Paddling Past Nicastro in the Stream of Commerce Doctrine: Interpreting Justice Breyer's Concurrence as Implicitly Inviting Lower Courts to Develop Alternative Jurisdictional Standards

• Citation: Vol. 63 No. 3
• Publication year: 2014

Paddling Past Nicastro in the Stream of Commerce Doctrine: Interpreting Justice Breyer's Concurrence as Implicitly Inviting Lower Courts to Develop Alternative Jurisdictional Standards

Kaitlyn Findley

PADDLING PAST NICASTRO IN THE STREAM OF COMMERCE DOCTRINE: INTERPRETING JUSTICE BREYER'S CONCURRENCE AS IMPLICITLY INVITING LOWER COURTS TO DEVELOP ALTERNATIVE JURISDICTIONAL STANDARDS

Abstract

The Supreme Court established the stream of commerce doctrine in its World-Wide Volkswagen Corp. v. Woodson opinion in response to the rapid emergence of complex personal jurisdiction questions in products liability cases involving nonresident manufacturers whose products were sold and caused injury in U.S. forums. Although the doctrine was initially intended to clarify jurisdictional analysis in these cases, its application has been ambiguous and judicially divisive due to the Court's chronic inability to explicate the quantity and quality of contacts that the doctrine requires a nonresident defendant to establish with a forum state before that state may exercise personal jurisdiction over it.

The Court first attempted to clarify the stream of commerce doctrine's application in Asahi Metal Industry Co. v. Superior Court, which instead resulted in the issuance of a split decision that announced two competing analytical standards for determining the requisite quantity and quality of a nonresident defendant's contacts with a forum state asserting jurisdiction: (1) the "pure stream of commerce test," requiring only a nonresident defendant's placement of its products in the stream of commerce with the expectation that the products will be sold in the forum state, and (2) the "stream of commerce plus test,"requiring evidence of a nonresident defendant's "additional conduct" directed at the forum state beyond merely placing its goods in the stream of commerce. For nearly a quarter of a century following Asahi, lower courts grappled with how to apply these competing tests without any further guidance from the Court.

In 2011, the Court finally made its second attempt to clarify the stream of commerce doctrine by granting certiorari in J. McIntyre Machinery, Ltd. v. Nicastro. Unfortunately, the Court issued another disappointing split decision, prompting a torrent of law review articles conjecturing the theoretical impact of Nicastro and criticizing the Court for failing to provide meaningful

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analytical guidance. In contrast, this Comment is devoted to critically analyzing the three patterns in which lower courts have actually responded to Nicastro, and it posits that although the criticism of the Court may be valid, it is counterproductive to moving the stream of commerce doctrine past Nicastro to a state of much-needed stability.

This Comment argues that Justice Breyer structured his concurrence, which constitutes the holding of Nicastro under the Marks Rule, in a manner that enables lower courts to interpret his opinion as an implicit invitation to develop alternative jurisdictional approaches for the Court to survey the next time it grants certiorari to clarify the doctrine. Providing the Court with a more varied doctrinal landscape to survey has the potential to break the persistent analytical deadlock that caused the Court to issue split decisions in Asahi and Nicastro. Thus, this Comment argues that reading Justice Breyer's concurrence as this implicit invitation is the only interpretation that will assist the Court in moving the stream of commerce doctrine past Nicastro toward the adoption of a stable and uniform personal jurisdiction analysis.

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Introduction..............................................................................................699

I. Personal Jurisdiction Jurisprudence and the Stream of Commerce Doctrine.......................................................................702

A. The Beginning of Fourteenth Amendment Due Process Limitations on Personal Jurisdiction: Pennoyer v. Neff............703
B. The Foundation for Contemporary Personal Jurisdiction Law: International Shoe ............................................................. 705
C. The Muddled Stream of Commerce Doctrine: World-Wide and Asahi .................................................................................... 707

1. The Stream of Commerce Doctrine's Announcement: World-Wide..........................................................................708
2. The Court's First Failed Attempt to Clarify the Stream of Commerce Doctrine: Asahi .................................................. 710
3. The Muddied Stream of Commerce Doctrine After Asahi .... 713

II. The Court's Second Failed Attempt to Clarify the Stream of Commerce Doctrine: J. McIntyre Machinery, Ltd. v. Nicastro ............................................................................................ 714

A. The Facts of Nicastro .................................................................714
B. Justice Kennedy's Plurality Opinion..........................................716
C. Justice Ginsburg's Dissent.........................................................718
D. Justice Breyer's Concurrence ....................................................720

III. Interpreting Justice Breyer's Concurrence as an Implicit Invitation Would Bring Stability to the Stream of Commerce Doctrine.......................................................................723

A. The Text and Spirit of the Concurrence Permit Its Interpretation as an Implicit Invitation ...................................... 725
B. Critical Analysis of Lower Court Responses to Nicastro that Further Destabilize the Doctrine ................................................ 730

1. Mistakenly Treating the Nicastro Plurality's Standard as Binding ................................................................................. 731
2. Factually Distinguishing Nicastro and Applying the Competing Tests from Asahi ................................................ 733

C. Stabilizing the Doctrine by Accepting Justice Breyer's Implicit Invitation: The Smith v. Teledyne Continental Motors, Inc. Case Study..............................................................735

1. Facts of Smith ......................................................................736
2. The Smith Court's Alternative Jurisdictional Standard.......737
3. Extrapolating the Stabilizing Implications of Smith to the Pattern of Accepting Justice Breyer's Implicit Invitation .... 743

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Conclusion..................................................................................................746

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Introduction

The Supreme Court announced the stream of commerce doctrine to facilitate complicated personal jurisdiction analyses in complex products liability cases involving nonresident¹ manufacturers whose products were sold in u.S. forum states² and caused injury. Under the stream of commerce doctrine, as originally described in World-Wide Volkswagen Corp. v. Woodson,³ a state's exercise of personal jurisdiction over a nonresident defendant is reasonable so long as the defendant "delivers its products into the stream of commerce with the expectation they will be purchased by consumers in the forum State."⁴

Despite the Court's simple phraseology, the actual application and requirements of the doctrine have remained fraught with ambiguity since its initial announcement in World-Wide, which should not come as a shock given the Court's interminable battle in squaring a state's exercise of personal jurisdiction with Fourteenth Amendment due process⁵ requirements more generally.⁶

In the Court's first foray into clarifying the stream of commerce doctrine, Asahi Metal Industry Co. v. Superior Court,⁷ the Court issued a split, plurality decision that announced two analytical standards for determining the quantity and quality of contacts that the doctrine requires a nonresident defendant to establish with a forum state before that state may exercise personal jurisdiction over the defendant: the "pure stream of commerce" test and the "stream of commerce plus" test. The pure stream of commerce test only requires that a nonresident defendant place its products in the stream of commerce with the expectation that the products will be sold in the forum state asserting

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jurisdiction.⁸ Conversely, the stream of commerce plus test requires evidence of a nonresident defendant's "additional conduct" directed at the state asserting jurisdiction beyond merely placing its goods in the stream of commerce.⁹

Following Asahi, lower courts were forced to choose between and apply the case's competing tests, resulting in the development of a significant split among lower courts and amplifying the analytical instability already present in the doctrine.¹⁰ After nearly twenty-five years of leaving lower courts to grapple with the application of these jurisdictional tests, the Court made its second, and most recent, attempt to clarify the stream of commerce doctrine by granting certiorari in J. McIntyre Machinery, Ltd. v. Nicastro.¹¹ Yet again, the Court issued a split decision, reinforcing the divide between the competing tests in Asahi and seemingly cementing the doctrine's analytical instability.¹²

Unfortunately, as the stream of commerce doctrine has become progressively unstable since its announcement in World-Wide, the need for its stability has exponentially increased due to the dramatic growth in injuries caused by product defects and the subsequent rise in products liability actions. The number of annual injuries in the United States caused by product defects has grown to over 34 million.¹³ And as the world becomes increasingly globalized and interconnected, domestic and international nonresident manufacturers, whose products have come to these consumers through the stream of commerce,¹⁴ are causing a growing portion of these injuries.¹⁵ Thus, as the number of injuries from defective products increases in the...