Also known as:streams of commerce · stream-of-commerce · stream of commerce doctrine
Written by attorneys · grounded in primary & secondary sources — see below
A theory of personal jurisdiction holding that a manufacturer or distributor subjects itself to suit in a forum state by placing a product into the stream of commerce with the expectation that it will be purchased by consumers there.
Sources & Authorities
How it applies
Common Examples
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Indemnity Suit Between Foreign Corporations
Sterling Manufacturing sold valve components to a Japanese assembler outside the United States. The assembler incorporated the valves into motorcycles sold nationwide. One motorcycle injured a rider in California. Sterling was sued for indemnity by the assembler in California court. The court declined jurisdiction because mere placement of the valves into the stream of commerce did not constitute purposeful availment and the burdens on the foreign defendant outweighed the forum's minimal interest.
Foreign Manufacturer Targeting National Market
Summit Bank financed a British machine-tool maker that sold equipment to a New Jersey distributor. The distributor resold a machine to a Pennsylvania buyer who was injured when the machine malfunctioned. The injured buyer sued the British maker in Pennsylvania. The court held that jurisdiction was improper because the maker had targeted the United States market generally rather than Pennsylvania specifically.
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Cases
Casebooks
Hornbooks
Course Outlines
Study Supplements
Component Part Reaching Forum State
Sterling Dynamics manufactured brake sensors in State A and sold them to an assembler in State B. The assembler installed the sensors in vehicles distributed to dealers in State C. A vehicle sold in State C crashed due to a sensor failure. The driver sued Sterling Dynamics in State C. The court applied stream-of-commerce analysis to determine whether the sensor placement satisfied purposeful availment.
Franchise Goods Distributed Nationally
A fast-food franchisor headquartered in State X required franchisees to purchase branded packaging from an approved supplier in State Y. The supplier placed the packaging into the stream of commerce knowing it would reach franchise locations across the country. A franchisee in State Z was sued after a customer was injured by defective packaging. The franchisor contested jurisdiction in State Z.
Gun Manufacturer and Interstate Sales
A firearms manufacturer in State P sold guns to wholesalers who resold them to retailers in multiple states. One gun reached State Q through this distribution chain and was used in a shooting. Victims sued the manufacturer in State Q. The court examined whether the manufacturer's placement of guns into the stream of commerce supported jurisdiction under the personal jurisdiction analysis.
Farm Equipment Reaching Distant Buyer
An equipment maker in State R produced hay balers and sold them to dealers in several western states. A baler was resold through an auction and eventually used on a farm in State S where it caused injury. The injured farmer sued the maker in State S. The court considered whether the maker's introduction of the baler into the stream of commerce created minimum contacts with State S.
Common questions
Frequently Asked
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Does merely placing a product into the stream of commerce establish personal jurisdiction?+
No. Mere placement of a product into the stream of commerce, even with awareness that it may reach the forum state, is not alone a clearly sufficient basis for personal jurisdiction.
Supporting sources
Must a foreign manufacturer target the forum state specifically?+
Yes. In stream-of-commerce cases a foreign manufacturer must target the forum state specifically, not just the United States market generally, for personal jurisdiction to be proper.
Supporting sources
How do stream-of-commerce cases typically arise?+
Stream-of-commerce cases typically arise when a defendant manufactures a product in one state or country and sells it to a second party, after which the product winds up in another state and causes injury there.
Supporting sources
What additional showing is required beyond awareness of possible forum sales?+
The defendant must have purposefully directed its activities at the forum state or taken other action indicating intent to serve that market beyond mere placement of goods into the stream of commerce.
Supporting sources
529 U.S. 598 (2000)Constitutional Law
…of the federal power; the exceptions prove the rule. Apart from them, proposals to carve islands of state authority out of the stream of commerce power were entirely unsuccessful. Roger Sherman's proposed definition of federal legislative power as excluding "matters of internal police" met Gouverneur Morris's response that "[t]he…
TortsProducts liability based on the design, manufacture, and distribution of products and defenses to such claims · Products liability based on the design, manufacture, and distribution of products and defenses to such claimsNEXTGENFoundational