KISTLER, J.
Defendant CTE Tech Corp. is a Taiwanese corporation that manufactures battery chargers.
The trial court denied CTE's motion, and we denied CTE's petition for a writ of mandamus directing the trial court to vacate its ruling. CTE then filed a petition for certiorari with the United States Supreme Court. After the Court issued its decision in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. ___, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011), the Court granted CTE's petition for
Plaintiffs are Oregon residents.
CTE moved to dismiss plaintiffs' claims against it for lack of personal jurisdiction. On that issue, the record shows that CTE is a Taiwanese corporation with its principal place of business in that country and that Invacare is an Ohio corporation with its principal place of business in that state. In 2004, CTE entered into a "master supply agreement" with Invacare to provide Invacare with battery chargers manufactured to Invacare's specifications.
In 2006-2007, Invacare sold 1,166 motorized wheelchairs in Oregon that Invacare made in Ohio.
After considering the facts set out above, the trial court denied CTE's motion to dismiss for lack of personal jurisdiction. CTE filed a petition for a writ of mandamus with this court, which we denied. As noted, after the Court issued its decision in Nicastro, it granted CTE's petition for certiorari, vacated our order, and remanded the case to us for further consideration in light of Nicastro. On remand, the parties have briefed the question whether, in light of the decision in Nicastro, Oregon may assert personal jurisdiction over CTE. We turn to that question.
The dispute in this case is narrow. CTE does not contend that Oregon's long-arm statute does not reach its conduct. Cf. North Pacific v. Guarisco, 293 Or. 341, 351-52, 356, 647 P.2d 920 (1982) (holding that Oregon courts lacked personal jurisdiction over out-of-state defendants to adjudicate a cause of action that did not fall within the reach of the then-applicable long-arm statute). Rather, CTE recognizes that ORCP 4 L provides for personal jurisdiction over out-of-state defendants "in any action where prosecution of the action against [the] defendant in this state is not inconsistent with the Constitution of this state or the Constitution of the United States." CTE argues, however, that the Due Process Clause does not permit Oregon to exercise personal jurisdiction over it when it has not purposefully availed itself of the privilege of conducting business in Oregon.
Plaintiffs, for their part, do not dispute that, under the Due Process Clause, a state may require an out-of-state defendant to appear in its courts only when the state has general or specific jurisdiction over that defendant. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) (discussing those bases for asserting personal jurisdiction over out-of-state defendants). Plaintiffs do not contend that Oregon has general jurisdiction over CTE; that is, plaintiffs do not contend that CTE's "affiliations with [Oregon] are so `continuous and systematic' as to render [CTE] essentially at home in the forum State." 131 S.Ct. at 2851 (describing general jurisdiction); cf. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416-18, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (explaining when an out-of-state corporation's "continuous and systematic general business contacts" within a state will give rise to general jurisdiction).
Plaintiffs rely instead on specific jurisdiction, which "depends on an affiliatio[n] between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation." See Goodyear Dunlop Tires, 131 S.Ct. at 2851 (explaining specific jurisdiction) (alteration in original; internal quotation marks omitted). "In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Id. (internal quotation marks omitted). In this case, plaintiffs argue that the sale of Invacare wheelchairs and CTE battery chargers in Oregon provides sufficient minimum contacts with this state for Oregon courts to assert specific jurisdiction over CTE for injuries that its battery chargers allegedly caused here.
On that question, we note that, if CTE had sold its battery chargers directly in Oregon, there would be no dispute that Oregon could exercise personal jurisdiction over CTE for
As CTE notes, the issue that this case presents is similar to the issue in Nicastro. In that case, a British manufacturer sold its products (metal shearing machines used in the recycling industry) to an independent United States distributor, which marketed them throughout the United States. Nicastro, 131 S.Ct. at 2786 (plurality opinion). The United States distributor sold one machine to a company in New Jersey. Id.
The Court allowed the British manufacturer's petition for certiorari and reversed the state court's judgment. See Nicastro, 131 S.Ct. at 2791 (plurality opinion); id. (Breyer, J., concurring in the judgment). The case did not produce a majority opinion for the Court. However, a majority of the members of the Court agreed that the fact that an out-of-state manufacturer sells its products through an independent nationwide distribution system is not sufficient, without more, for a state to assert personal jurisdiction over the manufacturer when only one of its products ends up in a state and causes injury there. Id. at 2791 (plurality opinion); id. at 2792 (Breyer, J., concurring in the judgment). Beyond that, the rationales advanced in the plurality opinion and the opinion concurring in the judgment differ.
Justice Kennedy, writing for the plurality, started from the premise that what matters for the purposes of determining a state court's authority over an out-of-state defendant "is the defendant's actions, not his expectations." Id. at 2789. In the plurality's view, the fact that it was foreseeable that a defendant's products might be distributed in one or all of the 50 states was not enough; rather, the plurality would require evidence that the out-of-state defendant had "targeted" the forum state in some way. Id. at 2788. As the plurality put it, the "question is whether a defendant has followed a course of conduct directed at the society or economy existing within the jurisdiction of a given sovereign, so that the sovereign has the power to subject the defendant to judgment concerning that conduct." Id. at 2789. Although there was evidence that the British manufacturer had targeted the United States, there was no evidence that it had targeted New Jersey specifically. Id. at 2790. For that reason, the plurality would have held that New Jersey lacked personal jurisdiction over the British manufacturer. Id. at 2790-91.
Justice Breyer, with whom Justice Alito joined, would have decided the case on a narrower ground. He reasoned that the Court's precedents stand for the proposition that "a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his
Finally, Justice Ginsburg, with whom Justices Sotomayor and Kagan joined, dissented. Justice Ginsburg reasoned that, when the British manufacturer "dealt with the United States as a single market" and sought to have its products distributed throughout the nation, due process did not prevent the state where the injury had occurred from holding the manufacturer accountable. Id. at 2801 (Ginsburg, J., dissenting). In her view, the fact that only one of the British manufacturer's machines had been sold in New Jersey was no bar to exercising jurisdiction over the manufacturer, when that machine was the one that gave rise to the plaintiff's claim. Id. at 2804.
When, as in this case, "a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgmen[t] on the narrowest grounds...." Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 51 L.Ed.2d 260 (1977) (internal quotation marks omitted) (ellipsis in original); accord Panetti v. Quarterman, 551 U.S. 930, 949, 127 S.Ct. 2842, 168 L.Ed.2d 662 (2007) (following Marks). Applying that rule, we look to Justice Breyer's opinion concurring in the judgment for the "holding" in Nicastro that guides our resolution of this case; that is, Justice Breyer's rationale was narrower than the plurality's and, as a result, controls our resolution of this case on remand. We accordingly discuss the rationale in Justice Breyer's opinion in greater detail.
In explaining why the record was not sufficient to establish personal jurisdiction over the British manufacturer, Justice Breyer reasoned:
Nicastro, 131 S.Ct. at 2792 (Breyer, J., concurring in the judgment) (ellipsis and second alteration in original).
Having reached that conclusion, Justice Breyer noted that he "d[id] not agree with
Justice Breyer explained that the New Jersey Supreme Court's rule was problematic for two reasons. First, it did not focus on the defendant's relationship with the forum, leading to the possibility that jurisdiction would rest "upon no more than the occurrence of a product-based accident in the forum State." Id. Second, New Jersey's rule would result in jurisdiction over all out-of-state manufacturers who distribute goods nationally without regard to the fairness of making them appear and defend. Id. at 2793-94. He explained that, although that rule might seem fair with regard to a large manufacturer that had the ability to appear and defend wherever its products caused injury (or to hedge against that possibility by buying insurance), New Jersey's rule did not seem as fair when applied to a small manufacturer selling its products through a national or international distributor. Id. Not only would it impose potentially undue burdens on small manufacturers selling only a few products in a state, but it also would require those manufacturers to anticipate and comply with the laws of the 50 states. Id. at 2794. For those reasons, Justice Breyer declined to follow either of the broad approaches advanced by the plurality or the New Jersey Supreme Court.
With that understanding of Nicastro in mind, we turn to the facts of this case.
CTE argues alternatively that "Invacare's sales figures in Oregon were a min[i]scule fraction — both in sheer numbers, as well as the proportion of end product manufacturer's total sales in the forum — compared to what the United States Supreme Court unanimously found to be insufficient in Asahi [Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987)]." We read both the holding and the record in Asahi differently. In that case, a Japanese manufacturer (Asahi) sold valve assemblies to a Chinese tire tube manufacturer (Cheng Shin), which incorporated both Asahi's valve assemblies and valve assemblies from other manufacturers into its tire tubes, which it sold worldwide. Id. at 106, 107 S.Ct. 1026. Cheng Shin alleged that 20 percent of the tire tubes that it sold in the United States were sold in California. Id. Beyond that, the decision in Asahi does not identify the total number of Cheng Shin tire tubes sold in either the United States or California, nor does it identify either the number of Cheng Shin tire tubes sold in the United States or California that incorporated Asahi's valve assemblies. See id. Apparently, the only evidence in the record on that issue consisted of an "informal examination" of a single store in California, which revealed that Cheng Shin had manufactured 53 of the 115 tire tubes offered for sale in that store and that only 12 of the 53 Cheng Shin tire tubes contained Asahi valve assemblies. Id. at 107, 107 S.Ct. 1026.
When one of Cheng Shin's tire tubes failed, the person injured as a result of that failure brought suit in a California state court against Cheng Shin, which filed an indemnification claim against Asahi. Id. at 105-06, 107 S.Ct. 1026. All the parties settled except for Cheng Shin and Asahi, which defended against Cheng Shin's indemnification claim on the ground that the California state courts lacked personal jurisdiction over it. As we read the various opinions in Asahi, a majority of the Court did not agree whether the evidence of Cheng Shin's sales of tire tubes containing Asahi valves established sufficient minimum contacts between Asahi and California for California to assert jurisdiction over it.
Justice O'Connor, writing for four Justices in Asahi, would have required evidence that Asahi purposefully had availed itself of the privilege of doing business in California; in her view, the fact that Asahi was "awar[e] that some of the valves sold to Cheng Shin would be incorporated into tire tubes sold in California" was not sufficient to satisfy due process. Id. at 112, 107 S.Ct. 1026 (opinion of O'Connor, J.). Justice Brennan, writing for four Justices, would have held that the sale of Asahi's valve assemblies in California established a "regular and anticipated flow of products from manufacture to distribution to retail sale," which was sufficient to establish the minimum contacts with California necessary for that state to assert personal jurisdiction over Asahi. Id. at 117, 121, 107 S.Ct. 1026 (Brennan, J., concurring in part and concurring in the judgment). Finally, Justice Stevens found it unnecessary to decide whether minimum contacts existed. Id. at 121, 107 S.Ct. 1026 (Stevens, J., concurring in part and concurring in the judgment). He reasoned that, even if they did, "this case fits within the rule that `minimum requirements inherent in the concept of "fair play and substantial justice" may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities.'" Id. at 121-22, 107 S.Ct. 1026 (Stevens, J., concurring in part and concurring in the
The Court agreed on only one point in Asahi. After Justice O'Connor expressed her view that Asahi's contacts with California were not sufficient to give the California courts jurisdiction over it, she reasoned alternatively that, even if those contacts were sufficient, exercising jurisdiction in the circumstances of that case would offend "traditional notions of fair play and substantial justice." Id. at 113 (internal quotation marks omitted). That part of her opinion rested primarily on the unique circumstance that, after all the other parties had settled, the only issue left to be adjudicated in California was an indemnification claim by one foreign company against another involving a transaction (Asahi's sale of valve assemblies to Cheng Shin) that had no connection to either California or the United States. Id. at 114-15.
All the Court joined that part of Justice O'Connor's opinion. See id. at 116 (Brennan, J., concurring in part and concurring in the judgment); id. at 121, 107 S.Ct. 1026 (Stevens, J., concurring in part and concurring in the judgment). As we read Asahi, its holding is limited to the alternative ground stated in Part II-B of Justice O'Connor's opinion; that is, the Court decided the case on an alternative ground that either assumed, in Justice O'Connor's opinion, or found, in Justice Brennan's opinion, sufficient minimum contacts.
Contrary to CTE's argument in this case, a unanimous Court did not find in Asahi that Asahi's contacts were not sufficient to establish personal jurisdiction over it.
In our view, the decision in Asahi provides little assistance to CTE. However, to the extent that the annual number of battery chargers that CTE sold to Invacare matters, we note that the trial court reasonably could have found that, in 2006-2007, CTE sold roughly 76,000 battery chargers to Invacare in Ohio, which Invacare then sold with its wheelchairs throughout the United States.
One other issue remains. As Asahi makes clear, even if the sale of CTE's battery chargers in Oregon provides sufficient minimum contacts for Oregon courts to assert personal jurisdiction over CTE, the remaining question is whether exercising jurisdiction would "offend traditional notions of fair play and substantial justice" and thus be inconsistent with due process. See Asahi, 480 U.S. at 113, 107 S.Ct. 1026 (internal quotation marks omitted). On that issue, we note that this is not a case, as in Asahi, where the only question that remains to be adjudicated is a claim for indemnification between two out-of-state defendants. Rather, in this case, Oregon residents seek to vindicate their claims for the death of their mother in the state where the death occurred, allegedly as a result of a defect in CTE's battery charger. Oregon has a strong interest in providing a forum for its residents who are injured in this state to recover for their injuries. Cf. Asahi, 480 U.S. at 114-16, 107 S.Ct. 1026(noting that the calculus would be different if California had an interest in determining the plaintiff's claim).
Moreover, this case does not raise the concerns about exercising jurisdiction over small manufacturers that distribute only a few products in a state as a result of a national distribution system, which Justice Breyer noted in Nicastro. See 131 S.Ct. at 2794 (Breyer, J., concurring in the judgment). As an initial matter, the trial court reasonably could have found that CTE is not a small manufacturer. Rather, over a two-year period, CTE's revenues (or at least the amounts payable) from Invacare alone exceeded $2,150,000. As noted, the trial court also reasonably could have found that, over that period, Invacare purchased approximately 76,000 battery chargers from CTE for distribution in this country. Additionally, in the master supply agreement between CTE and Invacare, CTE promised that its battery chargers would comply with all federal, state, and local laws. CTE thus voluntarily undertook to bring its battery chargers into compliance with the laws of the various states in which Invacare sold them. Finally, as part of the master supply agreement, CTE agreed that it would "continuously have on file with [Invacare] a current Certificate of Insurance showing evidence of products and general liability coverage for bodily injury, personal injury and property damage in the amount of one million dollars ($1,000,000) per occurrence." In selling its battery chargers to Invacare, CTE anticipated the need to defend against the very sort of claim that plaintiffs have brought here, and it agreed to obtain insurance as a hedge against the cost of doing so.
Requiring CTE to appear in Oregon does not offend traditional notions of fair play and substantial justice and thus does not preclude the trial court from exercising jurisdiction over CTE as a result of its contacts with this forum. The trial court could, consistently with due process, require CTE to appear in an Oregon court and respond to plaintiffs' claims that a defect in its battery charger caused their mother's death.
The alternative writ of mandamus is dismissed.