U.S. District Court for the Eastern District of Arkansas, Central Division, September 11, 2020
Defendant Cyprus Mines filed a motion to dismiss for lack of personal jurisdiction, arguing the court does not have jurisdiction over Cyprus even though it provided talc to Johnson & Johnson, which incorporated the talc into consumer products and then sold those consumer products in Arkansas. Cyprus argues that undertook no suit-related activities in or directed toward Arkansas, and there is therefore no basis for specific jurisdiction over it. The plaintiff argued the court had jurisdiction over Cyprus because Cyprus knew that Johnson’s Baby Powder and Shower-to-Shower, containing its talc, was being marketed and sold across the country, including in Arkansas. The plaintiffs further emphasized that Cyprus Mines intentionally became the exclusive supplier of talc to Johnson & Johnson.
The court noted that the resolution of this motion is not entirely dictated by precedent as the U.S. Supreme Court and the Court of Appeals have been wrestling with similar questions since the Supreme Court issued a splintered opinion in Asahi Metal Industry Co. v. Superior Court, Solano Co. In a diversity case, a federal district court can assert personal jurisdiction over a defendant to the extent allowed by the long-arm statute of the forum state and the Due Process Clause. The Arkansas long-arm statute authorizes personal jurisdiction to the fullest extent possible consistent with the Due Process Clause. Therefore, the court had to determine whether an assertion of personal jurisdiction over Cyprus Mines would violate the Due Process Clause. Due process requires ‘minimum contacts’ between a non-resident defendant and the forum state such that “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Specifically, there must exist “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” The court noted the primary concern is the burden on the defendant. There is also a five-part test for measuring minimum contacts: “(1) the nature and quality of the contacts with the forum state; (2) the quantity of those contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.” The Eighth Circuit previously instructed that the first three factors were the most important.
After a thorough analysis, with more emphasis on the first three factors of the five-factor test, the court agreed with Cyprus’ argument that the unilateral act of a third party to bring products that may contain Cyprus’ talc into the state of Arkansas cannot be a basis for personal jurisdiction over Cyprus, and Cyprus did not target Arkansas in any way. The fact that Cyprus Mines supplied Johnson & Johnson with talc knowing that Johnson & Johnson used the talc in products it sold all over the United States (and in Arkansas specifically) is not enough. Under Supreme Court and Eighth Circuit precedent, more is necessary to show purposeful availment or purposeful direction. Given the facts in the record of this case, the only potential “more” is the fact that Cyprus Mines intentionally and contractually became the exclusive supplier of talc to Johnson & Johnson. However, no case from the Supreme Court or the Eighth Circuit holds that such facts alone would change the personal jurisdiction calculus.
Consequently, Cyprus’ motion to dismiss for lack of personal jurisdiction was granted.