A little over a year ago, the Supreme Court heard argument in Ford Motor Co. v. Montana Eight Judicial District Court, 141 S.Ct. 1017 (2021) regarding an issue of personal jurisdiction. At that time, we tried our hand at reading the tea leaves and made this prediction about how the Ford Motor decision might adversely affect defendants in medical device litigation:
Focusing on sales of the product into the forum [for questions of personal jurisdiction], for instance, could easily slide down a slope into sales of similar products or of components within the plaintiff’s product that were also included in other products.
Fast forward to Harding v. Cordis Corporation, –N.E.2d–, 2021 Ill. App. (1st) 210032 (Ill. App. Dec. 3, 2021) in which the court concluded that
[Defendant component part manufacturer’s] national distribution, through [device manufacturer], of the custom-made nitinol component of the [IVC] filter, paired with [defendant’s] not-insignificant sales of nitinol directly to Illinois customers for use in medical devices, are sufficient minimum contacts that are related enough to this lawsuit such that Illinois courts have specific personal jurisdiction over [defendant] for these claims.
Id. at *7. Direct sales of similar products and component sales together created personal jurisdiction. Perhaps we need to reconsider our thoughts on tasseography?
Plaintiff in Harding is not a litigation tourist. She is an Illinois resident who sued defendant in Illinois for injuries she sustained after a piece of her IVC filter (an implanted medical device designed to filter blood clots) fractured. Id. at *1. Defendant is the manufacturer of the nitinol component of the IVC filter. Defendant is a Delaware company, headquartered in California where it manufactured the component based on the design specifications of the device manufacturer. Defendant shipped the component to Mexico where it was incorporated into the finished device which the device manufacturer then sold in the United States. Id. at *2. At no time did defendant sell, distribute or market the IVC filter component in Illinois. And, while it knew the device manufacturer sold the product in the United States, it did not have any knowledge of which specific states. Id.
Based on these facts, the appellate court concluded that defendant had a distributor relationship with the device manufacturer. Defendant “custom makes” the component part specifically for the device manufacturer and the sole market for defendant’s component part was through the device manufacturer’s nationwide sales of the IVC filter. Id. at *6. Unlike the manufacturer of an ordinary component like a nut or bolt, here “the manufacturer of a highly specialized component part,” purposefully availed itself “of a distributor’s exclusive network of nationwide marketing and sales.” Id. Hence, stream of commerce personal jurisdiction.
Unfortunately, aside from supplying the component part to the device manufacturer, defendant also sold raw nitinol and other nitinol component parts directly in Illinois, a portion of which were used for other medical devices – not the IVC filters at issue in the case. While Illinois sales were less than one percent of defendant’s total sales, they totaled over $2 million which the court considered not a de minimis amount. Id. at *2, *6. So, direct sales of a similar product “related to” the controversy and should be considered in deciding whether plaintiff had sufficiently established minimum contacts for specific personal jurisdiction. Id. at *6 (“distinguishing between nitinol use in the [particular] filter and in these other medical devices would be ‘too restrictive and narrow’ for a jurisdictional inquiry”).
And now we come full circle to Ford Motor. In that case, the autos at issue were not sold in the states where plaintiff brought suit (their home states). But the Supreme Court found personal jurisdiction over Ford based on its marketing and sales of the same model vehicles in those states. Applying Ford Motor to the instant case, the Illinois Appellate court concluded that
jurisdiction can be based on a combination of the sales of the offending product and other sales of similar products that, in total, provide evidence that the defendant “purposefully directed its activities” at the forum state and that the plaintiff’s claim sufficiently relates to the defendant’s varied contacts with the forum state.
Id. at *7. Sometimes we hate it when we’re right. On the bright side, this is probably only a temporary setback since immunity under the BAAA (Biomaterials Access Assurance Act) (you can find out more about this act starting here) should protect this defendant.