Hump Day Grab Bag #1: Personal Jurisdiction
Wednesday. Woden's day. The day between Tyr's day and Thor's day. The middle of the week. Humpday. It's all downhill from here, baby.
I've awakened this Humpday with a grab bag of cases, each of moderate interest, but none with enough meat to fully satisfy. So today, readers, it's tapas. Small plates for you. Mangia.
First plate: Personal Jurisdiction. The Utah Court of Appeals recently issued an interesting opinion that applied the U.S. Supreme Court's recent gallimaufry of opinions in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011).
In Gardner v. SPX Corp., 2012 WL 503722 (Utah. Ct. App. Feb. 16, 2012), the plaintiff's husband, a truck driver, was killed on his employer's loading dock when a vertical dock leveler fell on him. Plaintiff alleged that the control box was defective. It had been designed and made by a Canadian company. A Delaware corporation had an ownership interest in the Canadian company, but they were separate companies and all of the corporate formalities had been been observed, so no veil piercing could occur.
The control box manufacturer made its boxes based on the specifications of another Canadian company to which it sold the boxes. That company, in turn, sold the boxes to another Canadian company, which then sold the boxes to a US company that incorporated the boxes into dock levelers. Plaintiff argued that the Canadian control box manufacturer knew that the majority of dock levelers incorporating its component ultimately were sold in the United States to US users, particularly in the West.
The court held that this was not enough to meet the minimum requirements inherent in the due process concept of "fair play and substantial justice." The court analyzed the various opinions in Nicastro, observing that the "Court splintered on the question whether, in products liability cases, and especially products liability cases involving foreign defendants, the United States is more properly regarded as a 'single market' or fifty separate markets, each subject to a different authority." 2012 WL 503722 at *5. Focusing on the lack of "purposeful availment" of the forum's laws, the Utah court held that the Canadian control box manufacturer ("Schneider Canada") had not purposefully availed itself of the benefits of Utah law:
We conclude that, under the foregoing authorities, Schneider Canada lacks the requisite minimum contacts with the State of Utah. Schneider Canada is located and operates in Canada; it maintains no offices, owns no property, and has no employees in Utah. Schneider Canada manufactured the control box in question in Canada and sold it to a Canadian distributor. . . . Schneider Canada did not purposefully avail itself of the Utah market. It did not take active steps to sell its products in Utah. Although it was aware of potential sales in the United States, it neither advertised in Utah nor sent sales representatives to Utah. In short . . . the record does not show "special designing for Utah's market, advertising in Utah, establishing channels for providing regular advice to customers in Utah, or marketing the product through a distributor who has agreed to act as a sales agent in Utah." And although this was not as isolated a sale as occurred in [Nicastro], the record here does not show "special state-related design, advertising, advice, marketing or . . . special effort by the [Canadian] Manufacturer to sell in [Utah]."
Id. at *6 (citations omitted).
The court also focused on two other facts, which are interesting: regional sales, and the nature of the product as a component:
In addition, Schneider Canada's "knowledge of the mere possibility that its product might be taken into a region of the country in which Utah is located is not sufficient" to subject it to Utah's jurisdiction. Finally, unlike [the manufacturer in Nicastro], Schneider Canada "was a component-part manufacturer with 'little control over the final destination of its products once they were delivered into the stream of commerce.'"
Id. at *7 (citations omitted). The Utah court affirmed the dismissal of the Canadian control box manufacturer.
