Asahi Metal Industry Co. v. Superior Court

U.S. Supreme Court Asahi Metal Indus. v. Superior Court, 480
U.S. 102 (1987) Asahi Metal Indus. Co., Ltd. v.
Superior Ct. of California No. 85-693 Argued November 5,
1986 Decided February 24,
1987 480
U.S. 102 CERTIORARI TO THE SUPREME COURT OF
CALIFORNIA Syllabus 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 incorporates 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 seeking indemnification from
petitioner. Although the main suit was eventually settled and
dismissed, the Superior Court denied petitioner's motion to quash
the summons issued against it. The State Court of Appeal 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
jurisdiction 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
jurisdiction over petitioner would be unreasonable and unfair, in
violation of the Due Process Clause. Pp. 480 U. S.
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 Page 480 U. S. 103 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. 480 U. S.
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 Taiwanese 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 California, rather than in Taiwan or
Japan, while California's interests are diminished 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 create an
additional deterrent to petitioner's manufacture of unsafe
assemblies, the same effect would result from pressures placed on
petitioner by Cheng Shin, whose California sales would subject it
to state tort law. Pp. 480 U. S.
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 context. Although other nations'
interests will differ from case to case, those interests, as well
as the Federal Government's interest in its foreign 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. 480 U. S.
115 .

															JUSTICE O'CONNOR, joined by THE CHIEF JUSTICE, JUSTICE POWELL,
and JUSTICE SCALIA, concluded in Parts II-A and III that, even
assuming, 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 substantial 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, control, 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 "substantial 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 Page 480 U. S. 104 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. 480 U. S.
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 conclusion that petitioner did not purposely avail itself of
the California market. As long as a defendant is aware that the
final product is being marketed 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. 480 U. S.
116 -121.

															JUSTICE STEVENS, joined by JUSTICE WHITE and JUSTICE BLACKMUN,
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 "unreasonable and unfair" alone requires
reversal, and renders any examination of minimum contacts
unnecessary; and (2) even assuming that the "purposeful availment"
test should be formulated here, Part II-A misapplies 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. 480 U. S.
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 BRENNAN, WHITE, MARSHALL, BLACKMUN, POWELL, and STEVENS,
JJ., joined, and an opinion with respect to Parts II-A and III, in
which REHNQUIST, 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. 480 U. S. 116 .
STEVENS, J., filed an opinion concurring in part and concurring in
the judgment, in which WHITE and BLACKMUN, JJ., joined, post, p. 480 U. S.
121 . Page 480 U. S. 105 JUSTICE O'CONNOR announced the judgment of the Court and
delivered the unanimous opinion of the Court with respect 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
JUSTICE, JUSTICE POWELL, and JUSTICE SCALIA join.

															This case presents the question whether the mere awareness 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 constitutes
"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 justice.'" International
Shoe Co. v. Washington, 326 U. S. 310 , 326 U. S. 316 (1945), quoting Milliken v. Meyer, 311 U.
S. 457 , 311 U. S. 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 Page 480 U. S. 106 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 manufacturer of the tube.
Cheng Shin in turn filed a cross-complaint seeking indemnification
from its codefendants and from petitioner, Asahi Metal Industry
Co., Ltd. (Asahi), the manufacturer 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
jurisdiction "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
income 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 assemblies from other
suppliers as well, and sells finished tubes throughout the
world. Page 480 U. S. 107 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 purportedly
manufactured in Japan or Taiwan, and of those 97, 21 valve stems
were marked with the circled letter "A", apparently 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 Subpoena, 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 regarding the purchase of valve stem
assemblies, the fact that my Company sells tubes throughout the
world and specifically the United States has been discussed. I am
informed and believe that Asahi was fully aware that valve stem
assemblies 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 contract between Cheng Shin and Asahi. Tr. of
Oral Arg. 24.

															Primarily on the basis of the above information, the Superior
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 Page 480 U. S. 108 would be unreasonable to require Asahi to respond in California
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 California]." 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 jurisdiction over
Asahi to be consistent with the Due Process Clause. It concluded
that Asahi knew that some of the valve assemblies 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 components. The court considered Asahi's
intentional act of placing 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 B 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 touchstone" of the
determination whether an exercise of personal jurisdiction comports
with due process "remains whether the defendant purposefully
established minimum contacts' in the Page 480 U. S.
109 forum State." Burger King Corp. v. Rudzewicz, 471 U. S. 462 , 471 U. S. 474 (1985), quoting International Shoe Co. v. Washington, 326
U.S. at 326 U. S. 316 .
Most recently, we have reaffirmed the oft-quoted reasoning of Hanson v. Denckla, 357 U. S. 235 , 357 U.S. 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 471 U. S.
475 .

															"Jurisdiction is proper . . . where the contacts proximately
result from actions by the defendant himself that create a
'substantial connection' with the forum State." Ibid., quoting McGee v. International Life
Insurance Co., 355 U. S. 220 , 355 U. S. 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 constitutional 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 444 U. S.
295 -296. The Court disclaimed, 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
Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of commerce
with the expectation that they will be purchased by consumers in
the forum State." Id. at 444 U. S.
297 -298 (citation omitted). The Court reasoned: Page 480 U. S. 110 "When a corporation 'purposefully avails itself of the privilege
of conducting activities within the forum State,' Hanson v.
Denckla , 357 U.S. [235,] 357 U.S. 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 manufacturer or distributor . . . is not simply an
isolated occurrence, 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 injury to its
owners or to others." Id. at 444 U. S.
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 defendant'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 Process 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 Page 480 U. S. 111 some valves Asahi sold Cheng Shin into California, Asahi's
awareness that its valves would be sold in California was
sufficient 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 jurisdiction over the defendant. In
the present case, for example, 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 Company in Japan.
The Court of Appeals, adopting the reasoning 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., Page 480 U. S. 112 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 products 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 471 U. S. 475 ; McGee, 355 U.S. at 355 U. S. 223 ,
between 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 471 U. S. 476 ; Keeton v. Hustler Magazine, Inc., 465 U.
S. 770 , 465 U. S. 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, advertising in the forum State, establishing channels
for providing regular advice to customers in the forum State, or
marketing the product through a distributor who has agreed to serve
as the sales agent in the forum State. But 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 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, employees, 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 Industries, Page 480 U. S. 113 452 F.
Supp. 130 (MD Pa. 1978). There is no evidence that Asahi
designed its product in anticipation of sales in California. Cf. Rockwell International Corp. 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 326 U. S. 316 ,
quoting Milliken v. Meyer, 311 U.S. at 311 U. S.
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 relief. 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 444 U. S. 292 (citations omitted). Page 480 U. S. 114 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 severe.
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 dispute 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 jurisdiction 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 jurisdiction over Asahi are
slight. All that remains is a claim for indemnification asserted by
Cheng Shin, a Tawainese corporation, against Asahi. The transaction
on which the indemnification 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, California's
legitimate interests in the dispute have considerably diminished.
The Supreme Court of California argued that the State had an
interest in "protecting its consumers by ensuring 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 Page 480 U. S. 115 standards. Moreover, it is not at all clear at this point that
California law should govern the question whether a Japanese
corporation should indemnify a Taiwanese corporation on the basis
of a sale made in Taiwan and a shipment of goods from Japan to
Taiwan. Phillips Petroleum Co. v. Shutts, 472 U.
S. 797 , 472 U. S.
821 -822 (1985); Allstate Insurance Co. v.
Hague, 449 U. S. 302 , 449 U. S.
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 deterrent to the
manufacture of unsafe components; however, similar 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
addition 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 unwillingness 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 exercised when extending our notions of personal
jurisdiction into the international field." United States v.
First National City Bank, 379 U. S. 378 , 379 U. S. 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). Page 480 U. S. 116 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 unreasonable and
unfair. III Because the facts of this case do not establish minimum contacts
such that the exercise of personal jurisdiction is consistent 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. * We have no occasion here to determine whether Congress could,
consistent 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 Daetwyler 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).

															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 market." Ante at 480 U. S. 112 .
I do agree, however, with the Court's conclusion in Part II-B that
the exercise of personal jurisdiction over Asahi in this case would
not comport with "fair play and substantial justice," International Shoe Co. v. Washington, 326 U.
S. 310 , 326 U. S. 320 (1945). This is one of those rare cases in which

															"minimum requirements inherent in the concept 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 , 471 U. S.
477 -478 (1985). I therefore 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 toward Page 480 U. S. 117 the forum State." Ante at 480 U. S. 112 .
Under this view, a plaintiff would be required to show
"[a]dditional conduct" directed toward the forum before finding the
exercise of jurisdiction 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
unpredictable 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 corresponding
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
toward that State. Accordingly, most courts and commentators 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. [ Footnote 1 ] Page 480 U. S. 118 The endorsement in Part II-A of what appears to be the minority
view among Federal Courts of Appeals [ Footnote 2 ] represents a marked retreat from the analysis
in World-Wide Volkswagen v. Woodson, 444 U.
S. 286 (1980). In that case,

															"respondents [sought] to base jurisdiction on one isolated
occurrence 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 444 U. S. 295 .
The Court held that the possibility of an accident in Oklahoma,
while to some extent foreseeable in light of the inherent mobility
of the automobile, was not enough to establish Page 480 U. S. 119 minimum contacts between the forum State and the retailer or
distributor. Id. at 444 U. S.
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 anticipate being haled into Court there." Id. at 444 U. S. 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 alleviate 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 foreseeability
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 defendant's
product was regularly sold (sufficient contacts). The
Court stated:

															"Hence, if the sale of a product of a manufacturer or
distributor 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 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 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
corporation that delivers its products into the stream of commerce with the expectation that they will be purchased Page 480 U. S. 120 by consumers in the forum State." Id. at 444 U. S.
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 manufacturer 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 444 U. S.
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 consumer . . . took them there." Id. at 444 U. S.
306 -307 (BRENNAN, J., dissenting). [ Footnote 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
Minimum Contacts: World-Wide Volkswagen Corp v. Woodson, 80 Colum.L.Rev. 1341, 1359-1361, and nn. 140-146 (1980). Page 480 U. S. 121 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 operation, and it knew
that it would benefit economically from the sale in California of
products incorporating its components."

															App. to Pet. for Cert. C-11. [ Footnote 4 ] Accordingly, I cannot 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 California is insufficient to establish minimum
contacts with California.

															[ Footnote 1 ] 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.
Philadelphia Resins Corp., 766 F.2d 440 (CA10 1985) (endorsing
stream-of-commerce theory, but finding it inapplicable in instant
case), cert. denied, 474 U.S. 1082 (1986); Montalbano
v. Easco Hand Tools, Inc., 766 F.2d 737 (CA2 1985) (noting
potential applicability of stream-of-commerce theory, but remanding
for further factual findings). See generally Currie, The
Growth of the Long-Arm: Eight 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 approach); Von Mehren
& Trautman, Jurisdiction to Adjudicate: A Suggested Analysis,
79 Harv.L.Rev. 1121, 1168-1172 (1966) (same).

															[ Footnote 2 ]

															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 implicitly 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
(CA11 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); Dalmau 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 dispute" 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 marketing scheme," DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 285, cert. denied, 454 U.S. 1085 (1981).

															[ Footnote 3 ]

															In dissent, I argued that the distinction was without
constitutional significance, 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 444 U. S.
306 -307, and nn. 11, 12. See also id. at 444 U. S. 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 444 U. S.
318 -319 (BLACKMUN, J., dissenting) ("[F]oreseeable use
in another State seems to me little different 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 444 U. S. 295 . See Hedrick v. Daiko Shoji Co., 715 F.2d at 1358-1359.

															[ Footnote 4 ]

															Moreover, the Court found that "at least 18 percent of the tubes
sold in a particular California motorcycle supply shop contained
Asahi valve assemblies," 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.

															JUSTICE STEVENS, with whom JUSTICE WHITE and JUSTICE 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 assertion of personal
jurisdiction is constitutional. See Burger King Corp. v.
Rudzewicz, 471 U. S. 462 , 471 U. S.
476 -478 (1985). Part II-B establishes, after considering
the factors set forth in World-Wide Volkswagen Corp. v.
Woodson, 444 U. S. 286 , 444 U. S. 292 (1980), that California's exercise of jurisdiction over Asahi in
this case would be "unreasonable and unfair." Ante at 480 U. S. 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 Page 480 U. S. 122 the reasonableness of jurisdiction even if the defendant has
purposefully engaged in forum activities." Burger King, 471 U.S. at 471 U. S.
477 -478 (quoting International Shoe Co. v.
Washington, 326 U. S. 310 , 326 U. S. 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 formulated 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 480 U. S. 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 affected by the volume, the value, and the hazardous character
of the components. In most circumstances I would be inclined 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.

Summary: The Supreme Court of the United States ruled that a California court could not exercise personal jurisdiction over a Japanese company, Asahi, in a product liability case. The court considered the burden on the foreign defendant, the interests of the plaintiff and the forum state, and the lack of purposeful availment by the defendant of the forum state's market. The judgment of the California Supreme Court was reversed, and the case was sent back for further proceedings.