Jurisdiction in Massachusetts allows a plaintiff to bring in Salomon France to the local court.

Lafond v. Salomon North America Inc. et al, Superior Court County of Suffolk, Commonwealth of Massachusetts.

Although not a Precedent setting decision, it is indicative of where the courts are going.

This is a decision in the trial court of Massachusetts over ski bindings. The bindings broke injuring the plaintiff while he was skiing in Utah. He sued Salomon in the US and Salomon SAS, the French parent company based on Annecy France. The retailer, Bob Smith’s Wilderness House was brought in as a third party defendant.

The defendants filed a Motion to Dismiss, or what is referred to as a Rule 12(b)(2) motion. A Motion to Dismiss is granted only if the pleadings of the plaintiff do not state a legal claim or the defendant can’t be sued in this case. No evidence is reviewed by the court; it is purely a simple legal argument based on the laws of procedure.

Salomon SAS argued that it had no business in France, did no business in any country other than with Salomon North America based in Ogden Utah. Therefore, because it did no business in Massachusetts, it should not be brought into the litigation in Massachusetts.

So?

English: Seal of the Commonwealth of Massachusetts

Image via Wikipedia

The plaintiff claimed it went to the Salomon SAS website to research different bindings. The Salomon SAS website directed the plaintiff to the third party defendant Bob Smith’s Wilderness House as a retailer the plaintiff could from whom he could purchase the bindings.

The broken bindings were replaced by Salomon, although it is not known in the motion if it was Salmon SAS or Salomon North America.

The issue is whether court has the legal right to require a defendant to submit to its jurisdiction. The limits or requirements the court must follow are set usually set out in a long-arm  statute. That is the name given to the statute that controls whether the long arm of the law can extend outside of the state.

To exercise out of state jurisdiction over a defendant located in another state or country the defendant must have engaged in “purposeful and successful solicitation of business from Massachusetts residents.”

A website alone is not enough to bring a foreign or out of court defendant into the jurisdiction of a Massachusetts court. However, because the plaintiff identified the store where he purchased the bindings based on his actions on the Salomon SAS website that was enough to subject the foreign defendant to the jurisdiction of the Massachusetts court.

There are numerous other tests the court must review to subject a foreign business the jurisdiction of the court. However, this one act of directing the plaintiff to a local retailer was enough to subject the defendant to the jurisdiction of the Massachusetts court.

So Now What?

This is a crap decision. When a website brings you into court, a website alone, the purpose of long arm statutes has faded considerably.

However, this is just the first step in a long line of steps before the case is decided. Rarely is a Rule 12(b)(2) motion granted. Motions for Summary Judgment, other defense motions and a trial are all next, then appeals. Hopefully, an appellate court will look at this say the original decision must be overturned.

What can you do? In this case, maybe not a lot can be done, but there are something’s that might assist in some circumstances.

In every sale or contract, put into the agreement a jurisdiction and indemnification clause. You can use them in retail sales agreements with consumers, to some extent.

You also might consider an indemnification agreement between your US based distributor and yourself if you are a foreign, non US based, manufacture. The agreement would say that you would be 100% indemnified for any US based lawsuits, other than product recalls. This might encourage US plaintiff’s not to drag you into a US court.

Make sure your agreement with your US based distributor is not a big target for lawsuits. Identify when the inventory transfers to the US subsidiary and when payment is owed for the inventory.

Set up a defense program with your US Distributor, Reps and all retailers. The program should incorporate the use of a release. The program should make sure three things happen to help eliminate several of the issues in this case.

1.       It requires the use of a release by all parties at all times. You can even put one on your website. Releases are not 100% effective in product liability cases, but their jurisdiction and venue clauses may at least get the suit back to your home state.

2.      The agreement identifies who shall be protected who and for what reasons. The manufacture of a product in a product liability claim is going to be holding the bag in most cases so this is not a big deal. More importantly it keeps the retailer in your camp in litigation and prevents the embarrassment of brining in the retailer as a third party defendant, making them mad and making you look bad, that occurred in this case.

3.      It requires the retailer to notify you immediately of any problems so you can get ahead of the curve.

4.      It puts you in control of your litigation destiny and makes you look like the good guy when you are sued to all distributors and retailers in the industry.

For more cases on Jurisdiction and Venue see:

The legal relationship created between manufactures and US consumers

Four releases signed and all of them thrown out because they lacked one simple sentence!

A Recent Colorado Supreme Court Decision lowers the requirements to be brought into the state to defend a lawsuit.

What do you think? Leave a comment.

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