On June 8, Massachusetts’ highest court, the Supreme Judicial Court, held that a Massachusetts court had the authority (jurisdiction) to consider a case involving an out-of-state car manufacturer who sold cars in the Commonwealth. The case, Doucet v. FCA US LLC, concerned a 2015 New Hampshire car accident that left the passenger severely injured. The injured passenger’s family initially sued the Massachusetts car dealership and the Michigan manufacturer in New Hampshire state court but, after the New Hampshire court dismissed the case, filed suit in Massachusetts. The Massachusetts trial court dismissed the manufacturer from the case, reasoning that the court did not have jurisdiction over the non-resident manufacturer. The Supreme Judicial Court took the appeal.
The Supreme Judicial Court’s decision focuses on an analysis of the Massachusetts long-arm statute, a state law that authorizes Massachusetts courts to hear cases involving nonresident defendants in certain circumstances. One such circumstance is when is the non-resident “transact[s] any business in this commonwealth.” To fall within this category, the plaintiff’s claim must have arisen from the non-resident defendant’s transaction of business in the Commonwealth. In the Doucet case, the manufacturer in Michigan transferred the car at issue first to a dealership in Rhode Island before sending it to a dealership in Gloucester, Massachusetts. After the Gloucester dealership leased the car to a Massachusetts resident, it sold the car to another Massachusetts resident, who later sold it to other Massachusetts residents, who sold the car to a New Hampshire resident, who finally sold the car to Doucet (who also lived in New Hampshire). The accident also occurred in New Hampshire. The manufacturer argued that the sale of the car in Massachusetts was not connected to the plaintiffs’ claims arising from the New Hampshire accident and, therefore, Massachusetts courts lacked jurisdiction.
Taking an expansive interpretation of the Massachusetts long-arm statute, the Supreme Judicial Court held that the fact that the non-resident manufacturer had contracted with dealerships throughout Massachusetts to distribute cars in the Commonwealth was the “purposeful and successful solicitation of business from residents in the Commonwealth” that constituted transaction of business in Massachusetts under the long-arm statute. The Court also found that the plaintiffs’ claims arose from the manufacturer’s transaction of business in Massachusetts, reasoning that the distribution of the car to Massachusetts was the “first step in a train of events” that led to the accident, and that “but for” the first sale in Massachusetts, the car “would not have ended up with Doucet.”
By taking such a broad view of the long-arm statute, the Supreme Judicial Court opens Massachusetts courts up to claims involving nonresident defendants with only tenuous business connections to the Commonwealth. Companies should be advised that transacting business in Massachusetts, even several steps removed from the conduct that causes the actionable harm, could be enough to drag them into court here.