Also known as:stream of commerce grounds · stream-of-commerce · stream of commerce · stream of commerce doctrine · stream of commerce theory
Written by attorneys · grounded in primary & secondary sources — see below
A theory for asserting specific personal jurisdiction over an out-of-state defendant who places a product into the stream of commerce with the expectation that it will reach the forum state. The theory requires purposeful targeting of the forum rather than mere awareness that the product might arrive there. Jurisdiction also remains subject to the fair play and substantial justice analysis.
Sources & Authorities
How it applies
Common Examples
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Indemnity Claim Against Swiss Supplier
Silver Clinical sold pharmaceutical ingredients to Gold Med in France. Gold Med distributed tablets to pharmacies in a mid-Atlantic state where patients suffered injuries. Gold Med then sued Silver Clinical for indemnity in state court. The court dismissed the claim because Silver Clinical had only placed ingredients into commerce without purposefully targeting the forum and faced severe burdens as a foreign defendant in a dispute with minimal forum interest.
Foreign Manufacturer Targeting U.S. Market
A British manufacturer sold machines to a U.S. distributor for nationwide sale. One machine reached New Jersey and injured a worker. The worker sued in New Jersey. The court held jurisdiction improper because the manufacturer targeted the United States generally without specific efforts directed at New Jersey.
Select any source to read its text and confirm it supports the definition.
Cases
Course Outlines
Audi Distributor and Retailer Contacts
World-Wide Volkswagen sold an Audi in New York. The buyer drove the car to Oklahoma where an accident occurred. The buyer sued the New York distributor and retailer in Oklahoma. The court found no jurisdiction because the defendants had not purposefully directed any activities toward Oklahoma.
World-Wide Volkswagen Corp. v. Woodson444 U.S. 286, 297–98 (1980)
Tire Manufacturer and Forum Sales
Goodyear subsidiaries in Europe manufactured tires sold in the United States through a national distributor. Two boys from North Carolina died in a bus accident in France allegedly caused by a tire defect. Their parents sued the subsidiaries in North Carolina. The court held that the subsidiaries' placement of tires into the stream of commerce without targeting North Carolina did not support jurisdiction.
Goodyear Dunlop Tires Operations, S.A. v. Brown564 U.S. 915, 919 (2011)
German Automaker and Argentine Claims
Daimler AG manufactured vehicles in Germany. Argentine plaintiffs sued in California over alleged human-rights violations committed by a Daimler subsidiary in Argentina. The court rejected jurisdiction because Daimler had not purposefully directed activities toward California under stream-of-commerce analysis.
Daimler AG v. Bauman571 U.S. 117, 139 n.20 (2014)
Franchise Contract and Forum Contacts
Burger King sued a Michigan franchisee in Florida for breach of a franchise agreement. The franchisee had negotiated the contract with a Florida-based franchisor and agreed to Florida choice-of-law provisions. The court upheld jurisdiction because the defendant had purposefully availed itself of the forum through the contractual relationship rather than through mere stream-of-commerce placement.
Burger King Corp. v. Rudzewicz471 U.S. 462, 474 (1985)
Common questions
Frequently Asked
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Does mere awareness that a product may reach the forum state establish personal jurisdiction on stream-of-commerce grounds?+
No. The Supreme Court has held that simply placing a product into the stream of commerce even with knowledge that it might reach a particular state does not by itself create the minimum contacts needed for personal jurisdiction.
Supporting sources
Must a foreign manufacturer target the forum state specifically rather than the United States market generally?+
Yes. In stream-of-commerce cases a foreign manufacturer must target the forum state specifically for personal jurisdiction to be proper. Mere placement of goods in the stream of commerce without purposeful targeting of the forum is insufficient.
Supporting sources
When is the exercise of jurisdiction unreasonable even if minimum contacts exist under stream-of-commerce analysis?+
Jurisdiction is unreasonable when a foreign defendant faces an indemnity claim brought by another foreign corporation because the burdens of litigating in the forum are especially heavy while the forum state's interest in the dispute is slight.
Supporting sources
444 U.S. 286 (1980)Civil Procedure
…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. Cf. Gray v. American Radiator & Standard Sanitary Corp. , 22 Ill. 2d 432, 176 N. E. 2d 761 (1961). But…
TortsStrict liability and products liability · Claims against manufacturers and other defendants arising out of the manufacture and distribution of products, and defenses to such claimsUBEIntermediate