1st Circuit Finds German Manufacturer Subject to Personal Jurisdiction in MA

Mar 7, 2019 | Toxic Tort

Knox v. MetalForming, Inc., et al. is a products liability suit involving a plaintiff who was injured on the job while operating a metal bending machine. The machine was supplied to plaintiff’s employer by co-defendant and cross-claim plaintiff MetalForming, Inc. (“MetalForming”), a company domiciled in the State of Georgia, and manufactured by co-defendant Schechtl Maschinebau CmbH (“Schechtl”), which is based in Germany. Plaintiff initiated his action in Massachusetts state court before defendants removed to United States District Court for the District of Massachusetts, where Schechtl was granted a dismissal for lack of personal jurisdiction. The First U.S. Circuit Court reversed the District Court’s personal jurisdiction ruling on appeal, holding that Schechtl availed itself of jurisdiction in Massachusetts given that it has continuously kept open channels of business in Massachusetts and caused direct links with its Massachusetts customers. The First U.S. Circuit Court cited to facts in the record that showed that Schechtl’s customers were expected to directly contact it for troubleshooting issues and replacement parts, despite its customers making the initial product purchase through a third-party supplier.

The First U.S. Circuit Court expanded the analysis for determining personal jurisdiction for a foreign product manufacturer in the 2011 U.S. Supreme Court decision in J. McIntyre Machinery, Limited v. Nicastro.  The First U.S. Circuit Court’s decision follows a concurring opinion written by Justice Stephen G. Breyer in J. McIntyre Machinery, Limited that suggested that a defendant could be subject to the jurisdiction of a state where many of its products flow into the state and the defendant did not target that state. The narrower plurality decision in J. McIntyre Machinery, Limited held that a defendant must purposefully avail itself of business opportunities in the state or expect that goods that it has placed in the stream of commerce will be purchased in the state. Following the plurality decision, the District Court dismissed Schechtl for lack of personal jurisdiction given that Schechtl did not designate Massachusetts for special attention and did not target Massachusetts.

Legal minds have begun to speculate whether this decision is the signal of a broader shift in the First U.S. Circuit Court’s thought on products liability law given the global economy or whether the specific facts of Knox are a one-off that fit well with Justice Breyer’s concurring opinion. While the speculation continues, this decision is one to be watched by product manufacturers looking to expand their markets given that they are now more exposed to litigation without specifically targeting states for new or increased business.

CMBG3 Law’s attorneys defend companies in a wide variety of litigation fields and are well-versed on jurisdictional arguments and rulings from the courts. For more information about the Knox ruling or to determine if we may be able to assist you in a lawsuit, please contact Clifford Pascarella (email him or 617-279-8234).


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