Jurisdiction Can be a Problem in Product Liability Cases

Jurisdiction Can be a Problem in Product Liability CasesIf you are injured due to the fault of another, and the liable party is a company (that is, not an individual, as in a car accident), there are some key questions to answer. Who may be liable is the primary question. How they are liable is another key question. It is easy to overlook another question that can be a big impediment to injury cases: Where to sue.

Doing Business in Florida

Legally, you cannot sue just any company in any court. Assuming you are in Florida and want to sue there, you can only sue companies that have some contact with Florida. A Florida court has to have jurisdiction over the defendant. In many cases, that is an easy and obvious question. Companies that we see everyday that do business here are obviously subject to a Florida Court’s jurisdiction: Publix, the neighborhood mall, the local school, etc., all clearly do business in and have contacts here in Florida.

Sometimes, the location of a party that may be liable is not so obvious—even if it seems to be. This is where personal injury law intersects with business and corporate law. Many companies have parent companies and subsidiaries and holding companies, and those companies may have no contract with Florida, or even the United States, at all.

This becomes problematic often in products liability cases. You may see a product on the shelves that ends up being defective. Just because the product is sold here in Florida, does not mean that a Florida company is liable. That product may have manufacturers and designers and distributors who may be the liable party, and those manufacturing companies may have no connection at all to Florida.

Establishing Jurisdiction in Florida

To sue a company in Florida, the company must have minimum contacts with the state. That means the company must purposefully avail itself of the privilege of conducting business in Florida, and the defendant should reasonably anticipate being brought to court in Florida.

This is a simple question of fairness. You may own a small factory in Indiana that manufactures paint that Delta airlines uses to paint the passenger seats. That does not mean that your small paint company is now subject to being sued anywhere in the world just because you know Delta flies anywhere in the world.

If this test is passed, a Court has jurisdiction over the company or person, but still has to have jurisdiction over the issues in the case. Florida’s long-arm statute provides this jurisdiction when a company injures someone in the state due to negligence that occurred out of state, the defendant actively markets or sells its services or products in Florida, and a defendant’s products are used in the state in the ordinary course of business.

A company that just advertises its services but is located out of state, is not conducting business in Florida for the purpose of jurisdiction. So, for example, a company that has a webpage that it knows can be viewed in Florida, is not by that fact alone eligible to be brought to court in Florida.

Additionally, a third party can not bring a product to Florida for the purpose of jurisdiction. If a manufacturer sells a product to a New York company and that company brings the product to Florida, or even an ultimate consumer of the product does, and then an injury occurs in Florida as a result of that product, the original manufacturer is not purposely subjecting itself to jurisdiction in Florida.

Recent Case Deals With Jurisdiction

A recent case is a good example of how jurisdiction works. A victim sued Volkswagen for products liability, alleging that he contracted mesothelioma from Volkswagen’s products. Volkswagens are sold here in Florida, and they have dealerships here. Surely, they can be sued in Florida, right? Well, not so fast.

The actual liable company was a separate Volkswagen company that manufactured the items that allegedly caused the victim’s injuries. That company did ot sell cars, but rather sold, installed, or manufactured the products that went into the cars. They sold to Volkswagen, of course, but maintained in court documents that they had no contact with Florida.

They stated they had no Florida offices, no Florida bank accounts, paid no taxes to Florida, and had no control of how Volkswagen used their product or where they sold cars, after their product was put into Volkswagen cars.

The victim tried to argue that the manufacturer and Volkswagen were alter egos of one another—that the contacts that the car company had with Florida, were sufficient to find jurisdiction over the manufacturer. But the Court disagreed, saying one company did not have enough control over the other.

Furthermore, the fact that the manufacturing company may have been aware that cars with its product in them would be shipped to and sold in Florid  was not sufficient contact with the state to provide a Florida Court jurisdiction.

The Court did hold that before dismissing the manufacturer for lack of jurisdiction, that the parties should be allowed to conduct additional discovery, to determine the level of contact that the manufacturer has in Florida.

Be Wary of Liable Defendants

Many products that we buy and use are comprised of components that may be manufactured in all parts of the world. Sometimes it takes significant time and litigation just to determine what those entities are and where they may be located.

In general, in products liability cases, all parties in the chain from manufacture to sale, may be liable, including the retailer. That retailer may be right next door. But it is important to name as defendants all the responsible parties, not just the convenient ones.

If you are injured as a result of a defective product, make sure you include all potentially liable parties. Contact Brill & Rinaldi today about a free consultation to discuss your case and your injuries.