Woods v. Edgewater Amusement Park
1969 Mich. LEXIS 149, 381 Mich. 559, 165 N.W.2d 12 (1969)
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Rule of Law:
A state may exercise personal jurisdiction over a foreign corporation under a long-arm statute when the corporation's action, such as manufacturing a product for sale, causes a tortious consequence to occur within the state, as this constitutes sufficient minimum contacts to satisfy due process.
Facts:
- B. A. Schiff & Associates, Inc. (Schiff), a Florida corporation, manufactured an amusement park ride known as the 'Wild Mouse' at its Florida facility.
- Schiff sold the 'Wild Mouse' ride to Roger Haney in New Jersey for installation at a location in Haslett, Michigan.
- Roger Haney later sold the ride to Harry Stahl.
- To facilitate Stahl's acquisition, Schiff, as an accommodation to Haney, refinanced the ride at a bank in Coral Gables, Florida.
- The 'Wild Mouse' ride was installed and operated at Edgewater Amusement Park in Detroit, Michigan.
- Margaret Jo Delle Woods sustained personal injuries while riding the 'Wild Mouse' at Edgewater Amusement Park on June 18, 1960.
- Schiff asserted it never had employees in Michigan, did not transact business in the state, and was not involved in the ride's installation at Edgewater Amusement Park.
Procedural Posture:
- Margaret Jo Delle Woods (plaintiff) sued B. A. Schiff & Associates, Inc. (defendant) and others in the Wayne County Circuit Court, a state trial court.
- Schiff was served with a summons and complaint via registered mail in Florida.
- Schiff appeared specially and filed a motion to quash service, arguing the court lacked personal jurisdiction.
- While the motion was pending, Schiff was served a second time via personal service in Florida.
- The trial court denied Schiff's motion to quash service of process.
- Schiff, as appellant, appealed the trial court's denial to the Michigan Court of Appeals, an intermediate appellate court.
- The case was then transferred from the Court of Appeals to the Michigan Supreme Court, the state's highest court, for a final decision on the jurisdictional issue.
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Issue:
Does a Michigan court have personal jurisdiction over a Florida corporation that manufactured an amusement park ride outside of Michigan and had no direct business dealings in the state, when that ride subsequently caused an injury to a plaintiff in Michigan?
Opinions:
Majority - Kelly, J.
Yes. A Michigan court has personal jurisdiction over the Florida corporation. A state's long-arm statute, which grants jurisdiction for causing consequences to occur within the state resulting in a tort action, is constitutional if the defendant has sufficient 'minimum contacts' with the forum state. Citing McGee v. International Life Ins. Co. and Gray v. American Radiator, the court reasoned that if a corporation elects to sell its products for ultimate use in another state, it is not unjust to hold it answerable there for any damage caused by defects in those products. The record shows that Schiff transacted business which caused a consequence to occur in Michigan, satisfying both the statutory requirements and the due process 'minimum contacts' test.
Analysis:
This decision represents Michigan's adoption of the 'stream of commerce' theory for personal jurisdiction, significantly expanding the power of its courts over foreign corporations. By focusing on where the 'consequence' of a defendant's actions occurs rather than on the defendant's physical presence, the court aligns with the modern trend established by International Shoe and its progeny. This ruling makes it easier for Michigan residents to sue out-of-state manufacturers for product liability, as they no longer need to prove the company had a continuous and systematic presence in the state. The case solidifies the principle that purposefully placing a product into the national market can subject a manufacturer to jurisdiction in any state where that product causes injury.
