Also known as:stream of commerce · streams of commerce approach · stream-of-commerce approach · stream of commerce doctrine · stream-of-commerce theory
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
in civil procedure
A theory for establishing specific personal jurisdiction over a foreign defendant. The theory treats the defendant's placement of a product into the stream of commerce with awareness that the product may reach the forum state as a contact supporting jurisdiction.
Sense 1
1
in civil procedure
A theory for establishing specific personal jurisdiction over a foreign defendant. The theory treats the defendant's placement of a product into the stream of commerce with awareness that the product may reach the forum state as a contact supporting jurisdiction.
Sources & Authorities· 2 primary sources
Select any source to read its text and confirm it supports the definition.
Cases
Sense 2
2
in products liability
A theory extending strict liability for defective products to every participant in the overall producing and marketing enterprise. The theory reaches manufacturers, wholesalers, retailers, and other links in the commercial chain so that the cost of injuries is borne by those who place the product into the stream of commerce rather than by injured persons.
Sources & Authorities· 1 source
Select any source to read its text and confirm it supports the definition.
A theory extending strict liability for defective products to every participant in the overall producing and marketing enterprise. The theory reaches manufacturers, wholesalers, retailers, and other links in the commercial chain so that the cost of injuries is borne by those who place the product into the stream of commerce rather than by injured persons.
Each sense below has its own examples, sources, and questions.
Examples3
Indemnity Suit Between Foreign Corporations
A Japanese valve manufacturer sold valves to a Taiwanese tire-tube maker that incorporated them into tubes sold nationwide. One tube exploded in California, injuring a user who sued the tube maker. The tube maker then sought indemnity from the valve maker in California court. The valve maker had no offices, agents, or direct sales in California and had not designed the product for that market. The court held that mere placement into the stream of commerce with awareness of possible resale in California did not create minimum contacts sufficient for jurisdiction.
Foreign Manufacturer Targeting National Market
A British manufacturer of heavy machinery sold equipment exclusively through a U.S. distributor that resold the machines across the country. A machine reached New Jersey and injured a worker there. The manufacturer had no New Jersey advertising, employees, or direct sales and had not specifically targeted that state. The court held that awareness that the distributor might sell the machine anywhere in the United States did not satisfy the requirement of purposeful targeting of New Jersey.
Antitrust Challenge to Minimum Fee Schedule
A county bar association enforced a minimum fee schedule for title examinations that affected interstate real-estate transactions. The schedule increased costs for out-of-state lenders and buyers. Plaintiffs challenged the schedule under the Sherman Act. The court examined whether the local legal services had a sufficient effect on interstate commerce to support federal jurisdiction.
Goldfarb v. Virginia State Bar421 U.S. 773, 788
Frequently Asked2
Does merely placing a product into the stream of commerce with awareness that it might reach the forum state establish personal jurisdiction?+
No. The Supreme Court has held that awareness that a product may reach the forum state through the stream of commerce is not alone a clearly sufficient basis for personal jurisdiction.
Supporting sources
Must a foreign manufacturer specifically target the forum state rather than the national market to be subject to jurisdiction under the stream of commerce approach?+
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
Examples2
Landlord Liability for Defective Appliance
A landlord purchased a water heater from a wholesaler and installed it in a rental unit. The heater contained a latent defect that caused an explosion injuring the tenant. The tenant sued the landlord under strict products liability. The court applied the stream of commerce approach and held the landlord subject to liability as a participant in the marketing chain even though the landlord had not manufactured the heater.
Becker v. IRM Corp.698 P.2d 116 (Cal. 1985)
Copyright Exhaustion for Imported Books
A publisher sold textbooks abroad at lower prices. A student purchased copies overseas and imported them for resale in the United States. The publisher sued for copyright infringement. The court held that the first sale of the books abroad exhausted the copyright owner's distribution right, allowing the student to resell the copies without further permission.
Kirtsaeng d/b/a Bluechristine99 v. John Wiley & Sons Inc.568 U.S. 519 (2013)
Frequently Asked1
Does the stream of commerce approach in products liability extend strict liability beyond the manufacturer?+
Yes. The approach extends strict liability to all participants in the overall producing and marketing enterprise, including wholesalers and retailers, so that the cost of injuries is borne by those who place the product into the stream of commerce.
Supporting sources
421 U.S. 773, 788Property
…stations to change trains in the midst of an interstate journey. In Yellow Cab we held that such a trip was a part of the stream of commerce. Id. , at 228-229. [^maj-14]: 355 F. Supp., at 497. [^maj-15]: The County Bar cites phrases in several cases that implied the practice of a learned profession is not “trade or commerce”…
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