Products Liability Law Daily Wrap Up, JURISDICTION—HOUSEHOLD PRODUCTS—N.M. App.: Dismissal of cross-claims against Chinese fan motor supplier reversed in insurer’s defective fan-induced fire suit, (Jan 5, 2026)

By Pankhuri Bhatnagar, B.A. LL.B.

The supplier was found to have deliberately exploited the U.S. market, and the underlying property damage occurred in New Mexico, warranting specific personal jurisdiction over the company.

In a cross-claim for indemnity and contribution brought by the manufacturer of an allegedly defective ventilation fan against the fan’s motor supplier, the New Mexico Court of Appeals reversed a trial court’s dismissal of the manufacturer’s cross-claims for lack of personal jurisdiction. The appellate court held that New Mexico’s recent precedent expressly recognizes the stream of commerce theory; that the Chinese supplier “purposefully availed itself” of the New Mexico market by selling motors to U.S. intermediaries and designing its products to comply with U.S. safety standards; that the instant fire damage claims related to those contacts; and that exercising jurisdiction over the supplier was reasonable (Interinsurance Exchange of the Automobile Club v. Gibraltar Industries, Inc., No. A-1-CA-42334 (N.M. App. Dec. 18, 2025)).

Background. In 2021, Interinsurance Exchange of the Automobile Club, an insurance carrier, brought a subrogation suit on behalf of its insured for damages resulting from a house fire caused by an allegedly defective ventilation fan. The suit was brought against the fan’s designers, manufacturers, assemblers, marketers, distributors, and sellers, including Air Vent, Inc. (AVI or manufacturer) and Powermax Electric Co., Ltd., Guangdong (Powermax or supplier). AVI filed cross-claims against Powermax, alleging that to the extent the insurer was able to prove that the fan at issue was defective and an AVI product, any alleged defect would have arisen solely from the fan’s motor, which was designed, manufactured, and supplied by Powermax. A trial court granted the supplier’s motion to dismiss these cross-claims for lack of personal jurisdiction. The manufacturer appealed, arguing that the supplier purposefully availed itself of the New Mexico market through the national stream of commerce by (1) selling fan motors to intermediaries in the U.S.; (2) having a joint venture relationship with a Florida-based supplier; (3) maintaining a website which listed a U.S. phone number and stated that Powermax had an “important status in…American markets”; (4) maintaining worldwide insurance coverage; (5) designing its products to comply with U.S. safety standards; (6) selling 99 percent of its products in the U.S. through stores including Home Depot, Lowe’s, Grainger, Harbor Freight, and Wal-Mart; and (7) selling 2.8 million electric fan motors to AVI during the at-issue time period.

Legal standard. New Mexico courts “may exercise specific personal jurisdiction where a defendant purposefully avails itself of the privilege of conducting activities in the state and the claims arise out of or relate to those activities.” Chavez v. Bridgestone Americas Tire Operations, LLC, 2023-NMCA-022, ¶¶ 7-9. Additionally, the plaintiff’s claims must arise out of or relate to that purposeful availment, and the exercise of jurisdiction over the defendant must be fair and reasonable. Ford Motor Co. v. Montana Eighth Judicial District Court, 592 U.S. 351, 359-60 (2021). Purposeful availment requires contacts that are the defendant’s own choice and not random, isolated, or fortuitous, and may be established through exploitation of a market in the forum state. The parties here did not dispute the second prong of the jurisdictional analysis and primarily focused on the first prong.

Relevant precedents. AVI relied on Sproul v. Rob & Charlies, Inc., 2013-NMCA-072, for the proposition that Powermax purposefully availed itself of the New Mexico market by placing its products into the national stream of commerce. Sproul noted the continued viability of stream of commerce theory found in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). Powermax believed that the theory was no longer a part of the purposeful availment analysis, as per newer precedents—Ford Motor Co. and Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. 255 (2017)—but the court explained that neither case rejected stream-of-commerce principles as they both focused on the relatedness prong rather than the first prong. The trial court and the supplier’s reliance on J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011) was also misplaced since it was a nonprecedential plurality opinion that predated both Sproul and Chavez. Moreover, New Mexico’s most recent binding precedent expressly recognized that the stream of commerce theory remains viable within specific personal jurisdiction analysis. Chavez, 2023-12 NMCA-022, ¶¶ 7, 10.

Purposeful availment. The appeals court referred to the applicable precedents and noted that in Sproul, a Chinese bicycle manufacturer was found to have sufficient minimum contacts with New Mexico under the stream of commerce theory because it had agents and suppliers in the U.S., knew that its products were sold worldwide, complied with U.S. safety standards, and provided customer service to New Mexico clients. In Chavez, a tire manufacturer operated a “copyrighted, interactive website in New Mexico to solicit business and establish channels of communication with New Mexico residents” and was found to have numerous purposeful forum contacts. Applying the same rationale here, Powermax was also a Chinese manufacturer which sold fan motors to U.S. intermediaries, including 2.8 million fans to AVI during the at-issue time period; had suppliers and joint venture relationships in the U.S. to distribute its products nationally; was aware of its presence and “important status” in American markets; had a website that touted this status and listed a U.S. phone number; offered nationwide customer service availability; maintained worldwide insurance coverage that presumably protected it from insurance claims by New Mexicans; and complied with U.S. safety standards. The court held that these “efforts of the manufacturer…to serve directly or indirectly[] the market for its product in” New Mexico warranted the exercise of personal jurisdiction over it as per World-Wide Volkswagen, especially since the contacts were of its “own choice and not random, isolated, or fortuitous.” Chavez, 2023-NMCA-022, ¶8. Accordingly, the first prong was established and the second was not in dispute.

Reasonableness. The third prong tests reasonableness which balances five factors: “the burden on the defendant, New Mexico’s interest, the plaintiff’s interest, the interest in an efficient judicial system, and the interest in promoting public policy.” Zavala v. El Paso Cnty. Hosp. Dist., 2007-NMCA-149, 20 ¶12, 143 N.M. 36, 172 P.3d 173. This court observed that New Mexico had a substantial interest in adjudicating claims arising from property damage allegedly caused by defective products within the state; that the alleged property damage occurred in New Mexico; that litigating the controversy here would promote efficient resolution and public policy; and that AVI had an interest in adjudicating a controversy involving its product and an ensuing injury for which Powermax claimed indemnity. Accordingly, requiring the supplier to litigate in the forum did not offend traditional notions of fair play and substantial justice.

The case is No. A-1-CA-42334.

Judge: Hanisee, J.

Attorneys: John K. Ziegler (Conklin, Woodcock, Ziegler & Hazlett, P.C.) for Air Vent, Inc. Judy C. Selmeci (Wilson, Elser, Moskowitz, Edelman & Dicker LLP) for Powermax Electric Co., Ltd.

Companies: Air Vent, Inc.; Powermax Electric Co., Ltd.; Gilbraltar Industries, Inc.; Interinsurance Exchange of the Automobile Club

Cases: CourtDecisions JurisdictionNews HouseholdProductsNews NewMexicoNews