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Asahi Metal Industry Co., Ltd. V. Superior Court of California, Solano County LTD., Real Party in Interest)

This document is a Supreme Court case summary for Asahi Metal Industry Co. v. Superior Court of California. It discusses whether a Japanese company that manufactured tire valve assemblies in Japan and sold them to a Taiwanese tire company had sufficient minimum contacts with California to be subject to the state court's jurisdiction. The Court reversed the state court's finding of jurisdiction, with different opinions on whether the company's awareness that some products would reach California through the stream of commerce constituted purposeful availment of the California market. A majority also found that exercising jurisdiction in this case would be unreasonable and unfair.

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0% found this document useful (0 votes)
104 views21 pages

Asahi Metal Industry Co., Ltd. V. Superior Court of California, Solano County LTD., Real Party in Interest)

This document is a Supreme Court case summary for Asahi Metal Industry Co. v. Superior Court of California. It discusses whether a Japanese company that manufactured tire valve assemblies in Japan and sold them to a Taiwanese tire company had sufficient minimum contacts with California to be subject to the state court's jurisdiction. The Court reversed the state court's finding of jurisdiction, with different opinions on whether the company's awareness that some products would reach California through the stream of commerce constituted purposeful availment of the California market. A majority also found that exercising jurisdiction in this case would be unreasonable and unfair.

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OCTOBER TERM, 1986

Syllabus 480 U. S.

ASAHI METAL INDUSTRY CO., LTD. v. SUPERIOR


COURT OF CALIFORNIA, SOLANO COUNTY
(CHENG SHIN RUBBER INDUSTRIAL CO.,
LTD., REAL PARTY IN INTEREST)
CERTIORARI TO THE SUPREME COURT OF CALIFORNIA

No. 85-693. Argued November 5, 1986-Decided February 24, 1987

Petitioner manufactures tire valve assemblies in Japan and sells them to


several tire manufacturers, including Cheng Shin Rubber Industrial Co.
(Cheng Shin). The sales to Cheng Shin, which amounted to at least
100,000 assemblies annually from 1978 to 1982, took place in Taiwan, to
which the assemblies were shipped from Japan. Cheng Shin incorpo-
rates the assemblies into its finished tires, which it sells throughout the
world, including the United States, where 20 percent of its sales take
place in California. Affidavits indicated that petitioner was aware that
tires incorporating its assemblies would end up in California, but, on
the other hand, that it never contemplated that its sales to Cheng Shin
in Taiwan would subject it to lawsuits in California. Nevertheless, in
1979, a product liability suit was brought in California Superior Court
arising from a motorcycle accident allegedly caused by defects in a tire
manufactured by Cheng Shin, which in turn filed a cross-complaint seek-
ing indemnification from petitioner. Although the main suit was even-
tually settled and dismissed, the Superior Court denied petitioner's
motion to quash the summons issued against it. The State Court of Ap-
peal then ordered that the summons be quashed, but the State Supreme
Court reversed, finding that petitioner's intentional act of placing its
assemblies into the stream of commerce by delivering them to Cheng
Shin in Taiwan, coupled with its awareness that some of them would
eventually reach California, were sufficient to support state court juris-
diction under the Due Process Clause.
Held: The judgment is reversed, and the case is remanded.
39 Cal. 3d 35, 702 P. 2d 543, reversed and remanded.
JUSTICE O'CONNOR, delivered the opinion of the Court as to Parts I
and II-B, concluding that the state court's exercise of personal jurisdic-
tion over petitioner would be unreasonable and unfair in violation of the
Due Process Clause. Pp. 113-116.
(a) The burden imposed on petitioner by the exercise of state court
jurisdiction would be severe, since petitioner would be required not only
to traverse the distance between Japan and California, but also to submit
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 103

102 Syllabus

its dispute with Cheng Shin to a foreign judicial system. Such unique
burdens should have significant weight in assessing the reasonableness
of extending personal jurisdiction over national borders. Pp. 113-114.
(b) The interests of Cheng Shin and the forum State in the exercise
of jurisdiction over petitioner would be slight, and would be insufficient
to justify the heavy burdens placed on petitioner. The only surviving
question is whether a Japanese corporation should indemnify a Taiwan-
ese corporation on the bases of a sale made in Taiwan and a shipment of
goods from Japan to Taiwan. The facts do not demonstrate that it
would be more convenient for Cheng Shin to litigate its claim in Califor-
nia rather than in Taiwan or Japan, while California's interests are di-
minished by Cheng Shin's lack of a California residence and by the fact
that the dispute is primarily about indemnity rather than the safety of
consumers. While the possibility of being sued in California might cre-
ate an additional deterrent to petitioner's manufacture of unsafe assem-
blies, the same effect would result from pressures placed on petitioner
by Cheng Shin, whose California sales would subject it to state tort law.
Pp. 114-115.
(c) The procedural and substantive policies of other nations whose
interests are affected by the forum State's assertion of jurisdiction over
an alien defendant must be taken into account, and great care must be
exercised when considering personal jurisdiction in the international con-
text. Although other nations' interests will differ from case to case,
those interests, as well as the Federal Government's interest in its for-
eign relations policies, will always be best served by a careful inquiry
into the reasonableness of the particular assertion of jurisdiction, and an
unwillingness to find an alien defendant's serious burdens outweighed
where, as here, the interests of the plaintiff and the forum State are
minimal. P. 115.
JUSTICE O'CONNOR, joined by THE CHIEF JUSTICE, JUSTICE POWELL,
and JUSTICE SCALIA, concluded in Parts II-A and III that, even assum-
ing, arguendo, that petitioner was aware that some of the assemblies it
sold to Cheng Shin would be incorporated into tires sold in California,
the facts do not establish minimum contacts sufficient to render the
State's exercise of personal jurisdiction consistent with fair play and sub-
stantial justice as required by the Due Process Clause. Since petitioner
does not do business, have an office, agents, employees, or property, or
advertise or solicit business in California, and since it did not create, con-
trol, or employ the distribution system that brought its assemblies to, or
design them in anticipation of sales in, California, it did not engage in
any action to purposely avail itself of the California market. The "sub-
stantial connection" between a defendant and the forum State necessary
for a finding of minimum contacts must derive from an action purposely
directed toward the forum State, and the mere placement of a product
OCTOBER TERM, 1986

Syllabus 480 U. S.

into the stream of commerce is not such an act, even if done with an
awareness that the stream will sweep the product into the forum State
absent additional conduct indicating an intent to serve the forum state
market. Pp. 108-113, 116.
JUSTICE BRENNAN, joined by JUSTICE WHITE, JUSTICE MARSHALL,
and JUSTICE BLACKMUN, agreed with the Court's conclusion in Part
II-B that the exercise of jurisdiction over petitioner would not comport
with "fair play and substantial justice," but disagreed with Part II-A's
interpretation of the stream-of-commerce theory, and with the conclu-
sion that petitioner did not purposely avail itself of the California mar-
ket. As long as a defendant is aware that the final product is being mar-
keted in the forum State, jurisdiction premised on the placement of a
product into the stream of commerce is consistent with the Due Process
Clause, and no showing of additional conduct is required. Here, even
though petitioner did not design or control the distribution system that
carried its assemblies into California, its regular and extensive sales to a
manufacturer it knew was making regular sales of the final product in
California were sufficient to establish minimum contacts with California.
Pp. 116-121.
JUSTICE STEVENS, joined by JUSTICE WHITE and JUSTICE BLACK-
MUN, agreed that the California Supreme Court's judgment should be
reversed for the reasons stated in Part II-B of the Court's opinion,
but did not join Part II-A, for the reasons that (1) the Court's holding
that the State's exercise of jurisdiction over petitioner would be "un-
reasonable and unfair" alone requires reversal, and renders any exami-
nation of minimum contacts unnecessary; and (2) even assuming that the
"purposeful availment" test should be formulated here, Part II-A mis-
applies it to the facts of this case since, in its dealings with Cheng
Shin, petitioner has arguably engaged in a higher quantum of conduct
than the mere placement of a product into the stream of commerce.
Pp. 121-122.

O'CONNOR, J., announced the judgment of the Court and delivered the
opinion for a unanimous Court with respect to Part I, the opinion of the
Court with respect to Part II-B, in which REHNQUIST, C. J., and BREN-
NAN, WHITE, MARSHALL, BLACKMUN, POWELL, and STEVENS, JJ.,
joined, and an opinion with respect to Parts II-A and III, in which REHN-
QUIST, C. J., and POWELL and SCALIA, JJ., joined. BRENNAN, J., filed
an opinion concurring in part and concurring in the judgment, in which
WHITE, MARSHALL, and BLACKMUN, JJ., joined, post, p. 116. STEVENS,
J., filed an opinion concurring in part and concurring in the judgment, in
which WHITE and BLACKMUN, JJ., joined, post, p. 121.
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 105

102 Opinion of the Court

Graydon S. Staringargued the cause for petitioner. With


him on the briefs was Richard D. Hoffman.
Ronald R. Haven argued the cause and filed a brief for
respondent. *
JUSTICE O'CONNOR announced the judgment of the Court
and delivered the unanimous opinion of the Court with re-
spect to Part I, the opinion of the Court with respect to Part
II-B, in which THE CHIEF JUSTICE, JUSTICE BRENNAN,
JUSTICE WHITE, JUSTICE MARSHALL, JUSTICE BLACKMUN,
JUSTICE POWELL, and JUSTICE STEVENS join, and an opinion
with respect to Parts II-A and III, in which THE CHIEF JUS-
TICE, JUSTICE POWELL, and JUSTICE SCALIA join.
This case presents the question whether the mere aware-
ness on the part of a foreign defendant that the components it
manufactured, sold, and delivered outside the United States
would reach the forum State in the stream of commerce con-
stitutes "minimum contacts" between the defendant and the
forum State such that the exercise of jurisdiction "does not
offend 'traditional notions of fair play and substantial jus-
tice."' International Shoe Co. v. Washington, 326 U. S.
310, 316 (1945), quoting Milliken v. Meyer, 311 U. S. 457,
463 (1940).
I
On September 23, 1978, on Interstate Highway 80 in
Solano County, California, Gary Zurcher lost control of his
Honda motorcycle and collided with a tractor. Zurcher was
severely injured, and his passenger and wife, Ruth Ann
Moreno, was killed. In September 1979, Zurcher filed a
product liability action in the Superior Court of the State of
*Briefs of amici curiae urging reversal were filed for Alcan Aluminio
Do Brasil, S. A. by Lawrence A. SalibraII; for the American Chamber of
Commerce in the United Kingdom et al. by Douglas E. Rosenthal, Donald
I. Baker, and Andreas F. Lowenfeld; and for Cassiar Mining Corp. by
David Booth Beers and Wendy S. White.
George E. Murphy filed a brief for the California Manufacturers Associa-
tion as amicus curiae urging affirmance.
OCTOBER TERM, 1986

Opinion of the Court 480 U. S.

California in and for the County of Solano. Zurcher alleged


that the 1978 accident was caused by a sudden loss of air and
an explosion in the rear tire of the motorcycle, and alleged
that the motorcycle tire, tube, and sealant were defective.
Zurcher's complaint named, inter alia, Cheng Shin Rubber
Industrial Co., Ltd. (Cheng Shin), the Taiwanese manufac-
turer of the tube. Cheng Shin in turn filed a cross-complaint
seeking indemnification from its codefendants and from peti-
tioner, Asahi Metal Industry Co., Ltd. (Asahi), the manufac-
turer of the tube's valve assembly. Zurcher's claims against
Cheng Shin and the other defendants were eventually settled
and dismissed, leaving only Cheng Shin's indemnity action
against Asahi.
California's long-arm statute authorizes the exercise of ju-
risdiction "on any basis not inconsistent with the Constitution
of this state or of the United States." Cal. Civ. Proc. Code
Ann. §410.10 (West 1973). Asahi moved to quash Cheng
Shin's service of summons, arguing the State could not exert
jurisdiction over it consistent with the Due Process Clause of
the Fourteenth Amendment.
In relation to the motion, the following information was
submitted by Asahi and Cheng Shin. Asahi is a Japanese
corporation. It manufactures tire valve assemblies in Japan
and sells the assemblies to Cheng Shin, and to several other
tire manufacturers, for use as components in finished tire
tubes. Asahi's sales to Cheng Shin took place in Taiwan.
The shipments from Asahi to Cheng Shin were sent from
Japan to Taiwan. Cheng Shin bought and incorporated into
its tire tubes 150,000 Asahi valve assemblies in 1978; 500,000
in 1979; 500,000 in 1980; 100,000 in 1981; and 100,000 in 1982.
Sales to Cheng Shin accounted for 1.24 percent of Asahi's in-
come in 1981 and 0.44 percent in 1982. Cheng Shin alleged
that approximately 20 percent of its sales in the United
States are in California. Cheng Shin purchases valve assem-
blies from other suppliers as well, and sells finished tubes
throughout the world.
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 107

102 Opinion of the Court

In 1983 an attorney for Cheng Shin conducted an informal


examination of the valve stems of the tire tubes sold in one
cycle store in Solano County. The attorney declared that of
the approximately 115 tire tubes in the store, 97 were pur-
portedly manufactured in Japan or Taiwan, and of those 97,
21 valve stems were marked with the circled letter "A", ap-
parently Asahi's trademark. Of the 21 Asahi valve stems,
12 were incorporated into Cheng Shin tire tubes. The store
contained 41 other Cheng Shin tubes that incorporated the
valve assemblies of other manufacturers. Declaration of
Kenneth B. Shepard in Opposition to Motion to Quash Sub-
poena, App. to Brief for Respondent 5-6. An affidavit of a
manager of Cheng Shin whose duties included the purchasing
of component parts stated: "'In discussions with Asahi re-
garding the purchase of valve stem assemblies the fact that
my Company sells tubes throughout the world and specifi-
cally the United States has been discussed. I am informed
and believe that Asahi was fully aware that valve stem as-
semblies sold to my Company and to others would end up
throughout the United States and in California."' 39 Cal. 3d
35, 48, n. 4, 702 P. 2d 543, 549-550, n. 4 (1985). An affidavit
of the president of Asahi, on the other hand, declared that
Asahi "'has never contemplated that its limited sales of tire
valves to Cheng Shin in Taiwan would subject it to lawsuits
in California."' Ibid. The record does not include any con-
tract between Cheng Shin and Asahi. Tr. of Oral Arg. 24.
Primarily on the basis of the above information, the Supe-
rior Court denied the motion to quash summons, stating:
"Asahi obviously does business on an international scale. It
is not unreasonable that they defend claims of defect in their
product on an international scale." Order Denying Motion to
Quash Summons, Zurcher v. Dunlop Tire & Rubber Co., No.
76180 (Super. Ct., Solano County, Cal., Apr. 20, 1983).
The Court of Appeal of the State of California issued a
peremptory writ of mandate commanding the Superior Court
to quash service of summons. The court concluded that "it
OCTOBER TERM, 1986

Opinion of O'CONNOR, J. 480 U. S.

would be unreasonable to require Asahi to respond in Califor-


nia solely on the basis of ultimately realized foreseeability
that the product into which its component was embodied
would be sold all over the world including California." App.
to Pet. for Cert. B5-B6.
The Supreme Court of the State of California reversed and
discharged the writ issued by the Court of Appeal. 39 Cal.
3d 35, 702 P. 2d 543 (1985). The court observed: "Asahi
has no offices, property or agents in California. It solicits no
business in California and has made no direct sales [in Cali-
fornia]." Id., at 48, 702 P. 2d, at 549. Moreover, "Asahi did
not design or control the system of distribution that carried
its valve assemblies into California." Id., at 49, 702 P. 2d, at
549. Nevertheless, the court found the exercise of jurisdic-
tion over Asahi to be consistent with the Due Process Clause.
It concluded that Asahi knew that some of the valve assem-
blies sold to Cheng Shin would be incorporated into tire tubes
sold in California, and that Asahi benefited indirectly from
the sale in California of products incorporating its compo-
nents. The court considered Asahi's intentional act of plac-
ing its components into the stream of commerce-that is, by
delivering the components to Cheng Shin in Taiwan -coupled
with Asahi's awareness that some of the components would
eventually find their way into California, sufficient to form
the basis for state court jurisdiction under the Due Process
Clause.
We granted certiorari, 475 U. S. 1044 (1986), and now
reverse.
II
A
The Due Process Clause of the Fourteenth Amendment
limits the power of a state court to exert personal jurisdiction
over a nonresident defendant. "[T]he constitutional touch-
stone" of the determination whether an exercise of personal
jurisdiction comports with due process "remains whether the
defendant purposefully established 'minimum contacts' in the
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 109

102 Opinion of O'CONNOR, J.

forum State." Burger King Corp. v. Rudzewicz, 471 U. S.


462, 474 (1985), quoting InternationalShoe Co. v. Washing-
ton, 326 U. S., at 316. Most recently we have reaffirmed
the oft-quoted reasoning of Hanson v. Denckla, 357 U. S.
235, 253 (1958), that minimum contacts must have a basis in
"some act by which the defendant purposefully avails itself
of the privilege of conducting activities within the forum
State, thus invoking the benefits and protections of its laws."
Burger King, 471 U. S., at 475. "Jurisdiction is proper...
where the contacts proximately result from actions by the de-
fendant himself that create a 'substantial connection' with
the forum State." Ibid., quoting McGee v. International
Life Insurance Co., 355 U. S. 220, 223 (1957) (emphasis in
original).
Applying the principle that minimum contacts must be
based on an act of the defendant, the Court in World-Wide
Volkswagen Corp. v. Woodson, 444 U. S.286 (1980), rejected
the assertion that a consumer's unilateral act of bringing the
defendant's product into the forum State was a sufficient con-
stitutional basis for personal jurisdiction over the defendant.
It had been argued in World-Wide Volkswagen that because
an automobile retailer and its wholesale distributor sold a
product mobile by design and purpose, they could foresee
being haled into court in the distant States into which their
customers might drive. The Court rejected this concept of
foreseeability as an insufficient basis for jurisdiction under
the Due Process Clause. Id., at 295-296. The Court dis-
claimed, however, the idea that "foreseeability is wholly
irrelevant" to personal jurisdiction, concluding that "[t]he
forum State does not exceed its powers under the Due Proc-
ess Clause if it asserts personal jurisdiction over a corpora-
tion that delivers its products into the stream of commerce
with the expectation that they will be purchased by consum-
ers in the forum State." Id., at 297-298 (citation omitted).
The Court reasoned:
OCTOBER TERM, 1986

Opinion of O'CONNOR, J. 480 U. S.

"When a corporation 'purposefully avails itself of the


privilege of conducting activities within the forum State,'
Hanson v. Denckla, 357 U. S. [235,] 253 [(1958)], it has
clear notice that it is subject to suit there, and can act to
alleviate the risk of burdensome litigation by procuring
insurance, passing the expected costs on to customers,
or, if the risks are too great, severing its connection with
the State. Hence if the sale of a product of a manufac-
turer or distributor ... is not simply an isolated occur-
rence, but arises from the efforts of the manufacturer or
distributor to serve, directly or indirectly, the market
for its product in other States, it is not unreasonable to
subject it to suit in one of those States if its allegedly
defective merchandise has there been the source of in-
jury to its owners or to others." Id., at 297.
In World-Wide Volkswagen itself, the state court sought to
base jurisdiction not on any act of the defendant, but on the
foreseeable unilateral actions of the consumer. Since World-
Wide Volkswagen, lower courts have been confronted with
cases in which the defendant acted by placing a product in the
stream of commerce, and the stream eventually swept de-
fendant's product into the forum State, but the defendant did
nothing else to purposefully avail itself of the market in the
forum State. Some courts have understood the Due Process
Clause, as interpreted in World-Wide Volkswagen, to allow
an exercise of personal jurisdiction to be based on no more
than the defendant's act of placing the product in the stream
of commerce. Other courts have understood the Due Proc-
ess Clause and the above-quoted language in World-Wide
Volkswagen to require the action of the defendant to be more
purposefully directed at the forum State than the mere act of
placing a product in the stream of commerce.
The reasoning of the Supreme Court of California in the
present case illustrates the former interpretation of World-
Wide Volkswagen. The Supreme Court of California held
that, because the stream of commerce eventually brought
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT ill

102 Opinion of O'CONNOR, J.

some valves Asahi sold Cheng Shin into California, Asahi's


awareness that its valves would be sold in California was suf-
ficient to permit California to exercise jurisdiction over Asahi
consistent with the requirements of the Due Process Clause.
The Supreme Court of California's position was consistent
with those courts that have held that mere foreseeability or
awareness was a constitutionally sufficient basis for personal
jurisdiction if the defendant's product made its way into the
forum State while still in the stream of commerce. See Bean
Dredging Corp. v. Dredge Technology Corp., 744 F. 2d 1081
(CA5 1984); Hedrick v. Daiko Shoji Co., 715 F. 2d 1355 (CA9
1983).
Other courts, however, have understood the Due Process
Clause to require something more than that the defendant
was aware of its product's entry into the forum State through
the stream of commerce in order for the State to exert juris-
diction over the defendant. In the present case, for exam-
ple, the State Court of Appeal did not read the Due Process
Clause, as interpreted by World-Wide Volkswagen, to allow
"mere foreseeability that the product will enter the forum
state [to] be enough by itself to establish jurisdiction over the
distributor and retailer." App. to Pet. for Cert. B5. In
Humble v. Toyota Motor Co., 727 F. 2d 709 (CA8 1984), an
injured car passenger brought suit against Arakawa Auto
Body Company, a Japanese corporation that manufactured
car seats for Toyota. Arakawa did no business in the United
States; it had no office, affiliate, subsidiary, or agent in the
United States; it manufactured its component parts outside
the United States and delivered them to Toyota Motor Com-
pany in Japan. The Court of Appeals, adopting the reason-
ing of the District Court in that case, noted that although it
"does not doubt that Arakawa could have foreseen that its
product would find its way into the United States," it would
be "manifestly unjust" to require Arakawa to defend itself in
the United States. Id., at 710-711, quoting 578 F. Supp.
530, 533 (ND Iowa 1982). See also Hutson v. Fehr Bros.,
OCTOBER TERM, 1986

Opinion of O'CONNOR, J. 480 U. S.

Inc., 584 F. 2d 833 (CA8 1978); see generally Max Daetwyler


Corp. v. R. Meyer, 762 F. 2d 290, 299 (CA3 1985) (collecting
"stream of commerce" cases in which the "manufacturers
involved had made deliberate decisions to market their prod-
ucts in the forum state").
We now find this latter position to be consonant with the
requirements of due process. The "substantial connection,"
Burger King, 471 U. S., at 475; McGee, 355 U. S., at 223, be-
tween the defendant and 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.
Burger King, supra, at 476; Keeton v. Hustler Magazine,
Inc., 465 U. S. 770, 774 (1984). The placement of a product
into the stream of commerce, without more, is not an act of
the defendant purposefully directed toward the forum State.
Additional conduct of the defendant may indicate an intent or
purpose to serve the market in the forum State, for example,
designing the product for the market in the forum State, ad-
vertising in the forum State, establishing channels for provid-
ing regular advice to customers in the forum State, or mar-
keting the product through a distributor who has agreed to
serve as the sales agent in the forum State. But a defend-
ant's awareness that the stream of commerce may or will
sweep the product into the forum State does not convert the
mere act of placing the product into the stream into an act
purposefully directed toward the forum State. -

Assuming, arguendo, that respondents have established


Asahi's awareness that some of the valves sold to Cheng Shin
would be incorporated into tire tubes sold in California,
respondents have not demonstrated any action by Asahi to
purposefully avail itself of the California market. Asahi does
not do business in California. It has no office, agents, em-
ployees, or property in California. It does not advertise or
otherwise solicit business in California. It did not create,
control, or employ the distribution system that brought its
valves to California. Cf. Hicks v. Kawasaki Heavy Indus-
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 113

102 Opinion of the Court

tries, 452 F. Supp. 130 (MD Pa. 1978). There is no evidence


that Asahi designed its product in anticipation of sales in
California. Cf. Rockwell InternationalCorp. v. Costruzioni
Aeronautiche Giovanni Agusta, 553 F. Supp. 328 (ED Pa.
1982). On the basis of these facts, the exertion of personal
jurisdiction over Asahi by the Superior Court of California *
exceeds the limits of due process.

B
The strictures of the Due Process Clause forbid a state
court to exercise personal jurisdiction over Asahi under
circumstances that would offend "'traditional notions of fair
play and substantial justice."' International Shoe Co. v.
Washington, 326 U. S., at 316, quoting Milliken v. Meyer,
311 U. S., at 463.
We have previously explained that the determination of
the reasonableness of the exercise of jurisdiction in each case
will depend on an evaluation of several factors. A court
must consider the burden on the defendant, the interests of
the forum State, and the plaintiff's interest in obtaining re-
lief. It must also weigh in its determination "the interstate
judicial system's interest in obtaining the most efficient
resolution of controversies; and the shared interest of the
several States in furthering fundamental substantive social
policies." World-Wide Volkswagen, 444 U. S., at 292 (cita-
tions omitted).

*We have no occasion here to determine whether Congress could, con-


sistent with the Due Process Clause of the Fifth Amendment, authorize
federal court personal jurisdiction over alien defendants based on the
aggregate of national contacts, rather than on the contacts between the
defendant and the State in which the federal court sits. See Max Daet-
wyler Corp. v. R. Meyer, 762 F. 2d 290, 293-295 (CA3 1985); DeJames v.
Magnificence Carriers,Inc., 654 F. 2d 280, 283 (CA3 1981); see also Born,
Reflections on Judicial Jurisdiction in International Cases, to be published
in 17 Ga. J. Int'l & Comp. L. 1 (1987); Lilly, Jurisdiction Over Domestic
and Alien Defendants, 69 Va. L. Rev. 85, 127-145 (1983).
OCTOBER TERM, 1986

Opinion of the Court 480 U. S.

A consideration of these factors in the present case clearly


reveals the unreasonableness of the assertion of jurisdiction
over Asahi, even apart from the question of the placement of
goods in the stream of commerce.
Certainly the burden on the defendant in this case is se-
vere. Asahi has been commanded by the Supreme Court of
California not only to traverse the distance between Asahi's
headquarters in Japan and the Superior Court of California
in and for the County of Solano, but also to submit its dis-
pute with Cheng Shin to a foreign nation's judicial system.
The unique burdens placed upon one who must defend oneself
in a foreign legal system should have significant weight in
assessing the reasonableness of stretching the long arm of
personal jurisdiction over national borders.
When minimum contacts have been established, often the
interests of the plaintiff and the forum in the exercise of juris-
diction will justify even the serious burdens placed on the
alien defendant. In the present case, however, the interests
of the plaintiff and the forum in California's assertion of juris-
diction over Asahi are slight. All that remains is a claim for
indemnification asserted by Cheng Shin, a Tawainese cor-
poration, against Asahi. The transaction on which the in-
demnification claim is based took place in Taiwan; Asahi's
components were shipped from Japan to Taiwan. Cheng
Shin has not demonstrated that it is more convenient for it to
litigate its indemnification claim against Asahi in California
rather than in Taiwan or Japan.
Because the plaintiff is not a California resident, Califor-
nia's legitimate interests in the dispute have considerably di-
minished. The Supreme Court of California argued that the
State had an interest in "protecting its consumers by ensur-
ing that foreign manufacturers comply with the state's safety
standards." 39 Cal. 3d, at 49, 702 P. 2d, at 550. The State
Supreme Court's definition of California's interest, however,
was overly broad. The dispute between Cheng Shin and
Asahi is primarily about indemnification rather than safety
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 115

102 Opinion of the Court

standards. Moreover, it is not at all clear at this point that


California law should govern the question whether a Japa-
nese corporation should indemnify a Taiwanese corporation
on the basis of a sale made in Taiwan and a shipment of goods
from Japan to Taiwan. PhillipsPetroleum Co. v. Shutts, 472
U. S. 797, 821-822 (1985); Allstate Insurance Co. v. Hague,
449 U. S. 302, 312-313 (1981). The possibility of being haled
into a California court as a result of an accident involving
Asahi's components undoubtedly creates an additional deter-
rent to the manufacture of unsafe components; however, sim-
ilar pressures will be placed on Asahi by the purchasers of its
components as long as those who use Asahi components in
their final products, and sell those products in California, are
subject to the application of California tort law.
World-Wide Volkswagen also admonished courts to take
into consideration the interests of the "several States," in ad-
dition to the forum State, in the efficient judicial resolution of
the dispute and the advancement of substantive policies. In
the present case, this advice calls for a court to consider the
procedural and substantive policies of other nations whose
interests are affected by the assertion of jurisdiction by the
California court. The procedural and substantive interests
of other nations in a state court's assertion of jurisdiction
over an alien defendant will differ from case to case. In
every case, however, those interests, as well as the Federal
Government's interest in its foreign relations policies, will be
best served by a careful inquiry into the reasonableness of
the assertion of jurisdiction in the particular case, and an un-
willingness to find the serious burdens on an alien defendant
outweighed by minimal interests on the part of the plaintiff
or the forum State. "Great care and reserve should be exer-
cised when extending our notions of personal jurisdiction into
the international field." United States v. First National
City Bank, 379 U. S. 378, 404 (1965) (Harlan, J., dissenting).
See Born, Reflections on Judicial Jurisdiction in International
Cases, to be published in 17 Ga. J. Int'l & Comp. L. 1 (1987).
OCTOBER TERM, 1986

Opinion of BRENNAN, J. 480 U. S.

Considering the international context, the heavy burden on


the alien defendant, and the slight interests of the plaintiff
and the forum State, the exercise of personal jurisdiction by a
California court over Asahi in this instance would be unrea-
sonable and unfair.
III
Because the facts of this case do not establish minimum
contacts such that the exercise of personal jurisdiction is con-
sistent with fair play and substantial justice, the judgment of
the Supreme Court of California is reversed, and the case is
remanded for further proceedings not inconsistent with this
opinion.
It is so ordered.
JUSTICE BRENNAN, with whom JUSTICE WHITE, JUSTICE
MARSHALL, and JUSTICE BLACKMUN join, concurring in part
and concurring in the judgment.
I do not agree with the interpretation in Part II-A of the
stream-of-commerce theory, nor with the conclusion that
Asahi did not "purposely avail itself of the California mar-
ket." Ante, at 112. I do agree, however, with the Court's
conclusion in Part II-B that the exercise of personal jurisdic-
tion over Asahi in this case would not comport with "fair play
and substantial justice," International Shoe Co. v. Wash-
ington, 326 U. S. 310, 320 (1945). This is one of those rare
cases in which "minimum requirements inherent in the con-
cept of 'fair play and substantial justice' . . . defeat the
reasonableness of jurisdiction even [though] the defendant
has purposefully engaged in forum activities." Burger King
Corp. v. Rudzewicz, 471 U. S.462, 477-478 (1985). I there-
fore join Parts I and II-B of the Court's opinion, and write
separately to explain my disagreement with Part II-A.
Part II-A states that "a defendant's awareness that the
stream of commerce may or will sweep the product into the
forum State does not convert the mere act of placing the
product into the stream into an act purposefully directed to-
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 117

102 Opinion of BRENNAN, J.

ward the forum State." Ante, at 112. Under this view, a


plaintiff would be required to show "[a]dditional conduct"
directed toward the forum before finding the exercise of ju-
risdiction over the defendant to be consistent with the Due
Process Clause. Ibid. I see no need for such a showing,
however. The stream of commerce refers not to unpredict-
able currents or eddies, but to the regular and anticipated
flow of products from manufacture to distribution to retail
sale. As long as a participant in this process is aware that
the final product is being marketed in the forum State, the
possibility of a lawsuit there cannot come as a surprise. Nor
will the litigation present a burden for which there is no cor-
responding benefit. A defendant who has placed goods in
the stream of commerce benefits economically from the retail
sale of the final product in the forum State, and indirectly
benefits from the State's laws that regulate and facilitate
commercial activity. These benefits accrue regardless of
whether that participant directly conducts business in the
forum State, or engages in additional conduct directed to-
ward that State. Accordingly, most courts and commen-
tators have found that jurisdiction premised on the placement
of a product into the stream of commerce is consistent with
the Due Process Clause, and have not required a showing of
additional conduct.'

'See, e. g., Bean Dredging Corp. v. Dredge Technology Corp., 744 F.


2d 1081 (CA5 1984); Hedrick v. Daiko Shoji Co., 715 F. 2d 1355 (CA9
1983); Nelson v. Park Industries, Inc., 717 F. 2d 1120, 1126 (CA7 1983),
cert. denied, 465 U. S. 1024 (1984); Stabilisierungsfonds fur Wein v.
Kaiser Stuhl Wine Distributors Pty. Ltd., 207 U. S. App. D. C. 375,
378, 647 F. 2d 200, 203 (1981); Poyner v. Erma Werke Gmbh, 618 F. 2d
1186, 1190-1191 (CA6), cert. denied, 449 U. S.841 (1980); cf. Fidelity &
Casualty Co. of New York v. PhiladelphiaResins Corp., 766 F. 2d 440
(CA10 1985) (endorsing stream-of-commerce theory but finding it inappli-
cable in instant case), cert. denied, 474 U. S.1082 (1986); Montalbano v.
Easco Hand Tools, Inc., 766 F. 2d 737 (CA2 1985) (noting potential ap-
plicability of stream-of-commerce theory, but remanding for further factual
findings). See generally Currie, The Growth of the Long-Arm: Eight
OCTOBER TERM, 1986

Opinion of BRENNAN, J. 480 U. S.

The endorsement in Part II-A of what appears to be the


minority view among Federal Courts of Appeals' represents
a marked retreat from the analysis in World-Wide Volks-
wagen v. Woodson, 444 U. S. 286 (1980). In that case, "re-
spondents [sought] to base jurisdiction on one, isolated occur-
rence and whatever inferences can be drawn therefrom: the
fortuitous circumstance that a single Audi automobile, sold
in New York to New York residents, happened to suffer an
accident while passing through Oklahoma." Id., at 295.
The Court held that the possibility of an accident in Okla-
homa, while to some extent foreseeable in light of the inher-
ent mobility of the automobile, was not enough to establish
Years of Extended Jurisdiction in Illinois, 1963 U. Ill. Law Forum 533,
546-560 (approving and tracing development of the stream-of-commerce
theory); C. Wright & A. Miller, Federal Practice and Procedure § 1069,
pp. 259-261 (1969) (recommending in effect a stream-of-commerce ap-
proach); Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested
Analysis, 79 Harv. L. Rev. 1121, 1168-1172 (1966) (same).
'The Court of Appeals for the Eighth Circuit appears to be the only
Court of Appeals to have expressly adopted a narrow construction of the
stream-of-commerce theory analogous to the one articulated in Part II-A
today, although the Court of Appeals for the Eleventh Circuit has implic-
itly adopted it. See Humble v. Toyota Motor Co., Ltd., 727 F. 2d 709
(CA8 1984); Banton Industries, Inc. v. Dimatic Die & Tool Co., 801 F. 2d
1283 (CAll 1986). Two other Courts of Appeals have found the theory
inapplicable when only a single sale occurred in the forum State, but do not
appear committed to the interpretation of the theory that the Court adopts
today. E. g., Chung v. NANA Development Corp., 783 F. 2d 1124 (CA4),
cert. denied, 479 U. S.948 (1986); Dalna Rodriguez v. Hughes Aircraft
Co., 781 F. 2d 9 (CA1 1986). Similarly, the Court of Appeals for the Third
Circuit has not interpreted the theory as JUSTICE O'CONNOR's opinion has,
but has rejected stream-of-commerce arguments for jurisdiction when the
relationship between the distributor and the defendant "remains in dis-
pute" and "evidence indicating that [defendant] could anticipate either use
of its product or litigation in [the forum State] is totally lacking," Max
Daetwyler Corp. v. R. Meyer, 762 F. 2d 290, 298, 300, n. 13, cert. denied,
474 U. S.980 (1985), and when the defendant's product was not sold in the
forum State and the defendant "did not take advantage of an indirect mar-
keting scheme," DeJames v. Magnificence Carriers, Inc., 654 F. 2d 280,
285, cert. denied, 454 U. S.1085 (1981).
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 119

102 Opinion of BRENNAN, J.

minimum contacts between the forum State and the retailer


or distributor. Id., at 295-296. The Court then carefully
explained:
"[T]his is not to say, of course, that foreseeability is
wholly irrelevant. But the foreseeability that is critical
to due process analysis is not the mere likelihood that a
product will find its way into the forum State. Rather,
it is that the defendant's conduct and connection with the
forum State are such that he should reasonably antici-
pate being haled into Court there." Id., at 297.
The Court reasoned that when a corporation may reasonably
anticipate litigation in a particular forum, it cannot claim that
such litigation is unjust or unfair, because it "can act to allevi-
ate the risk of burdensome litigation by procuring insurance,
passing the expected costs on to consumers, or, if the risks
are too great, severing its connection with the State." Ibid.
To illustrate the point, the Court contrasted the foreseea-
bility of litigation in a State to which a consumer fortuitously
transports a defendant's product (insufficient contacts) with
the foreseeability of litigation in a State where the defend-
ant's product was regularly sold (sufficient contacts). The
Court stated:
"Hence if the sale of a product of a manufacturer or dis-
tributor such as Audi or Volkswagen is not simply an
isolated occurrence, but arises from the efforts of the
manufacturer or distributor to serve, directly or indi-
rectly, the market for its product in other States, it is not
unreasonable to subject it to suit in one of those States if
its allegedly defective merchandise has there been the
source of injury to its owner or to others. The forum
State does not exceed its powers under the Due Process
Clause if it asserts personal jurisdiction over a corpora-
tion that delivers its products into the stream of com-
merce with the expectation that they will be purchased
OCTOBER TERM, 1986

Opinion of BRENNAN, J. 480 U. S.

by consumers in the forum State." Id., at 297-298


(emphasis added).
The Court concluded its illustration by referring to Gray
v. American Radiator & Standard Sanitary Corp., 22 Ill.
2d 432, 176 N. E. 2d 761 (1961), a well-known stream-of-
commerce case in which the Illinois Supreme Court applied
the theory to assert jurisdiction over a component-parts man-
ufacturer that sold no components directly in Illinois, but did
sell them to a manufacturer who incorporated them into a
final product that was sold in Illinois. 444 U. S., at 297-298.
The Court in World-Wide Volkswagen thus took great care
to distinguish "between a case involving goods which reach a
distant State through a chain of distribution and a case
involving goods which reach the same State because a con-
sumer ...took them there." Id., at 306-307 (BRENNAN, J.,
dissenting).3 The California Supreme Court took note of
this distinction, and correctly concluded that our holding in
World-Wide Volkswagen preserved the stream-of-commerce
theory. See App. to Pet. for Cert. C-9, and n. 3, C-13--
C-15; cf. Comment, Federalism, Due Process, and Mini-
mum Contacts: World-Wide Volkswagen Corp v. Woodson,
80 Colum. L. Rev. 1341, 1359-1361, and nn. 140-146 (1980).

In dissent, I argued that the distinction was without constitutional sig-


nificance, because in my view the foreseeability that a customer would use
a product in a distant State was a sufficient basis for jurisdiction. 444
U. S., at 306-307, and nn. 11, 12. See also id., at 315 (MARSHALL, J.,
dissenting) ("I cannot agree that jurisdiction is necessarily lacking if the
product enters the State not through the channels of distribution but in the
course of its intended use by the consumer"); id., at 318-319 (BLACKMUN,
J., dissenting) ("[F]oreseeable use in another State seems to me little dif-
ferent from foreseeable resale in another State"). But I do not read the
decision in World-Wide Volkswagen to establish a per se rule against the
exercise of jurisdiction where the contacts arise from a consumer's use of
the product in a given State, but only a rule against jurisdiction in cases
involving "one, isolated occurrence [of consumer use, amounting to] ...the
fortuitous circumstance .... ." Id., at 295. See Hedrick v. Daiko Shoji
Co., 715 F. 2d, at 1358-1359.
ASAHI METAL INDUSTRY CO. v. SUPERIOR COURT 121

102 Opinion of STEVENS, J.

In this case, the facts found by the California Supreme


Court support its finding of minimum contacts. The court
found that "[a]lthough Asahi did not design or control the
system of distribution that carried its valve assemblies into
California, Asahi was aware of the distribution system's op-
eration, and it knew that it would benefit economically from
the sale in California of products incorporating its compo-
nents." App. to Pet. for Cert. C-11." Accordingly, I can-
not join the determination in Part II-A that Asahi's regular
and extensive sales of component parts to a manufacturer
it knew was making regular sales of the final product in Cali-
fornia is insufficient to establish minimum contacts with
California.
JUSTICE STEVENS, with whom JUSTICE WHITE and JUS-
TICE BLACKMUN join, concurring in part and concurring in
the judgment.
The judgment of the Supreme Court of California should be
reversed for the reasons stated in Part II-B of the Court's
opinion. While I join Parts I and II-B, I do not join Part
II-A for two reasons. First, it is not necessary to the
Court's decision. An examination of minimum contacts is
not always necessary to determine whether a state court's as-
sertion of personal jurisdiction is constitutional. See Burger
King Corp. v. Rudzewicz, 471 U. S. 462, 476-478 (1985).
Part II-B establishes, after considering the factors set forth
in World-Wide Volkswagen Corp. v. Woodson, 444 U. S.286,
292 (1980), that California's exercise of jurisdiction over
Asahi in this case would be "unreasonable and unfair."
Ante, at 116. This finding alone requires reversal; this case
fits within the rule that "minimum requirements inherent in
the concept of 'fair play and substantial justice' may defeat
' Moreover, the Court found that "at least 18 percent of the tubes sold in
a particular California motorcycle supply shop contained Asahi valve as-
semblies," App. to Pet. for Cert. C-11, n. 5, and that Asahi had an ongoing
business relationship with Cheng Shin involving average annual sales of
hundreds of thousands of valve assemblies, id., at C-2.
122 OCTOBER TERM, 1986

Opinion of STEVENS, J. 480 U. S.

the reasonableness of jurisdiction even if the defendant has


purposefully engaged in forum activities." Burger King, 471
U. S., at 477-478 (quoting InternationalShoe Co. v. Wash-
ington, 326 U. S.310, 320 (1945)). Accordingly, I see no
reason in this case for the plurality to articulate "purposeful
direction" or any other test as the nexus between an act of a
defendant and the forum State that is necessary to establish
minimum contacts.
Second, even assuming that the test ought to be formu-
lated here, Part II-A misapplies it to the facts of this case.
The plurality seems to assume that an unwavering line can be
drawn between "mere awareness" that a component will find
its way into the forum State and "purposeful availment" of
the forum's market. Ante, at 112. Over the course of its
dealings with Cheng Shin, Asahi has arguably engaged in a
higher quantum of conduct than "[t]he placement of a product
into the stream of commerce, without more . . . ." Ibid.
Whether or not this conduct rises to the level of purposeful
availment requires a constitutional determination that is af-
fected by the volume, the value, and the hazardous character
of the components. In most circumstances I would be in-
clined to conclude that a regular course of dealing that results
in deliveries of over 100,000 units annually over a period of
several years would constitute "purposeful availment" even
though the item delivered to the forum State was a standard
product marketed throughout the world.

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