Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty.

Justice O'Connor's plurality began with the principle that due process requires contacts arising from the defendant's own purposeful actions toward the forum. Under International Shoe, Hanson, Burger King, and World-Wide Volkswagen, a defendant must purposefully avail itself of the forum's market so that it can reasonably anticipate being sued there.

The plurality distinguished a product's foreseeable arrival in a State from conduct deliberately aimed at that State. Placing a component into the stream of commerce, without more, does not itself show an intent to serve every State in which the component may eventually be sold. The plurality said additional conduct could establish purposeful direction, such as designing for the forum market, advertising there, providing customer-service channels there, or using a distributor committed to serving that forum.

On the record before it, the plurality found no forum-directed conduct by Asahi. Asahi sold valves in Taiwan to Cheng Shin; it neither controlled nor created the distribution network that carried finished tubes to California, and it had no California business presence, solicitation, advertising, property, agents, or evidence of California-specific product design. Thus, even assuming Asahi knew some valves would reach California, the plurality concluded that it had not purposefully availed itself of the California market.

Only four Justices joined this stream-of-commerce analysis. Justice Brennan, joined by three others, believed Asahi's awareness that its regularly supplied components would be marketed in California could itself establish minimum contacts. Justice Stevens, joined by two others, thought the issue unnecessary and questioned the plurality's characterization of Asahi's substantial, ongoing sales relationship as mere awareness.

Even when minimum contacts exist, due process independently requires a reasonable exercise of jurisdiction. The Court weighed the burden on the defendant, the forum State's interest, the plaintiff's interest in relief, the judicial system's interest in efficient resolution, and the relevant substantive policies.

The burden on Asahi was unusually severe. It was a Japanese corporation required to defend itself in a distant State and within a foreign legal system. The Court emphasized that this international burden deserves substantial weight when a state court extends its jurisdiction across national borders.

California's and Cheng Shin's interests were slight. The original California injury claims had settled, leaving only Cheng Shin's indemnification claim against Asahi. Cheng Shin was Taiwanese, Asahi was Japanese, the underlying sale occurred in Taiwan, and the components moved from Japan to Taiwan. Cheng Shin did not show that California was more convenient than Taiwan or Japan.

California's general interest in product safety did not materially strengthen its interest in this remaining dispute, which concerned indemnification rather than direct compensation for a California victim. It was also uncertain whether California law would govern an indemnity claim between foreign corporations arising from an overseas transaction.

The Court further instructed that state courts must account for the interests of other nations and for federal foreign-relations concerns in international jurisdiction cases. Given Asahi's heavy burden and the minimal interests of California and Cheng Shin, asserting jurisdiction offended traditional notions of fair play and substantial justice.