Post-BMS, Courts Grapple with the Nexus Between Stream of Commerce Activities and the Plaintiff’s Claim Required for Specific Jurisdiction over Manufacturers in Product Liability Cases

Courts have struggled for decades to define the constitutional limitations on personal jurisdiction over major product manufacturers who sell their products nationwide. The central tension has been determining the validity and potential scope of the “stream of commerce” theory in a world of advancing technology and associated evolution of business operations and practices. That tension is increasing as state courts decide what kind of nexus is required, between a defendant’s “forum-directed” commercial activities and the plaintiff’s claim, to justify the exercise of specific jurisdiction. Specifically, how purposefully forum-directed and how closely tied to the specific claim must the activities be?

Stream of commerce theory posits that a defendant that has placed a product into the nationwide channels of commerce should anticipate that its products will thereby be “swept” into any state and if it causes injury there, it will be subject to suit. In its purest form, the theory collides to some degree with the fundamental limiting requirement that a defendant may be haled into a forum to litigate only where it has “purposely availed” itself of the privilege of doing business by, for example, directing its products into the forum.

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Clinical Trial Activity Is Not an Exception to the Rule

Defendants and courts have seen a variety of arguments set forth in attempts to demonstrate specific personal jurisdiction. One argument seen with increasing frequency in medical products cases is that specific jurisdiction exists over an out-of-state defendant for the claims of non-resident plaintiffs because the defendant conducted clinical trials of the product at issue in the forum state. Courts have consistently rejected this argument. Continue reading