Boston (Dolan) – The U.S. Supreme Court has agreed to decide two cases questioning whether a foreign company can be sued in state court for introducing a dangerous product into the stream of commerce that injured residents of that state.
The first case involved an accident that severed four fingers off the right hand of a man operating a recycling machine used to cut metal. A British company manufactured the machine and sold it through its exclusive U.S. distributor. The plaintiff sued the British company and its U.S. distributor in New Jersey state court for product liability.
The state Supreme Court reversed a trial court’s dismissal, finding that the foreign company had sufficient contacts with the state.
“[W]e … hold that a foreign manufacturer that places a defective product in the stream of commerce through a distribution scheme that targets a national market, which included New Jersey, may be subject to the in personam jurisdiction of a New Jersey court in a product-liability action,” the court said.
In the second case, the families of two North Carolina teenagers killed in a bus crash in France brought suit in North Carolina state court, alleging faulty tires. The tires were made in Turkey, and the plaintiffs sued Goodyear’s Luxembourg affiliate and its branches in Turkey and France. A state appeals court held that the foreign defendants had sufficient contacts in the state to support general personal jurisdiction.
“[T]housands of tires manufactured by each of the defendants were distributed in North Carolina as the result of a highly organized distribution process that involved defendants and other Goodyear affiliates. Thus, we believe that, on the facts of this case, sufficient basis exists to support a finding of general personal jurisdiction under [the state statute] and the due process clause,” the court said.