Last week, Mississippi’s highest court ruled that a South Korean company, LG Chem, which manufactured the battery that powered a “vaping device,” could be sued in Mississippi, despite that company having no physical presence in Mississippi and not being registered to do business in Mississippi.
The case – Dilworth v. LG Chem, Ltd. – is based on allegations that Melissa Dilworth received serious burns after the battery inside her vaping device exploded. In addition to LG Chem, the plaintiff also sued the vape store, the store’s suppliers, and the manufacturer of the vaping device. LG Chem sought to dismiss the claims against it, arguing that the batteries it manufactures are not made for individual, stand-alone sale in Mississippi but are instead intended to be used in specific applications by sophisticated companies. The court rejected LG Chem’s arguments, first finding that the South Korean company purposefully availed itself of the lithium-ion battery market in Mississippi because it placed its products in the stream of commerce knowing they would be sold – whether stand-alone or as a part of another product – in Mississippi. That the battery reached consumers exclusively through third-party distributors unauthorized to sell the products for individual use was immaterial. Likewise of no consequence to the jurisdictional question was whether or not the alleged injuries resulted from an unintended use of the product. That issue, the court held, went to the merits of the case and not the threshold jurisdictional question. Finally, the court found that Mississippi’s interest in adjudicating the dispute was high because a Mississippi resident was injured in Mississippi by a product purchased in Mississippi.
The Dilworth decision is another reminder that an entity that may not physically operate a business in Mississippi – or even in the United States – may nonetheless be forced to litigate a case against it in Mississippi. The decision also shows that the Mississippi Supreme Court follows the more expansive stream-of-commerce test adopted by the Fifth Circuit. Why this is pertinent to businesses engaged in the medical cannabis industry in Mississippi should be clear. Medical cannabis products will soon be sold to qualified patients in Mississippi. Those products will be in various forms, including vaping devices similar to the one at issue in Dilworth. Foreign companies that design, test, or manufacturer components of those products, or that perform similar functions related to component parts of equipment used to grow or process cannabis must be aware that, even though they don’t specifically market their particular component parts to Mississippians, simply placing them in a stream of commerce that finds its way to Mississippi can have serious implications. The notion that such a company is adequately outside the jurisdiction of Mississippi under these circumstances should, well, go up in smoke.