## Facts

- Asahi Metal Industry Co., Ltd., a Japanese corporation, manufactured tire valve assemblies in Japan and sold them in large quantities to Cheng Shin Rubber Industrial Co., Ltd., a Taiwanese tire maker.
- Cheng Shin incorporated Asahi’s assemblies into tires sold worldwide, including in the United States; a substantial portion of Cheng Shin’s U.S. sales occurred in California.
- A California motorcycle accident led to a products-liability suit by an injured rider against multiple defendants, including Cheng Shin, alleging defects in the tire, tube, and sealant.
- Cheng Shin filed a cross-complaint in California seeking indemnification from Asahi for any liability arising from the accident.
- The injured rider’s claims settled and were dismissed; the only remaining dispute was Cheng Shin’s indemnity claim against Asahi, leaving a controversy between two foreign companies arising from a transaction centered outside California.
- Asahi asserted it had no offices, property, or direct business operations in California and did not specifically target the California market.

## Issues

1. Whether California’s exercise of personal jurisdiction over Asahi comported with due process under the “fair play and substantial justice” reasonableness factors.
2. Whether a foreign component manufacturer’s awareness that its components may reach the forum through a downstream distributor is sufficient for “minimum contacts,” or whether additional forum-directed conduct is required.

## Decision

- The Supreme Court reversed and remanded, unanimously concluding that California’s exercise of personal jurisdiction over Asahi violated due process.
- A majority held that, even assuming minimum contacts, asserting jurisdiction was unreasonable given the heavy burden on Asahi, California’s limited interest after settlement of the personal-injury claims, and the international context.
- The Court did not produce a majority rule on the stream-of-commerce theory:
  - A plurality concluded that placing a product into the stream of commerce, without additional forum-directed conduct, does not establish purposeful availment.
  - A concurrence would treat awareness of regular marketing in the forum as sufficient for minimum contacts, but still found jurisdiction unreasonable.
  - Another concurrence suggested minimum contacts may depend on the volume, value, and hazardous character of the component, and found it unnecessary to resolve minimum contacts because reasonableness controlled.

## Legal Principles

- Due process requires that personal jurisdiction satisfy both (1) minimum contacts and (2) reasonableness consistent with “fair play and substantial justice.”
- Even if minimum contacts are assumed, jurisdiction can be unconstitutional when the balance of reasonableness factors makes litigation in the forum unfair, especially where an alien defendant faces substantial burdens.
- Reasonableness analysis considers: the burden on the defendant, the forum state’s interest, the plaintiff’s interest in convenient and effective relief, the efficient resolution of controversies, and the shared interests of jurisdictions (including international interests and foreign-relations concerns).
- No controlling Supreme Court rule emerged on whether mere placement of goods into the stream of commerce with awareness of forum sales establishes purposeful availment; lower courts may not treat the case as settling a single stream-of-commerce test.

## Conclusion

The Court held that California could not constitutionally exercise personal jurisdiction over a Japanese component manufacturer in an indemnity dispute with a Taiwanese company when the remaining case had minimal forum interest and the international burdens and comity concerns made jurisdiction unreasonable, while leaving unsettled the precise minimum-contacts standard for stream-of-commerce cases.


Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102 (1987)