N.J. Supreme Court Adopts Broadest View of Stream-of-Commerce Personal Jurisdiction

When is it permissible under the Fourteenth Amendment Due Process Clause for a court to exercise personal jurisdiction over a nonresident defendant whose only contact with a state is that it placed its product into a chain of distribution which ultimately delivered its product into the state, causing injury there? The answer to this question has long divided the lower federal and state courts both before and following the U.S. Supreme Court’s decision in Asahi Metal Industry Co. v. Superior Court , 480 U.S. 102 (1987). The division persists because the Justices in Asahi produced three opinions, none of which commanded a majority, on the so-called “stream-of-commerce” theory of personal jurisdiction. Since 1987, the U.S. Supreme Court has not revisited this issue, despite petitions for certiorari in cases taking conflicting positions, forcing the lower federal and state courts to choose among the differing standards.

In Nicastro v. McIntyre Machinery America, Ltd., 201 N.J. 48 (2010), the N.J. Supreme Court appeared to adopt the broadest of the three standards from Asahi , holding in a 5-2 decision, authored by Justice Albin, 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.” The Court held that personal jurisdiction is proper if the manufacturer “knows or reasonably should know that through its distribution scheme its products are being sold in New Jersey.”