Monday, March 19, 2018

Federal Court Addresses Standards for Jurisdiction Over Out-of-State Defendant

In the case of Wylam v. Trader Joe’s Co., No. 3:16 - CV - 2112 (M.D. Pa. Jan. 18, 2018 Mariani, J.), a Pennsylvania Federal Court denied a Motion to Dismiss without prejudice in this matter involving a question of proper general personal jurisdiction over an out-of-state Defendant.  

The Court ruled that there is no general jurisdiction over the moving third party Defendant in this matter.   Rather, that Defendant was noted to be a foreign  company with a principle place of business abroad.   No minimal contacts within Pennsylvania were seen in the record.   More specifically, the Opinion noted that the Defendant did not have any physical presence in the Commonwealth of Pennsylvania. 

Judge Robert D. Mariani
M.D. Pa.
Judge Robert D. Mariani noted that the Plaintiff was attempting to rely upon a stream of commerce personal jurisdiction argument.  The Court noted that this argument has never been approved by the Pennsylvania Supreme Court, while not being decisively rejected either.  

However, the court in Wylam ruled that a single in-state sale, without some additional conduct directed towards the forum state, did not support the Plaintiff's stream of commerce jurisdiction argument.  

The Court also noted that the fact that a Defendant’s products are carried by national retailers is also insufficient to establish jurisdiction in any state.  

The court also generally noted that it is the burden of the Plaintiff to establish jurisdiction and that speculation in this regard is not sufficient.  

As stated, the court denied the Motion to Dismiss without prejudice.   However, the Plaintiff was allowed to complete jurisdictional discovery, limited to the stream of commerce issue in an effort to gather further support for the jurisdictional arguments.  

Anyone wishing to review a copy of this decision may click this LINK.  The companion Order can be viewed HERE.

I send thanks to Attorney James M. Beck of the Philadelphia office of the law firm of Reed Smith for bringing this case to my attention. 

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