The following is the long essay question from the midterm, plus the key I used for grading it:
Essay Question. (42 points)
D1 was born and raised in Madison, Wisconsin (in the Western District of Wisconsin). She also attended university in Madison, where she earned a chemistry degree. In 2000, she decided to work for the D2 Corp., which at the time had a laboratory in Madison. After the lab closed in 2010, the D2 Corp. removed all of its employees from the United States (except for a plant in Oregon). D1 became a chemist on-call for the D Corp., living out of a suitcase and moving from lab to lab on a temporary basis as needed. As a result, she sold her house in Madison and since 2010 hadn’t visited Wisconsin once. Since January of 2013, she has been working at a D2 Corp. plant in the United Kingdom, staying in a hotel. But she was promised in March of 2013 that she would be set up permanently in a new lab in Portugal when it was completed in 2014. When she visited the construction of the lab in April of 2013, she decided she liked Portugal and concluded that she wanted to make the place her home.
The D2 Corp. is a high-quality lubricant manufacturer incorporated in, and with its headquarters in, the United Kingdom. It has laboratories and plants all over the world. Its only presence in the United States is the plant in Oregon. The D2 Corp. sells its products to a single worldwide distributor—Lubricants, Inc.—a Canadian corporation, with its principal place of business in Canada. Lubricants, Inc. sells D2 Corp. lubricants, as well as many other lubricants, to many manufacturers all over the world.
The only U.S. manufacturer that Lubricants, Inc. sells its products to is Bikes Corp., which is incorporated in and has all its employees, officers and directors in California. Bikes Corp. ships its products all over the United States. 5% of its sales are in Wisconsin. But D2 Corp. lubricants also get into hundreds of other products that are sold in the United States by foreign manufacturers who have bought the lubricant from Lubricants, Inc. The value of the D2 Corp. lubricants in products in Wisconsin is about $30,000—around .09 % (that is, 9/10,000) of the D2 Corp.’s total sales.
While she was working at a D2 Corp. lab in Brazil in June, 2012, D1 invented a new compound for lubricating bearings, Chemical X. The D2 Corp. considered Chemical X an important new product and began production at the Oregon plant in December of 2012, after getting the necessary regulatory approvals from various governments, including the United States. Unfortunately Chemical X was defective and in fact resulted in the bearings being worn down prematurely. Production was stopped in May 2013, but some Chemical X had already been sold to Lubricants Inc., which sold it to Bikes Corp. Bikes Corp. put it in around 200 bikes.
One of those bikes was sold by Bikes Corp. to a bike store in Milwaukee, Wisconsin (in the Eastern District of Wisconsin). P, a citizen of Wisconsin, bought the bike, whose front wheel promptly fell off only a few blocks from the store, while P was riding it home. The accident was due to the effect of Chemical X. P suffered serious harm: she broke her arm and leg and now has permanent back pain. P filed suit under Wisconsin negligence and product liability law against D1 and the D2 Corp. in August 2013 in the Federal District Court for the Eastern District of Wisconsin. Service on the D2 Corp. was on the Chief Legal Officer of the D2 Corp. while he was in Milwaukee, Wisconsin, to inspect the bicycle that caused the accident. D1 was served in hand at her lab in the United Kingdom.
When deposed in his office in London, the CEO of the D2 Corp. admitted that he was aware that D2 Corp. lubricants were in products throughout the United States.
Is there subject matter jurisdiction for P v. D1 & the D2 Corp.? (10 points) Is there personal jurisdiction over the defendants? (30 points) Is there venue? (2 points)