United States: Television, Personal Jurisdiction, And Whether Corporate Knowledge Can Be Imputed From Internet Drivel

You wouldn't be the first to notice that some of our posts say more about television programs – and certainly with more gusto – than about the law. We could make the case that pop culture and the law are related, and that familiarity with the former can make one a better advocate when engaged in the latter. We could even cite an article on the value of pop culture that was written by an in-house lawyer who might be the smartest person we know. But let's not perpetrate a fraud. Truth be told, it's flat-out easier to tackle tv than preemption. Would you rather binge watch Orange is the New Black or the latest judicial jibberings on the parallel violation exception? Especially in these lingering dog days of Summer, not much in the law seems dramatic or even mildly entertaining. To be sure, not so long ago the Summer was also a wasteland for television. The good stuff concluded in the Spring. Summer was strictly for repeats. Under the old model, after fine offerings such as Game of Thrones and The Americans wrapped up before Memorial Day, there would be nothing worth watching until the Fall season, when a couple of decent shows might temporarily distract you from the decline of the West (by which we mean the American League West, the AFC West, and the overall culture of the Enlightenment). But things have changed when it comes to programming. Television comes through whilst the law remains in its mid-year torpor. Of a sudden, Summer tv offers a bounty for couch potatoes seeking an escape from the inferno. So hang up that seersucker suit, pour out a Pimm's, and feast your eyes on these tv treasures:

Stranger Things (Netflix) – We love the 80s. That was when we entered law school and, more importantly, exited law school. A decade that starts with the eruption of Mt. St. Helens and ends with the collapse of the Berlin Wall, and that introduced Seinfeld and The Simpsons in-between, is special. Stranger Things is a love letter to the 80s. It is a Spielbergian, Stephen King-ian mash up of horror, sci-fi, government conspiracy, and teen-agers coming of age. Stranger Things also supplies a great role for Winona Ryder, who first grabbed our eyes in Heathers (1988). You know how at the end of a Netflix episode a clock starts counting down in the corner, and you have to decide either to exit or let the next episode start? With Stranger Things, we always let the next episode take over the screen, and let all the next episodes take over our day. Could. Not. Stop. Watching.

Mr. Robot (USA) – Maybe this bold show is undergoing something of a sophomore slump, but the episode that mimics 90s sitcoms (e.g., Full House, Family Matters) may have been the best hour of tv since Cersei burned down the town and the Khalisi set sail with a dragon escort. If you watch this show, you might actually have something substantive to say to the techno-geeks who patrol your office. And they might have something to say to you besides, "Have you tried rebooting?"

The Night Of (HBO) – One always has high expectations for any show in the 9 pm Sunday night slot on HBO, and The Night Of does not disappoint. It is based on a British show called Criminal Justice. One of the writers for the American version is Richard Price, who has penned some fine novels (Lush Life) and some of the best episodes of The Wire. The first couple chapters of The Night Of were blisteringly suspenseful, reminding us how modern technology spies on us, but how there are still tragedies that manage to evade the cameras and our understanding. Then the show settled into a Law & Order-type procedural, complete with the requisite interview of someone at their workplace. (Comedian John Mulaney does a bit about a guy calmly loading crates onto a truck while answering questions about a grisly murder. "Tony Ramirez? Yeah, I remember him. Worked on Tuesdays, I think." Keeps lifting crates. A detective puts a picture under the witness's nose. The witness hardly pauses as he flings a crate into the trailer. "No, I don't recognize him" Picks up another crate.) The workplace interview in The Night Of involved a hearse driver, so the creepiness level was turned up to 11. The most recent entry of The Night Of featured a cross-examination of a defense expert by the prosecutor. The expert and prosecutor clearly have been locking horns for many years. By now, they know each other's moves. They even seem to enjoy each other's company. The wry back-and-forth reminded us of some mini-battles we have had with certain plaintiff experts we have deposed repeatedly. Of course, in our case there was no murder — except, you know, for the expert's occasional murder of the truth.

Watch these shows and you will thank us.

What's that? You came to this blog to learn a little something about the law, not television? Okay, if you insist. But how about if we split the difference, and discuss a case about television? To be precise, it is a case about televisions, in the plural. In Oliver v. Funai Corp., 2015 WL 930541 (D. N.J. Dec. 21, 2015), the plaintiffs claimed that the defendants sold them defective televisions. The defect consisted in certain allegedly faulty components. When those components went bad, the televisions would "stop displaying a picture and sound." That does, indeed, seem like a problem. The plaintiffs alleged that the televisions in question typically failed outside of the stated one-year warranty period and ninety-day warranty period for labor, leaving consumers with little reprieve. The legal claims included fraudulent concealment and the like. There were two plaintiffs, one in Massachusetts and one in Arizona. One of the plaintiffs alleged that he purchased his television in September of 2012, and that the same television failed in January 2014, after only 190 hours of usage. At this point, and not just because we are a crotchety defense hack, we grew suspicious of that plaintiff. Four months of tv viewing, totaling only 190 hours? That's just a little more than an hour and a half a day. Who watches so little tv? Most people would burn through 190 hours just during the NFL playoffs. Was this person confining their viewing to PBS specials on How Turtles Do Calculus, or the Cleveland Symphony's production of an opera based on Kafka's Metamorphosis, "Roach!" Surely there is an issue in this case of credibility and/or limitation of damages.

What does any of this have to do with drug or device law? The Oliver case involves one issue we have addressed a lot recently, personal jurisdiction, and one we hardly ever see, which is whether internet postings constitute information that can be attributed to a corporate defendant.

Personal Jurisdiction

The defendants in Oliver were (1) Funai Corp., which is incorporated and has its principal place of business in New Jersey, and (2) its parent, Funai Electric, a company incorporated and headquartered in Japan. Was there personal jurisdiction over the Japanese parent company? As most of our readers know by now, personal jurisdiction consist of both general jurisdiction and specific jurisdiction. With general jurisdiction, a company can be sued for anything. With specific jurisdiction, a company can be sued only for its conduct specifically in and targeted to that particular jurisdiction. Under the Supreme Court's decision in Bauman, general jurisdiction extends only to companies that are essentially "at home" in that jurisdiction, and that at-home-ness applies to place of incorporation, principal place of business, and extremely rare exceptions, such as temporary relocation of a company during war time. The Oliver court easily decided that the plaintiffs could not show general jurisdiction under the paradigmatic examples laid out in Bauman. In support of their general jurisdiction argument, the plaintiffs chiefly relied upon the fact that Funai Electric allegedly "funnels its televisions through the State of New Jersey." But it is well-settled by the Supreme Court that while "[f]low of a manufacturer's products into a forum ... may bolster an affiliation germane to specific jurisdiction... ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant."

So now we are onto specific jurisdiction. And the plaintiffs still do not have enough contacts to cross the finish line. The Oliver court concluded that the connection between Funai Electric's allegedly manufacturing televisions for distribution to its New Jersey subsidiary was not enough to establish jurisdiction in New Jersey for a case where the plaintiffs bought, used (though clearly not enough), and were unhappy with their televisions in other states. In fact, the plaintiffs' argument for specific jurisdiction was really another general jurisdiction argument in disguise. Under their theory, by running televisions through a New Jersey distributor, a company at home in Japan would have opened itself up to litigation in New Jersey by any American consumer. The court rejected such a nonsensical result. Indeed, the court was so struck by the nonsensical nature of the plaintiffs' position that it also rejected a request for jurisdictional discovery.

Fraudulent Concealment

With Funai Electric now out of the Oliver case, that left only Funai Corp., which also had a strong argument for dismissal on the pleadings. Funai Corp contended that the plaintiffs could not meet the elements of a fraudulent concealment claim because the plaintiffs failed to plead that Funai Corp. knew of the defect prior to the plaintiffs' purchases. In response, the plaintiffs directed the court to "numerous consumer complaints that 'date back to 2011 and beyond." But the complaints appeared on the websites of third-parties such as Amazon and Wal-Mart, and the plaintiffs provided no indication that the defendants viewed or would have viewed those websites. Moreover, many of the postings, written by unknown bloggers (i.e., "oliveubabe" and "2ofakind0") [Sure, those are funny names. But have you seen some of the names our commenters use? Which reminds us — "Cocaine Princess," where have you been?], did not specifically reference the defect alleged in the plaintiffs' complaint; rather, they alleged general problems with the televisions' functionality or quality. Accordingly, the court was not persuaded that knowledge of the alleged defect could be imputed to the defendants based upon anonymous internet complaints on third-party websites. Nor was the court persuaded that knowledge could be imputed to the defendants based upon the representations made in the anonymous internet complaints that the consumers contacted the defendant via phone to voice their concerns.

This ruling in Oliver should be of interest to our clients. As the court reasoned in Oliver, "[i]mputing knowledge of a defect to a manufacturer based upon an internet posting would mean that virtually every consumer product company would be subject to fraud claims and extensive discovery." That is true because everything is on the internet. And by "everything," we mean everything that is true, false, something-in-between, and crazy. If the mere existence of some statement or accusation on the internet could be attributed to a corporate defendant, then it is open season for alleging all sorts of corporate frauds. That is an unacceptable result. The internet, as wonderful and useful as it can be, is a vast mess. Most of what you see on the internet is ridiculous, frivolous, and merits no assumption of veracity.

There is one exception. If you are on our website and you are reading legal analysis or a tv recommendation, then you can take judicial notice.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.