Source: http://www.kslaw.jp/blog/2019/01/international-jurisdiction-in-products-liability-cases-1-1458825.html
Timestamp: 2019-04-20 16:52:41+00:00

Document:
With the increase of foreign trade, more and more foreign manufacturers and distributors have become involved in products liability litigation in the United States. Whether the courts in the United States (both federal and state) have jurisdiction over them or not is a primary concern for those foreign companies. In many cases, their foreign products reach the forum states through the stream of commerce, and then they are distributed to the U.S. customers by regional distributors, wholesalers and retailers. Therefore, in many products liability cases in which defective products of foreign manufacturers and distributors cause injuries to persons in the United States, those foreign companies do not have a direct relationship with the forum states. Therefore, they cannot clearly anticipate whether they will be subject to the jurisdiction of the forum states.
However, those manufacturers and distributors derive legal and economic Benefits from the direct or indirect sale of their products in the forum states, and those states have an interest in protecting their residents firom defective products. It is sometimes unfair to permit them to escape from the reach of the forum state's judicial power.
The extent and reach of the forum state's judicial power are limited by the Due Process Clause of the United States Constitution, and the courts in the United States have developed and refined the concept of "minimum contacts'' through a series of court decisions in order to assure due process for nonresident defendants. Stream of commerce theory is advocated in order to show that minimum contacts exist between the forum state and the nonresident defendant who does not have any direct contact with the forum state but who has placed its products into the ordinary channels of sale and has derived a benefit from the resulting sale of its products in the state.
This article first 1ooks at the origin and the development of the concept of minimum contacts in the leading United States court cases and then examines the minimum contacts in the international setting in the decision of the Supreme Court in the Asahi case. Next, this article discusses the federal and state court decisions after Asahi and looks at how American courts after Asahi have applied the stream of commerce theory in international settings. The article then reviews foreign countries' approaches to this problem, especially Japan and European civil law countries. Finally, this article concludes that foreign manufacturers and distributors, whose products reach the United States through the normaI course of commercial distribution and causes injuries in the United States, should be subject to the jurisdiction of the courts in the United States.
In lnternational Shoe Co. v. State of Washington, the Supreme Court of the United States laid down the modern approach to the constitutional limitations on a state's exercise of judicial power over persons outside its boundaries. The Court abandoned the strict and restrictive jurisdictional principle rendered in Pennoyer v. Neff, which required the physical presence of a defiendant within the boundaries of the state when served in order to exercise personal jurisdiction over a nonresident defendant. Instead, the Court in International Shoe established the minimum contacts test.
The Court held that states had jurisdiction over nonresident defendants, if they had "certain minimum contacts with the forum State'' such that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice. The Court justified the minimum contacts doctrine by the benefit and protection of the law of the state in which the defendant exercised the privilege of conducting activities. The Court stated that ''to the extent that a corporation exercises the privilege of conducting activities within a state," it was not unreasonable to require the corporation to respond to a suit in the state, as one of its obligations corresponding to the exercise of that privilege.
Then the Court fiound substantial contacts between the defendant and the state which were sufficient to support the claim for taxes on the commissions generated by the activities of its sales representatives in the state. The Court based its decision on the facts that the defendant regularly and systematically solicited orders in the state through eleven to thirteen salesmen employed by the defendant and that the defendant regularly shipped a substantial volume of merchandise to purchasers within the state, Thus the Court concluded that the exercise of jurisdiction of the court of Washington over the Delaware corporation did not offend the Due Process Clause.
As the Court noted, defendant's contacts with the forum state should be assessed in light of "the fair and orderly administration of the laws." based on the quality and nature of defendant's activities. The Court did not require defendant's physical presence in the forum state for the exercise of jurisdiction. As the result, the Court opened the way for more flexible and broader application of the state's jurisdiction over nonresident defendants.
However, the concept of minimum contacts is literally vague, and it does not necessarily give a clear guidance for nonresident defendants whether they will be subject to the jurisdiction of a forum state. The concept of minimum contacts and its relationship with the"notions of fair play and substantial justice" have been developed and clarified in the subsequent cases.
Since International Shoe, courts in the United States have relaxed the minimum contacts requirement and expanded the jurisdiction of states over nonresident defendants. For example, in McGee v. International Life Ins. Co., the Supreme Court of the United States sustained the assertion of jurisdiction by a California court over a nonresident defendant, although the defendant's sole contact with Califonia was only a single offer of a contract of insurance by mail to the insured. The Court held that, when "the suit was based on a contract which had substantial connection with [the forum state],'' the courts have jurisdiction over the nonresident defendant under the Due Process Clause.
Although the Court referred to the defendant's contants with the forum state and minimum contacts were critical elements for the exercise of jurisdiction, the contact was very limited under the facts in this case. The Court did not insist that defendant's contacts with the forum state be regular or systematic. It was enough that the insurance company had initiated the contact with a resident, the suit was based on that contact, and the state had a strong regulatory interest in the subject of the litigation.
Instead of the suit emphasizing the defendant's contacts with the forum state, the Court emphasized the interest of the forum state, the interest of the plaintiff, the location of the evidence, and the inconvenience to the defendant. The Court examined these factors and concluded that the state's "manifest interest in providing effective means of redress for its residents" and the plaintiff's interest in suing in the forum state outweighed the inconvenience to the defendant.
The Court expressly stated that its decision relied on the judicial trend toward the expansion of the scope of a state's judicial power over nonresident defendants. The Court attributed the judicial trend to "the fundamental transformation'' of the national economy which invited a great increase of interstate business activities. In addition, the Court justified the broad application of the state's jurisdiction by the development of "modem transportation and communication'' which had made the defense of a suit in foreign state substantially less burdensome for the nonresident defendant.
Contrary to the expansive trend of personal jurisdiction represented by McGee, in World-Wide Volkswagen v. Woodson, the Supreme Court again restricted the exercise of a state's personal jurisdiction over a nonresident defendant, emphasizing the protection of a nonresident defendant and the need to consider interstate federalism.
Responding to plaintiff's argument that it was foreseeable for the defendants to be sued in Oklahoma, the Court stated that even though foreseeability was a critical element in the due process analysis, it was not the mere likelihood that its product would reach the forum state, but defendant's reasonable anticipation of "being haled into court'' in the forum state that must support the exercise of jurisdiction.
Then, referring to the Hanson v. Denckla, the Court held that when a defendant "purposefully avails itself of the privilege of conducting activities within the forum State,'' the defendant could reasonably anticipate "being haled into court there" and the exercise of forum state's jurisdiction was reasonable and consistent with the Due process Clause.
Then the Court denied the exercise of personal jurisdiction of Oklahoma over the New York corporations, stating that the car owner's unilateral activity in bringing a product sold by defendant elsewhere into the forum state was not enough to satisfy the minimum contacts requirement, even though it was foreseeable that purchasers of an automobile might take it to Oklahoma.
[F]orum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State, and those products subsequently injure forum consumers."
Although, the Supreme Court approved the stream of commerce theory in dictum in World-Wide Volkswagen, whether the Court would be satisfied merely by a deflendant's act of placing its product in the stream of commerce or whether it would require defendant's further action in more purposefully directing its marketing efforts at the forum state was not spelled out. The lower courts struggled with interpreting the language in World-Wide Volkswagen and reached inconsistent conclusions in subsequent cases.
In Wide-World Volkwagen, the Court further articulated a two-prong analysis enumerating multiple factors to be considered in the fainess and reasonableness test. As those multiple factors, the Court indicated (1) "the burdens on the defendant,'' (2) "the forum State's interest in adjudicating the dispute,'' (3) ''the plaintiff's interest in obtaining convenient and effective relief '' (4) "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," and (5) "the shared interest of the several States in furthering fundamental substantive social policies.'' These multiple factors were refined and restated in Burger King and Asahi. Emphasizing the territorial limitation on the sovereign power of each state from the point of federalism, however , the Court concluded that the interstate federalism concems superseded the consideration of other multiple factors.
Reflecting the different views of the Due Process Clause's limitation on a state's jurisdiction, the courts in the United States went in two divergent directions. In addition, even after World-Wide Volkswagen, the relationship between the minimum contacts test and the flairness and reasonableness test had not been clarified. In Burger King Corp. v. Rudzewicz, Justice Brennan established a general framework for the due process analysis and utilized a two-pronged test.
Justice Brennan first1ooked to the contacts of the nonresident defendant　with　the forum state.　He held that the purpose of the Due Process Clause was to add predictability as to whether the potential defendant could be sued in the forum state. Thus, if he defendant had "purposefu1ly directed'' his activities toward the residents of forum state, and the litigation had arisen out of or related to those activities, the defendant had a fair warning and a reasonable expectation of being sued in the forum state.
In referring to the stream of commerce theory, Justice Brennan stated that the "forum State does not exceed its power under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State" and those products subsequently injure forum consumers. Thus, in Burger King, Justice Brennan reaffirmed again in dicta the stream of commerce theory articulated in Worid-Wide Volkswagen, and attributed the legitimacy of the theory to a fair warning and a reasonable prediction that the defendant would be sued in the forum state.
Further, Justice Brnnan explained that purposefully-established minimum contacts must be found before the examination of the fainess and reasonableness of subjecting the defendant to litigation in the forum state. He stated that ''[o]nce it has been decided that a defendant purposefully established minimum contacts within the forum state,these contacts may be considered in the light of other fiactors to determine whether the assertion of personal jurisdiction would comport with "fair play and substantial justice."
In addition, the Court articulated the relationship between the minimum contacts test and the fairness and reasonableness test, holding that: (1) even if the minimum contacts are slight, so long as the fairness and reasonableness is strong, courts have jurisdiction over the defendant, (2) if the defendant purposefully directed his activities toward the forum state so that the minimum contacts test is plainly satisfied, the burden of the proof shifts to the defendant to show that other factors might make jurisdiction unreasonable, and (3) even if the defendant purposefully engaged in the activities within the forum state and the minimum contacts requirements are satisfied, the defendants can avoid the exercise of state's jurisdiction over them by the strong showing of unfaimess or unreasonableness. Thus, Justice Brennan clarified the minimum contacts test and showed how it and the fairness and reasonableness test are mutually related each other.
As the factors to be considered in the fairness and reasonableness test at the second prong, Justice Brennan examined five factors enumerated in World-Wide Volkswagen and considered the concrete interests of each party and the forum state. Then considering defendant's substantial and continuous relationship with Florida and defendant's failure to show the unfairness and unreasonableness of the exercise of jurisdiction in Florida, he concluded that the exercise of 1ong-arm jurisdiction over the defendant did not offend the Due Process Clause.
Although the minimum contacts test had evoIved primarily in domestic cases, in Asahi Metal industry Co. v. Superior Court of California, the Supreme Court applied the minimum contacts test to the intemational context. In this case the Court first unanimously held that it would be unfair and unreasonable for a court of California to exert jurisdiction over a Japanese component parts manufacturer for an indemnification cross-claim by the Taiwanese manufacturer of the final product, once the products liability claim by the injured plaintiff had been settled and dismissed. On the issue of whether the Japanese manufacturer had established minimum contacts with California, the Court was severely divided into two four-justice plurality opinions, and a third opinion by the ninth justice. As the result of its firactured opinion, the Court failed to provide a clear standard for lower courts and both state and federal courts have struggled to apply Asahi and have not done so consistently.
In 1978 while Gary Zurcher was driving his Honda motorcycle in Cali1liomia, he lost control of his motorcycle and caused an accident in which he was severely injured and his wife was killed. In September 1979, Zurcher and his deceased wife's children filed a product liability action in a court of California against Cheng Shin Rubber Induslrial Co.,Ltd. (Cheng Shin), a Taiwanese manuliacturer of the tire tube, and Sterling May Co., a California retailer. Zurcher alleged in the complaint that the accident was caused by a defect of the tire manufactured by Cheng Shin. Cheng Shin, in turn, filed a cross-complaint seeking indemnity from its co-defendants and from Asahi Metal Industry Co., Ltd. (Asahi), a Japanese manufacturer of the tire tube's valve assembly. Asahi moved to quash Cheng Shin's service of summons, arguing that Asahi did not have the required minimum contacts with California, so that the exercise of personal jurisdiction over Asahi would be inconsistent with the Due Process Clause of the Fourteenth Amendment of the United States Constitution. Zurcher's claims against Cheng Shin and the other defendants were eventually settled and dismissed, leaving only Cheng Shin's indemnity action against Asahi pending in the California court.
The trial court found the following facts. Asahi is a major manufacturer of tire valve assemblies in Japan and sells its assemblies to several manufacturers including Cheng Shin for the use as component parts in tire tube products. Asahi had done substantial business with Cheng Shin for ten years, exporting its valve assemblies from Japan to Taiwan, although the sales to Cheng Shin represented a small portion of Asahi's gross income. Cheng Shin purchased valve assemblies from other suppliers as well, and sold its final products all over the world including the United States. Even though Asahi did not have direct contact with California, substantial numbers of Asahi's valve assemblies reached California after being incorporated in tires. While Asahi was aware that the valve assemblies sold to Cheng Shin would reach California, Asahi's president declared that Asahi never contemplated that sales to Cheng Shin in Taiwan would subject it to litigation in California.
The Superior Court of California denied Asahi's motion to , quash service of summons, finding that"Asahi had the requisite minimum contacts with California and that jurisdiction was fair and reasonable.'' The court relied on the following factors: (1)a significant number of tubes with Asahi valve assemblies were sold in California, (2)Asahi sold a substantial number of valve assemblies to Cheng Shin, (3) Cheng Shin was doing substantial business with California, and (4) Asahi knew that its valve assemblies would be incorporated into tubes sold in California.
The California Court of Appeals issued a writ of mandate ordering the Superior Court of California to quash service of summons, holding that mere foreseeability that some of its products incorporated into final products would be used in California was not a sufficient basis for requiring Asahi to defend this action a California court.
The Supreme Court of California reversed the decision of the Court of Appeals, holding that the minimum contacts requirement was satisfied when a component parts manufacturer intentionally sold its products to another manufacturer, knowing that its component parts incorporated into final products would be sold in the forum State. The court held that: (1) Asahi was doing substantial business in California through Cheng Shin and indirectly benefited from these sales of finished products including its component parts. (2) Asahi knew that some of its products would probably reach to California and should reasonably have anticipated being haled into court in California. Then the court concluded that even though Asahi did not have direct ties with California and did not design or control the distribution system that carried its valve assemblies into California, Asahi had sufficient contacts with California so that the exercise of jurisdiction over Asahi was consistent with constitutional due process.
The Supreme Court of California further examined whether the exercise of jurisdiction satisfied the fairness and reasonableness test. Although the court acknowledged that the state's interests was not so strong as if it were directly providing a means of redress for its injured resident, the California court found the state had a substantial interest in asserting jurisdiction over Asahi. First,the state had an interest in protecting its consumers through having foreign manufacturers comply with state safety standards. Second, the state had an interest in the administration of its laws and had jurisdiction when most of the evidence was within its boundaries. Third, the state had an interest in avoiding conflicting decision with floreign countries.
The Supreme Court of the United States granted certiorari and reversed the decision of the Supreme Court of California. Following the decision in Burger King, the court used thet wo-prong analysis to determine whether California could exert jurisdiction over Asahi consistent with due process.
While all nine justices agreed that the exercise of jurisdiction by California over Asahi on the indemnity claim was inconsistent with the Due Process Clause, the Court was sharply divided into three opinions on the issue of whether the placement of the products into the stream of commerce with awareness that the products would reach the forum state would satisfy the minimum contacts test. Justice O'Connor wrote for four judges and ruled that Asahi lacked minimum contacts with California. Justice Brennan, writing for four justices, found jurisdiction based on the stream of commerce could be upheld. Justice Stevens, the ninth justice, found that examination of minimum contacts was not necessary since the court found the exercise of the jurisdiction was unfair to the defendant. The confusion in the Court's opinion reflected the justices' different views on the stream of commerce theory and the limitation of the state's judicial power over nonresident defendants.
In Part II-A of her opinion, Justice O'Connor focused her examination on the defendant's action in the forum state as the basis of minimum contacts, and she held that when the defendant purposefully avails itself of the privilege of conducting activities within the forum state, it was not unreasonable to subject the defendant to suit there. For the exercise of personal jurisdiction over a nonresident defendant, Justice O'Connor required"substantial connection"between the defendant and the forum state originating from the defendant's activities ''purposefully directed'' toward the forum state. She then concluded that the mere act of placing a product into the stream of commerce, with awareness that continuing commercial transactions would sweep the product into the forum state,was not enough to conclude that the defendant parts manufacturer had purposefully directed activities toward the forum state.
To make defendant's activities count as purposefully directed toward the forum state, Justice O'Conner would recluire that defendant engage in additional conduct indicating an intent or purpose to serve the market in the forum state. As such additional conduct by the defendant, Justice O'Conner listed acts like (1)"designing the product for the market in the forum State, '' (2) ''advertising in the forum State," (3) "establishing charnnels for providing regular advice to customers in the forum State, or (4) ''marketing the product through a distributor who has agreed to serve as the sales agent in the forum State.'' Then, examining the acts of Asahi toward California, Justice O'Conner concluded that the exercise of personal jurisdiction over Asahi by the Superior Court of California exceeded the limits of due process, since Asahi did none of the acts that could turn selling a component to the manufacturer of the finished product outside, the United States into ''purposefully directing" its products to California by engaging in efforts to market its products there.
Justice Brennan objected that Justice O'Conner's opinion represented a marked retreat from the Court's analysis in World-Wide Volkswagen, noting that the Court in World-Wide Volkswagen carefully distinguished the case in which the defendant's products reached a forum state through a regular chain of distribution from the case in which the consumer fortuitously transported defendant's products to the forum state. In the former case, Justice Brennan noted that, according to W,orld-Wide Volkswagen, due process merely requires the defiendant's expectation that their products would be purchased by consumers in the forum state once the defendant delivered its products into the stream of commerce.
Justice Brennan also noted that in World-Wide Volkswagen the Court had cited Gray in which the Supreme Court of lllinois applied the stream of commerce theory and asserted jurisdiction over a component parts manufacturer that did not have direct contact with Illinois. He concluded from thefacts that Asahi was aware of the operation of the distribution system and Asahi received economic benefit from the sales in California. Thus, shipping tire valve assemblies to Taiwan with notice that they would be incorporated in tires sold to the US. market was sufficient to support a finding that minimum contacts existed between Asahi and the state where its product eventua1ly caused harm to a consumer.
Justice Stevens concurred in the judgment. If the exercise of jurisdiction by the forum state was unreasonable and unfair, examination of minimum contacts was not necessary to determine whether a state court's assertion of personal jurisdiction was constitutional. Nevertheless, Jusitice Stevens rejected Justice O'Conner's distinction between a"mere awareness'' that a component would find its way into the forum state and "purposeful availment ' of the forum's market. Instead, Justice Stevens asserted that the purposeful availment determination in the stream of commerce setting required "a constitutional determination that is affected by the volume, the value and the hazardous character of the components.'' Then he implicitly recognized minimum contacts between Asahi and California, stating "a regular course of dealing that results in deliveries of over 100,000 units annually over a period of several years would constitute "purposeful availment'' even though the item delivered to the forum state was a standard products marketed throughout the world.
After addressing the role of fairness and reasonableness in the due process analysis, the Court evaluated five factors articulated in World-Wide Volkswagen and restated in Burger King, and concluded that the exercise of personal jurisdiction over Asahi would be unreasonable and unfair. Justice O'Conner delivered the opinion of the Court. Eight Justices concurred in her opinion in this section in ruling that the indemnity cross complaint by Cheng Shin against Asahi should be dismissed.
Second, the Court discussed the interests of the plaintiff and the forum state. The Court noted that "[w]hen minimum contacts have been established, often the interests of the plaintiff and the forum in the exercise of jurisdiction will justify even the serious burdens placed on the alien defendant.'' However, the Court found that here these interests were slight and did not justify the serious burdens on the defendant.
The Court reasoned that Cheng Shin had not demonstrated that California was a more convenient forum than Taiwan or Japan for the litigation of the indemnification claim between these Taiwanese and Japanese corporations. The Court also found that the interest of California had considerably diminished, because neither party was a resident in California, and it was uncertain whether California law would govern the indemnity claim.
As stated in part II-B, both parties in the dispute of Cheng Shin's indemnification claim in Asahi were foreign corporations and no forum resident was involved in this dispute. In addition, Cheng Shin's indemnification claim was based on the contraot between a Taiwanese corporation and a Japanese corporation, and related to the shipment from Japan to Taiwan. Therefore, the interests of California to resolve Cheng Shin's indemnification claim in that forum were very limited. Further, the interest of Cheng Shin in obtaining the relief in California was not so strong because Cheng Shin could seek the relief in the courts of Taiwan or Japan even if the jurisdiction of California were denied. In addition, the burden on Asahi to defend litigation in California was very severe. Asahi's officials must travel the long distance from the Japanese headquarters to the forum in California to attend the trial, and Asahi must submit its documents under an unfiamiliar foreign country's judicial system. In the light of these facts, the burden on Asahi overcame the interests of Cheng Shin and the State of California. The Court correctly held that the exercise of jurisdiction of California against Asahi was unfair and unreasonable on this claim for indemnity.
However, Asahi should be distinguished from the case where a resident of the forum state sues a foreign corporation to recover injuries sufflered in the forum state. In such case, both the plaintiff and the forum state may have strong interests in asserting jurisdiction over the foreign company. The forum state has a strong interest in providing an effective means of redress for its injured resident who would find it impractical to sue in the defendant's home jurisdiction. A resident plaintiff has a strong interest in avoiding the expenses, inconvenience, and potential bias of the foreign defendant's jurisdiction. The assertion of jurisdiction over a foreign corporation in these circumstances is not necessarily unfair and unreasonable.
Certainly, the assertion of a state's jurisdiction over a foreign defendant affects the foreign relations of the United States by creating the possibility of retaliatory actions by other nations. Further, it necessarily involves each state in the scope of the federal power over foreign relations and foreign commerce to a constitutionally impermissible degree. In intemational cases like Asahi, courts need to pay a special caution to the fairness and reasonableness of the limitation on the state's judicial power, international relationships, and the govemment's foreignpolicies.
However, the federalism consideration should not be given too much weight in the due process analysis. The argument for limitation based on federalism is that the states stand as coequal sovereigns and possess rights against each other. Therefore, a state may not assert jurisdiction over a person or property located in another state, because to do so would violate a right possessed by another coequal sovereign. This territorial sovereignty theory of jurisdiction is traditionally traced to the case of Pennoyer. The argument is based on the contention that the several states of the United States are in all respects like independent countries, expect insofar as the federal constitution controls. The Pennoyer Court never asserted that there was a direct constitutional basis for the territorial theory of jurisdiction, but rather assumed that this theory followed from the concept of sovereignty rooted in international law as that concept extended to the United States' federal system. However, when a product manufacturer in a foreign country caused injuries to persons in another country, the manufacturer has already invaded another country's sovereign power through the sale of its defective product in that country. Therefore, the foreign countries' sovereign power itself is not a reason to reserve the judicial power of the forum state. Further, in international law, the right to assert immunity from jurisdiction belongs to the nation and does not beiong to the individual defendant. Territorial sovereignty does not provide a theoretical basis for the right of a foreign defendant to move for a dismissal of an action on the grounds of absence of personal jurisdiction.
The purpose of due process is to protect the liberty of individuals by providing a potential defendant assurance as to where he will be sued. As the Supreme Courtof the United States stated in Insurance Corp. of Irelamd Ltd v. Compagnie des Bauxites de Guinee, the federalism consideration is not relevant with the Due Process Clause.
The stream of commerce is a "regular and anticipated flow of products from manufacture to distribution to retailsale."Once a participant in this process places its products in the stream of commerce, knowing that ''the final product is being marketed in the form State,"these manufacturers can reasonably anticipate being sued in the forum state. In addition, the burden on the defendant to litigate in the forum state corresponds to the defendants' economic and legal benefit "from the retail sale of the final product inthe forum State." Therefore the exercise of the forum state's jurisdiction over foreign manufacturers is not inconsistent with the Due Process Clause, as far as they have placed their products into the stream of commerce with the awareness that their products will reach the forum states.
In World-Wide Volkswagen, the Supreme Court approved in dictum the forum state's exercise of personal jurisdiction over a nonresident defendant that delivered its products into the stream of commerce with the expectation that its products would be purchased by consumers in the forum state. To satisfy the purposeful availment requirement, the Court did not require any additional conduct other than defendant's "expectation" of purchase of the products in the forum state. By requiring defendant's additional conduct, Justice O'Connor in Asahi imposed artificial barriers to personal jurisdiction and implicitly rejected the stream of commerce theory endorsed in World-Wide Volkswagen. Justice O'Connor overlooked the fact that the company manifested the basic commercial purpose to profit from the market through a regular course of sales. Imposing an additional conduct requirement unduly protects indirect shippers and manufacturers from the exercise of personal jurisdiction of the forum state in which they have profited.
Further, her opinion fails to comport with the realities of intemational commerce. It is not usual that foreign component parts manufacturers, whose products are incorporated into final products by the foreign final product manufacturers and sold in the United States, engage in the additional conducts noted by Justice O'Conner in Asahi. All of these activities are usually undertaken by final product manufacturers or replacement parts manufacturers. Under Justice O'Connor's opinion, most of foreign component part manufacturers would not be subject to the jurisdiction of the courts in the United States, even if a large amount of their products are continuously incorporated into final products and are continuously sold in the United States over many years and despite knowledge that their products will reach the United States.
The purpose of the Due Process Clause is to provide a defendant with reasonable predictability whether its activities will cause it to be subject to litigation in the forum State, thereby permitting it to take steps to alleviate the risk of litigation by procuring insurance, etc. When a foreign corporation is aware of the destination of its products, it can reasonably assume that it could cause injuries in the destination state, and consequently it is given clear notice that it might be sued in the forum state for claims relating to the sale of its products. Therefore, it is not unreasonable to subject the foreign corporation to the suit in the forum state. Justice O'Conner distinguished between the defendant's mere awareness of the destination of its product and its purposeful availment of the forum. For the purpose of notice, Justice O'Conner's additional conduct requirement is not necessarily for manufacturers who already have notice that they may be subject to litigation in the forum because they knew that their products are sold in the forum state.
If it places its products in the stream of commerce with the expectation that these products will reach the forum state and the products cause damage to residents in the forum state. In products liability actions, the balance should be weighed for the protection of consumers. In some cases, it is possible that a foreign defendant may not actually know that its products are sold in some distant forum. Proof of defiendants knowledge will be difficult because all the material information is in the hands of a distant defendant. However, the determination that the defendant was not aware of the final destination of its products would deprive the resident of the United States of the right to sue foreign corporations and recover for damages in products liability cases in the United States. When a manufacturer directly or indirectly makes regular sales in a forum state and enjoys the benefit from the sale of its products in the forum state, it is not unreasonable that the manufacturer be subject to the jurisdiction of the forum state. When the product has been sold regularly in the state, a defendant should not be permitted to use its ignorance of its commercial activities as a shield to avoid jurisdiction. Even under this approach, the due process principle will protect the defendant from jurisdiction arising out of an unknown, isolated or fortuitous sale, since the random conduct does not constitute purposeful availment.
Therefore, once a foreign company places its product in the stream of commerce, and the product reaches the forum state through the normal course of commercial distribution and causes injuries to a forum state's resident, the foreign company should be subject to the jurisdiction of the forum state.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.