Tennessee Court Lacks Personal Jurisdiction Over Japanese Manufacturer of Electric Generator

The U.S. District Court for the Middle District of Tennessee granted a Japanese generator manufacturer’s motion to dismiss for lack of personal jurisdiction in a case involving multiple deaths in a camper caused by the emission of carbon monoxide.  In response to a suit brought by the decedents’ estates, the Japanese manufacturer claimed the court had no personal jurisdiction because the company does not do business in Tennessee, the plaintiffs’ actions do not arise from any company activities in Tennessee, and the company lacks any systematic and continuous contacts with the state.  The plaintiffs, however, argued that the company was an “active market participant” in Tennessee and had an agreement with a California company for distribution in the United States requiring that the foreign company participate in the distribution process.  Pointing to facts such as the foreign company’s modification of its manual and decal to comply with U.S. regulations, the plaintiffs contended that the foreign company maintained “something more” than just awareness of its products entering the stream of commerce, which subjected it to personal jurisdiction.  The court disagreed and explained that the foreign company structured its distribution agreement to entirely cut ties from its products as they entered the U.S. stream of commerce, including requiring the U.S. distributor to perform service on any returned products as well as being responsible for all advertising and marketing.