Virginia Business Litigation Lawyer Blog

The United States Supreme Court recently held that a foreign manufacturer that places a product into the stream of commerce in the United States does not automatically subject itself to jurisdiction in each of the states where the product might foreseeably end up. Relying on this decision, a Roanoke Circuit Court judge has dismissed a Japanese manufacturing company from a product-liability case brought against it in Virginia.

Janet May was employed by Progress Press in 2006 and was operating a stitching machine made by Osako & Co., a Japanese company. She alleged that she was injured because the machine had an improper conveyor belt. She sued Osako and others for negligence and breach of warranty.

Osako sold its products in the United States through Consolidated International Corp., its exclusive distributor, which was a company independent of Osako. Osako knew that its products would be sold in the United States generally and made some product changes for the U.S. market but did not take any actions to specifically target Virginia. Osako has no physical locations in the United States. On these facts, Osako moved to dismiss May's suit for lack of jurisdiction.

Judge Charles N. Dorsey of the Circuit Court granted the motion. He relied heavily on J. McIntyre Machinery v. Nicastro, a U.S. Supreme Court ruling that was decided June 27, 2011. In the Nicastro case, which was a product-liability case with very similar facts to this one, the Supreme Court reversed the New Jersey Supreme Court and found that New Jersey lacked jurisdiction over a British company that sold a piece of machinery in that state. The high court rejected the New Jersey court's theory that placing the product into the "stream of commerce" conferred jurisdiction on that state's courts.

May had relied heavily on the Nicastro case - before it was reversed. Indeed, she had contended that her case and that case were "so similar that this Court has no way to find differently than the New Jersey court," Judge Dorsey wrote. In view of the reversal in Nicastro, the judge concluded, he had no choice but to apply the U.S. Supreme Court's ruling and to find that Virginia courts lack jurisdiction over Osako.

As reported in the Washington Post, a jury trial in Fairfax County, Virginia, resulted in an award of $3.2 million in damages to a 36-year-old Arlington resident who was injured while shopping at IKEA's Potomac Mills store.  On July 28, 2006, as the shopper stopped near the store's exit to inspect the bargain bin, a display of countertops weighing over 350 pounds came crashing down on her, crushing her pelvis.  

Personal injury lawsuits based on theories of premises liability do not typically involve damages awards involving millions of dollars, especially in the conservative jurisdiction of Fairfax County, Virginia.  In 2008, for example, only 15 jury verdicts across the entire Commonwealth of Virginia were for one million dollars or more.  In this particular case, however, the jury was moved by the fact that the shopper was an athlete who frequently traveled to China, Europe, and across the United States to pursue hiking, biking, and climbing activities.  Since the accident, she can only walk about three blocks before the pain becomes unbearable.  In other words, IKEA's negligence resulted in effectively terminating her athletic pursuits and the joy she derived therefrom.  The jury decided to compensate her for this pain and suffering.

Business that invite customers to shop at their retail stores need to take precautions to ensure the safety of their shoppers.  An injured patron will generally have grounds to sue the business if the patron is injured by falling merchandise and the patron did not cause the objects to fall.  This would be true regardless of whether the business owner is guilty of active negligence or simply allowed a known dangerous condition to exist on the premises without taking steps to protect the store's customers.

Even if the business is negligent, however, it will not be held liable if the patron's injury was not causally related to that negligence or to a dangerous condition on the premises, or if the acts of a third party supersede the business owner's negligence.  IKEA was not found to be entitled to the benefit of any of these defenses.