Stream of Commerce or Stream of Commerce Plus, we may never know…

This week we’re discussing Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987) a case that is in every civil procedure case book and every law student reads, despite no real law being determined by it.

This case stems from a products liability lawsuit in which a tire blows on a motorcycle, causing serious injuries to the driver and apparently death to the driver’s wife, who was riding on the back of the motorcycle. This story reminds me of a tee shirt that I’ve seen somewhere, probably on the boardwalk of some beach. Something to the effect of “If you’re reading this, the B** fell off?” Well Mr. Zurcher probably felt pretty bad if he was wearing such a shirt at the time of this accident. Regardless, Zurcher files a products liability lawsuit against the manufacturer of the tires, Cheng Shin, a company from Taiwan who is appropriately sued in California as they sell the tires directly in the forum state. However, Cheng Shin files a cross complaint to indemnify another company, Asahi Metal Industry, from whom they buy valves for the tires. The indemnification law suit is basically their way of saying that they feel that Asahi is at least partially responsible for the issue that caused this accident, and should at least contribute to the settlement as deemed appropriate by the court. Cheng Shin settles the underlying claim with Zurcher, but still wants a contribution from Asahi. Asahi sues the Superior court for the personal jurisdictional question, as they claim that they in fact do not have minimum contacts in California, they deal directly with Cheng Shin, and that the venue is not appropriate.

The reason that I make the comment about there being no law determined in this case, is that there is a 4-4-1 split among the justices, no majority means no law.

The first grouping says that when you enter a product into the stream of commerce, and have reason to believe where it may end up, that you are liable to litigation in that forum. The second grouping says that with the stream of commerce that there needs to be another step, another level of purposeful availment, or reaching into the forum to avail one’s self. The final justice seems only to care about the fact that they are subject to this case, despite the fact that the other justices found 2 different ways to get there.

So we start to see two different theories to discuss when breaking down similar cases, and different courts could adopt either method. HINT: When you see a similar fact pattern or hypo, break it down and discuss it both ways.