Superior Court Applies “Dual” Personal Jurisdiction

The requirements necessary for establishing personal jurisdiction in the United States have grown increasingly difficult in recent years due to SCOTUS opinions such as Bristol-Myers Squibb, Daimler, and Goodyear. Various approaches to establishing personal jurisdiction, such as California’s sliding-scale approach, have been rejected by the SCOTUS.  Delaware’s “dual” personal jurisdiction has not been expressly rejected and was followed by the Delaware Superior Court in the recent case of Cardona v. Hitachi et al.

In the present case, Cardona, a Maryland resident, sued the designer and manufacturer of a nail gun, HKK a Japanese Corporation, along with its wholly-owned US subsidiary and distributing entity, HKU, alleging that the nail gun malfunctioned and caused Cardona serious permanent injuries while at a job site in Delaware.  HKK moved to dismiss as Cardona failed to establish specific personal jurisdiction.

In determining if the court holds personal jurisdiction over a party, the Superior Court recited the two-step approach. First, the court must look to Delaware’s long-arm statute and determine whether jurisdiction is appropriate there.  Second, the court must assure that jurisdiction complies with the Due Process Clause of the US Constitution.

Delaware’s long-arm statute affords the court jurisdiction to the maximum extent allowed by the US Constitution and contains both specific and general personal jurisdiction provisions. A combination of the two, “dual” jurisdiction has developed:

It is conceivable that a tort claim could enjoy a dual jurisdiction basis under (c)(1) [general] and (c)(4) [specific] if the indicia of activity set forth under (c)(4) were sufficiently extensive to reach the transactional level of (c)(1) and there was a nexus between the tort claim and transaction of business or performance of work.

Further clarified, “dual” jurisdiction exists as long as “(1) the defendant manufacturer demonstrates ‘an intent or purpose to serve the Delaware market with its product,’ and (2) that intent or purpose results in the introduction of the product into Delaware and ultimately causes the plaintiff’s injury.”  The Court did note that there have been criticisms to the “dual” jurisdiction approach.

The Court, sub judice, found that an intent to serve the Delaware market was shown by HKK setting up HKU a Delaware entity responsible for distributing HKK’s products to the US.  Also, although the specific nail gun’s point of origin is unknown, the specific model of nail gun is sold at Lowe’s stores nationwide and a strong inference exists that “significant amounts of [nail guns] have been sold in … Delaware.”

The Court went on to conduct a Due Process analysis, holding that, “HKK … solicited business from the whole U.S. market, and … HKK’s products were sold in Delaware.” Additionally, nail gun sales in Delaware were part of the “regular and anticipated flow” of commerce, not a fortuitous event – HKK set up a Delaware subsidiary for exactly this purpose.  The Defendant argued that Bristol-Meyers Squibb overruled the “stream of commerce” theory, but the Court disagreed. What was missing in Bristol-Meyers Squibb was a connection between the forum state and the claim.  Here, Plaintiff was performing a job in Delaware and the nail gun was supplied by a Delaware employer (also a named defendant). The Court found that the above actions satisfied at least two of the tests outlined in Asahi and denied the Defendant’s Motion to Dismiss.

Read the full opinion here.

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