Home / News / Foreign manufacturer subject to lawsuit

Foreign manufacturer subject to lawsuit

Website a basis for personal jurisdiction

A Massachusetts resident who was injured when his ski binding broke on a mountain in Utah could bring a products-liability suit in the commonwealth against the French company that made the binding, a Superior Court judge has ruled.

The plaintiff had purchased the bindings from a Massachusetts retailer after researching options on the defendant manufacturer’s website.

The defendant, Salomon S.A. — which has no offices, agents, employees or facilities in Massachusetts and distributes its products to the U.S. market through an entity based in Utah — argued that its Internet presence was insufficient to subject it to personal jurisdiction in the commonwealth.

But Judge Elizabeth M. Fahey disagreed.

“[Salomon’s website] is not merely a passive instrument that only presents information about Salomon products,” Fahey wrote, denying the defendants’ motion to dismiss. “Rather, it explicitly solicits business from Massachusetts residents by directing them to Massachusetts retailers that sell Salomon products. … Accordingly, Salomon S.A. transacts business in Massachusetts.”

The 24-page decision is LaFond v. Salomon North America, Inc., et al.

Evolving tools?

Plaintiff’s counsel Susan M. Bourque of Boston said the ruling is important because it shows that, as technology evolves, so do the tools available to subject foreign manufacturers to jurisdiction here.

“The Internet is an amazing tool to reach people [that a company] could never reach through foot traffic in a store,” Bourque added. “But there has to be a risk-benefit analysis by companies. They need to say to themselves, ‘We want to get our products out there in front of as many people as possible, but how we do so may impact our level of liability.’”

Bourque’s colleague and co-counsel in the case, Eric J. Parker, called the decision a “game changer” for the purposes of personal jurisdiction.

“Companies can no longer have their cake and eat it, too,” he said. “They can’t use technology to achieve the very same thing they used to achieve by having a physical presence, while shielding themselves from the laws of Massachusetts when something goes wrong.”

Parker also said the decision sends a message to plaintiffs’ lawyers to scour any web presence that a foreign company might have that could confer jurisdiction that otherwise might not exist.

“Be a good detective and ensure you’ve looked at everything,” he said.

Konstantine William Kyros, an Internet and technology lawyer in Boston, said LaFond is significant given the differing conclusions courts have reached over the past decade regarding jurisdictional issues surrounding Internet sites.

“The extension of jurisdiction to a ‘locate a store’ feature on websites has huge implications,” said Kyros, who was not involved in the case. “Retail businesses that have refrained from having a direct sales feature on their websites may have been doing so in part to insulate themselves from jurisdiction, taxes and other local regulations. That is now out the window, at least as far as jurisdiction is concerned.”

Kyros said one option for companies using “locate a store” features is to direct the consumer using offsite links that are technically not part of the site, along with a disclaimer.

“[Companies] might also distinguish this case based on the specific facts alleged in the pleadings about how [the plaintiff in LaFond] bought his ski equipment,” Kyros said. “Jurisdiction might only extend to circumstances in which the consumer actually used the website to locate a store and buy the product, [and a] court may well conclude that jurisdiction does not extend automatically to having a site with that ‘locate a store’ feature.”

If that turns out to be the case, Kyros said, plaintiffs would be well advised to recall exactly how they used the website in their purchase and include those details in the pleadings.

Defense counsel Mark S. Bodner of Boston declined to comment due to the ongoing nature of the litigation.

Broken binding

In June 2004, plaintiff Gary LaFond, a Massachusetts resident, accessed the website of defendant Salomon S.A., a French manufacturer of ski products, to research various bindings.

Based in part on information he obtained from the site, the plaintiff decided to go with the Salomon 912Ti alpine ski bindings, which he purchased from a store in Boston.

According to the plaintiff, he was skiing in Alta, Utah, on Jan. 20, 2007, when the heel plate of his left ski binding broke, causing him to fall and suffer serious injury.

The plaintiff later filed suit against Salomon alleging negligence, breach of implied warranty of merchantability and violation of consumer protection statute Chapter 93A.

Salomon filed a motion to dismiss for lack of personal jurisdiction.

As Salomon noted in its motion, it has no employees, agents or offices in Massachusetts, nor has it ever shipped products to Massachusetts. Instead, it arranged for its products to be shipped and distributed throughout the U.S. by Amer Sports Winter & Outdoor Company, which is based in Utah.

Thus, Salomon argued, it lacked the necessary minimum contacts necessary for it to be subject to a suit in Massachusetts.

Is it there and is it fair?

Fahey determined first that Salomon’s website placed it within the reach of Massachusetts’ long-arm statute, Chapter 223A, §3(a).

The judge pointed out that the site was more than simply a “passive instrument” that presented information about Salomon products. Instead, it explicitly solicited business from residents of the commonwealth by directing them to retail stores in the state that sell Salomon products.

“By thus soliciting business, Salomon S.A. purposefully targets Massachusetts residents through the website [as required by the statute],” Fahey said.

The judge also found that exercising personal jurisdiction over Salomon would not pose due-process concerns.

In other words, Fahey said, Salomon had minimum contact with the commonwealth such that it would be fair and reasonable to hail the company into the state to defend the action. Specifically, Salomon had listed 56 Massachusetts retailers on its website and had not instructed its distributor, ASWO, to refrain from distributing its products to Massachusetts.

“As such … Salomon purposefully avails itself of the benefits of doing business in Massachusetts by placing its products in the stream of commerce with the intention of reaching consumers, including consumers in Massachusetts,” she said.

Fahey rejected Salomon’s argument that, as a French company with no office or personnel in Massachusetts, it would face a severe disadvantage in having to defend itself in a Massachusetts court.

“[Salomon’s situation] does not differentiate itself from any other alien corporation with no presence in the forum state,” the judge stated.

Finally, Fahey said, with witnesses, medical records, documents and other evidence likely scattered between Utah, where the accident occurred; Massachusetts, where the plaintiff lived and the bindings were purchased; and France, where Salomon presumably designed and manufactured the bindings, Massachusetts would be as effective a forum location as either of the others.

“Similarly, while Massachusetts and France both have an interest in promoting substantive social policies, Massachusetts’ interest is stronger here given the facts of this case,” Fahey said.

Accordingly, the judge concluded, Salomon’s motion to dismiss should be denied.

Leave a Reply

Your email address will not be published. Required fields are marked *