In September 1978 Gary Zurcher lost control of his Honda motorcycle on Interstate Highway 80 in Solano County, California, and collided with a tractor. Zurcher suffered severe injuries while his passenger and wife Ruth Ann Moreno was killed.
In September 1979 Zurcher filed a product liability action in the Superior Court of California for Solano County against Cheng Shin Rubber Industrial Co., Ltd., the Taiwanese manufacturer of the motorcycle tube, and other defendants. Zurcher alleged that defects in the tire, tube, and sealant caused the accident.
Cheng Shin filed a cross-complaint seeking indemnification from Asahi Metal Industry Co., Ltd., the Japanese manufacturer of the tube’s valve assembly. Zurcher’s claims against Cheng Shin and the other defendants were eventually settled and dismissed, leaving only Cheng Shin’s indemnity action against Asahi.
Asahi is a Japanese corporation. It manufactures tire valve assemblies in Japan and sells them to Cheng Shin and other tire manufacturers for use as components in finished tire tubes, with all sales to Cheng Shin taking place in Taiwan. Asahi sold Cheng Shin 150,000 valve assemblies in 1978, 500,000 in 1979, 500,000 in 1980, 100,000 in 1981, and 100,000 in 1982. Those sales accounted for 1.24 percent of Asahi’s income in 1981 and 0.44 percent in 1982. Cheng Shin alleged that approximately 20 percent of its United States sales occur in California.
In 1983 an attorney for Cheng Shin examined valve stems at one cycle store in Solano County and found that of 115 tire tubes, 12 Asahi-marked valve stems were incorporated into Cheng Shin tubes. An affidavit from a Cheng Shin manager stated that discussions with Asahi had covered worldwide sales including the United States. Asahi’s president stated the company never contemplated that its limited sales would subject it to lawsuits in California. The Superior Court denied Asahi’s motion to quash service of summons. The Court of Appeal issued a peremptory writ commanding the Superior Court to quash service. The California Supreme Court reversed. The United States Supreme Court granted certiorari.
View case