affirmed the trial court’s decision to admit the disputed evidence, finding Plaintiff did not meet his burden in demonstrating the trial court ruled incorrectly. The Court found that so long as punitive damages were alleged, compliance with industry standard and custom goes to prove whether defendant acted with a nonculpable state of mind, hence, to negate an inference of complete indifference and conscious disregard for the safety of others – proof punitive damages requires.

The Court’s decision is a positive development for Missouri manufacturers, designers, sellers, and resellers in defending against claims for punitive damages in product liability cases.

Illinois Appellate Court Reverses Plaintiffs' Verdict in Asbestos Lawsuit

March 16, 2020 | Gregory Odom

Recently, the Illinois Fourth District Appellate Court issued an opinion reversing the Circuit Court of McLean County in an asbestos lawsuit. In Krumwiede v. Tremco, Inc., the court determined that the plaintiffs failed to establish at trial that the decedent’s work with the defendant’s products was a substantial factor in the cause of the decedent’s illness.  This is yet another instance in which the Fourth District has reversed the Circuit Court of McLean County in an asbestos lawsuit.  The opinion should give defendants wary of trying an asbestos lawsuit in McLean County optimism about the potential for appellate relief.

In Krumwiede, the plaintiffs alleged that the decedent was exposed, in part, through his work with Tremco caulk and tape.  The decedent worked as a window glazier from the mid-1950’s to the early 1990’s.  At trial, two of the decedent’s former co-workers testified that they and the decedent used Tremco caulk and glaze in their roles as glaziers.  The witnesses, however, could not recall seeing dust emanate from the Tremco products or anything on the products’ packaging indicating that they contained asbestos. 

Plaintiff’s medical expert, Dr. Arthur Frank, testified that a person’s cumulative dose to asbestos contributes to the development of mesothelioma.  In elaborating on this opinion, Dr. Frank testified that there is no scientific way to determine what exposure to asbestos caused a person’s illness, but rather, a person’s total exposure is considered the cause of the illness.  Dr. Michael Graham, a pathologist, testified for Tremco, opining that there were amosite asbestos fibers found in the decedent’s lung tissue, but that those fibers had nothing to do with the decedent’s work with Tremco products, as those products only contained chrysotile asbestos fibers.  Dr. William Longo also testified for Tremco.  He explained that he previously tested the Tremco products and found no detectable asbestos fibers, which was because the products were thermoplastic materials.  Dr. Longo admitted, however, that he could not rule out that Tremco products released respirable asbestos fibers.  Ultimately, the jury returned a verdict for the plaintiffs.

But the appellate court concluded that the plaintiffs failed to establish that the decedent's work with Tremco products was a substantial factor in the cause of his mesothelioma.  According to the court, simply working around Tremco products did not establish that the decedent had frequent, regular, and proximate contact with respirable asbestos fibers from the products.  The court believed that there was an absence of evidence explaining under what circumstances Tremco's products released respirable asbestos fibers.  In other words, just because the products were capable of releasing asbestos fibers did not mean they actually did so when the decedent worked with the products.  The court also determined that the plaintiff failed to present evidence showing that Tremco's products released more than a de minimis amount of asbestos fibers when the decedent encountered the products.  And while the court found that Dr. Frank's "cumulative exposure" testimony was proper under Illinois law, the court concluded that his testimony did nothing to aid the plaintiffs in meeting the “substantial factor” test under Illinois law because he did not opine that exposure from Tremco products was a substantial factor in bringing about the decedent's illness. 

This is a positive development for Illinois defendants in asbestos litigation.  Specifically, defendants should consider relying on this opinion to argue that a plaintiff cannot satisfy his or her burden of proving causation simply by establishing that a defendant’s products can release asbestos fibers.  
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About Product Liability Law Blog

The BSCR Product Liability Blog examines significant developments, trends, and topics in product liability law of interest to individuals and product manufacturers, distributors and sellers. Learn more about the editor, David E. Eisenberg,  and our Product Liability practice.

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