Opinion ID: 1665281
Heading Depth: 2
Heading Rank: 3

Heading: Effect of Alloy Wheels

Text: In Alloy Wheels, this Court, in an opinion authored by Justice Johnstone, unanimously held: The plaintiff now before us argues that the evidence establishes an intent or purpose in Alloy Wheels to serve, in the words of its brief, `the American market.' Evidence of an intent or purpose to serve `the American market,' however, absent evidence of `an intent or purpose to serve the market in the forum State,' does not establish the `action of the defendant purposefully directed toward the forum State' that would constitute contact sufficient to warrant the exercise of personal jurisdiction over the defendant by the forum state. [ Ex parte] McInnis, [820 So.2d 795,] 804 [(Ala.2001) ] (quoting Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987)). On the contrary, the plaintiff now before us has not submitted substantial evidence that Alloy Wheels `purposefully directed' any action `at the forum State [other] than the mere act of placing a product in the stream of commerce.' World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), Asahi, and McInnis, supra. No evidence establishes sufficient minimum contacts between Alloy Wheels and the State of Alabama. 882 So.2d at 827 (emphasis added). Leytham first contends that Alloy Wheels is distinguishable from this case. We do not consider Alloy Wheels to be distinguishable. The defendant in Alloy Wheels manufactured the component in the United Kingdom for installation on a car manufactured in the United Kingdom and shipped to the United States. The component included markings applied by the manufacturer in conformity with Federal Motor Vehicle Safety Standards. Recognizing that Alloy Wheels serves as a formidable obstacle, Leytham, alternatively, asks us to overrule Alloy Wheels. The United States Supreme Court has not given clear guidance on this issue. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Court stated: When a corporation `purposefully avails itself of the privilege of conducting activities within the forum State,' Hanson v. Denckla, 357 U.S. [235, 253 (1958)], it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. The Court there held that the unilateral, isolated act of a purchaser of a vehicle in driving through Oklahoma did not subject the New York seller to jurisdiction in Oklahoma. 444 U.S. at 298, 100 S.Ct. 559. In Asahi Metal Industry Co. v. Superior Court of California, Solano County, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), the Court considered whether the defendant's act of placing the product into the stream of commerce subjected it to jurisdiction in a forum that the product foreseeably reached. The Court split three ways, with four Justices in one camp, four in another, and Justice Stevens in the middle. Four Justices emphasized that the defendant must insert the product into the stream of interstate commerce with a reasonably specific intent or purpose to serve the market in the forum State, 480 U.S. at 112, 107 S.Ct. 1026 (plurality opinion of O'Connor, J.); while four dissenting Justices emphasized that placement into the stream of commerce with reasonable foreseeability of the arrival of the product into the forum state was sufficient. 480 U.S. at 117, 107 S.Ct. 1026 (Brennan, J., concurring in part and concurring in the judgment). Justice Stevens provided the fifth vote to hold that a finding of personal jurisdiction in that case did not comport with due process. In his special writing, after concluding that the fundamental unfairness was sufficiently clear as to obviate the necessity for articulation of a standard, Justice Stevens stated: Second, even assuming that the test ought to be formulated here, Part II-A misapplies it to the facts of this case. The plurality seems to assume that an unwavering line can be drawn between `mere awareness' that a component will find its way into the forum State and `purposeful availment' of the forum's market. [480 U.S. at 110-13.] Over the course of its dealings with Cheng Shin, Asahi has arguably engaged in a higher quantum of conduct than `[t]he placement of a product into the stream of commerce, without more....' Ibid. [480 U.S. at 112.] Whether or not this conduct rises to the level of purposeful availment requires a constitutional determination that is affected by the volume, the value, and the hazardous character of the components. In most circumstances I would be inclined to conclude that 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 product marketed throughout the world. 480 U.S. at 122, 107 S.Ct. 1026 (Stevens, J., concurring in part and concurring in the judgment) (emphasis added). Leytham points to several jurisdictions, some of which involve claims against Duck Boo, that have taken a broader approach to personal jurisdiction than did this Court in Alloy Wheels. According to Alison G. Myrha, Fifth Circuit Survey June 2005-May 2006, Civil Procedure, 39 Tex. Tech L.Rev. 689, 718 n. 120 (2007), 19 jurisdictions adhere to a test comparable to the test used in Alloy Wheels, while 8 jurisdictions reject the requirement of additional conduct beyond the placement of the product into the stream of commerce. According to the article, in the United States Courts of Appeals, the Fifth and Eighth Circuits have embraced the more relaxed standard set forth by Justice Brennan while the First, Fourth, Sixth, and Eleventh Circuits have adopted the more restrictive standard set forth by Justice O'Connor. Recently, in Luv n' care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 475 (5th Cir.2006), Judge DeMoss, concurring specially in a holding that the defendant was subject to suit in Louisiana, noted that while he was bound by Fifth Circuit precedent to apply the less restrictive view urged by Justice Brennan in Asahi, he preferred the stream-of-commerce-plus approach advocated by Justice O'Connor. Judge DeMoss stated:  Asahi is the last in a long line of Supreme Court cases to define the contours of [the `minimum contacts'] test, and it left the test in a state of complete disarray.... It is the stream of commerce approach that the Fifth Circuit follows and that I criticize here (although I recognize its binding effect). The stream of commerce, or `mere foreseeability,' approach requires only that a nonresident defendant place its product in the stream of commerce with the expectation that the product will reach the forum state. Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 380 & n. 7 (5th Cir.2002). As Judge Niemeyer of the Fourth Circuit eloquently stated in Lesnick v. Hollingsworth & Vose Co., 35 F.3d 939, 945 (4th Cir.1994), `To permit a state to assert jurisdiction over any person in the country whose product is sold in the state simply because a person must expect that to happen destroys the notion of individual sovereignties inherent in our system of federalism.' Justice O'Connor's stream-of-commerce-plus approach states that mere foreseeability is not enough and requires `[a]dditional conduct of the defendant ... indicat[ing] an intent or purpose to serve the market in the forum State,' and thereby better comports with our country's principles of federalism. See Asahi, 480 U.S. at 112, 107 S.Ct. 1026. .... For the above reasons, I hope Insta-Mix will apply for a writ of certiorari and I urge the Supreme Court to take up the minimum contacts issue and resolve it and the increasing circuit divide with clarity. The United States Supreme Court denied certiorari. Insta-Mix, Inc. v. Luv n' care, Ltd., 548 U.S. 904, 126 S.Ct. 2968, 165 L.Ed.2d 951 (2006). We, of course, can only speculate as to the basis for the denial. It is noteworthy that in 2002 and 2003 the defendant in Luv n' care, Ltd. v. Insta-Mix, Inc . filled 65 purchase orders for bottles to be sent to Louisiana and sent invoices to Wal-Mart Stores, Inc., confirming the orders bound for Louisiana. Also, Judge DeMoss's plea for greater respect for federalism runs counter to Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 n. 10, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) (The restriction on state sovereign power described in World-Wide Volkswagen Corp. [v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)], however, must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause. That Clause is the only source of the personal jurisdiction requirement and the Clause itself makes no mention of federalism concerns.). In support of her contention that Alloy Wheels should be overruled, Leytham urges us, in her response to Duck Boo's petition, to embrace Justice Stevens's standard in this proceeding based on the volume, the value, and the hazardous character of the seat belt. As for the hazardous character of the product, Leytham states: Moreover, the seat belts are at least theoretically designed to protect citizens of Alabama and other states, so the `hazardous character' of [Duck Boo's] defective seat belts further supports jurisdiction, at least under [Justice] Stevens's reasoning. Leytham's brief at 16-17. With regard to volume and value, Leytham concedes that that determination cannot be made based on the materials before us. She states: Ms. Leytham is entitled to develop similar evidence as to how many seat belts [Duck Boo] sold to Kia [Motors] and other automobile manufacturers that sold vehicles across the United States. Leytham's brief at 15-16.