Asahi Metal Indus. Co. v. Superior Court

Brief Fact Summary.

A Taiwanese company is being sued for product liability in a California court and the Supreme Court is deciding whether California’s jurisdiction over the Taiwanese company is proper.

Synopsis of Rule of Law.

Under the Due Process Clause a foreign company’s awareness that its products will reach a state within America in the stream of commerce is not sufficient to establish the minimum contacts required to exercise personal jurisdiction.

Facts.

A man is injured and his wife is killed in a motorcycle accident after one of the wheels explodes on a California highway. The man brings suit in a California court against Cheng Shin Rubber Industrial Co., Ltd., a Japanese company that manufactured the tires, who then filed a cross-complaint for indemnification from Asahi Metal Industry Co., the valve manufacturer of the valve that was in the exploded tire. All other defendants dropped out and only Cheng Shin and Asahi remained.

Issue.

Is a foreign corporation’s awareness that its products will be in the American stream of commerce sufficient to establish the minimum contacts required for personal jurisdiction?

Held.

No, a foreign corporation’s awareness that its products will be in the American stream of commerce is not sufficient to establish the minimum contacts required for personal jurisdiction. Decision of the State Supreme court is reversed.

Concurrence.

Justice Justice Brennan, White, Marshall, and Blackmun

The manufacturer’s awareness that its product will be sold in the forum state should be enough to establish personal jurisdiction. If the manufacturer benefits economically and legally from the forum state then personal jurisdiction should be proper.

Justice Justice Stevens joined by Justices White and Blackmun –

The additional actions required along with stream of commerce from O’Connor’s opinion is not necessary. It can still be unfair for a state to exercise jurisdiction even if the manufacturer did these additional actions.

Discussion.

1. Foreseeability is not enough to establish personal jurisdiction.
2. Along with placing their products into the stream of commerce, a manufacturer must purposefully direct their products to the forum state through some additional action. This may include designing the product for that market, advertising the product through a distributor or sales agent, conducting a consumer report for that market, or selling replacement parts in the market. Asahi did none of these.
3. The Fourteenth Amendment finds personal jurisdiction improper when it would offend the “traditional notions of fair play and substantial justice.”
4. Reasonableness depends on the burden placed on the defendant in defending in the forum state, the forum state’s interest in presiding over the case, the plaintiff’s interest, the judicial system’s interest, and other relevant social policies.
5. Asahi’s burden in having to defend in California is great.
6. Cheng Shin, the tire company, has not shown that bringing suit in Taiwan or Japan, is impractical.
7. Cheng Shin is not a California resident and the state’s interest in presiding over the case is de minimis
8. The contacts are not sufficient to establish personal jurisdiction and thus personal jurisdiction is improper.