metal industry

Asahi Metal Industry Co. v. Superior Court

Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987) was a case decided by the United States Supreme Court, in which the court considered whether a foreign corporation, by merely being aware that its products could end up in the forum state and into the "stream of commerce" which later caused injuries, satisfied the minimum contact necessary to satisfy jurisdictional due process requirements.

Facts

Asahi Metal Industry Co. was a Japanese company, which manufactured a valve used in motorcycle wheels. These valves were bought by Cheng Shin Rubber Industrial Co., a Taiwanese distributor. One of these valves was alleged to have failed, causing an accident in California. The accident victim sued Cheng Shin in a California state court, and Cheng Shin in turn filed a third-party complaint(cross-complaint) seeking indemnification from Asahi. Asahi contested California's personal jurisdiction over Asahi, but the California courts found jurisdiction based on Asahi's alleged awareness of the international distribution of its products. Specifically, Asahi moved to quash Cheng Shin's summons. The California Superior Court and the California Supreme Court both denied the motion, leading Asahi to appeal to the United States Supreme Court.

Result

The Supreme Court articulated the five-factor test for determining whether "traditional notions of fair play" would permit the assertion of jurisdiction over a foreign (meaning out-of-state) defendant:

  1. What is the burden on the defendant?
  2. What are the interests of the forum state?
  3. What is the interest of the plaintiff?
  4. Does the allowance of jurisdiction serve interstate efficiency?
  5. Does the allowance of jurisdiction serve interstate policy interests?

The Court found that in this case, the burden on the defendant was severe based on both the geographic distance and legal dissimilarities between Japan and the United States. Cheng Shin was not a California resident, diminishing California's interest in the case. Cheng Shin also did not show that it would be inconvenienced if the case for indemnification against Asahi were heard in Japan or Taiwan instead of California. Finally, neither interstate efficiency nor interstate policy interests would be served by finding jurisdiction.

Because an assertion of jurisdiction would not be "fair play", the California Court of Appeal (California's Supreme Court) was reversed.

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