Asahi Metal Industry Co. v. Superior Court of California

Brief Fact Summary.

Gary Zurcher, an individual, brought a product liability action against various defendants in California state court after he was severely injured and his wife was killed in a  motorcycle accident and his wife was killed in a motorcycle accident.  One of the defendants filed a cross-complaint for indemnification against Petitioner, Asahi Metal Industry Co. Asahi moved to quash the defendant’s service of the summons upon it. The trial court denied the motion. The state appellate court issued a peremptory writ of mandate commanding the trial court to quash service of summons. The California Supreme Court reversed. The Supreme Court granted certiorari.

Synopsis of Rule of Law.

To satisfy the minimum contacts requirement for a finding of personal jurisdiction, the requisite “substantial connection” between the defendant and the forum state must come from an action of the defendant purposefully directed toward the forum state.

Facts.

After he was severely injured and his wife was killed in a  motorcycle accident, Gary Zurcher, an individual, brought a product liability action against various defendants in California state court. Zurcher alleged that the accident was caused by a rear tire explosion, and alleged defects in the tire, tube, and sealant.  One of the defendants, a Taiwanese tube manufacturer, filed a cross-complaint for indemnification against Petitioner, Asahi Metal Industry Co., the manufacturer of the tube’s valve assembly. Jurisdiction was based on California’s long arm statute. Asahi moved to quash the defendant’s service of the summons upon it, claiming that the California state court could not exercise jurisdiction over it. The trial court denied the motion. The state appellate court issued a peremptory writ of mandate commanding the trial court to quash service of summons. The California Supreme Court reversed. The Supreme Court granted certiorari.

Issue.

Does a foreign defendant’s mere awareness of the fact that components it manufactured, sold and delivered outside of the United States would reach a state in the United States in the stream of commerce provide a basis for the exercise of jurisdiction over it by the courts in that state?

Held.

No. A foreign defendant’s placement of a product into the stream of commerce, without more, is not an act of the defendant that is “purposefully directed” toward the forum state.

Concurrence.

Justice Brennan

Justice Brennan disagreed with the Court’s interpretation of the stream of commerce theory. He did not join in the Court’s determination that Petitioner’s regular and extensive sales of parts to a manufacturer it knew was making regular sales in California did not establish contacts sufficient for a basis of jurisdiction.

Justice Stevens

Justice Stevens argued that Calfornia’s exercise of jurisdiction in this case would be fundamentally unfair, so that no minimum contacts analysis was necessary, and that the he would be inclined towards finding “purposeful availment” of the forum‘s market given the facts of this case.

Discussion.

A defendant’s awareness that a product may be swept into the forum state in the stream of commerce does not rise to the level of purposeful direction of the product toward the forum state. In this case, even awareness that the product would reach California would not satisfy the “purposeful direction” requirement; among other things, Petitioner did no business in California, had no offices or employees there, and did not advertise or solicit business there.