Published Decision: Knox v. MetalForming, Inc., 914 F.3d 685 (1st Cir. 2019)

MG+M Boston Attorneys Javier Flores, Eric Skelly, and Thaddeus Lenkiewicz authored the appellate briefing. Attorney Flores presented oral argument.

The extent to which state and federal courts may exercise specific personal jurisdiction over foreign defendants has long been an area of ambiguity and disharmony. Notably, the U.S. Supreme Court’s two most recent attempts to address the issue both failed to produce a majority opinion. The lower courts have thus been tasked with delineating the boundaries of jurisdictional authority, armed only that the competing tests articulated in the Supreme Court’s fractured pronouncements. On January 30, 2019, the Court of Appeals for the First Circuit issued a decision in the matter of Knox v. MetalForming, Inc. and Schechtl Maschinenbau GmbH[1], which provides much needed clarity concerning the relevant factors and applicable standards for the exercise of personal jurisdiction over foreign product manufacturers.

  1. Case-Specific Jurisdiction Precedent and the Stream-of-Commerce Analysis

For the exercise of personal jurisdiction to be constitutional, a defendant must have “certain minimum contacts” with the forum state such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”[2] In the absence of general jurisdiction, a plaintiff must establish that the court has case-specific jurisdiction over the defendant, for which a three-part test applies. First, the plaintiff’s claim must directly arise out of, or relate to, the defendant’s forum-state activities. Second, the defendant’s forum contacts must represent a purposeful availment of the privilege of conducting activities in the forum state. Third, the exercise of jurisdiction must be reasonable.

While the test is well established, it is “’not susceptible of mechanical application” and requires a highly fact-specific inquiry.[3] Particularly, the Supreme Court’s efforts to provide guidance in the application of “purposeful availment” prong to foreign manufacturers has resulted in competing variations of the so-called “stream-of-commerce” test. The Supreme Court first set forth the “stream-of-commerce” standard in World-Wide Volkswagen v. Woodson, stating that a “forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.”[4] In Asahi Metal Indus. v. Super. Ct., Justice O’Connor, writing for three other justices, stated that placing a defective product into the stream of commerce combined with “an intent or purpose to serve the market in the forum State” satisfied purposeful availment.[5] This “stream-of-commerce plus” standard, sought “[a]dditional conduct of the defendant” to “indicate an intent or purpose to serve the market in the forum State.”[6] Examples included designing the product for the market in the forum state, advertising in the forum state, establishing channels for providing regular advice to customers in the forum state, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum state.
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On April 16, 2018, a Rhode Island court addressed for the first time whether an entity owes a duty of care to protect non-employees from exposure to the asbestos-tainted work clothes of the entity’s employee.  In a decision denying the defendant Crane Co.’s motion for summary judgment in the matter of Carolyn Nichols, as Executrix of the Estate of Iva Pearl Jones, et al. v. Allis Chalmers Product Liability Trust, et al., C.A. No. PC-2008-1134, Judge Sarah Taft-Carter held that while the existence of such a duty is determined on a case-by-case basis, the plaintiffs had presented sufficient evidence to establish that Crane Co. had a duty to protect against such “secondary” or “take-home” exposure.  The decision is significant in that the Court demonstrated a willingness to impose such a broad duty upon an employer if certain factors are met through the plaintiff’s evidence.

In the Jones matter, the plaintiffs alleged that the decedent, Iva Pearl Jones (“Ms. Jones”) was exposed to asbestos from the clothing of her brother-in-law, Stanley Nichols (“Mr. Nichols”) while Mr. Nichols was employed by Crane Co. from 1979 to 1980 and resided in the same home as Ms. Jones and other family members.  The testimony also established that Ms. Jones “always” did the laundry, including Mr. Nichols’ work clothes.  Ms. Jones was diagnosed with mesothelioma in 2005 and passed away in 2007.  The plaintiffs alleged that Crane Co. failed to take adequate precautions to prevent asbestos fibers from leaving the work site and failed to warn employees of a foreseeable risk of take-home exposures to their cohabitants. Following discovery, Crane Co. moved for summary judgment on all counts asserting that it had no duty of care to Ms. Jones, its employee’s sister-in-law, and that the plaintiffs had failed to establish that the alleged exposure to asbestos from Mr. Nichols’ clothing caused Ms. Jones’ disease.

The Court, noting that an employer’s duty to protect against “take-home” exposures is an issue of first impression in Rhode Island, recognized the division of existing authority in other jurisdictions that have addressed the issue in NY, MD, GA, TN, NJ, IL, and ND. The Court held that it need not find a “special relationship” between Crane Co. and Ms. Jones to impose a duty because the plaintiffs allegations were based upon Crane Co.’s own alleged misfeasance in utilizing asbestos-containing products and not on an alleged failure of Crane Co. to protect against the actions of a third-party tortfeasor.  Instead, the Court held that under Rhode Island law, the existence of a duty of care is determined on a case-by-case basis considering the following factors: (1) the foreseeability of the harm; (2) the degree of certainty of injury; (3) the closeness of connection between the defendant’s conduct and the plaintiff’s injury; (4) the policy of preventing future harm; (5) the burden to the defendant and consequences to the community in imposing a legal duty; and (6) the relationship between the parties.

After considering the above-factors, the Court
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