Summary
The First Circuit reversed the dismissal of claims against a German manufacturer for lack of personal jurisdiction, holding that the manufacturer purposefully availed itself of the Massachusetts forum. The court found that a regular course of sales (45 machines, 234 parts, $1.5M over 16 years), combined with manufacturing to purchaser specifications and establishing direct service channels to forum customers, constituted the "something more" required for specific jurisdiction under *J. McIntyre Machinery v. Nicastro*. The case was remanded for proceedings on the underlying products liability and breach of warranty claims.
Topics
Practice areas
Questions Presented
- Whether the district court had personal jurisdiction over Schechtl, a German manufacturer, based on its distribution of products in Massachusetts through an independent distributor.
Holdings
- The court held that the exercise of personal jurisdiction over Schechtl comports with due process because Schechtl purposefully availed itself of the privilege of doing business in Massachusetts through a regular course of sales, made-to-order manufacturing, and direct ongoing relationships with Massachusetts purchasers.
Key quotations
“The question on appeal is whether there is personal jurisdiction over Schechtl, named as a defendant by Knox and as a cross-claim defendant by MetalForming. The district court dismissed the claims against Schechtl, finding that Schechtl had not purposefully availed itself of the privilege of doing business in Massachusetts. We reverse.” (at 686)
“The argument for jurisdiction here does not rest on MetalForming's Massachusetts activities. It rests instead on the totality of Schechtl's activities, voluntarily undertaken, that connect the German company to Massachusetts.” (at 691)
“Over sixteen years, Schechtl, through MetalForming, sold forty-five machines (an average of close to three machines in each of those sixteen years). It also provided 234 parts to purchasers in Massachusetts. Those parts and machines led to nearly $1.5 million of Massachusetts sales for Schechtl.” (at 691)
“Schechtl's relationship with purchasers in Massachusetts did not end when Schechtl accepted the purchase order and manufactured the machine. Schechtl required that MetalForming include, with each machine, materials that instructed that purchaser to contact Schechtl directly, whether to purchase replacement parts or to obtain assistance with troubleshooting and fixing problems.” (at 692)
Factual background
Stephen Knox was injured while operating a Schechtl MAX 310 metal-bending machine at his workplace in Massachusetts. The machine was manufactured by Schechtl, a German company, and sold to Knox's employer by MetalForming, Schechtl's exclusive U.S. distributor. Over sixteen years, Schechtl sold forty-five machines and 234 parts to Massachusetts purchasers through MetalForming, generating nearly $1.5 million in sales. The distribution agreement required MetalForming to include direct contact information for Schechtl with each machine, and Schechtl provided warranty and parts service directly to end users.
Procedural history
The Knoxes sued Schechtl and MetalForming in Massachusetts state court. MetalForming removed to federal court and filed crossclaims against Schechtl. Schechtl moved to dismiss for lack of personal jurisdiction. The district court granted the motion, and both the Knoxes and MetalForming appealed.
Remand instructions
Reversed and remanded for further proceedings consistent with this opinion.