Nicastro Decision Impedes Access to Justice

    Public Citizen has released a report analyzing the impact of the U.S. Supreme Court’s decision in J. McIntyre Machinery Co. v. Nicastro, 131 S. Ct. 2780 (2011), on the ability of people injured by the products of out-of-state and foreign manufacturers to obtain access to the courts to remedy their injuries. Nicastro significantly limited the ability of a U.S. court to assert jurisdiction over a manufacturer that did not specifically target the marketing of its products at the state where the court is located, even though the product was sold in and caused injury in that state. The report finds that in a significant and growing number of cases, Nicastro has prevented plaintiffs from turning to their own states’ courts for redress of in-state injuries that resulted from foreign or out-of-state manufacturers’ release of their products into the stream of commerce.

    In Nicastro, the Supreme Court ruled that a worker injured in New Jersey by a machine manufactured in England and sold throughout the United States through a domestic distributor in Ohio could not sue the manufacturer in New Jersey. The case did not, however, produce a majority opinion that provided an authoritative explanation for the result.

    A four-Justice plurality, in an opinion by Justice Kennedy, concluded that the Constitution’s Due Process Clause does not permit a state (or a federal court sitting in that state) to assert jurisdiction over a foreign or out-of-state company that did not take affirmative steps aimed specifically at marketing its product in that state, even when, as in Nicastro, the manufacturer targeted the U.S. market as a whole through a distributor tasked with selling its product in any state where a customer could be found. A concurring opinion by Justice Breyer, joined by Justice Alito, did not go that far, but held that in the absence of state-specific targeting, an isolated sale of one or two products within the state was not enough to support jurisdiction. Justices Ginsburg, Sotomayor, and Kagan dissented.

    The report is based on a review of every reported judicial decision citing Nicastro within the first 25 months after its issuance—approximately 300 cases. An appendix to the report summarizes 221 of those cases that contain relevant discussions of jurisdictional issues. The report concludes that although many of the cases citing Nicastro do so merely for boilerplate or uncontroversial propositions, a significant number follow its holding and deny jurisdiction over defendants who benefited from the marketing of their product in a particular state but who did not specifically target that state (as opposed to the U.S. market as a whole), with the result that injured plaintiffs have been deprived of access to an in-state or U.S. forum in which to seek justice.

    The report also finds that a number of courts, following the approach of Justice Breyer’s concurrence, have held that Nicastro allows exercise of jurisdiction where enough of a defendant’s products have reached the forum state to support the conclusion that the product’s presence was not an isolated event. However, in cases such as Nicastro itself, where the dangerous product sold by the defendant is a large or specialized piece of equipment that is not sold in such large numbers as, say, mass-produced consumer products, this approach is less likely to succeed. The result is that, under Nicastro, many plaintiffs find themselves arbitrarily deprived of in-state forums even though the defendants, in a very real sense, benefited from availing themselves of the market for their products in the forum states.