Asahi Metal Industry Co. v. Superior Court (of California)
480 U.S. 102 (1987)
- Gary Zurcher lost control of his Honda motorcycle while driving in Solano County and crashed into a truck. His wife died in the accident.
- Asahi, maker of valves in the tire that caused the accident, was aware that the valves would enter California.
- Zurcher filed a product liability action in the Superior Court of Calif. (Trial court) against Cheng Shin Rubber, a Taiwanese manufacturer of tire tubes.
- Cheng Shin flied a cross complaint seeking indemnification from Asahi, manufacturer of the tube’s valve assembly.
- Zurcher’s claims against Cheng Shin and other were eventually settled, leaving the Cheng Shin’s indemnification claim against Asahi.
- Asahi moved to quash the service of summons
- Superior Court (defendant) denied the motion to quash summons, holding that jurisdiction was constitutional
- The Court of Appeal issued a preemptory mandate commanding the Superior Court to quash the service of summons, holding that jurisdiction was unconstitutional
- The California Supreme Court reversed, holding that the jurisdiction was constitutional
Reversed- jurisdiction not constitutional.
Whether the service of summons upon Asahi was in accordance with due process.
The service of summons was not constitutional because a corporation must be guilty of an action purposefully directed toward the forum state, and introducing goods in the stream of commerce is not considered a purposeful action
A state has jurisdiction over a defendant corporation if the corporation has performed direct actions toward the forum state, and merely placing products in the stream of commerce is not sufficient.
* Exercise of jurisdiction is unreasonable
* (1) Minimum contacts must be based on acts of the defendant (purposeful availment) and (2) they must be enough that the corporation reasonably thinks they will be taken to court.
* Factors for weighing reasonableness in matters of jurisdiction World-Wide Volkswagen Corp. v. Woodson (1987):
- Defendant’s burden
- Forum State interest
- Plaintiff’s interest
- Interstate judicial interests.
- (not taken up much, p. 116) interstate judicial interest in the most efficient resolution of controversy.
- Defendant’s burden: severe; costs of litigating in a foreign country
- State interest: low because:
- Plaintiff is not a California resident
- The dispute is more about indemnification than safety
- Plaintiff’s interest: court only says it is slight.
- Interstate judicial interests: this is an international case and should be examined carefully in the interest of maintaining friendly relations with other countries.
* Balance comes out in favor Asahi, because jurisdiction is unreasonable, according to “fair play and substantial justice” described in International Shoe.
* Justices O’Connor, Rehnquist, Powell, and Scalia put forth a “stream of commerce theory”
For personal jurisdiction over foreign companies:
- Minimum contacts must be established by the direct acts of the defendant in the state.
- A unilateral act on the part of the consumer is not enough to be a “minimum contact”
- “Minimum contact” can also be defined as when a corporation delivers products into the stream of commerce with the expectation that they will be purchased in the forum state.
* Defendants do not show evidence of Asahi trying to purposely avail itself of the California Market.
Justices BRENNAN, WHITE, MARSHALL, and BLACKMUN disagree with the “stream of commerce theory”: By placing goods in the stream of commerce, a company gets (1) economic benefits from the sale of their products in the state and (2) the protection of the laws of that state. These benefits come by merely placing one’s goods in the stream of commerce, and to get them, no additional actions are needed.
Moreover, Asahi knew those valves would end up in CA.
Justice STEVENS, WHITE, and BLACKMUN disagree with the “stream of commerce plus theory” because the distinction between “mere awareness” and “purposeful availment” is not clear-cut.