J. McIntyre Machinery, Ltd. v. Nicastro

Opinion Summary:

This case arose from a products-liability suit filed in New Jersey state court where Robert Nicastro seriously injured his hand while using a metal-shearing machine manufactured by defendant. The accident occurred in New Jersey, but the machine was manufactured in England, where defendant was incorporated and operated. At issue was whether the New Jersey courts had jurisdiction over defendant, notwithstanding the fact that the company at no time either marketed goods in the State or shipped them there. The Court held that due process protected defendant's right not to be coerced except by lawful judicial power. As a general rule, the exercise of judicial power was not lawful unless defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." The Court held that there could be exceptions, say, for instance, in cases involving an intentional tort, but the general rule was applicable in this products-liability case, and the so-called "stream-of-commerce" doctrine could not displace it. Therefore, the Court held that the facts did not demonstrate that defendant purposefully availed itself of the New Jersey market and New Jersey was without power to adjudge the rights and liabilities of defendant where its exercise of jurisdiction would violate due process. Accordingly, the judgment of the New Jersey Supreme Court was reversed.



J. McINTYRE MACHINERY, LTD. v. NICASTRO, individually and as administrator of the ESTATE OF NICASTRO

certiorari to the supreme court of new jersey

No. 09–1343. Argued January 11, 2011—Decided June 27, 2011

Respondent Nicastro injured his hand while using a metal-shearing machine that petitioner J. McIntyre Machinery, Ltd. (J. McIntyre), manufactured in England, where the company is incorporated and operates. Nicastro filed this products-liability suit in a state court in New Jersey, where the accident occurred, but J. McIntyre sought to dismiss the suit for want of personal jurisdiction. Nicastro’s jurisdictional claim was based on three primary facts: A U. S. distributor agreed to sell J. McIntyre’s machines in this country; J. McIntyre officials attended trade shows in several States, albeit not in New Jersey; and no more than four J. McIntyre machines (the record suggests only one), including the one at issue, ended up in New Jersey. The State Supreme Court held that New Jersey’s courts can exercise jurisdiction over a foreign manufacturer without contravening the Fourteenth Amendment’s Due Process Clause so long as the manufacturer knew or reasonably should have known that its products are distributed through a nationwide distribution system that might lead to sales in any of the States. Invoking this “stream-of-commerce” doctrine of jurisdiction, the court relied in part on Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U. S. 102 . Applying its test, the court concluded that J. McIntyre was subject to jurisdiction in New Jersey, even though at no time had it advertised in, sent goods to, or in any relevant sense targeted the State:clubjuris

Held: The judgment is reversed:clubjuris

201 N. J. 48, 987 A. 2d 575, reversed:clubjuris

Justice Kennedy, joined by The Chief Justice, Justice Scalia, and Justice Thomas, concluded that because J. McIntyre never engaged in any activities in New Jersey that revealed an intent to invoke or benefit from the protection of the State’s laws, New Jersey is without power to adjudge the company’s rights and liabilities, and its exercise of jurisdiction would violate due process. Pp. 4–12:clubjuris

(a) Due process protects the defendant’s right not to be coerced except by lawful judicial power. A court may subject a defendant to judgment only when the defendant has sufficient contacts with the sovereign “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U. S. 310, 316. Freeform fundamental fairness notions divorced from traditional practice cannot transform a judgment rendered without authority into law. As a general rule, the sovereign’s exercise of power requires some act by which the defendant “purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U. S. 235, 253. In cases like this one, it is the defendant’s purposeful availment that makes jurisdiction consistent with “fair play and substantial justice” notions. No “stream-of-commerce” doctrine can displace that general rule for products-liability cases:clubjuris

The rules and standards for determining state jurisdiction over an absent party have been unclear because of decades-old questions left open in Asahi. The imprecision arising from Asahi, for the most part, results from its statement of the relation between jurisdiction and the “stream of commerce.” That concept, like other metaphors, has its deficiencies as well as its utilities. It refers to the movement of goods from manufacturers through distributors to consumers, yet beyond that descriptive purpose its meaning is far from exact. A defendant’s placement of goods into commerce “with the expectation that they will be purchased by consumers within the forum State” may indicate purposeful availment. World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 , 298. But that does not amend the general rule of personal jurisdiction. The principal inquiry in cases of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign. See, e.g., Hanson, supra, at 253. In Asahi, Justice Brennan’s concurrence (joined by three other Justices) discarded the central concept of sovereign authority in favor of fairness and foreseeability considerations on the theory that the defendant’s ability to anticipate suit is the touchstone of jurisdiction. 480 U. S., at 117. However, Justice O’Connor’s lead opinion (also for four Justices) stated that “[t]he ‘substantial connection’ between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State.” Id., at 112. Since Asahi, the courts have sought to reconcile the competing opinions. But Justice Brennan’s rule based on general notions of fairness and foreseeability is inconsistent with the premises of lawful judicial power under this Court’s precedents. Today’s conclusion that the authority to subject a defendant to judgment depends on purposeful availment is consistent with Justice O’Connor’s Asahi opinion. Pp. 4–10:clubjuris

(b) Nicastro has not established that J. McIntyre engaged in conduct purposefully directed at New Jersey. The company had no office in New Jersey; it neither paid taxes nor owned property there; and it neither advertised in, nor sent any employees to, the State. Indeed, the trial court found that petitioner did not have a single contact with the State apart from the fact that the machine in question ended up there. Neither these facts, nor the three on which Nicastro centered his jurisdictional claim, show that J. McIntyre purposefully availed itself of the New Jersey market. Pp. 10–12:clubjuris

Justice Breyer, joined by Justice Alito, agreed that the New Jersey Supreme Court’s judgment must be reversed, but concluded that because this case does not present issues arising from recent changes in commerce and communication, it is unwise to announce a rule of broad applicability without fully considering modern-day consequences. Rather, the outcome of the case is determined by the Court’s precedents. Pp. 2–7:clubjuris

(a) Based on the record, respondent Nicastro failed to meet his burden to demonstrate that it was constitutionally proper to exercise jurisdiction over petitioner J. McIntyre Machinery, Ltd. (British Manufacturer). The three primary facts the state high court relied on do not satisfy due process. None of the Court’s precedents finds that a single isolated sale, even if accompanied by the kind of sales effort indicated here, is sufficient. See World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 ; Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U. S. 102 . Here, the relevant facts show no “regular … flow” or “regular course” of sales in New Jersey, id., at 117 (Brennan, J., concurring in part and concurring in judgment); id., at 122 (Stevens, J., concurring in part and concurring in judgment); and there is no “something more,” such as special state-related design, advertising, advice, or marketing, id., at 111, 112 (opinion of O’Connor, J.), that would warrant the assertion of jurisdiction. Nicastro has shown no specific effort by the British Manufacturer to sell in New Jersey. And he has not otherwise shown that the British Manufacturer “ ‘purposefully avail[ed] itself of the privilege of conducting activities’ ” within New Jersey, or that it delivered its goods in the stream of commerce “with the expectation that they will be purchased” by New Jersey users. World-Wide Volkswagen, supra, at 297–298. Pp. 2–4:clubjuris

(b) Justice Breyer would not go further. Because the incident at issue does not implicate modern concerns, and because the factual record leaves many open questions, this is an unsuitable vehicle for making broad pronouncements that refashion basic jurisdictional rules. At a minimum, he would not work such a change to the law in the way either the plurality or the New Jersey Supreme Court suggests without a better understanding of the relevant contemporary commercial circumstances. Insofar as such considerations are relevant to any change in present law, they might be presented in a case (unlike the present one) in which the Solicitor General participates. Pp. 4–7:clubjuris

Kennedy, J., announced the judgment of the Court and delivered an opinion, in which Roberts, C.J., and Scalia and Thomas, JJ., joined. Breyer, J., filed an opinion concurring in the judgment, in which Alito, J., joined. Ginsburg, J., filed a dissenting opinion, in which Sotomayor and Kagan, JJ., joined.