Foreign Corporation's Mere Awareness That Its Products May Ultimately End Up In a Forum State Is Not Sufficient Contact to Support Personal Jurisdiction

In Dow Chemical Canada ULC v. Superior Court, 2011 WL 6382110 (Cal. App. 2d Dist. Dec. 21, 2011), the California Court of Appeal, Second District, held that “plac[ing] products into the stream of commerce in a foreign country (or another state), aware that some may or will be swept into the forum state[,]” is not, by itself, sufficient to support the forum state’s exercise of personal jurisdiction over the manufacturer of the products. The Court’s decision explores the limits of personal jurisdiction after the recent decision by the United States Supreme Court in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 8780 (2011), and provides more certainty to foreign corporations regarding the likelihood of being forced to litigate in California courts.

In Dow Chemical, nine California residents were injured when a “Sea-Doo” watercraft exploded on the California side of Lake Havasu. A product liability action was subsequently brought against Dow Chemical Canada ULC (“Dow Canada”) based upon an alleged defect in the fuel tank. Dow Canada specially appeared in the California court to argue that it lacked the sufficient minimum contacts with California to support the exercise of personal jurisdiction.

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Published In: Business Organization Updates, Civil Procedure Updates, International Trade Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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