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Asahi Metal Industry Co. v. Superior Court

Supreme Court of the United States · 1987 · Civil Procedure

personal jurisdictionstream of commercereasonablenessforeign defendantsminimum contactspurposeful availmentstream of commerceforeign corporation

Facts

Asahi, a Japanese corporation, manufactured tire valve assemblies in Japan and sold them to Cheng Shin, a Taiwanese tire tube manufacturer, in Taiwan. Cheng Shin incorporated those valves into finished tire tubes that were sold worldwide, and Cheng Shin alleged that about 20 percent of its United States sales were in California. After a California motorcycle accident led to a products-liability suit, all original claims were settled, leaving only Cheng Shin's indemnity cross-claim against Asahi. Asahi had no offices, agents, employees, property, advertising, or direct sales in California, and it did not create, control, or employ the distribution system that brought its valves there.

Issue

Whether California could exercise personal jurisdiction over Asahi based solely on Asahi's sale of component parts outside the United States and its alleged awareness that some of those components would reach California through the stream of commerce. Also, whether jurisdiction over Asahi would be reasonable and consistent with fair play and substantial justice in the circumstances of this indemnity dispute.

Rule

Minimum contacts require an action of the defendant purposefully directed toward the forum State. The placement of a product into the stream of commerce, without more, is not enough; additional conduct indicating an intent or purpose to serve the forum market may suffice, such as designing the product for the forum, advertising there, establishing channels for advice to forum customers, or marketing through a distributor serving as a sales agent there. Even when minimum contacts are asserted, jurisdiction must also be reasonable in light of the burden on the defendant, the forum State's interests, the plaintiff's interest in obtaining relief, the judicial system's interest in efficient resolution, and the relevant interests of other sovereigns, especially in international cases.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

NordWerk GmbH, a German manufacturer of bicycle brake pads, sells pads in Germany to Alpine Motion Ltd., a Swiss bicycle assembler. Alpine Motion distributes completed bicycles throughout the United States, including Oregon, and NordWerk knows some bicycles are sold there, but NordWerk has no offices, advertising, employees, property, or distribution control in Oregon.

A rider injured in Portland settles with all defendants except Alpine Motion, which then files an indemnity claim against NordWerk in Oregon state court. Under the controlling rule, is Oregon most likely to have personal jurisdiction over NordWerk?

Explanation. Minimum contacts must arise from the defendant’s own act purposefully directed toward the forum. Placing a product into the stream of commerce, without more, is not enough. NordWerk merely sold components abroad and knew some finished products would reach Oregon; it did not advertise there, design for that market, control distribution, or otherwise target Oregon. That is insufficient under the majority opinion’s stream-of-commerce analysis.