Opinion ID: 1655690
Heading Depth: 1
Heading Rank: 1

Heading: The Quantity of the Contacts

Text: Despite having sold thousands of its bat weights here, On-Deck claims it has no contacts with Minnesota. On-Deck points out that it has never had an office, sales outlet, place of business, or agent for service of process here. It claims it has never had a direct contact with Minnesota. This may be true, but it fails to account for On-Deck's numerous indirect contacts with Minnesota. On-Deck ignores its indirect contacts with Minnesota because it believes that, after the United States Supreme Court's decision in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), purposeful contacts must be direct contacts. Placing a product in the stream of commerce that leads to a state does not subject a manufacturer to jurisdiction, according to On-Deck, because such contacts are indirect rather than direct. On-Deck's frontal assault on the stream-of-commerce theory of jurisdiction misconstrues World-Wide Volkswagen, ignores the Supreme Court's express recognition of the theory, forgets scholarly comment on the subject, and fails to account for the plethora of cases upholding jurisdiction under a stream-of-commerce theory. The World-Wide Volkswagen case dealt with a regional distributor and a retail dealer of cars at the end of the distribution chain who were being hailed into court in a jurisdiction far from their areas of distribution simply because the plaintiff had driven the car to that jurisdiction. Id. at 289, 100 S.Ct. at 563. Jurisdiction over the automobile's manufacturer and importer was assumed, though not at issue. Id. at 317-18, 100 S.Ct. at 570-71 (Blackmun, J., dissenting). Regional distributors and retail dealers cannot, according to the Supreme Court, be forced to defend lawsuits in jurisdictions far from their area of business just because a plaintiff brought the product to the jurisdiction. Id. at 298, 100 S.Ct. at 567. Far different, however, is the situation of a manufacturer or a primary distributor: Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The 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. Id. at 297-98, 100 S.Ct. at 567. (emphasis added). To hold otherwise would be to doom all products liability cases to dismissal from forums other than the place of manufacture or initial sale. Jay,  Minimum Contacts as a Unified Theory of Personal Jurisdiction: A Reappraisal, 59 N.C.L.Rev. 429, 442-43 (1981); see also Comment, Federalism, Due Process, and Minimum Contacts: World-Wide Volkswagen Corp. v. Woodson, 80 Colum.L.Rev. 1341, 1360-61 n. 146 (1980). Courts have uniformly followed the United States Supreme Court's admonition in World-Wide Volkswagen and held manufacturers subject to personal jurisdiction under the stream-of-commerce theory. E.g., Nelson v. Park Industries, Inc., 717 F.2d 1120 (7th Cir.1983), cert. denied, ___ U.S. ___, 104 S.Ct. 1277-78, 79 L.Ed.2d 682 (1984); Ford Motor Co. v. Atwood Vacuum Machine Co., 392 So.2d 1305 (Fla. 1981); Svendsen v. Questor Corp., 304 N.W.2d 428 (Iowa 1981). As the Iowa Supreme Court wrote, even though the actual marketing of the product is done by intermediaries: [T]hrough their actions in marketing their product, [the defendants] sought to serve the Iowa market, and therefore should be amenable to the jurisdiction of the Iowa courts.    it is reasonable to infer that their commercial transactions resulted in more than insubstantial use and consumption in this state. See Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 441-42, 176 N.E.2d 761, 766 (1961). This affords a sufficient basis for the conclusion that the [defendants] through the Omaha distributor, indirectly sought to serve the Iowa market, and consequently are subject to suit within this state. Id. at 431 (emphasis added). According to the Seventh Circuit, even though the defendants did not originate the distribution system and do not control it, they did place the flannel shirts in and move them along a stream of commerce destined for retail sale throughout the United States. Nelson v. Park Industries, Inc., 717 F.2d at 1126; see Bean Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081, 1085 (5th Cir.1984). In essence, the fairness requirement of due process does not extend so far as to permit a manufacturer to insulate itself from the reach of the forum state's long-arm rule by using an intermediary or by professing ignorance of the ultimate destination of its products. DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 285 (3rd Cir.1981), cert. denied, 454 U.S. 1085, 102 S.Ct. 642, 70 L.Ed.2d 620 (1981); accord Hedrick v. Daiko Shoji Co., 715 F.2d 1355 (9th Cir.1983); Noel v. S.S. Kresge Co., 669 F.2d 1150 (6th Cir.1982); Shanks v. Westland Equip. and Parts Co., 668 F.2d 1165 (10th Cir.1982). A manufacturer who places its product in the stream of commerce in an effort to serve, directly or indirectly, markets in a jurisdiction is subject to suit in that jurisdiction under World-Wide Volkswagen. Although On-Deck does not have any direct contacts with Minnesota that can be proven in this case, it has a plethora of indirect contacts. It entered into contracts with others to distribute its products throughout North America, Hawaii and the Carribean, a market which specifically includes Minnesota. The On-Deck trademark and Elston Howard's picture are on the packaging of every weight. Both Frank Hamilton, the owner of On-Deck, and Elston Howard, the president of On-Deck, have traveled the United States extensively marketing their product. On-Deck's distributors have, in fact, attempted to and been quite successful at marketing the product in Minnesota, and On-Deck has profited as a result. Frank Hamilton's claim that he never knew his products were marketed in Minnesota, aside from its incredulity, is irrelevant. On-Deck's distribution contracts and marketing efforts were calculated attempts to create a national market for his product, a market which specifically includes Minnesota. The bat weights arrived here not by some fortuitous happenstance of a plaintiff bringing the product to the jurisdiction as in World-Wide Volkswagen, but by the purposeful marketing efforts of On-Deck and On-Deck's distributors. On-Deck, having attempted and succeeded in penetrating the market in Minnesota for bat weights, albeit through distributors, has had numerous contacts with Minnesota.