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Is International Shoe Getting the Boot? Ginsburg Dissent Protests Jurisdictional Bar to Tort Suit

Jun 27, 2011, 08:03 pm CDT

Comments

Anyone who thinks there's something important in these cases hasn't been following personal jurisdiction doctrine for some time. The field already was a mess, probably the most screwed up of all the procedure subjects, and these cases don't identify some bold new consensus template for doing the analysis (particularly a plurality opinion). They do provide more evidence that Procedure is not Ginsburg's strong suit. She had established that in the Erie/Hanna and Supplemental Jurisdiction areas, and now she's add the other major pillar of Procedure to the list. She should start drafting clerks to fill subject matter needs rather than the best athlete available .

By Pushkin on 2011 06 27, 9:52 pm CDT

Having worked in the tire biz for many years and being a Michelin America Small Tire (MAST) certified tire geek, I would argue that SCOTUS hit it right in Goodyear v. Brown. The Nicastro decision, however, is wrong in my lowly opinion.

Tire manufacturers have very specific markets for their tires based in part upon the statutory quality requirements of the market. That means that for the most part, a tire company doesn't want to sell tires specified for the European market, especially France, in the U.S. because the tire construction, durability and performance standards are much higher (and no, I don't mean speed when I say performance); hence, they are often far more costly to build.

What's defective in Europe isn't always defective in the U.S. In 2004, when this incident occurred, this was very true. Fortunately for safety reasons, and unfortunately for price reasons, we are coming closer together. Recent rule changes have demanded that our tires come more in line with European tires. However, even today ECU standards are higher than ours and French standards, to subsidize Michelin, are even higher.

The American market has some of the lowest priced tires in the major world markets and simply wouldn't tolerate the higher priced tires. So when the tires trickled into the American market, it wasn't because of an intent to do business with that brand in the U.S. Remember, just because Goodyear-Dunlop was named in the suit and does business here, doesn't mean that the tires were necessarily built by either of these companies and intended for our market. The opposite is probably true.

On the other hand, in Nicastro, J. McIntyre new full well the machinery was going to be sold in the entire 50 states. The US is one of the largest markets in the world for metal recycling products and it would be foolish for the company to not intentionally do business through a distributor selling in the U.S.

By Papa Bear on 2011 06 28, 3:10 pm CDT

I wish I could compartmentalize my thinking more, because I have always found products liability law to be distasteful. It is premised basically on the Harper and James notion that injury from any product is an externality, and that society, through the pricing of the product, should make the injured person whole.

The problem is that this not only basically a no fault system, but also imbued with hindsight. The jury will have sympathy for the poor injured person, whose own carelessness is not a factor. Why? Because it is forseeable that people will be careless (this is certainly true, but so true it ought not to matter). And company X failed to warn, or if they warned, did not do so in enough detail, or if it did, it did so in so much detail that the trees got lost in the forest. If the shear cut off fingers, there should have been a guard or interlock. If there was one, and it failed, there should have been two. If workers removed safeties so they could be more efficient in using the product, somehow the design should have made the machine not work. And so on.

As soon as I read the case where a maker of stove black was allowed to be sued because there was no warning on its bottle that babies should not drink it, I knew I was entering into an Alice in Wonderland world. I could see liability if it was so poisonous that getting a drop on an adult's finger would cause death, and there was no warning. But drinking it? Mom wouldn't have done that, so wasn't it her responsibility, alone, to make sure baby could not get its hands on the bottle?

This is, at least peripherally, relevant to Nicastro. What we see here is uncertainty (which I think is appropriate given the importance of the issues) as to whether it is fair to subject every maker of every product to the jurisdiction of whatever state a product related injury happens to occur in. This seems the almost inevitable consequense of a "stream of commerce" view, because it really is forseeable that anything which is sold, perhaps beyond sales only right out of one's workshop to drop-in customers, might end up anywhere.

Imagine you are making a product. In market X, there are specific rules. You comply with them. In X, if the product meets the rules, there can be no liabillity. Then it finds its way to the US. Fair to let you be sued there, where entirely different rules apply? I was always bothered by the fact that my clients would ask me what they had to do to avoid being sued. They didn't want things to go wrong, and viewed being sued as an indication that they had done something wrong. Typically all I could do was give them the platitudes of tort law (had it been products liability that would have been even worse). They often bave me that sort of "so what good are you" look.

Where to draw a line? Both plurality and concurrence see something unfair about a small outfit being sued in a far away state. So who is small, and who is big?

Suing the intermediary distributor seems an option, a they are busy availing themselves of state markets. Could not distributors cover themselves by insurance or by indemnity agreements with manufacturers? Part of their markup? The distributor, of course, has no control over supposed defects in most of these instances. And then there is the deep pockets theory - as in this case, where the distributor had gone bankrupt by the time the accident happened - gosh, is that fair to the injured plaintiff?

What about the plaintiff suing in the UK? Should be no in personam issue there. Would a UK court apply New Jersey products liability law?

But you have to love our jurisprudence. SCOTUS says, in essence, the New Jersey Supremes did the best they could, but their dart landed in the wrong place. And,by the way, we still don't know where the right place is, just that it isn't here.

By Walt Fricke on 2011 06 28, 7:09 pm CDT

No surprise in either decision. The Roberts Court majority is rewriting American law, slowly but steadily, to favor Big Business and corporations in all things. They won't be happy until they "restore" American law to the way it was in the 1890's, before the Progressives, Teddy Roosevelt and the New Deal: An America that is undeniably on the side of corporations and Big Business while being hostile to anything that benefits non-business interests - like the overwhelming majority of the population.

By Be a plumber on 2011 06 28, 7:48 pm CDT

Walt Fricke (@3): you raise a number of good points regarding product liability law and their runaway nature. Unfortunately, that has nothing to do with personal jurisdiction, and linking the two (which was what the four justices who wrote the majority opinion were probably doing here whether they admit it or not) is "judicial activism" at its best/worst. If the problem is runaway product liability laws, fix the runaway product liability laws.

That said, I think both the concurrence and the dissent in the Nicastro opinion are written in good faith and honestly believe there is/is not jurisdiction in this instance. For my part, I think Ginsburg makes the better argument, pointing out the company's goal was to sell everywhere in America that it could, that it insured for product liability in America, that the New Jersey buyer heard about the machine at a Las Vegas convention from the manufacturer, etc. etc. etc.

Ginsberg and Breyer are being intellectually honest here. Kennedy and clan? Not so much.

By Then where? on 2011 06 28, 8:23 pm CDT

Be a Plumber,

In Goodyear v. Brown, that wasn't a matter of being in favor of big biz, it was the correct ruling. Simply because a few tires trickled into the American market, it doesn't mean that the company intended for those products to sold here. They were never intended for sale here and the actual manufacturer, a subsidiary of Goodyear-Dunlop, had no business contacts in America.

The logic in Nicastro isn't quite as clear because McIntyre claimed they didn't know the machine would be sold in NJ. That's bunk. It contracted with its distributor to distribute its products throughout the U.S. It's that simple. If it did not specifically tell the distributor to not sell the shear in NJ, then it's safe to presume that the shear will be sold there if there is a demand for it; therefore, it's safe to assume McIntyre should've known this. This ruling allows for a foreign manufacturer to simply claim it didn't know and then not take any responsibility. Sounds like something my six-year old great-nephew would argue.

While many cases do go in favor of big biz, for some reason, nobody ever comments about cases that go against big biz. We've seen several of those this term, too. For example, CSX Trans v. McBride, Stanford Jr. Univ. v. Roche, Williamson v. Mazda, FCC v. AT&T, etc.

I'm not in favor of many of this court's decisions, but those who make generalizations that all of the court's decisions are for big biz are not making valid arguments.

By Papa Bear on 2011 06 28, 8:49 pm CDT

There have been several major empirical studies of the Court's decisions over the past few years and they make it clear that this particular Court's decisions are pro business in greater proportions than past Court's. It is not a idle generalization, it is a well documented fact. You need to read more Papa Bear. These two cases are about long arm jurisdiction, however, not business. Goodyear was an easy case and correctly decided. It may even be helpful in clearing up some of the chaos in general jurisdiction, using the Brilmayer view of the doctrine articulated thirty years ago and just now getting its due recognition. McIntyre, on the other hand, changes nothing. It is just a repeat of Asahi, with Kennedy writing the O'Connor (from Asahi) opinion, Ginsburg writing the Brennan opinion (changing the emphasis a little), and Breyer writing the Stevens opinion. The only difference this time around is that Breyer/Stevens view picked up one more vote (or looked at another way, Ginsburg lost one vote for the Brennan view). But another plurality opinion clears up none of the confusion of the Asahi plurality opinion, In fact, it makes things worse by commingling the questions of how to define contacts (purposeful or foreseeable), with the question of the relationship between contacts and fairness factors in defining the overall standard. Both Kennedy's and Ginsburg's opinion are a mess.

By Pushkin on 2011 06 29, 12:25 pm CDT

Pushkin,

While what you write may well be correct, my response was directed toward a generalization which lumped one sound decision and one not-so-sound decision together and claimed that they were made simply to support big business: a generalization. That it was directed toward a specific post was indicated by the fact that it was addressed to the poster. Be a Plumber, was obviously to difficult for you to read. Therefore, instead of criticizing the quantity of my reading, you need to improve your reading skills, or at least read things in context. Reading a great deal is pointless if you don't understand what you've just read.

If you can be insulting, I can, too. I'd much rather have an intelligent conversation, though. Tossing insults just demonstrates that we can all submit to our less intelligent side, occasionally.

By Papa Bear on 2011 06 29, 3:26 pm CDT

I say good on SCOTUS and Justice Ginsburg. International Shoe was bad law and should be reversed. If that is pro-business, that is good too. The country needs jobs.

By Walter Sobchak on 2011 07 02, 2:13 am CDT

Great headline writing. I actually took guilty pleasure in the laugh I got out of that pun. Don't judge me.

By Lee on 2011 07 05, 3:06 pm CDT

The New Jersey case is absolute bunk. The manufacturer sold it to a known U.S. distributor!?!?!?! That should have been the outcome determinative factor alone for crying out loud. What a moronic decision. Sorry but the tire case was wrongly decided too. Forget the fact that a few of the tires made it to America. If you are advocating for the injured (dead 13 year olds by the way is as sympathetic a client plaintiff as you can get) here, the argument should have been that the manufacturer can reasonably expect that U.S. tourists would come to Europe, ride buses with their tires and expect not be be hurt by same. Thus, being answerable to North Carolina citizens in their state court for injuries caused by their product is not onerous or illogical at all.

By EJF on 2011 07 05, 4:36 pm CDT

@ Papa Bear
Like you, I have been in the tire business for many years and you are right about everything you have stated.
Just a question, are you practicing law now, or just exposed to products liability?

By KLAW on 2011 07 05, 11:03 pm CDT

KLAW @ 12,

After 10 years in the tire biz and before that 15 years in the food service biz, I re-injured my back cracking a couple of vertebra. On top of which, as the result of the original injury and my body being out of kilter, my hips had worn prematurely and needed to be replaced. The end result as been multiple surgeries and recuperation/rehabilitation time, part of which was spent earning an AAS in paralegal studies. Unfortunately, work has been very limited to short-term temp jobs, a couple of administrative procedures on my own, and volunteer activities.

With things continuing the way they are, I've decided to knock off my last few credits for a bachelors and head to law school. Hopefully, I can graduate by the time I'm 55 and be able to practice. My family is raised so a substantial income isn't needed; however, with my retirement money spent while on disability, I need to get a position or establish a practice that allows me to have at least a moderate income. Disability is barely sufficient and getting less so daily. So, as I will not be able to retire with any sort of income unless I hit it lucky, I need to work and I've chosen the law.

As to the tire bit, I was a true tire geek and I really loved the job. It's hard for people to understand why, but when a person came to my store looking for auto service of the sort we provided (tires, brakes, steering/suspension, etc), I realized that most of them had little understanding of what they needed and many were afraid they were going to be taken advantage of. I can proudly say that I was able to help most customers without cheating any of them. I earned a pretty good living, went home feeling good about my work, and was just getting to the point where I was financially able to really enjoy life when I was injured on the job and it all fell apart rapidly.

My goal is a simple practice doing debtor/creditor, bankruptcy, landlord/tenant, fair employment/housing and small estate planning and probate. I will also not shy away from small claims actions as I've had the opportunity to sit in small claims court on several occasions and I see a great need for legal assistance in that area as well as in smaller PI/PD cases. I may even do some SS disability claims work which I'm looking into now as a P/L.

Quite honestly, I'd be very happy if I can earn $50k per year, own a new motorcycle once again and be able to restore or customize the three I have. In that regard, I'm far in away better off than so many kids graduating from law school in that they have their whole lives ahead of them and families to raise and $50k just won't cut in the world we've built. To me, it's triple what I've got coming in and my wife and I have raised a family over the past 10 years on significantly less.

By Papa Bear on 2011 07 06, 6:39 am CDT

@ Papa Bear
I wish you the best. Legal jobs at this moment is tough but it will come back. I felt you had some exposure to legal theory because in one of your post you were making a claim for minimal contact through which jurisdiction can be shown.

By klaw on 2011 07 06, 9:14 pm CDT

The danger of inept decisions such as these is that multi-state fraud is now being invited because target states' courts are deliberately burying their heads in the sand.

Hypothetically, a New Yorker looking for items to purchase online buys a product that severely injures him. Long arm jurisdiction means a New York court should be able to take the case and render judgment on it as a means to protect its tax paying citizen. However, that is not so.

The current global marketplace has centuries old jurisdictional law being applied by civil court shut-ins. The New Yorker files suit in his local courthouse but the judge there dismisses the case for lack of personal jurisdiction over the seller. The order of dismissal states that the plaintiff failed to allege the seller's purposeful contacts within New York by the seller.

What our jurists fail to see is that a global marketplace has a global audience: that the intended reach touches every state in a purposeful way. Moreover, thousands of transactions can take place out of view of the plaintiff and the court, but the onus is not on the seller to prove lack of contacts in a state.

These decisions further the shield against local law suits of distant sellers by placing the onus on the plaintiff to dig up information to prove purposeful contacts. Our New York has to fly over to the seller's host state and file suit there to recover. This is ridiculously advantageous to the deep pocketed seller to defend locally all suits against him.

Ginsburg reveals that she is on to this disparity and states that our New Yorker should be able to avail himself of his local court because of the commerce taking place. Sadly, she is only in the minority and foreign businesses can commit all the wrongs they want with impunity from suit except within their own courts.

By Peter C. Lomtevas on 2011 07 07, 11:27 am CDT

<i>They do provide more evidence that Procedure is not Ginsburg’s strong suit.</i>

She actually taught the subject, and wrote on it, for many years before she went on the bench. I was in her last class.

By CJColucci on 2011 07 07, 3:16 pm CDT

KLAW,

Just from coursework and studies.

By Papa Bear on 2011 07 07, 9:56 pm CDT

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