Also known as:stream of commerce cases · stream of commerce · stream-of-commerce doctrine · stream of commerce theory · stream-of-commerce jurisdiction
Written by attorneys · grounded in primary & secondary sources — see below
An approach to personal jurisdiction that permits a forum state to exercise authority over a nonresident defendant who has placed goods into the stream of commerce with the intention that they reach the forum.
Sources & Authorities
How it applies
Common Examples
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Indemnity Suit Between Foreign Firms
Spectrum Financial, a Japanese component maker, sold parts to a Taiwanese assembler that incorporated them into finished goods sold across the United States. After a defective part caused injury in State X, the assembler sued Spectrum in State X for indemnity. Spectrum had known the goods might reach State X but had taken no steps to target that market specifically. The court declined jurisdiction because mere awareness of possible distribution did not satisfy due process.
Nationwide Marketing Without Forum Targeting
Sapphire Holdings, a German tool manufacturer, sold its products to a U.S. distributor that resold them throughout the country. Simon Stern, a State Y resident, was injured by one of the tools and sued Sapphire in State Y. Sapphire had never advertised, shipped, or directed sales efforts specifically to State Y. The court held that jurisdiction was improper because the company had not purposefully targeted the forum.
Select any source to read its text and confirm it supports the definition.
Cases
Study Supplements
Conference Promotion Creates Contacts
Southland Foods attended three medical conferences in State D over two years to promote its heart monitors to local physicians. An independent distributor then sold a monitor to a State D hospital where it injured a resident. The injured patient sued Southland in State D. The conferences supplied the purposeful contacts that linked the company to the forum market.
Retailer Awareness Insufficient
Starlight Media placed televisions into national distribution through independent retailers. A retailer sold one unit in State Z to a local buyer who was later injured. Starlight knew its products reached State Z but maintained no direct presence or marketing there. The court found the contacts too attenuated for jurisdiction.
Tire Sales Through National Chain
Goodyear's foreign subsidiary manufactured tires sold through a national retailer that maintained stores in State W. A State W resident was injured by a defective tire purchased in the state. The subsidiary had not directed sales specifically to State W. Jurisdiction failed because the subsidiary had not purposefully availed itself of the forum.
Chemical Shipment Through Intermediary
Indiana Harbor Belt shipped chemicals to a buyer that resold them nationwide. A downstream purchaser in State Q suffered injury from the product. The shipper had no direct dealings with State Q customers and exercised no control over final distribution. The court held that the indirect route did not create jurisdiction.
Common questions
Frequently Asked
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Does merely placing a product into the stream of commerce with knowledge that it might reach the forum establish personal jurisdiction?+
No. The Supreme Court has held that awareness that a product may reach the forum is not alone sufficient. Additional evidence of purposeful targeting of the specific state is required.
Supporting sources
How does attendance at in-forum conferences affect the stream-of-commerce analysis?+
Attendance at conferences in the forum to promote products can supply purposeful contacts that support jurisdiction even when sales occur through an independent distributor. The promotional activity shows intent to serve the forum market.
Supporting sources
What happens when a manufacturer advertises and maintains service facilities in the forum but the specific product arrived through an unrelated used sale?+
The claim may still relate to the contacts if the marketing created demand in the forum. Courts weigh whether the defendant's systematic efforts to serve the market make jurisdiction reasonable despite the product's indirect path.
Supporting sources
Is knowledge of nationwide distribution through an independent intermediary enough for jurisdiction?+
No. General awareness that goods will be sold nationally does not constitute purposeful targeting of a particular state. The defendant must direct its own activities toward the forum.
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…