Asahi Metal Industry Co. v. Cheng Shin Rubber Co.
480 U.S. 102 (1987)
Author: Jim

Facts:  A gray Zurcher was riding his motorcycle on California highway and due to a sudden flat tire, he got into an accident which rendered him serious injuries and his wife who was the passenger was killed.  Zurcher brought suit against Chen Shin Rubber Co., a Taiwanese manufacturer of the tire tube.  Chen Shin in turn filed cross complaint seeking indemnification from its codefendants and Asahi Metal Industry Co. which supplied tube’s valve to Chen Shin.

Key Facts:  Ashai is a Japan based company. Chen Shin was one of Ashai’s customers and the sale of valves took place in Taiwan.  Chen Shin claims that Ashai knew that by placing its products in the stream of commerce, some of these products will end up in California.  Ashais’ President claims that by supplying the products to Chen Shin, it never subjected itself to California jurisdiction.

Issue:  Does the mere awareness that a part that defendant manufactured and place in the stream of commerce will result in the forum state establishes the minimum contact for person jurisdiction?

Holding: No

Rationale: Just the mere knowledge that its product will end up in the forum state does not prove that the defendant purposefully availed itself to the laws of the forum state.  A court should consider whether the defendant had the intent or purpose to serve the customers in the forum state.  The court can consider whether the defendant advertised in the forum state, whether it designed its products to suit the needs of the customers in the forum state, whether it established channels for providing regular advice to customers in forum state, etc.  In the current case, Ashai was involved in no practice that would lead one to believe that it purposefully availed itself to the forum state of California.  So the mere knowledge on the part of Ashai that some of its parts will end up in California does not establish minimum contact that is needed for personal jurisdiction.  Furthermore, when considering “traditional notions of fair play and substantial justice” clause, it can be concluded that subjection Ashai (Japan based) to California will be quite unfair and burdensome on the defendant.  Furthermore, since Chen Shin is Taiwan based company, California does not have the “legitimate interest” in hearing this case in its forum.

NOTES:  In order to consider reasonableness of practicing personal jurisdiction, it has to consider several factors:

1. Burden on the defendant

2. Interests of the forum state

3. Plaintiff’s interest in obtaining relief

4. Shared interest of the several States in furthering fundamental substantive social policies