Clifford Chance

Cross Border Litigation Series: Supreme Court Limits Jurisdiction Over Foreign Manufacturers

30 June 2011

The US Supreme Court has overturned two state court rulings regarding the standard for subjecting a foreign manufacturer to personal jurisdiction in US courts in product liability cases. In both cases, the state courts held that they could exercise jurisdiction over a foreign manufacturer because the manufacturer placed its products in the "stream of commerce" and knew or reasonably should have known that its products would end up in the state. The Supreme Court reversed both decisions, concluding that such an exercise of jurisdiction was inconsistent with the Due Process Clause of the Fourteenth Amendment.

These cases have broad implications for non-US manufacturers whose products are sold in the US. Although the Court did not muster a majority for any single jurisdictional test, a majority of the Court rejected the proposition that merely placing a product into the stream of commerce provides jurisdiction in every state. Absent a showing that a manufacturer targeted a particular state's market, it will now be more difficult for product liability plaintiffs to assert jurisdiction over that manufacturer in any particular state.

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