Asahi Metal Industry Co., Ltd., v. Superior Court of CA, U.S. Supreme Court (1987)
Author: Bram

Cause of action: The following is a cause of action for a motion to quash service of summons by Cheng Shin over Asahi.

Procedural History: Following settlement of original products liability lawsuit against petitioner and Cheng against Zurcher, cross complaint by Cheng alleging they should be indemnified remained.  Asahi moved to quash the summons, by reason CA's long arm statute was not long enough to comport with executing personal jurisdiction based solely on the fact there was a foreseeable possibility some of its valve stems for tires would be sold in the U.S.

Superior Court of CA denied motion to quash summons.  Court of Appeal of CA issued a peremptory writ of mandate commanding the Superior Court to quash service of summons.  The Supreme Court of CA reversed and discharged the writ.  The Court granted certiorari and reversed (allowing motion to quash).

Facts: Original complainant Zurcher was injured when a tire on a bike which had tires made by Cheng Shin blew out due to alleged product liability involving the tire tube, sealing and valve, causing him to crash into a tractor.  Zurcher settled before trial, but the cross complaint filed by Cheng against petitioner for indemnification still remained.

Shin alleged approximately 20% of its business was in CA.  They allege with that amount of business, and considering the amount of tire valves it bought from Asahi, that they would be responsible for any malfunctions in the states as well, and should be sued where the accident occurred.  Cheng bought its tire valve assemblies from Asahi in Taiwan after Asahi makes the assemblies in Japan.

Issue(s): Whether the mere awareness on the part of a foreign DF that components it manufactured, sold, and delivered outside the U.S. would reach the forum State in the stream of commercial commerce constitutes "minimum contacts" between the DF and the forum State such that the exercise of jurisdiction "does not offend 'the traditional notions of fair play and substantial justice?'"

Court's Rationale/Reasoning: The first test is obviously to see whether the defendant purposefully established minimum contacts in the forum state.  The standard is one of reasonableness: burden on DF, interests of the forum State, and PL's interest in obtaining relief.  This is a case which does not demonstrate any of those things in the forum State being petitioned for by Cheng and supported by the respondent court.  Asahi, does not business in the U.S,, owns no offices, agents or employees in CA, or property either.

The potential burden on Asahi is also potentially severe: not only coming all he way to CA from Japan, but also engaging in an entirely new type of judicial proceeding.  Once the minimum contacts situation is handled, all that was left was the indemnification claim. The sale of parts in Asia from Asashi to Cheng demonstrates no ability to indemnify oneself in the U.S., and thus the CA court which wishes to "unquash" the summons has no real cause to do so.

Rule: A state court may exercise personal jurisdiction over a nonresident defendant as long as there exist "minimum contacts" between the DF and the forum state.

Holding: No.  The limits of reasonableness and the burden on the petitioner in this case both fail the minimum contacts rule, and thus the motion to quash is reinstated. (reversed and remanded)

Concurrence: A plaintiff should not have to additionally prove the stream of commerce existed; it should be easily assumed that one exists ("regular and anticipated flow of products from manufacturer to distributor to wholesaler").

Also, it is not necessary to prove by some test minimum contacts.  Otherwise the existence of tubes in the tires would be enough to show minimum contacts.