Stream of Commerce Test


If a corporation delivers its products into the stream of commerce with the expectation that its products will be purchased by consumers in the forum state, courts in the forum state may have adequate personal jurisdiction over the corporation in product liability cases.  However, the actions of the defendant must be “voluntary and purposefully directed” towards the forum state.

In Asahi Metal Industry Co.Ltd v. Superior Court[1], four of the eight justices were of the opinion that if a corporation is aware that its final product is being marketed in the forum state, there is a possibility of a lawsuit in the state.  The other four justices opined that there must be an “intent or purpose to serve the market in the forum state, when a product is placed into the stream of commerce in the forum state.”

The Supreme Court held in another significant case Worldwide Volkswagen Corporation v. Woodson[2] that the contact with the state cannot be considered “voluntary or purposefully directed”  if the product came to be in the forum state only because the consumer/plaintiff brought it there.

[1] Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102 (U.S. 1987)

[2]World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980)