Idaho Supreme Court Tells Wine Bottle Manufacturer to Stop Whining Over Personal Jurisdiction

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White and Williams LLPIn Griffin v. Ste. Michelle Wine Estates Ltd., No. 47703, 2021 Ida. LEXIS 127, the Supreme Court of Idaho considered whether an Italian wine bottle manufacturer’s contacts with Idaho were sufficient under the Due Process Clause of the United States Constitution to permit the exercise of personal jurisdiction over the manufacturer in Idaho for a plaintiff’s product liability action. Stated another way, the court considered whether a manufacturer located outside the United States (with no domestic presence) could be sued in Idaho because its’ product reached Idaho and caused injury.

As set forth in Griffin, the plaintiff, Mary Clare Griffin (Griffin) purchased a bottle of Italian wine, which broke in her hands as she attempted to open it, causing substantial injuries. Griffin brought a product liability suit against Zignago Vetro S.P.A (Zignago) the Italian manufacturer of the glass wine bottle, as well as several other parties involved in the export/import and distribution of the wine bottle.

Zignago is a foreign limited liability company operating in Italy, but it also engages in international trade. From 2008 to 2018, Zignago sold over ninety-two million glass wine bottles to Marchesi Antinori Srl (Marchesi), an Italian wine company that produces a variety of wines. Marchesi sells its wine to various distributors. Since 2013, forty-two million bottles of Marchesi wine have been exported to the United States, with approximately 1,308 bottles distributed in Idaho. Before Marchesi and Zignagno entered the agreement for the supply of wine bottles, the parties discussed the markets in which Marchesi operated, a fact that Zignago acknowledged.

Zignago moved the district court to dismiss Griffin’s complaint based on a lack of personal jurisdiction, and the district granted the motion. Griffin appealed that decision.

Personal jurisdiction refers to a court’s authority over a party in litigation. The Supreme Court of the United States has recognized two categories of personal jurisdiction: (1) general jurisdiction – based on presence in the state; and (2) specific jurisdiction – based on activities in a state. The Griffin court addressed the issue of specific jurisdiction.

Discussing specific jurisdiction, the Supreme Court of the United States stated, in World-Wide Volkswagen Corp. v. Woodson, 444 US 286 (1980), that an out-of-state defendant may be subject to specific personal jurisdiction by placing its’ products into the stream of commerce with the expectation that they will be purchased in the forum state. While the “stream of commerce” test does not apply to an “isolated occurrence,” the test can be met by “efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States.”

According to the Griffin court, the Supreme Court of the United States’ framework for analyzing personal jurisdiction pursuant to the Due Process Clause indicates that “a State may exercise specific jurisdiction over an out-of-sate defendant if the defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” To determine whether the defendant meets this standard, courts look to whether the defendant “purposefully availed” itself to the forum state, whether it was foreseeable that the defendant would be haled into the forum state’s court and whether exercising jurisdiction over the out-of-state defendant would be fair.

The court in Griffin followed the stream of commerce test from World-Wide Volkswagen, which it felt controlled the analysis, despite later non-majority decisions of the Supreme Court of the United States suggesting that courts apply a stream of commerce “plus” test. Under the stream of commerce “plus” test, the defendant must do more than place a product into the stream of commerce: it must engage in additional conduct that indicates an intent or purpose to serve the market in the forum state, such as by advertising there or having a sales office in the state. However, employing the narrowest grounds analysis, the Griffin court found that the stream of commerce test was the applicable test in Idaho.

Applying the stream of commerce test, the court found that personal jurisdiction existed in Idaho because Zignago placed its product into the stream of commerce with the expectation it would be sold in the United States, including Idaho, as Marchesi purchased the bottle from Zignago, filled it with wine, and exported the wine bottles to the United States. Thus, the court found that the manufacturer of the bottle, Zignago, purposefully availed itself of conducting business activity in Idaho and subjected itself to the jurisdiction of the state despite having no presence in Idaho or specifically targeting the state.

Even though this case does not deal with a subrogation matter directly, it involves the foundation of every lawsuit – personal jurisdiction. For subrogation professionals investigating product liability claims, it is important to look at the specific actions of all parties involved in the manufacturer and distribution of the product, as well as its component parts. It also important to understand what test the examining court will use to determine whether it should exercise personal jurisdiction.

 

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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