Asahi Metal Industry Co. v. Superior Court

480 U.S. 102 (1987)

Yeazell, p. 129-135

 

Facts: A man got into a motorcycle accident and sued Cheng Shin for product liability.  Cheng Shin filed a third-party complaint in California against Asahi, which made parts for Cheng Shin.

 

Procedural Posture: Asahi moved to quash Cheng Shin’s summons, saying California didn’t have jurisdiction.  The California Superior Court denied the motion, and Asahi appealed to the California Supreme Court, which also denied the motion.  Asahi appealed up to the United States Supreme Court.

 

Issue: Does Asahi have minimum contacts with California such that the exercise of personal jurisdiction would not offend “traditional notions of fair play and substantive justice”?

 

Rule: The majority agrees with the five factor test for “fair play”: (1) burden on the defendant, (2) interests of the forum state, (3) interest of the plaintiff, (4) interstate efficiency, and (5) interstate policy interests.

 

Analysis: The Court finds that fair play would be violated because:

 

1.     The burden on the defendant is “severe” because the corporation would have to travel from Japan to California and defend itself under the laws of a foreign country.

2.     The plaintiff is not a California resident, and thus California’s interests in the case are “diminished”.  California can enforce its interest in having safe products in its state indirectly by applying pressure to direct suppliers of goods to California, who in turn will apply commercial pressure to their suppliers.

3.     Cheng Shin has not shown that California is a more convenient forum than Japan or Taiwan in which to pursue its claim.

4.     Jurisdiction is not necessarily in the best interests of the other countries involved.

5.     Jurisdiction is not warranted by any international policy considerations, if they even exist.

 

The court disagrees about whether there are minimum contacts.  Some of the justices believe that in another case with the same contacts but more fair play jurisdiction could hold.

 

Conclusion: The judgment of the California Supreme Court is reversed and California is found not to have jurisdiction over Asahi.

 

Notes and Problems

 

1.     Let’s straighten it out!

a.      It appears that only Part I was unanimous, while Part II-B commanded an 8-1 majority.  Parts II-A and III were actually only approved by four of the nine justices.

b.     Part II-A says there were no minimum contacts.  Part III asserts both that there were no minimum contacts and no fair play.  I believe that the majority that went again these two parts believed that there were minimum contacts, yet no fair play.

c.     Justice Scalia must have believed that there weren’t minimum contacts but there was fair play, or else he disagreed with the application of the five factor test.

d.     Looks like lower courts can do whatever they want in the absence of a majority.  When the cat’s away, the mice will play.  The Court may not find it desirable to reach a majority opinion.  Rather, they might seek to leave certain issues up to the judgment of regional courts that know their area of jurisdiction best.

2.     Would the outcome have changed?

a.      If Asahi had been a U.S. manufacturer, the “fair play” analysis would have been different.  The burden on a U.S. manufacturer would be much lower than a Japanese manufacturer.  However, the plaintiff would still be a foreign corporation and the interests of California would still be limited.  If the plaintiff really wanted to litigate in California, it would be better for Asahi as a U.S. corporation than litigating in Taiwan.  Finally, there would be less of an international conundrum, although the plaintiff would still be international.  All five factors are taken into account together, and if the change in circumstances had warranted a finding of “fair play” from the majority, then I think California would have jurisdiction because a majority would still hold that there are minimum contacts.

b.     If Asahi was a primary defendant, we would presume that Mr. Zurcher would be the plaintiff.  That means in the fair play realm, the plaintiff’s convenience interest and California’s interest would be greater.  I don’t think that would be enough to sway a majority of the court because the burden on the defendant is the number one concern of the five factor test.

c.     Again, I think in this case the interests of plaintiff and forum would be greater, but the burden on the defendant would be too great.

d.     There could be no doubt in this case that minimum contacts were present.  However, I don’t know if the court would be swayed as far as the fair play factors.  There would be a greater forum interest and arguably less burden on the defendant, since they would be set up to do business directly in California and would presumably have direct representatives there.  I think it would be close on fair play, but the court might find jurisdiction.

e.      This would affect the fair play interest in a convenient forum for the plaintiffs.  Cheng Shin would still have to demonstrate, however, that the U.S. is a more convenient forum than Taiwan itself.  I think Cheng Shin would fail here.

3.     I believe Dealer will be subject to personal jurisdiction since the Dealer appears to be located in Florida.  Volvo will be subject to personal jurisdiction because it is partly owned by a domestic company (although I’d like to know what percentage of Volvo is owned by GM) and because it actively solicits business in Florida.  I think National Distributor could be subject to personal jurisdiction in Florida if we assume they do business there with Dealer.  I think BrakeCo is the most problematic, even though they seem to be primarily responsible for the actual accident.  I’d like to know if BrakeCo sells replacement parts in Florida or whether they only sell components to foreign manufacturers (possibly for assembly in foreign facilities).  That might help establish whether there are minimum contacts.

4.     “Substantial justice and fair play” is no longer merely a descriptor for the minimum contacts necessary to gain jurisdiction, but rather an independent test.

 

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