Stream of commerce, from China to Virginia

The Chinese defendant in Germano v. Taishan Gypsum Co., part of the “Chinese Drywall” MDL proceeding, sought to set aside a default judgment for lack of personal jurisdiction.  742 F.3d 576 (5th Cir. 2014).  Applying Fourth Circuit law, which the Court characterized as taking a “more conservative” approach to recent Supreme Court decisions than the Fifth (see Ainsworth v. Moffett Engineering, 716 F.3d 174 (5th Cir. 2013).  The Court found jurisdiction under that Circuit’s “stream-of-commerce plus” test, noting that the defendant sold directly into Virginia, made markings on its product specific to the Virginia customer, modified the design specifically for that customer, and had a plan to expand sales by leveraging the relationship with the customer.  The Court also found a lack of excusable neglect, noting that service was proper under the Hague Convention and that the defendant delayed seeking legal counsel for many months.