Foreign Manufacturer Dismissed for Lack of Personal Jurisdiction in the Southern District of Indiana

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Case:

Patterson v. Chiappa Firearms, USA, LTD, No. 1:20-cv-01430-JPH-MG, 2021 WL 4287431 (S.D. Ind. Sept. 21, 2021).

Significance:

  • First Indiana case to apply the “relate to” standard articulated in Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021).
  • Rejects a broad, unlimited stream of commerce theory for establishing personal jurisdiction.
  • Denied plaintiff jurisdictional discovery, noting that foreign nationals should not be subjected to extensive discovery in order to determine whether personal jurisdiction over them exists.

Case Analysis:

In Patterson v. Chiappa Firearms, the plaintiff, an Indiana citizen, bought a handgun from an online gun seller in Kentucky and had it delivered to Indy Arms Company in Indianapolis. The gun subsequently exploded in Indiana when the plaintiff test-fired it, fracturing the plaintiff’s finger. The gun was manufactured by Chiappa Italy and distributed by Chiappa USA.

The Southern District of Indiana held that it did not have general or specific personal jurisdiction over co-defendant Chiappa Italy, the Italian manufacturer of the gun. The court lacked general jurisdiction because Chiappa Italy is an Italian corporation with a principal place of business in Italy, and there were no allegations that Chiappa Italy had continuous and systematic contacts with Indiana to make it essentially at home in Indiana.

The court also lacked specific jurisdiction because the alleged injury did not arise out of, and was not related to, Chiappa Italy’s forum-related activities. The court noted that the “‘arise out of’ test—the ‘first half’ of the ‘arise out of or relate to’ standard—‘asks about causation.’” Here, because plaintiff did not allege that Chiappa Italy’s contacts with Indiana motivated the gun purchase or caused the injury, the court found that the record did not show causation and that the “arise out of” half of the standard did not support personal jurisdiction.

Likewise, the court also found that the “relate to” half of the standard did not support personal jurisdiction. Although the “relate to” half of the standard is more lenient, contemplating that some relationships will support jurisdiction without a causal showing, that does not mean anything goes. Here, the court distinguished the facts of this case from the facts in Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021). Unlike in Ford, Chiappa Italy did “not invade Indiana’s market ‘[b]y every means imaginable.’” For instance, there was no evidence of Indiana billboards, TV and radio spots, print ads, or direct mail from Chiappa Italy. Instead, “Chiappa Italy’s closest contact to Indiana is that Hoosiers can buy some of its products through its website and use the website to find Indiana gun dealers who sell or can transfer firearms. That is a far cry from Ford’s 36 dealerships in Montana and 84 in Minnesota.’” Consequently, Chiappa Italy’s alleged contacts with Indiana are “isolated or sporadic”—not continuous—and as such do not support specific jurisdiction.

The court also rejected plaintiff’s stream of commerce theory, which argued that it should be enough that Chiappa Italy expected that a product it manufactured would be sold in Indiana. Although the Supreme Court has not conclusively determined whether a stream of commerce theory remains viable, the court noted that there is no authority endorsing the broad theory proffered by plaintiff. Indeed, the court went on to express doubt about whether the Seventh Circuit or the Supreme Court would treat primarily internet or online connections as meaningful contacts with a forum state, noting that allowing those contacts to establish specific jurisdiction would create de facto universal jurisdiction, counter to the Supreme Court’s apparent approach.

Finally, in a footnote at the end of the court’s order, the court declined plaintiff’s request for jurisdictional discovery. The court placed the onus on plaintiff to explain why jurisdictional discovery would be appropriate, and found that plaintiff failed to do so, noting that the plaintiff failed to explain how Chiappa Italy’s sales volume in Indiana would impact the court’s jurisdictional analysis. Quoting C. States, Se. & Sw. Areas Pension Fund v. Reimer Exp. World Corp., 230 F.3d 934, 947 (7th Cir. 2000), the court noted that “[f[oreign nationals usually should not be subjected to extensive discovery in order to determine whether personal jurisdiction over them exists.”

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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