⭐J. McIntyre, Ltd. v. Nicastro
Plaintiff Nicastro seriously injured his hand using a metal-shearing machine manufactured by defendant J. McIntyre Machinery, Ltd. The accident occurred in New Jersey, but the machine was manufactured in England, where defendant is incorporated and based. Defendant does not sell or market goods in New Jersey. The machine was sold by a third-party distributor in that state. J. McIntyre officials advertised to distributors in various states, but never New Jersey. No more than four machines ended up in New Jersey.
New Jersey Supreme Court ruled for plaintiff, holding that defendant was able to be called into court in any state where defendant should know a distribution system might sell defendant's products might be sold.
Do state courts have jurisdiction over companies that sell their products to third-party distributors that sell in the forum state?
Conduct directed at the society or economy existing within the jurisdiction of a state gives the state the power to subject the defendant to judgment concerning that conduct.
A defendant may be subject to the jurisdiction of the federal government, but not that of any individual state.
Defendant did not intend to sell goods in New Jersey and therefore did not purposely avail itself of the privileges of conducting business there. As it was not directed there, the state has no power to subject defendant to its jurisdiction. To do otherwise would threaten may small business owners who sell to nationwide distributors.
No, state courts don't have jurisdiction over companies that only sell their products to third-party distributors who market in that state if the company in question does not do or direct business there themselves. Reversed.
: To broaden rule would have bad consequences. There was no demonstration that the constitution or precedent justified jurisdiction. However, setting this rule of targeting a state may also have serious consequences.
: This ruling is reverting to premodern policy. Defendant intended to market anywhere it could in the United States, and thus should be liable anywhere it does happened to be sold. It would be a bigger burden for plaintiff to go to England than for defendant to come to one state instead of another.