Asahi Metal Industry Co. v. Superior Court case brief (Civil Procedure)

Asahi Metal Industry Co. v. Superior Court,
480 U.S. 102, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987).


Parties to the case:

In the underlying action:
Zurcher (P)
Asahi Metal Industry Co., Cheng Shin, et al., (D)

At the time of appeal:
Cheng Shin had a cross claim pending against Asahi Metal.
All other parties had settled.

Current parties:
Asahi Metal (P)
Superior Court of California (D)

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PROCEDURAL HISTORY:

-The only parties that are left in this case at the time of appeal are co-defendants Asahi Metal and Cheng Shin.
-This matter involves an appeal of the Superior Court’s denial of Asahi Metal’s motion to quash service of summons (also known as service of process).
-Asahi Metal sought a writ of mandate (writ of mandamus) from the Court of Appeal of the State of California to compel the Superior Court to quash service of summons.

FACTS:

-Mr. Zurcher lost control of his motorcycle, colliding with a tractor.  As a result, he was seriously injured and his passenger, Mrs. Zurcher, was killed.
-Zurcher alleged that the accident was the result of a defective tire tube which caused the rear wheel of his motorcycle to lose air rapidly and explode.

-Zurcher brought suit and named multiple defendants: Cheng Shin, the Taiwanese manufacturer of the tire tube, as well as Asahi Metal Industry Co., the Japanese assembly manufacturer of the tire valve.
-Asahi Metal had sold tire valve assemblies directly to Cheng Shin in Taiwan and Cheng Shin then incorporated these valves into motorcycle tires.
-Cheng Shin sought indemnity from Asahi Metal in the Zurcher suit and filed a cross claim against Asahi and the other defendants.
-Zurcher eventually settled out of court with all of the defendants leaving Cheng Shin’s cross claim as the only remaining issue that needed to be decided.

-Asahi Metal moved to quash the service of summons, claiming that California could not exercise jurisdiction over Asahi because sales to Cheng Shin took place in Taiwan and shipments were sent from Japan to Taiwan.
-Asahi Metal did no business in California and did not directly import any products to California. -Only 1.24% of the company’s income came from sales to Cheng Shin and only 20% of Cheng Shin’s sales in the United States were in California.
-Cheng Shin testified that that Asahi Metal knew that its products were being sold in California due to being told.

-The Superior Court found it fair to require Asahi to defend in California and denied Asahi Metal’s motion to quash service of summons.
-The Court of Appeals reversed the Superior Court holding and issued a writ of mandate to compel the Superior Court to grant the motion to quash.
-On appeal the California Supreme Court reversed again, finding that Asahi Metal’s intentional act of placing its assemblies into the stream of commerce, together with its awareness that some of them would eventually reach California, were sufficient to support state court jurisdiction under the Due Process Clause.
-Asahi Metal appealed and the United States Supreme Court granted certiorari.

ISSUE:
Is the mere awareness that a product may reach a remote jurisdiction (here, California) when put in the stream of commerce sufficient to satisfy the Due Process requirement for minimum contacts?

HOLDING:
No.  Mere awareness that a product may reach a remote jurisdiction when put in the stream of commerce is not by itself sufficient to satisfy the requirement for minimum contacts under the Due Process Clause.

RULES:
-Under the Due Process clause, Minimum contacts require that there exist some act by a party which would purposefully avail itself of the privilege of conducting activities within the forum state.
-The court had previously held, in World-Wide Volkswagen Corp. v. Woodson, that a party must do more than intentionally put goods in the stream of commerce even if it expected its products to reach the forum state.

"Asahi Metal has not purposefully availed itself of the California market. Asahi’s actions could constitute sufficient minimum contacts if it advertised or marketed its products in California or deliberately designed them to conform to unique California regulations. Asahi however has not engaged in these activities and has done nothing to indicate that it deliberately wants to see its products used in California."

The substantial connection with the forum state necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum state. Even if these minimum contacts were to be found, traditional notions of fair play and substantial justice must also be examined.

CONCLUSION:
-Under the facts of the case, it would be fundamentally unfair to require Asahi Metal to defend after California’s interest in the suit has been terminated.
-Zurcher settled the suit and the dispute is now between two nonresident defendants.
-Jurisdiction is therefore unreasonable.

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Brennan's Concurrence:

It is sufficient to establish minimum contacts to show that Asahi Metal has intentionally placed products into the “stream of commerce.” However, it would be fundamentally unfair and unreasonable to require it to defend this suit in California. I do not agree with the interpretation of the stream of commerce theory but I do agree that the exercise of personal jurisdiction would not comport with fair play and substantial justice.

Stevens'Concurrence:

This case fits within the rule that minimum requirements inherent in the concept of fair play and substantial justice may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities. A regular course of dealing resulting in deliveries of over 100,000 units annually over a period of several years constitutes purposeful availment. It would not be fair however to require Asahi to defend in California when there are no American parties left in the case.


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