Asahi Metal Industry Co. v. Superior Court

Brief Fact Summary. Zurcher (Plaintiff), a motorcyclist, sued various defendants in a California state court alleging that the tire on his motorcyclist was defective, causing his injury and the death of his wife. One defendant filed a cross-complaint against another defendant, Asahi, the manufacturer of the tire valve assembly. Asahi is a Japanese corporation that does no business in the United States. Asahi moved to dismiss for lack of personal jurisdiction.
Synopsis of Rule of Law. A state cannot exercise personal jurisdiction over a foreign defendant when it would impose a serious burden on the defendant to litigate in the forum state and the interests of the plaintiff are slight.

Facts. Zurcher filed a product liability action in a California state court, alleging that a tire on the motorcycle blew out and that the tire, along with its tube and sealant, were defective. Zurcher settled with the manufacturer of the tube, a Taiwanese company named Cheng Shin Rubber Industrial Co. Cheng Shin then filed a cross complaint against Ashahi Metal Industry Co., the manufacturer of the tire valve assembly, seeking indemnification. Asahi is located in Japan. Sales between Cheng Shin and Asahi typically took place in Taiwan and products were be shipped from Japan to Taiwan. An affidavit from Cheng Shin stated that Asahi knew that the tire tubes containing Asahi’s product would be shipped to the United States and would be subject to lawsuits in California. The trial court denied a motion to quash the summons because Asahi does business on an international scale. The Court of Appeals issued a writ of mandate commanding the trial court to quash summons, holding that jurisdiction could not be predicated solely on the basis of the foreseeability of Asahi’s products being sold in the United States. The Supreme Court of California reversed, discharging the writ on the grounds that Asahi “benefited indirectly from the sale in California of products incorporating its components.” Asahi appealed.

Issue. In order to establish the minimum contacts required for a state to assert personal jurisdiction, must jurisdiction arise out of an action purposefully directed toward the forum state, or is the foreseeability of the product entering the forum state through a stream of commerce sufficient?

Held. Yes. (Plurality) The defendant must have minimum contacts with the forum that do not offend traditional notions of fair play and substantial justice. Plaintiff must demonstrate that it is more convenient for it to litigate in California rather than Taiwan or Japan. Neither Plaintiff nor Asahi is a California resident. Under World Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the court must consider “the interests of the several states.” These interests apply to other nations as well. There must be “purposeful availment,” i.e., a showing of intentional participation in the forum state’s market. Concurrence. Justice Brennan: Asahi did receive benefits from California. It benefits from the retail sale of the final product, and from California’s laws that regulate and facilitate commercial activity. There should not be a requirement of additional conduct if you can show that the defendant benefits from the laws of the forum state. In addition, once a defendant is shown to have put its product in the stream of commerce, this is enough to exercise personal jurisdiction. However, in this situation, Asahi did not have the minimum contacts necessary to demonstrate that exercising jurisdiction would comport with notions of fair play and substantial justice. J. Stevens: If the court finds that it would be “unreasonable and unfair” for California to exercise jurisdiction, then that alone prevents exercising jurisdiction. Also, regular course of dealings that result in deliveries to the forum state are enough to show “purposeful availment.”

Discussion. This case reinforces the requirement of “purposeful availment” in order to establish minimum contacts with the forum state. In addition, the concurring opinions range from a broad interpretation of the minimum contacts (Justice Brennan’s stream of commerce theory) to a strict interpretation by Justice Stevens (there is no need for a minimum contacts analysis if exercising jurisdiction would be unfair). Be sure to note that this is only a plurality decision, making this case persuasive but not mandatory authority.