Personal Jurisdiction over Foreign Manufacturers

State v LG Electronics, Wash app, div 1, January 12, 2015:150112 State-v-LG-Electronics

There has been ongoing debate in the courts over how much contact foreign manufacturers must have with a state for the state court to assert personal jurisdiction over foreign manufacturers and make the foreign manufactures defend in the state’s courts. The state’s power is constrained by the due process clause of the Fourteenth Amendment. The foundational case is International Shoe Co. v. Washington, 326 U.S. 310 (1945), in which the United States Supreme Court] held that a state may authorize its courts to exercise personal jurisdiction over an out-at-state defendant if the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.”Personal Jurisdiction over foreign manufacturers

The courts have subsequently developed two concepts of personal jurisdiction: (1) General Jurisdiction and (2) Specific Jurisdiction. General jurisdiction “permits the exercise of personal jurisdiction over a nonresident defendant where the defendant’s ‘continuous corporate operations within a state (are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.'” Daimler AG v Bauman, 134 S. Ct. at 754-55 (2014). Specific jurisdiction, which since International Shoe “has become the centerpiece of modern jurisdictional theory,” requires that suit arise out of or relate to the defendant’s contacts with the forum. Daimler, 134 S. ct. at 754-55. Specific Jurisdiction requires proof of three elements (1) minimum contacts; (2) action “arises” from minimum contacts; and (3) asserting jurisdiction does not offend traditional notions of fair play and substantial justice.

In State v LG Electronics, Washington’s Attorney General alleged price fixing of CRT tubes by 20 foreign manufacturers. The court held that while the sale of a single product in the state would probably not be sufficient for Specific Jurisdiction, selling a substantial number of products through an independent wholesale distribution system is sufficient “minimum contact” with the state and satisfies the requirements that the manufacturers “purposely availed” themselves of the privilege of doing business in Washington. The second requirement that the cause of action arise from the manufacturers’ indirect sales in Washington was also satisfied. The third factor, that asserting personal jurisdiction not offend traditional notions of fair play and substantial justice, is resolved by the court “consider[ing] ‘the quality, nature, and extent of the defendant’s activity in Washington, the relative convenience of the plaintiff and the defendant in maintaining the action here, the benefits and protection of Washington’s laws afforded the parties, and the basic equities of the situation.'” (see AU Optronics, 180 Wn. App. at 926).

The court asserted personal jurisdiction subject to further proceedings.

 Personal Jurisdiction over Foreign Manufacturers

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