Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG

On July 21, 2011, the United Court of Appeal for the Eigth Circuit, did not have jurisdiction over a German corporation in the products liability suit because the corporation did not have sufficient “minimum contacts” with Missouri. Viasystems, a Missouri-based corporation manufactures telecommunications equipment.

Vitasystems contracted to manufacture base units for Ericsson A.B., a Swedish company. Each base unit consisted of a cooling fan, and, at Ericsson’s prompting, Viasystems purchased cooling fans that were manufactured by EBM-Papst St. Georgen GmbH & Co., KG (St. Georgen), a German corporation.

The fans were manufactured in St. Georgen’s Germany plant and shipped to China, where they were sold to EBM-Papst Shanghai, a Chinese corporation, which resold them to Viasystems‘ Chinese subsidiary. After the fans were installed, the completed base units were sold to Ericsson for use in mobile phone facilities in Japan. At no point did the fans or base units enter the United States.

Subsequently, fan failure in some of the base units started to occur. Ericsson replaced the fans at a cost of $5 million and demanded reimbursement from Viasystems. Viasystems partially reimbursed Ericsson and, in turn, made demand on St. Georgen to assume responsibility for the replacement costs. St. Georgen made only a partial payment, Viasystems filed suit in federal court. The district court granted St. Georgen’s motion to dismiss for lack of personal jurisdiction. Viasystems appealed.

The fundamental inquiry is whether the defendant has purposefully availed itself of the benefits and protections of the forum state, to such a degree that it should reasonably anticipate being haled into court there.

The Court of Appeal found that St. Georgen’s incidental contacts with Missouri (scattered e-mails, phone calls, and a wire-transfer of money to Viasystems in Missouri) did not constitute a “deliberate” and “substantial connection” with the state such that St. Georgen could “reasonably anticipate being haled into court there.” Nor could jurisdiction be based on the effects on Viasystems in Missouri of St. Georgen’s refusal to pay Ericsson’s replacement costs in full. St. Georgen’s refusal to pay the replacement costs in full simply was not “uniquely or expressly aimed at the forum state.

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