ASAHI METAL INDUSTRY CO v. SUPERIOR COURT
Casebook Pgs. 117-123
Author: Anon

Procedural Basis: Writ of Certiorari to the Supreme Court of California for its reversal of the Court of Appeal’s writ of mandate directing the Superior Court to quash service of summons on cross-complaint for indemnification in action for damages for negligence.

Facts: Gary Zurcher and his wife were in a motorcycle accident that left his wife dead and Gary severely injured.  He claimed that the accident was caused when the rear wheel of his motorcycle suddenly lost air and exploded, sending the motorcycle out of control into a tractor.  Zurcher filed suit in California where the accident occurred alleging that the tire, tube and sealant of his motorcycle were defective.  Zurcher named the tire tube’s manufacturer, Cheng Shin, as one of the defendants.  Cheng Shin filed a cross-claim for indemnification in the event it was found liable against the other defendants and against Asahi Metal Industry (D), the Japanese manufacturer of the tire tube’s valve assembly.  Zurcher settled out of court with Cheng Shin and the other defendants, leaving Cheng Shin’s cross claim against Asahi as the sole remaining issue to be tried.  Asahi argued that California could not exercise jurisdiction over it since it lacked sufficient contacts with the state.  Asahi (D) did not do business with California, nor did it import any products into California.  Instead, it sold its valve assemblies to Cheng Shin and the valve assemblies were shipped to Taiwan.  Asahi (D) claimed that it had never contemplated that it might be subject to suit in California b/c of sales to Cheng Shin in Taiwanbut Cheng Shin claimed that Asahi (D) definitely knew that its products were being sold in California.

Procedural History: The Trial Ct. found that Asahi (D) could be subjected to California’s jurisdiction.  The Court of Appeals disagreed and ordered the Superior Court to quash service of summons on Asahi (D).  The Supreme Court of California overruled the Court of Appeal finding that Asahi’s (D) intentional act of putting its products into the “stream of commerce” with the awareness that they might wind up in California was enough to justify California’s exercise of jurisdiction.  Asahi (D) appealed to the U.S. Supreme Court.

Issue: Is it sufficient, in order to establish minimum contacts with a state, to put a product into the stream of commerce, with the expectation that it will reach the forum state?

Rule: The D must purposely avail himself of the forum by more than just putting a product into the stream of commerce with the expectation that it will reach the forum state, however, such conduct is enough to satisfy the minimum contacts requirement.  Once it has been established that minimum contacts exist, the fairness requirement must still be met as well, which will be much harder to do in the case of a non-U.S. resident.

Application: Something more in addition to placing products in the stream of commerce with the forum state is necessary to establish minimum contacts between the D and the forum state.  It’s not enough that Asahi (D) might have been able to guess that some of his products might eventually find their way into California.  Instead, Asahi (D) would have had to perform some act showing that it deliberately intended to take advantage of that state’s market or laws.  Even if minimum contacts did exist, it would be fundamentally unfair to require Asahi (D) to defend himself there.

Conclusion:  Reversed and remanded.

Concurrence: (Brennan, White, Marshall, Blackmun) It is sufficient to establish minimum contacts to show that D has intentionally placed products into the “stream of commerce.”  Asahi (D) was benefiting from the laws of California and should be held to have the necessary contacts with California to be subjected to its jurisdiction.  However, it would be fundamentally unfair and unreasonable to require Asahi (D) to defend this suit in California.  Therefore, the court was correct in overturning the judgment of the California Supreme Court.

Concurrence: (Stevens, White, Blackmun) Asahi did have sufficient knowledge that its products were being sold in California and should therefore be held to have had sufficient minimum contacts with that state.

Tutorial Notes: Merely putting product into stream of commerce isn’t sufficient.  Can’t buy something, take it to a different state and sue for it there.  Indirect sales like Gray, but different outcome.