Asahi Metal Industry Co. v. Superior Court

Facts

On September 23, 1978, Gary Zurcher lost control of his motorcycle in Solano County, California, and collided with a tractor. He was severely injured, and his wife and passenger, Ruth Ann Moreno, was killed. Zurcher sued in a California state court, claiming that a sudden loss of air and an explosion in the rear tire caused the accident, and that the tire, tube and sealant were defective. One defendant was Cheng Shin, the Taiwanese company that made the tube. Cheng Shin filed a cross-complaint seeking indemnification (repayment of what it might have to pay) from Asahi, the Japanese company that made the tube's valve assembly. Zurcher's claims were later settled and dismissed, leaving only Cheng Shin's claim against Asahi. Asahi made its valve assemblies in Japan and sold them to Cheng Shin and other tire makers. Its sales to Cheng Shin took place in Taiwan, and the shipments went from Japan to Taiwan. Cheng Shin bought at least 100,000 Asahi assemblies a year from 1978 through 1982 and sold finished tubes throughout the world. A Cheng Shin manager's affidavit stated, on information and belief, that Asahi was fully aware its valve assemblies would end up in California. Asahi's president stated in an affidavit that Asahi never contemplated that its limited sales to Cheng Shin in Taiwan would subject it to lawsuits in California. Asahi had no office, agents, employees or property in California, did not advertise there, and did not control the distribution system that brought its valves there.

Issues

1. Does a foreign manufacturer establish minimum contacts with a State merely because it sells components abroad knowing that the stream of commerce will carry some of them into that State?
2. Even if such contacts exist, would California's exercise of personal jurisdiction over Asahi, on a Taiwanese company's claim for indemnification, offend traditional notions of fair play and substantial justice?

Holding

Exercising personal jurisdiction over Asahi in California would be unreasonable and unfair, so the Due Process Clause forbids it, even apart from the stream-of-commerce question. On minimum contacts, Part II-A, which spoke only for Justice O'Connor, Chief Justice Rehnquist, Justice Powell and Justice Scalia, concluded that awareness alone does not make placing a product into the stream of commerce an act purposefully directed toward the forum State.