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Hollingsworth & Vose Company v. Connor

11/1/2000

orld-Wide Volkswagen, to allow an exercise of personal jurisdiction to be based on no more than the defendant's act of placing the product in the stream of commerce. Other courts have understood the Due Process Clause and the above-quoted language in World-Wide Volkswagen to require the action of the defendant to be more purposefully directed at the forum State than the mere act of placing a product in the stream of commerce. Id. at 110.


Concluding the discussion on the two divergent interpretations of the minimum contacts standard, the O'Connor plurality opinion stated that the more stringent "purposefully directed" test, rather than the "stream of commerce test," was the position that was "consonant with the requirements of due process." Asahi, 480 U.S. at 112. "The substantial connection between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State." Id. See Burger King, 471 U.S. at 476; Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).


Aware that the federal circuits are confrontational on this recondite question of whether the "stream of commerce" language in World-Wide Volkswagen should control in this type of analysis, our reading of World-Wide Volkswagen and Asahi is in harmony with the ray that broke through the clouds of logical inconsistency in the Fourth Circuit with Lesnick. The Lesnick Court reviewed in considerable detail the Asahi Supreme Court opinion, concluding:


he Supreme Court has not abandoned the International Shoe two pronged test as further articulated in Hanson and Burger King. The touchstone of the minimum contacts analysis remains that an out-of state person have engaged in some activity purposefully directed toward the forum state. See Hanson, 357 U.S. at 253; Burger King, 471 U.S. at 475; World-Wide Volkswagen, 444 U.S. at 297. And if that initial test is met, a court must still determine whether the exercise of such jurisdiction would offend traditional notions of fair play and substantial justice. See Asahi, 480 U.S. at 113. This reading of World-Wide Volkswagen and Asahi has prior support in our jurisprudence. See Ellicott Mach. Corp. v. John Holland Party, Ltd., 995 F.2d 474, 477 (4th Cir. 1993) (holding that minimum contacts exist where the defendant "purposefully directs its activities toward the residents of the forum"); see also Federal Insurance Co. v. Lake Shore, Inc., 886 F.2d 654 (4th Cir. 1989). To permit a state to assert jurisdiction over any person in the country whose product is sold in the state simply because a person must expect that to happen destroys the notion of individual sovereignties inherent in our system of federalism. Such a rule would subject defendants to judgment in locations based on the activity of third persons and not the deliberate conduct of the defendant, making it impossible for defendants to plan and structure their business contacts and risks. Moreover, we do not believe that the holding of World-Wide Volkswagen takes us as far as plaintiff in this case suggests. Thus, we hold that the test to be applied in considering the reach of personal jurisdiction inquires whether (1) the defendant has created a substantial connection to the forum state by action purposefully directed toward the forum state or otherwise invoking the benefits and protections of the laws of the state; and (2) the exercise of jurisdiction based on those minimum contacts would not offend traditional notions of fair play and substantial justice, taking into account such factors as (a) the burden on the defendant, (b) the interests of the forum state, (c) the plaintiff's interest in obtaining relief, (d) the efficient resolu

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