New Jersey residents can sue foreign companies in state court, high court rules

Partners Jonathan Miller and Michael Galpern were recently interviewed by Trial magazine of the American Association for Justice for their role in the recent Nicastro v. McIntyre Machinery victory. The full text of the article is found below:

March 4, 2010
New Jersey residents can sue foreign companies in state court, high court rules

Carmel Sileo

The New Jersey Supreme Court has ruled that a foreign manufacturer can be sued in New Jersey state court for selling dangerous products there. In affirming an intermediate court decision, the states highest court held that a foreign manufacturer that places a defective product in the stream of commerce through a distribution scheme that targets a national market, which includes New Jersey, may be subject to the in personam jurisdiction of a New Jersey court in a product liability action. (Nicastro v. McIntyre Machinery, 2010 WL 343563 (N.J. Feb. 2, 2010).)

Jonathan Miller, a lawyer in Philadelphia, said the opinion is a strong and reasoned call for the stream-of-commerce theory in products liability law. Miller and Michael Galpern of Cherry Hill, New Jersey, appeared on behalf of the New Jersey Association for Justice, which filed an amicus brief in the case.

In 2001, Robert Nicastro was a 30-year employee at Curcio Scrap Metal in Saddle Brook, New Jersey. While operating a recycling machine designed to cut metal, Nicastro was involved in an accident that severed four fingers on his left hand.

In 2003, Nicastro sued the maker of the recycling machine, McIntyre Machinery, based in Nottingham, England. He also sued McIntyre America, the companys U.S. distributor, alleging that the machine was defectively designed and did not have adequate safety warnings or instructions.

A trial court granted McIntyres motion to dismiss for lack of personal jurisdiction, but an appellate court ruled that the company had taken deliberate steps to place its products in the U.S. market and, under the stream-of-commerce theory, was subject to New Jerseys jurisdiction. The defendants appealed.

Writing for the court, Justice Barry Albin emphasized the changing nature of the global marketplace, where trade knows no boundaries and where courts must discard outmoded constructs of jurisdiction in product liability cases, and embrace a modality that will provide legal relief to our citizens harmed by the products of a foreign manufacturer.

The court found that a refusal to hold McIntyre accountable under state law would undermine the states ability to protect its citizens, and it would logically follow that a New Jersey company could evade responsibility for making dangerous products simply by moving its operations overseas. Also, asking the plaintiff to seek redress in an overseas courtroom would be unreasonable. Finally, the court reasoned, any manufacturer that did not want to be haled into a New Jersey court could simply opt to not sell its products in the state.

Under all the circumstances, Albin concluded, New Jersey has a rightful claim to resolve the dispute between the parties and to assert jurisdiction over this product liability action. We will not deny plaintiff a forum in the courts.

This case makes it clear that plaintiffs in products liability cases can look beyond national boundaries, Miller said. He called it a major victory for the people and manufacturers of New Jersey, because it ensures that foreign companies must face their share of responsibility.

Miller noted that the ruling leaves some questions open. It may be limited to foreign products that injure U.S. citizens, and limited to products liability. But overall, he said, this is the most significant case of my legal career. I cant think of anything Ive done that is more important.