B. D. v. Samsung SDI Co., Ltd.
___ F.4th ___ (7th Cir. 2025) (2025)
Rule of Law:
A court may exercise specific personal jurisdiction over a foreign defendant only when the defendant has purposefully availed itself of the forum through its in-state contacts, the plaintiff's lawsuit relates to those specific contacts, and it would be fair to subject the defendant to the court's power. The 'relatedness' prong requires a sufficient connection between the defendant's deliberate forum activities and the plaintiff's injury, distinguishing between different 'streams of commerce' if the defendant intentionally participated in one but actively sought to prevent participation in another.
Facts:
- Samsung SDI Co., Ltd. is a battery manufacturer headquartered and operating primarily in South Korea, without a physical presence in Indiana or registration to do business in the U.S.
- Samsung SDI manufactures 18650 lithium-ion batteries, which are powerful, rechargeable, and not intended for individual consumer purchase.
- The company sells millions of these batteries annually to sophisticated corporate customers who incorporate them into battery packs with safety features (circuit boards) designed to prevent thermal runaway.
- These battery packs are then integrated into widely available end products like laptops, power drills, and vacuum cleaners, which are distributed to consumers across the country, including in Indiana.
- Samsung SDI implements measures to ensure 18650 batteries are used safely and only in packs, requiring customers to acknowledge this and refusing sales to entities tied to the e-cigarette industry.
- Despite Samsung SDI's efforts, individual, unpackaged 18650 batteries are available to Indiana consumers from third-party vendors (e.g., e-cigarette stores) through unauthorized transactions.
- Bryan Myers, B.D.'s stepfather, purchased an individual 18650 battery from an e-cigarette store in Vincennes, Indiana, and later gave it to B.D.
- The individual 18650 battery exploded in B.D.'s pocket, causing severe burns that required three weeks of hospitalization and a skin graft.
Procedural Posture:
- B.D., through his stepfather Bryan Myers, filed a products liability lawsuit against Samsung SDI in Indiana state court.
- Samsung SDI removed the case to the United States District Court for the Southern District of Indiana based on diversity of citizenship.
- Samsung SDI moved to dismiss B.D.'s complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2).
- The district court initially denied Samsung SDI's motion, concluding B.D. made a prima facie case for personal jurisdiction.
- Samsung SDI appealed the district court's denial to the United States Court of Appeals for the Seventh Circuit.
- The Seventh Circuit remanded the case to the district court for further jurisdictional discovery concerning Samsung SDI's contacts with Indiana related to B.D.'s claimed injuries.
- On remand, Samsung SDI renewed its motion to dismiss for lack of personal jurisdiction after additional discovery.
- The district court granted Samsung SDI's renewed motion to dismiss, reasoning B.D. failed to show Samsung SDI purposefully availed itself of the Indiana forum.
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Issue:
Does a federal court in Indiana have specific personal jurisdiction over Samsung SDI Co., Ltd., a foreign battery manufacturer, when the plaintiff's injury resulted from an individual battery purchased through an unauthorized derivative-product stream of commerce, despite the manufacturer purposefully availing itself of the Indiana forum through an end-product stream of commerce?
Opinions:
Majority - Brennan, Circuit Judge
No, a federal court in Indiana does not have specific personal jurisdiction over Samsung SDI. The court applied the three-prong test for specific personal jurisdiction, which requires (1) purposeful availment, (2) the lawsuit to arise out of or relate to the defendant's forum contacts, and (3) jurisdiction to comport with fair play and substantial justice. The court found that Samsung SDI purposefully availed itself of the Indiana forum through the 'end-product stream of commerce' by selling 18650 batteries to corporate customers who then incorporated them into consumer products widely available in Indiana. However, Samsung SDI did not purposefully avail itself of Indiana through a 'derivative-product stream of commerce' for individual batteries, as it actively took steps to prevent such sales and individual batteries only became available through the 'unilateral actions of unknown third parties.' The critical issue lies with the second prong: the relationship between Samsung SDI's purposeful contacts and B.D.'s lawsuit. B.D.'s injury stemmed from an individual battery purchased through an unauthorized derivative-product transaction, which bears no relation to Samsung SDI's deliberate contacts with Indiana via the end-product stream of commerce. The court emphasized the 'disconnect' between the defendant's purposeful in-state contacts (batteries in consumer products) and the plaintiff's lawsuit (injury from an individual battery sold outside the intended channels). The court distinguished Ford Motor Co. v. Montana Eighth Jud. Dist. Ct. by noting that in Ford, the defendant systematically served a market for the very product that caused the injury, whereas here, Samsung SDI did not serve a market for individual batteries to consumers in Indiana. Allowing jurisdiction in this case would undermine the principles of reciprocity and fair warning inherent in personal jurisdiction doctrine, effectively blurring the lines between specific and general jurisdiction by focusing too much on the plaintiff's contacts rather than the defendant's deliberate actions related to the injury. Since the second prong was not met, the court did not need to address the third 'fairness' prong.
Analysis:
This case provides important clarification on the 'relatedness' prong of specific personal jurisdiction, particularly for component manufacturers operating within a 'stream of commerce.' It establishes that a defendant's purposeful availment through one distribution channel (e.g., end products) does not automatically confer jurisdiction for injuries arising from a completely different, unauthorized distribution channel (e.g., individual component sales). The decision reinforces the defendant-focused nature of personal jurisdiction, emphasizing that manufacturers can structure their conduct to limit exposure to jurisdiction by explicitly avoiding certain markets or product uses. Future cases will likely scrutinize the specificity of the connection between the defendant's deliberate forum contacts and the plaintiff's precise injury, especially in complex supply chains with multiple product variations.
