Here and There and Back Again: Drowning in the Stream of Commerce

Abstract

The Supreme Court’s inability to establish a clear analytical path concerning personal jurisdiction in the stream-of-commerce context has confused lower courts and potential plaintiffs alike. The Court needs to adopt a clear stream-of-commerce analysis that is both consistent with its prior decisions and reflects the realities of the modern commercial world.

In today’s global economy, a manufacturer’s specific intentional contact with an individual state is a rarity. However, it is easily foreseeable for a manufacturer’s product to travel from nation to nation, and from state to state. A manufacturer, with assistance from national or international marketing campaigns or through the Internet, can, therefore, easily turn entire nations into a single targeted market without giving a thought of addressing individual states.

In view of these realities, the Court should create a clear process whereby proper personal jurisdiction involving potential defendants with a national market can be easily and predictably analyzed. Some commentators have proposed statutory solutions, while others have proposed the creation of a rebuttable presumption, with the burden on the out-of-forum defendant to show that it took affirmative steps to avoid the forum state when it placed its product into the stream of commerce.

This article proposes a more balanced, and perhaps more elegant approach, to the stream-of-commerce conundrum, asserting that the Court should adopt a burden shifting approach. Analysis under this proposal would first require that a plaintiff seeking to hale a manufacturing defendant into court in a particular jurisdiction show that the defendant had engaged in a national marketing strategy without regard to state territorial borders. If this burden were met, then the burden would shift to the defendant that it took specific steps to avoid marketing and/or selling its product in the jurisdiction at issue.

Part II of this article traces the historical development of the Court’s personal jurisdiction jurisprudence from the territorial limitations of Pennoyer to the breakdown of this analysis with the development of the modern mobile industrial state of the Twentieth Century. Part III then looks at the Court’s modern development of its personal jurisdiction analysis, beginning with its articulation of minimum contacts as a substitute for actual physical presence in International Shoe through its development of the split stream-of-commerce analysis presented in both World Wide Volkswagen and Asahi. Part IV looks at the J. McIntyre decision, the Court’s most recent effort to solve the stream-of-commerce conundrum created by its prior opinions. Part V examines various approaches taken by lower courts in light of the Court’s failure to resolve this conundrum. In the article’s conclusion, Part VI, the burden shifting approach outlined above is proposed.

Keywords: Commerce, personal jurisdiction, global commerce, stream-of-commerce

JEL Classification: K10, K12, K20, K40