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Parties: (1) P- Zurcher, driver/owner of motorcycle that collided into a tractor
and killed his wife

D- Cheng Shin Rubber Industrial Co., Ltd & Asahi Metal Industry Co.
Parties settled.
(2) P- Asahi Metal Industry Co.
D- Superior Court of California

Procedure: P sued D for damages due to defective motorcycle tire, tube, and sealant. The
only parties left in this case at the time of this appeal were co-defendants Asahi
Metal and Cheng Shin. This matter involved an appeal of the Superior Court’s
denial of D’s motion to quash service of summons (i.e. service of process).
Asahi Metal sought a writ of mandate (i.e. 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 and collided with a tractor. 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 his rear
wheel to lose air rapidly and explode. Zurcher brought suit and named as
defendants Cheng Shin, the Taiwanese manufacturer of the tire tube, and Asahi
Metal Industry Co., the Japanese tire valve assembly manufacturer. Asahi
Metal had sold tire valve assemblies directly to Cheng Shin in Taiwan and
Cheng Shin then incorporated the 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 to be decided.

D moved to quash the service of summons, claiming that California could not
exercise jurisdiction over it because sales to Cheng Shin took place in Taiwan
and shipments were sent from Japan to Taiwan. D 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 D was told and knew that its products were being sold in California.

Superior Ct: Found it fair to require D to defend in California and denied D’s motion to quash
service of summons.; Ct of Appeals: Reversed and issued a writ of mandate to compel the
Superior Court to grant the motion to quash. California Supreme Court: 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. D appealed and the United States Supreme Court granted certiorari.
Issue: Is the mere awareness that a product may reach a remote jurisdiction when put
in the stream of commerce sufficient to satisfy the requirement for minimum
contacts under the Due Process Clause?

Holding/Rule: No. The mere awareness that a product may reach a remote jurisdiction when
put in the stream of commerce is not sufficient to satisfy the requirement for
minimum contacts under the Due Process Clause.

Reasoning: Minimum contacts require that there be some act by a party which would
purposefully avail itself of the privilege of conducting activities within the
forum state. The court 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.

D has not purposefully availed itself of the California market. D’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. D 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 minimum contacts were to be found,
traditional notions of fair play and substantial justice must be examined. Under
these facts it would be fundamentally unfair to require D to defend after
California’s interest in the suit that has been terminated. Zurcher settled the suit
and the dispute is now between two nonresident defendants. Jurisdiction is
therefore unreasonable.

Judgment: Reversed and remanded.

Concurrence: (Brennan): 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)
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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