The limit personal jurisdiction has on a court’s authority has long relied on a three-element test: (1) the defendant must have certain minimum contacts with the forum state, (2) the lawsuit must arise out of or be connected to the defendant’s contacts with the forum state, and (3) the exercise of jurisdiction must not offend “traditional notions of fair play and substantial justice.” The Supreme Court of the United States has spoken often about element one—”“minimum contacts.” Many cases detail the nature and quality of a defendant’s conduct that can create the requisite contacts with the forum state to justify requiring the defendant to appear and defend in the forum state. One recurring problem in “minimum contacts” cases is what to do about harmful products (whether allegedly defective or infringing on a patent) that the defendant sold outside the forum state which end up causing harm in the forum state. The Court has indicated, using a “stream of commerce” analogy, the defendant may satisfy the requisite contact with the forum state by delivering the product into the stream with knowledge that the product will be sold in the forum state. The Court, however, has never been able to agree about the precise contours of this doctrine and lower courts vary wildly in how they approach so-called stream of commerce problems. The Supreme Court has also laid out the factors courts should consider for element three and has expressly held personal jurisdiction to be improper when personal jurisdiction would not be fair and reasonable. Until recently, however, the Court has never spoken about element two—the “arising out of or connected to” element.
The Court spoke twice on the second element—the first time in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County (BMS) and more recently in Ford Motor Co. v. Montana Eighth Judicial District Court. The Court has now provided significant guidance on this second element. This Article considers what the Court’s recent pronouncements on element two might tell us about stream of commerce cases and whether such cases satisfy element one (contacts) and/or element two (arising out of/connected to). For jurisdictions that follow the so called “stream of commerce plus” test, the facts of Ford show that a stream of commerce analysis is no longer necessary. A defendant’s seemingly unrelated plus conduct is itself the requisite connection between the defendant and the forum. And the in-forum injury connects the litigation to the forum after BMS and Ford. The pure stream of commerce theory is less clear. BMS and Ford seem to require some in-forum event, likely the retail sale of the allegedly defective product, so that the litigation is sufficiently connected to the forum. Courts, however, have had mixed reactions to the extent to which these related cases affect a stream of commerce analysis, ranging from complete abrogation of the theory to having no impact.
St. Mary's University School of Law
Fording the Stream of Commerce: What Relatedness Tells Us About Stream of Commerce Cases,
St. Mary's L.J.
Available at: https://commons.stmarytx.edu/thestmaryslawjournal/vol55/iss1/3