State of Tennessee v. NV Sumatra Tobacco Trading Company

Summary

The Tennessee Supreme Court held that Tennessee courts lacked personal jurisdiction over an Indonesian cigarette manufacturer whose products entered Tennessee through independent foreign distributors and a Florida entrepreneur. The court concluded that the manufacturer’s contacts with Tennessee did not satisfy the Due Process Clause of the Fourteenth Amendment and dismissed the State’s escrow-fund enforcement action. The court reversed the Court of Appeals’ decision granting summary judgment to the State.

Holdings

1. A challenge to personal jurisdiction under Tenn. R. Civ. P. 12.02(2) should be treated as a jurisdictional motion to dismiss, even when the parties submit evidence outside the pleadings; doing so does not convert the motion into a motion for summary judgment.
2. Tennessee courts lacked specific personal jurisdiction over NV Sumatra because the record did not establish that NV Sumatra purposefully targeted Tennessee or purposefully availed itself of the benefits and protections of Tennessee law.
3. J. McIntyre Machinery did not materially change Tennessee law governing specific personal jurisdiction or require adoption of the broader stream-of-commerce theory.

Questions Presented

1. Whether the trial court and Court of Appeals properly treated NV Sumatra's personal-jurisdiction challenge as a summary-judgment issue rather than a Tenn. R. Civ. P. 12.02(2) motion to dismiss.
2. Whether Tennessee courts could exercise specific personal jurisdiction over an Indonesian manufacturer whose cigarettes reached Tennessee through independent intermediaries.
3. Whether targeting the United States market as a whole, combined with sales of the manufacturer's products in Tennessee, established minimum contacts with Tennessee under the Due Process Clause of the Fourteenth Amendment.

Disposition

reversed