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  • Writer's pictureKirk Hartley

Defective Products and Non-US Manufacturers – New Jersey Supreme Court Acknowledges Global Tra

With a hat tip to Sean Wajert at the MassTort Defense blog, for an article on the opinon, set out below are recent, striking words from the New Jersey Supreme Court on the scope of the state’s power to exercise jurisdiction over non-US companies that export goods to the United States, The Court minces no words in responding to the huge onset of imports. One assumes that both US manufacturers and plaintiff’s counsel will like this ruling since it helps to preserve a level playing field for US and non US manufacturers. As some will recall, the US Chamber of Commerce and AAJ last August agreed on efforts to broaden jurisdiction over non-US manufactrurers. The opinion is Nicastro v. McIntyre Machinery America Ltd., No. A-29-08 (N.J. 2/2/10).

"JUSTICE ALBIN delivered the opinion of the Court.

Today, all the world is a market. In our contemporary international economy, trade knows few boundaries, and it is now commonplace that dangerous products will find their way, through purposeful marketing, to our nation’s shores and into our State. The question before us is whether the jurisdictional law of this State will reflect this new reality.

In this case, the foreign manufacturer of an allegedly defective and dangerous industrial machine targeted the United States economy for the sale of its product. The machine was sold to a New Jersey business by the manufacturer’s exclusive American distributor. An employee of that New Jersey business lost several fingers while using the machine because the machine allegedly lacked a safety guard. The foreign manufacturer knew or reasonably should have known that by placing a product in the stream of commerce through a distribution scheme that targeted a fifty-state market the product might be purchased by a New Jersey consumer. We must resolve whether under those circumstances the manufacturer is subject to the jurisdiction of our State court system in a product-liability action.

We affirm the Appellate Division, which found the New Jersey Superior Court, Law Division, as the proper forum for this action. We also reaffirm our decision in Charles Gendler & Co. v. Telecom Equipment Corp., in which we held that “the stream-of-commerce theory supports the exercise of jurisdiction if the manufacturer knew or reasonably should have known of the distribution system through which its products were being sold in the forum state.” 102 N.J. 460, 480 (1986). The increasingly fast-paced globalization of the world economy has removed national borders as barriers to trade and has proven the wisdom of Charles Gendler. Due process permits this State to provide a judicial forum for its citizens who are injured by dangerous and defective products placed in the stream of commerce by a foreign manufacturer that has targeted a geographical market that includes New Jersey. See id. at 480- 83. The exercise of jurisdiction in this case comports with traditional notions of fair play and substantial justice."

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