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Douglas W. Butler, et al., v. JLA Industrial Equipment, Inc. d/b/a Hotsy Equipment of Minnesota, et al.. MN personal jurisdiction, minimum contacts
Douglas Butler worked in Minnesota for Aspen Waste Systems. In 2006, he was injured on the job while washing a truck with a pressure washer. The hose burst, and Butler was burned by the hot water. He and his wife brought a lawsuit in Hennepin County, Minnesota, against the manufacturers and distributors of the hose. One of the defendants was Schieffer-Magam Industries, Ltd. (SMI), an Israeli corporation. SMI argued that the Minnesota court had no personal jurisdiction, since SMI lacked sufficient contacts with Minnesota.
Between 2001-11, SMI sold about $1.3-4 million in hose to U.S. customers. However, it does not have any employees, bank accounts, or offices in Minnesota. It does not advertise or ship products to Minnesota. However, it was aware of the distribution of its products in the U.S., and was aware that the product was sold to customers in Minnesota.
The lower court held that it had personal jurisdiction over SMI, and SMI appealed this ruling to the Minnesota Court of Appeals. The court analyzed the case under the "stream of commerce theory", which originated with World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). The Minnesota Supreme Court had applied that theory in Rostad v. On-Deck, Inc., 372 N.W.2d 717 (Minn. 1985), in which it held that a company with no direct contacts, but a plethora of indirect contacts, was subject to jurisdiction in Minnesota.
The Court of Appeals applied these and other precedents, and concluded that SMI had sought to directly or indirectly participate in the Minnesota market. It also held that there was more than a mere possibility that SMI products would wind up in Minnesota. The court held that this was enough to constitute purposeful availment. It went on to note that these contacts related directly to this case, and that Minnesota had an interest in providing a forum.
For these reasons, the court held that SMI had sufficient contacts with Minnesota to support jurisdiction, and affirmed the trial court's order.
No. A13-1448 (Minn. Ct. App. April 21, 3014).
Please see the original opinion for the court's exact language.
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Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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