Sunday, March 15, 2009

A layup for the Supreme Court

The Asahi decision provides us with guidelines to determine whether personal jurisdiction is just and reasonable.

Asahi Metal Industry Co. v. Superior Court (1987)

Facts
Gary Zercher, a California resident, was riding his motorcycle. Zercher was injured after his tire blew out. He sued the Taiwanese tire company, and reached a settlement out of court. This tire company then sued Asahi (Japanese) in California court for selling them a defective part.

Question
Is this an appropriate use of personal jurisdiction?

Holding
No

Reasoning
The issue of minimum contacts was irrelevant. Even if minimum contacts were established, asserting personal jurisdiction in this would be unreasonable. The “reasonable test” is made up of the following six elements (plus a bit on how they apply to Asahi):

Burden on defendant
Asahi would be forced to fly halfway around the world for proceedings.

Interests of forum state
California expressed an interest in protecting their state from faulty products. SCOTUS said that California's interests were served when Zercher settled out of court. The remaining conflict was between the two foreign companies.

Plaintiff’s interest in relief
The tire company wanted their money back. SCOTUS felt that they could settle that dispute in Taiwan. Or Japan. Hell, anywhere in Asia would be more pragmatic than California.

Efficient resolution of interstate judicial conflicts
SCOTUS wanted to be very cautious in expanding jurisdiction overseas. Foreign policy is messy enough already.

Shared interest of states in forming fundamental social policies
Doesn’t really apply here.

And the winner is…
Asahi. But they may have been sued later in Taiwan or Japan.

summarized from Life of a Law Student

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