A manufacturer based in State A produces and sells an industrial cleaning product. A business in State B purchases the product and uses it at its location, where a customer claims to have been injured by exposure to the chemicals. The injured customer files a lawsuit in State B, naming the manufacturer as the defendant and alleging negligence. The manufacturer has not traveled to or physically entered State B but regularly markets its product to businesses there and derives significant revenue from sales within the state. Does State B’s court have personal jurisdiction over the manufacturer?
No, because the manufacturer has not traveled to or physically entered State B.
No, because the personal injury claim does not directly relate to the manufacturer’s business transaction.
Yes, because the manufacturer marketed and sold its product in State B, meeting the criteria for minimum contacts.
Yes, because generating revenue from a state contributes to establishing minimum contacts when paired with purposeful business activity.
State B’s court would have personal jurisdiction over the manufacturer because the manufacturer purposefully availed itself of the privilege of conducting business in State B. Under the principle set forth in International Shoe Co. v. Washington, personal jurisdiction can exist if the defendant has 'minimum contacts' with the forum state, and the exercise of jurisdiction does not violate traditional notions of fair play and substantial justice. Marketing and selling products in State B, and deriving significant revenue from those activities, establish these 'minimum contacts.' While revenue generation alone is insufficient for personal jurisdiction, the connection between the manufacturer's activity in the state (targeted sales) and the plaintiff's claim (negligence related to the product) satisfies the requirement. The incorrect answers either misrepresent the importance of physical presence or misstate the relevance of the identity of the plaintiff or revenue as standalone factors in determining jurisdiction.
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What are minimum contacts and why are they important for personal jurisdiction?
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What role does the revenue generated from sales in a state play in determining jurisdiction?