State of Tennessee v. NV Sumatra Tobacco Trading Company
2013 Tenn. LEXIS 335
| Tenn. | 2013Background
- Tennessee sought to enforce the Escrow Fund Act against NV Sumatra for sales of United brand cigarettes in Tennessee from 2000–2002.
- NV Sumatra distributed through intermediaries (Unico/Silmar) and through a Florida distributor (FTS); no Sumatra employees or direct Tennessee presence.
- Court proceedings focused on whether Tennessee could exercise specific jurisdiction over NV Sumatra under the Due Process Clause.
- The trial court granted summary judgment dismissing for lack of jurisdiction; the Court of Appeals reversed and granted summary judgment for the State on the merits.
- The Tennessee Supreme Court held that Tennessee lacked personal jurisdiction over NV Sumatra; the decision analyzed streams of commerce and McIntyre/McIntyre-era precedent.
- Dissent argued the record showed sufficient minimum contacts, under a Breyer-concurrence approach, to justify jurisdiction and remand for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a foreign manufacturer may be subject to Tennessee jurisdiction via stream-of-commerce through intermediaries | NV Sumatra purposefully availed itself via distribution chain. | No direct control or purposeful targeting of Tennessee; sales were through intermediaries. | Lacks minimum contacts; no jurisdiction |
| Whether the national market targeting alone suffices for specific jurisdiction in Tennessee | Targeting the U.S. market, including Tennessee, supports jurisdiction. | Forum-specific analysis required; national targeting not enough. | Not sufficient for Tennessee jurisdiction |
| Whether McIntyre and its aftermath alter Tennessee’s approach to minimum contacts in this case | McIntyre supports broader application of minimum contacts. | McIntyre does not disturb Tennessee’s long‑standing framework; consented to by precedents. | McIntyre does not change the result; no jurisdiction |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful direction and fair play standard for specific jurisdiction)
- International Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts framework for in personam jurisdiction)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (foreseeability not enough; focus on purposeful availment and fair play)
- Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987) (stream-of-commerce plus and the limits of mere awareness)
- J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780 (2011) (plurality/concurring opinions—forum-specific analysis; no single controlling test)
- Gordon v. Greenview Hosp., Inc., 300 S.W.3d 635 (2009) (two-step minimum contacts framework; pleading and discovery considerations)
- Mullins v. Harley-Davidson Yamaha BMW of Memphis, Inc., 924 S.W.2d 907 (1996) (limitations on jurisdiction where manufacturer lacks presence or control)
- Davis Kidd Booksellers v. Day-Impex, 832 S.W.2d 572 (1992) (nationwide distribution not evidence of specific intent to serve Tennessee)