Does a state court's exercise of personal jurisdiction over a foreign component-part manufacturer, whose only connection to the forum is awareness that its product would reach the forum through the stream of commerce, comport with the Due Process Clause where the burden on the defendant is severe and the forum's and plaintiff's interests are slight?

Gary Zurcher lost control of his Honda motorcycle on a California highway in September 1978, severely injuring himself and killing his wife and passenger, Ruth Ann Moreno. Zurcher filed a product liability action in California Superior Court in Solano County, alleging that a sudden loss of air and explosion in the rear tire was caused by a defective tire, tube, and sealant. He sued Cheng Shin Rubber Industrial Co., the Taiwanese manufacturer of the tube. Cheng Shin cross-complained for indemnification against Asahi Metal Industry Co., the Japanese manufacturer of the tube's valve assembly. Zurcher's claims were settled, leaving only the indemnity action between Cheng Shin and Asahi.

Asahi manufactured valve assemblies in Japan and sold them to Cheng Shin in Taiwan, shipping them from Japan to Taiwan. Cheng Shin bought 150,000 assemblies in 1978, 500,000 in 1979, 500,000 in 1980, 100,000 in 1981, and 100,000 in 1982; these sales represented 1.24 percent of Asahi's income in 1981 and 0.44 percent in 1982. Cheng Shin sold finished tubes worldwide, and about 20 percent of its U.S. sales were in California. Asahi had no offices, property, or agents in California, solicited no business there, made no direct sales there, and did not control the distribution system carrying its valves to California. A Cheng Shin manager stated that Asahi knew its valves would end up throughout the United States, including California.

Zurcher filed suit in the Superior Court of California, Solano County, in September 1979. After Cheng Shin cross-complained against Asahi for indemnification, Asahi moved to quash service of summons, arguing that California's exercise of jurisdiction violated the Due Process Clause of the Fourteenth Amendment. The Superior Court denied the motion. The California Court of Appeal issued a peremptory writ of mandate commanding the Superior Court to quash service, concluding that mere foreseeability that the product would be sold in California was insufficient. The Supreme Court of California reversed and discharged the writ, holding that Asahi's awareness that its components would reach California through the stream of commerce was sufficient for jurisdiction. The United States Supreme Court granted certiorari, reversed the California Supreme Court's judgment, and remanded.

(O'Connor, J.)

No. California's exercise of personal jurisdiction over Asahi would be unreasonable and unfair and would offend traditional notions of fair play and substantial justice. Eight Justices joined this reasonableness analysis in Part II-B, which was the opinion of the Court.

The Due Process Clause limits a state court's power over nonresident defendants. Under International Shoe Co. v. Washington, 326 U.S. 310 (1945), jurisdiction requires minimum contacts with the forum such that the suit does not offend fair play and substantial justice. Even where a defendant has purposefully engaged in forum activities, jurisdiction may be defeated if it is unreasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).

Reasonableness depends on the burden on the defendant, the forum State's interests, the plaintiff's interest in relief, the interstate judicial system's interest in efficient resolution, and the shared interest of the several States in furthering substantive social policies. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). Here the burden on Asahi is severe: it must defend itself in a foreign legal system across national borders, a burden entitled to significant weight.

The interests of the plaintiff and forum are slight. Only an indemnification claim between a Taiwanese corporation and a Japanese corporation remains. The underlying transaction occurred in Taiwan, Cheng Shin is not a California resident, and Cheng Shin did not show that California is more convenient than Taiwan or Japan. California's interest in enforcing safety standards is diminished because the dispute concerns indemnification, and it is unclear that California law governs. Courts must also weigh the procedural and substantive interests of other nations and the Federal Government's foreign relations policies, exercising great care and reserve in the international field.

A plurality (Part II-A) would also have held that placing a product in the stream of commerce, without additional conduct purposefully directed at the forum, does not establish minimum contacts. Because Part II-B independently requires reversal, the judgment of the Supreme Court of California is reversed and the case remanded.

Concurrence in part and concurrence in the judgment (Brennan, J.) Brennan, joined by White, Marshall, and Blackmun, disagrees with Part II-A. The stream of commerce is the regular and anticipated flow of products from manufacture to distribution to retail sale. A participant aware that the final product is marketed in the forum State cannot be surprised by a lawsuit there, and it benefits economically from retail sales and indirectly from the State's commercial laws. No showing of additional conduct is required. Asahi's regular, extensive sales of components to a manufacturer it knew sold the final product regularly in California establish minimum contacts. He joins Part II-B in finding jurisdiction unreasonable under fair play and substantial justice.

Concurrence in part and concurrence in the judgment (Stevens, J.) Stevens, joined by White and Blackmun, declines to join Part II-A for two reasons. First, it is unnecessary: Part II-B's finding that jurisdiction is unreasonable independently requires reversal. Second, Part II-A misapplies the test to the facts. No bright line separates mere awareness from purposeful availment, and the volume, value, and hazardous character of the components matter. A regular course of dealing involving over 100,000 units annually over several years would ordinarily constitute purposeful availment.