WATERMAN, Justice.
In this appeal, we must confront unsettled federal precedent to decide whether a Chinese tire manufacturer that sold thousands of tires in Iowa through an American distributor may be compelled to defend a lawsuit here consistent with the Due Process Clause of the United States Constitution. The tire exploded as an Iowan was airing it up at his father's business in Adel, Iowa. The Iowan suffered
This case presents our first opportunity to address the "stream of commerce" test for personal jurisdiction in a products-liability, personal-injury case since the United States Supreme Court's sharply divided decision in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. ___, ___, 131 S.Ct. 2780, 2785, 180 L.Ed.2d 765, 772 (2011). For the reasons explained below, we hold that the Federal Constitution permits the exercise of personal jurisdiction over this high-volume, foreign manufacturer whose allegedly dangerous product purchased in Iowa injured a resident here. Accordingly, we reverse the district court's jurisdictional ruling and remand the case to proceed on the merits.
Jim Book owns and operates an auto repair shop, Alley Auto Sales in Adel, Iowa. In October 2009, Jim's seventeen-year-old son, Dylan Book, worked part-time for him through an apprenticeship affiliated with Dylan's high school. Jim agreed to sell and mount a new set of tires on a customer's horse trailer. Jim bought from an Iowa retailer four LT 285/R16 10-ply Treadstone tires manufactured in China by Doublestar Dongfeng Tyre Company, Ltd. (Doublestar). On the morning of October 20, Jim began mounting the tires. When he tried to air one up, he had trouble getting the tire to seat properly on the wheel rim. He failed to realize he was attempting to mount a sixteen-inch tire on an older model 16.5" rim, a common mistake. Distracted by a phone call, Jim left the tire mounted on the wheel rim but underinflated. Dylan and a coworker, Cody Donnelly, stepped into the shop. Without talking to his father, Dylan began to air up the tire with Donnelly next to him.
Dylan's mother, Karen Book, filed a products-liability action in the Iowa District Court for Dallas County, their home county, seeking money damages for Dylan's personal injuries and medical expenses and her loss of consortium. The petition, filed October 8, 2010, initially named as defendants Hunter Engineering Company (the company that designed and sold the machine used to mount and inflate the tire); Iowa Tire, Inc. (the Iowa retailer that sold the accident tire to Alley Auto Sales); Holt Sales and Service, Inc. (the Iowa-based wholesaler that sold the accident tire to Iowa Tire); and Voma Tire Corporation (Voma), a national tire distributor that sold the accident tire to Holt. On April 20, 2012, plaintiffs amended their petition to name as additional defendants Doublestar and Societa Italiana Costruzioni Elettromeccaniche S.I.C.E. S.p.A.
SICE and Doublestar filed motions to dismiss for lack of personal jurisdiction. In July 2012, the district court granted SICE's motion and deferred ruling on Doublestar's motion to allow jurisdictional discovery to "resolve the question of how the tire arrived in Iowa and ... the number of times that tires have been shipped directly into Iowa and the volume of tires so shipped." The defendants answered interrogatories and requests for production and plaintiffs' counsel deposed corporate representatives of Doublestar and Voma. The evidentiary record establishes the following facts.
Doublestar is a Chinese corporation with its principal place of business in China. Doublestar manufactures tires in Shiyan City, located in Hubei Provence in central China. Doublestar, one of the ten largest tire manufacturers in China, produced nearly 3.2 million tires in the nine months preceding Dylan's accident.
Voma is a Tennessee corporation with its principal place of business in Memphis. Voma owns the "Treadstone" trademark and has been selling Treadstone tires since 2008. Doublestar is one of Voma's several tire suppliers. About twenty-five to thirty percent of Voma's sales in 2008 and 2009 were tires manufactured by Doublestar. Voma provided Doublestar with a mold to stamp "Treadstone" on the sidewall of these tires during the manufacturing process, and Voma exclusively sold the Treadstone tires in the United States. Voma's revenue from tire sales dropped from ten million dollars in 2010 to zero when it ceased selling tires by late 2012. Voma remained in business servicing warranty claims.
When Voma ordered tires from Doublestar in 2009, it provided detailed shipping requirements to the Chinese manufacturer. Doublestar delivered the tires F.O.B.
As of October 20, 2009, Voma had purchased 180,000 tires from Doublestar. Voma sold 16,700 of those Doublestar tires to Holt in Iowa. On sixteen occasions in 2008 and once in 2009, Voma instructed Doublestar to ship the tires directly from China to Holt in Des Moines, bypassing Voma's Tennessee facility. Those seventeen direct shipments from China to Iowa conveyed a total of 12,681 tires. None of those seventeen China-to-Iowa shipments included any 10-ply tires of the same model as the accident tire, but some of the containers included a similar 14-ply Treadstone tire. The Doublestar witness testified its employees knew some containers of tires were shipped directly to "Des Moines, IA" but denied those persons knew "IA" meant the State of Iowa.
Doublestar sold Voma 7008 of the 10-ply Treadstone tire model, the type involved in Dylan's accident, 999 of which Voma sold to Holt in Iowa. In the month leading up to Dylan's accident, Voma was selling approximately 150 of the 10-ply tires to Holt every two weeks. Voma shipped all of these 10-ply tires from its warehouse in Tennessee. The DOT number stamped on the accident tire indicates Doublestar manufactured it in China in early June of 2009. In 2009, Holt purchased seven shipments of the 10-ply tires, all from Voma's warehouse in Tennessee.
In May 2013, after completion of jurisdictional discovery, the district court granted Doublestar's motion to dismiss. The district court made a factual finding that the accident tire was shipped from China to Voma's warehouse in Memphis and found no 10-ply tires were shipped directly to Iowa from China. The district court found the tires directly shipped from China to Des Moines were a different model. Plaintiffs dismissed their claims against the remaining parties on October 13, 2013, pursuant to a confidential settlement and appealed Doublestar's dismissal. We retained the appeal. At oral argument, counsel for Doublestar conceded that Doublestar would be subject to personal jurisdiction in Tennessee, Voma's home state.
"`We review a district court's decision on a motion to dismiss for lack of personal jurisdiction for correction of errors at law.'" Sioux Pharm, Inc. v. Summit Nutritionals Int'l, Inc., 859 N.W.2d 182, 188 (Iowa 2015) (quoting Shams v. Hassan, 829 N.W.2d 848, 853 (Iowa 2013)). "We are not bound by the court's conclusions of law or application of legal principles. The district court's factual findings are binding on appeal if supported by substantial evidence." Id. (citation omitted).
"[W]e accept as true the allegations of the petition and the contents of uncontroverted affidavits." Shams, 829 N.W.2d at 853 (internal quotation marks
We must decide whether the Due Process Clause of the United States Constitution permits the exercise of personal jurisdiction over Doublestar in Iowa. This issue requires us to revisit the stream-of-commerce test of personal jurisdiction in light of J. McIntyre Machinery and its progeny. We conclude that the stream-of-commerce test as adopted in World-Wide Volkswagen Corp. and followed by our precedent remains good law. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 567, 62 L.Ed.2d 490, 501-02 (1980); Svendsen v. Questor Corp., 304 N.W.2d 428, 430-31 (Iowa 1981). We hold Doublestar, a large, high volume manufacturer selling to a national market, is subject to personal jurisdiction in Iowa based on its direct shipments to Iowa of thousands of tires and indirect shipments of thousands more to this state through its American distributor, including the allegedly hazardous "accident tire" that injured the Iowa plaintiff at his workplace in Iowa.
We begin by discussing the constitutional boundaries of personal jurisdiction. Next, we trace the development of the stream-of-commerce test and its competing formulations set forth in several divided opinions of the U.S. Supreme Court and applied inconsistently in the lower courts. Our survey of contemporary precedent nationwide persuades us the Svendsen test we have used in Iowa products-liability cases should be applied in this case, and we decline to adopt a more restrictive test as to a high-volume manufacturer of a potentially hazardous product. Finally, we apply the test and determine that Doublestar is subject to jurisdiction in Iowa in this products-liability action.
"The Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal's authority to proceed against a defendant." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. ___, ___, 131 S.Ct. 2846, 2853, 180 L.Ed.2d 796, 805 (2011). "The Due Process Clause protects an individual's right to be deprived of life, liberty, or property only by the exercise of lawful power." J. McIntyre Mach., 564 U.S. at ___, 131 S.Ct. at 2786, 180 L.Ed.2d at 773 (plurality opinion). "As a general rule, neither statute nor judicial decree may bind strangers to the State." Id. at ___, 131 S.Ct. at 2787, 180 L.Ed.2d at 774. "A court may subject a defendant to judgment only when the defendant has sufficient contacts with the sovereign `such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."'" Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945)). We recently reaffirmed that "[f]airness is the crux of the minimum-contacts analysis.'" Sioux Pharm, 859 N.W.2d at 189 (quoting Shams, 829 N.W.2d at 854).
World-Wide Volkswagen Corp., 444 U.S. at 291-92, 100 S.Ct. at 564, 62 L.Ed.2d at 498. Personal jurisdiction is only appropriate when "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. at 297, 100 S.Ct. at 567, 62 L.Ed.2d at 501. "Random or attenuated contacts with the forum state do not satisfy the minimum contacts test." Ostrem v. Prideco Secure Loan Fund, LP, 841 N.W.2d 882, 891 (Iowa 2014).
There are two forms of personal jurisdiction, general and specific. Id. at 892. General jurisdiction "`refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.'" Id. (quoting Sondergard v. Miles, Inc., 985 F.2d 1389, 1392 (8th Cir.1993)). General or "all-purpose" jurisdiction exists only when the defendant is "essentially at home in the forum State." Goodyear, 564 U.S. at ___, 131 S.Ct. at 2851, 180 L.Ed.2d at 803; see also Sioux Pharm, 859 N.W.2d at ___ (applying Goodyear "at home" test). Neither party argues that general jurisdiction applies in this case, and we agree that Doublestar is not subject to general personal jurisdiction in Iowa.
"Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state...." Capital Promotions, 756 N.W.2d at 833 (internal quotation marks omitted). "[S]pecific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction plays a reduced role." Mary Twitchell, The Myth of General Jurisdiction, 101 Harv. L. Rev. 610, 628 (1988); accord Goodyear, 564 U.S. at ___, 131 S.Ct. at 2854, 180 L.Ed.2d at 806-07. Classically, the defendant must commit "`some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Ostrem, 841 N.W.2d at 892 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958)). In order to find the minimum contacts necessary for specific jurisdiction, the plaintiff must show two requirements:
Capital Promotions, 756 N.W.2d at 834 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528, 540-41 (1985) (footnote omitted)). "`If sufficient minimum contacts exist, the court must then determine whether the assertion of personal jurisdiction would comport with fair play and substantial justice.'" Sioux Pharm, 859 N.W.2d at 196 (quoting Shams, 829 N.W.2d at 857).
444 U.S. at 297-98, 100 S.Ct. at 567, 62 L.Ed.2d at 501-02. Subsequent decisions, however, have "created significant confusion in lower courts over the constitutional standard for minimum contacts." State ex rel. Edmondson v. Native Wholesale Supply, 237 P.3d 199, 207 (Okla.2010).
The Supreme Court's most recent decision on the stream-of-commerce test, J. McIntyre Machinery, failed to yield a majority opinion, and courts remain divided on what test to use in products-liability cases. See AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1362-63 (Fed. Cir.2012) (per curiam) (noting J. McIntyre Machinery "declined to resolve [the Supreme Court's] long-standing split on that theory" and left open questions unanswered in prior decisions); Russell v. SNFA, 370 Ill.Dec. 12, 987 N.E.2d 778, 790 (Ill.2013) (noting the "lower federal and state courts struggled to reconcile [the Supreme Court's] competing standards for the stream-of-commerce theory" after Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), and describing its precedent as "`extremely balkanized'" (quoting Wiles v. Morita Iron Works Co., 125 Ill.2d 144, 125 Ill.Dec. 812, 530 N.E.2d 1382, 1388 (1988))). The Books argue this case is controlled by our long-standing Iowa precedent, Svendsen, applying the World-Wide Volkswagen test. Doublestar urges us to apply the more stringent "stream-of-commerce plus" test in the plurality opinion of J. McIntyre Machinery. We conclude our long-standing Iowa test remains good law and permits the exercise of personal jurisdiction over Doublestar here. We decline to employ the more stringent test to a high-volume manufacturer of an allegedly dangerous product. To explain why, we take a closer look at the development of the stream-of-commerce test.
In World-Wide Volkswagen, Harry and Kay Robinson, who lived in New York, purchased a new Audi sedan from a tri-state dealer there. World-Wide Volkswagen Corp., 444 U.S. at 288-89, 100 S.Ct. at 562-63, 62 L.Ed.2d at 495-96. A year later, they set out to drive to Arizona. Id. at 288, 100 S.Ct. at 562, 62 L.Ed.2d at 495. As they drove through Oklahoma, another car struck their Audi in the rear, causing a fire that severely burned Kay and her two children. Id. The Robinsons filed a products-liability action in state court in Oklahoma, against the Audi manufacturer, the importer, the distributor, and the retail dealer, alleging "their injuries resulted from defective design and placement of the Audi's gas tank and fuel system." Id. at 288, 100 S.Ct. at 562, 62 L.Ed.2d at 495-96. The foreign manufacturer, Audi NSU Auto Union Aktiengesellschaft, and the importer, Volkswagen of America, Inc., did not contest personal jurisdiction in Oklahoma. Id. at 288 n. 3, 100 S.Ct. at 562 n. 3, 62 L.Ed.2d at 496 n. 3. The distributor, World-Wide Volkswagen Corp., and retailer, Seaway Volkswagen, Inc., however, moved to dismiss for lack of personal jurisdiction. Id. at 288, 100 S.Ct. at 562-63, 62 L.Ed.2d at 496. World-Wide and Seaway distributed and sold Audis in only three states: New York, New Jersey, and Connecticut.
We applied the World-Wide Volkswagen stream-of-commerce test a year later in Svendsen, 304 N.W.2d at 430-31. In that case, we concluded a Missouri manufacturer of billiards tables was subject to personal jurisdiction in Iowa when it sold a defective table to an Omaha distributor, who resold the table in Iowa where the plaintiff using it was injured. Id. at 429 n. 1, 431. As we said:
Id. at 431. We concluded the close geographic proximity to Iowa of both the manufacturer and distributor combined with the marketing efforts of the parties made it foreseeable that the defendant's product would be used in Iowa. Id.
We later clarified Svendsen to note the mere foreseeability the product would enter the forum is insufficient to establish personal jurisdiction. See Smalley v. Dewberry, 379 N.W.2d 922, 924-25 (Iowa 1986). In Smalley, the plaintiff argued that because a trailer hitch is mobile and could foreseeably be driven anywhere in the United States, the defendants should be subject to jurisdiction wherever the trailer traveled. Id. at 925. We concluded the foreseeability that matters is not simply that the product will enter the forum state, but rather that "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. (quoting World-Wide Volkswagen Corp., 444 U.S. at 297, 100 S.Ct. at 567, 62 L.Ed.2d at 501). A few years later, we elaborated on the foreseeability requirement:
State ex rel. Miller v. Baxter Chrysler Plymouth, Inc., 456 N.W.2d 371, 376 (Iowa
Meanwhile, the U.S. Supreme Court decided Asahi. Asahi, like this case, was a products-liability action for injuries caused by the failure of a tire manufactured in a foreign country. 480 U.S. at 105-06, 107 S.Ct. at 1029, 94 L.Ed.2d at 100. Gary Zurcher lost control of his Honda motorcycle on Interstate 80 in California when his rear tire suddenly lost air. Id. The collision severely injured Zurcher and killed his passenger and wife, Ruth Ann Moreno. Id. at 105, 107 S.Ct. at 1029, 94 L.Ed.2d at 100. Zurcher brought a claim against Cheng Shin, the Taiwanese tire manufacturer, which in turn brought a claim for indemnity against Asahi Metal Industry Co., Ltd., the Japanese manufacturer of the tube valve assembly. Id. at 106, 107 S.Ct. at 1029, 94 L.Ed.2d at 100. Cheng Shin and the other defendants settled with the victim, leaving only Cheng Shin's indemnity claim against Asahi. Id. Asahi had no direct contacts with California. Id. at 106-07, 107 S.Ct. at 1029, 94 L.Ed.2d at 100-01. Cheng Shin purchased up to 500,000 valve assemblies from Asahi annually, and sales to Cheng Shin accounted for only approximately one percent of Asahi's annual income. Id. at 106, 107 S.Ct. at 1029, 94 L.Ed.2d at 101. Approximately twenty percent of Cheng Shin's U.S. sales were in California. Id. Taking a cue from World-Wide Volkswagen, the Asahi concurrence distinguished between "`goods which reach a distant State through a chain of distribution and ... goods which reach the same State because a consumer ... took them there.'" Id. at 120, 107 S.Ct. at 1036, 94 L.Ed.2d at 109 (Brennan, J., concurring in part and concurring in judgment) (quoting World-Wide Volkswagen, 444 U.S. at 306-07, 100 S.Ct. at 584, 62 L.Ed.2d at 507 (Brennan, J., dissenting)).
The Asahi Court concluded that jurisdiction over Asahi did not comport with fair play and substantial justice, but could not reach a majority holding on minimum contacts. Id. at 105, 107 S.Ct. at 1028, 94 L.Ed.2d at 100. Instead, Justice O'Connor, joined by Chief Justice Rehnquist and Justices Powell and Scalia, proposed one test, while Justice Brennan, joined by Justices White, Marshall, and Blackmun proposed another. Compare id. at 108-13, 107 S.Ct. at 1030-32, 94 L.Ed.2d at 102-05, with id. at 116-21, 107 S.Ct. at 1034-37, 94 L.Ed.2d at 107-10 (Brennan, J., concurring in part and concurring in judgment). Justice Stevens filed a third opinion concurring in part and concurring in the judgment, also joined by Justices White and Blackmun. Id. at 121-22, 107 S.Ct. at 1037, 94 L.Ed.2d at 110-11 (Stevens, J., concurring in part and concurring in judgment).
Under Justice Brennan's test:
Id. at 117, 107 S.Ct. at 1034, 94 L.Ed.2d at 107 (Brennan, J., concurring in part and concurring in judgment). By contrast, under Justice O'Connor's test:
Id. at 112, 107 S.Ct. at 1032, 94 L.Ed.2d at 104 (plurality opinion). Justice Stevens, writing separately, criticized the way Justice O'Connor applied her "plus" test and offered a variation:
Id. at 122, 107 S.Ct. at 1037, 94 L.Ed.2d at 111 (Stevens, J., concurring in part and concurring in judgment) (emphasis added) (citation omitted). The divided Asahi decision predictably led to a split in authority in the lower courts:
Angela M. Laughlin, This Ain't the Texas Two Step Folks: Disharmony, Confusion, and the Unfair Nature of Personal Jurisdiction Analysis in the Fifth Circuit, 37 Cap. U. L. Rev. 681, 703-06 & nn. 129-33 (collecting cases).
Doublestar relies on Humble v. Toyota Motor Co., in which Arakawa, a Japanese corporation, manufactured car seats and sold them to Toyota Motor Company, Ltd. in Japan, which installed them in vehicles to be sold in the United States. 727 F.2d 709, 710 (8th Cir.1984) (per curiam). The district court dismissed the action for lack of personal jurisdiction, finding that Toyota made all marketing and sales decisions, and the Eighth Circuit affirmed in a per curiam opinion. Id. at 711. Humble is distinguishable because, unlike Arakawa, Doublestar shipped its products directly to the forum state at the direction of its American distributor. Moreover, the Court of Appeals for the Eighth Circuit caselaw supports jurisdiction in other respects.
Even before World-Wide Volkswagen, the Eighth Circuit held nonresident manufacturers could not avoid personal jurisdiction by using distributors as intermediaries:
Hutson v. Fehr Bros., Inc., 584 F.2d 833, 838-39 (8th Cir.1978) (quoting Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137, 1144 (7th Cir.1975) (citations omitted)). More recently, the Eighth Circuit echoed its conclusion that foreign manufacturers cannot avoid jurisdiction by using intermediaries. See Clune v. Alimak AB, 233 F.3d 538, 542 (8th Cir.2000) (noting Justice O'Connor's test was not supported by five justices). That case arose from a fatal workplace accident in Missouri using a hoist made in Sweden. Id. at 540. The Clune court concluded that personal jurisdiction existed over the Swedish manufacturer that had designed the hoist for a U.S. market; had agreements with U.S. distributors; displayed its label on its hoists; and through intermediaries, had sold between twenty and forty of the machines in Missouri. Id. at 543-44. The Eighth Circuit rejected the manufacturer's argument that it did not know where its products would end up once the ship left the Swedish port. Id. at 543 ("`[S]uch ignorance defie[d] reason and could aptly be labeled as "willful."'" (quoting Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 613 (8th Cir.1994))). Clune effectively applied Brennan's broader stream-of-commerce test. Likewise, in Barone, the Eighth Circuit held Hosoya, a Japanese fireworks manufacturer, was subject to personal jurisdiction in Nebraska because it sold fireworks to a distributor that resold them in Nebraska. 25 F.3d at 611, 615. The Barone court applied a broad version of the stream-of-commerce test and focused on the fact that Nebraska was part of the Japanese company's distribution scheme, saying, "Hosoya has reaped the benefits of its network of distributors, and it is only reasonable and just that it should now be held accountable in the forum of the plaintiff's choice...." Id. at 615. The Eighth Circuit used the broader stream-of-commerce test again in Vandelune v. 4B Elevator Components Unltd., saying no direct marketing presence is necessary when a foreign manufacturer designed and labeled grain elevators for the Iowa market and sold 619 units in a year. 148 F.3d 943, 948 (8th Cir.1998). As the court said,
Id. (quoting Barone, 25 F.3d at 615).
We note that some courts rely on Justice Steven's conclusion that the jurisdictional analysis is "affected by the volume, the value, and the hazardous character" of the goods. Asahi, 480 U.S. at 122, 107 S.Ct. at 1037, 94 L.Ed.2d at 110-11 (Stevens, J., concurring in part and concurring in judgment). One federal district court elaborated:
Abuan v. Gen. Elec. Co., 735 F.Supp. 1479, 1486 (D.Guam 1990) (citations omitted). The Abuan court ruled that Monsanto, a bulk seller of Polychlorinated Biphenyls (PCBs), was subject to personal jurisdiction in Guam on personal injury claims arising from exposure to that chemical when a hose on an electrical transformer ruptured to spill that dangerous chemical there. Id. at 1480-81. The court found Monsanto had sold PCBs "by the railcar tank-load" to General Electric in Alabama. Id. at 1486. The court relied on the volume of the hazardous chemical sold in determining that Monsanto was subject to jurisdiction in other forums where GE installed the transformers containing PCBs. Id. at 1486-87. Other courts similarly have considered the hazardous nature of the product in determining personal jurisdiction. See Morris v. SSE, Inc., 843 F.2d 489, 494 (11th Cir.1988) ("Finally, we believe that the Sentinel Mark 2000 falls within Justice Stevens' `hazardous product' category.... Thus it is clear that SSE was aware it was sending a hazardous product to Gulf Coast Air Sports...."); Seirus Innovative Accessories, Inc. v. Cabela's, Inc., No. 09-CV-102 JLS (WMC), 2009 WL 9141752, at *3 (S.D.Cal. Nov. 2, 2009) (applying Stevens's standard to the volume of products sold in California); Osorio v. Dole Food Co., No. 07-22693-CIV, 2009 WL 48189, at *7, *11 (S.D.Fla. Jan. 5, 2009) (discussing the hazardous-product rule and then applying it to the chemicals at issue); Ex parte DBI, Inc., 23 So.3d 635, 638 (Ala.2009) (noting the parties conducted discovery on the volume, value, and hazardous character of the product to apply the Stevens test).
After Asahi, the Supreme Court did not revisit the stream-of-commerce test for almost twenty-five years, and when it did, the Court failed to speak in one voice. Instead, the Court was once again fragmented, with Justice Kennedy authoring the plurality opinion joined by Chief Justice Roberts, and Justices Scalia and Thomas, while Justice Breyer filed a concurring opinion joined by Justice Alito. See J. McIntyre Mach., 564 U.S. at ___, 131 S.Ct. at 2785, 180 L.Ed.2d at 772 (plurality opinion); id. at ___, 131 S.Ct. at 2791, 180 L.Ed.2d at 778 (Breyer, J., concurring in judgment). Justice Ginsburg filed a dissenting opinion in which Justices Sotomayor and Kagen joined. Id. at ___, 131 S.Ct. at 2794, 180 L.Ed.2d at 782 (Ginsburg, J., dissenting). In J. McIntyre Machinery, the Court reviewed a products-liability decision by the New Jersey Supreme Court. Id. at ___, 131 S.Ct. at 2786, 180 L.Ed.2d at 772-73 (plurality opinion). The plaintiff seriously injured his hand while using a metal shearing machine manufactured in England and sold in New Jersey through a U.S. distributer. Id. No more than four machines sold by the manufacturer ended up in New Jersey and possibly only the one used by the plaintiff. Id. As the plurality put it, "The question here is whether the New Jersey courts have jurisdiction over J. McIntyre, notwithstanding the fact that the company
Justice Kennedy's plurality opinion explicitly rejected Brennan's approach in Asahi and endorsed Justice O'Connor's stricter version, stating, "The principal inquiry in cases of this sort is whether the defendant's activities manifest an intention to submit to the power of a sovereign." Id. at ___, 131 S.Ct. at 2788, 180 L.Ed.2d at 775.
Id. (emphasis added). The plurality concluded that although J. McIntyre Machinery marketed its goods in the United States generally, it did not target New Jersey and, therefore, was not subject to jurisdiction. Id. at ___, 131 S.Ct. at 2791, 180 L.Ed.2d at 778.
Justice Breyer and Justice Alito concurred in the judgment but rejected the plurality's reasoning. Id. at ___, 131 S.Ct. at 2793, 180 L.Ed.2d at 780 (Breyer, J., concurring in judgment) (calling the plurality's test a "seemingly strict no-jurisdiction rule" and questioning the meaning of the "targeting" language as applied to modern online commercial markets). Instead, Justice Breyer's concurrence opined, "In my view, the outcome of this case is determined by our precedents." Id. at ___, 131 S.Ct. at 2791, 180 L.Ed.2d at 778. The concurrence expressly limited the holding to the facts of the case and declined to adopt any broader rules. Id. at ___, 131 S.Ct. at 2792, 180 L.Ed.2d at 779 ("None of our precedents finds that a single isolated sale ... is sufficient."). To bolster his conclusion that a single sale is insufficient, Justice Breyer referred to Justice Stevens's statement in Asahi that the volume, value, and hazardous character of the product impacts the jurisdictional analysis. Id.
The three-justice dissent, authored by Justice Ginsburg, harshly criticized the plurality and the concurrence, stating:
Id. at ___, 131 S.Ct. at 2795, 180 L.Ed.2d at 782 (Ginsburg, J., dissenting) (quoting Russell J. Weintraub, A Map Out of the Personal Jurisdiction Labyrinth, 28 U.C. Davis L. Rev. 531, 555 (1995) [hereinafter Weintraub]). The dissent pointedly criticized the plurality for relying on federalism principles rather than the Due Process Clause and argued that J. McIntyre Machinery should be subject to jurisdiction in every state because of its decision to target a national market. Id. at ___, 131 S.Ct. at 2798-99, 180 L.Ed.2d at 786-87. Without choosing between the competing stream-of-commerce tests from Asahi, the dissent argued that sufficient minimum contacts existed to satisfy either standard. Id. at ___, 131 S.Ct. at 2803, 180 L.Ed.2d at 791. The dissent also collected cases upholding personal jurisdiction over foreign manufacturers targeting a nationwide market through U.S. distributors. Id. at ___ & n. 19, 131 S.Ct. at 2804-06 & n. 19, 180 L.Ed.2d at 792-95 & n. 19. Finally, the dissent invoked concerns of reasonableness and fairness by arguing manufacturers should be subject to personal jurisdiction anywhere their products cause injury:
Id. at ___, 131 S.Ct. at 2800-01, 180 L.Ed.2d at 788-89 (footnotes omitted). Justice Ginsburg concluded, "I take heart that the plurality opinion does not speak for the Court[.]" Id. at ___, 131 S.Ct. at 2804, 180 L.Ed.2d at 792.
"When there is no majority opinion, the narrower holding controls." Panetti v. Quarterman, 551 U.S. 930, 949, 127 S.Ct. 2842, 2856, 168 L.Ed.2d 662, 679 (2007) (citing Marks v. United States, 430 U.S. 188, 193, 97 S.Ct. 990, 993, 51 L.Ed.2d 260, 266 (1977)); State v. Iowa Dist. Ct., 801 N.W.2d 513, 522 (Iowa 2011) (same). We agree with the federal circuit courts of appeal that have concluded Justice Breyer's concurrence controls the holding of J. McIntyre Machinery. See Williams v. Romarm, SA, 756 F.3d 777, 784 (D.C.Cir. 2014); In re Chinese-Manufactured Drywall Prods. Liab. Litig., 753 F.3d 521, 541 (5th Cir.2014); AFTG-TG, 689 F.3d at 1363. Justice Breyer's concurrence expressly relies on existing precedent and disclaims any new stream-of-commerce test. J. McIntyre Mach., 564 U.S. at ___, 131 S.Ct. at 2794, 180 L.Ed.2d at 782 (Breyer, J., concurring in judgment). Accordingly, the stream-of-commerce test of World-Wide Volkswagen and Svendsen remains good law and controlling precedent in Iowa after J. McIntyre Machinery.
Other state appellate courts likewise have interpreted J. McIntyre Machinery to conclude their existing precedent on the stream-of-commerce test remains good law. See Russell, 370 Ill.Dec. 12, 987 N.E.2d at 794 ("Accordingly, as in [Wiles], we will not adopt either the broad or narrow version of the [stream-of-commerce]
The Books urge us to follow the Oregon Supreme Court's decision in Willemsen v. Invacare Corp., in which a Taiwanese manufacturer of battery chargers, CTE, supplied chargers for motorized wheelchairs to an Ohio corporation, which then sold over one thousand wheelchairs to customers in Oregon. 352 Or. 191, 282 P.3d 867, 869-70 (2012) (en banc). Plaintiffs sued CTE in Oregon after their mother died in a fire ignited by the defective battery, and CTE moved to dismiss for lack of personal jurisdiction. Id. The trial court denied the motion, and the Oregon Supreme Court denied CTE's petition for a writ of mandamus. Id. The United States Supreme Court granted CTE's petition for certiorari and remanded the case to the Oregon Supreme Court for reconsideration in light of J. McIntyre Machinery. Id. The Oregon Supreme Court determined that Justice Breyer's concurrence was the holding of J. McIntyre Machinery because it was the narrowest ground for the decision. Id. at 873. Under that holding, a single sale in a forum state is insufficient to establish personal jurisdiction over a manufacturer selling through a national distributor. Id. at 874. In Willemsen, by contrast, 1102 wheelchairs with the battery chargers had been sold in Oregon over a two-year period. Id. The Oregon Supreme court concluded that this volume was sufficient to constitute a "`regular course' of sales." Id. at 875 (quoting J. McIntyre Mach., 564 U.S. at ___, 131 S.Ct. at 2792, 180 L.Ed.2d at 779). Therefore, the court concluded personal jurisdiction could be exercised over CTE in Oregon under a stream-of-commerce test. Id. at 877.
We believe the present case is a clearer case for personal jurisdiction than Willemsen. There was a regular course of sales of Doublestar's tires (not merely products containing Doublestar components) into Iowa, and Doublestar actually shipped thousand of tires (albeit not the accident tire) into Iowa.
Doublestar's challenge to jurisdiction relies in part on our decision in Capital Promotions, a case that never mentions the stream-of-commerce test. 756 N.W.2d 828. That case was not a products-liability action and is factually inapposite. Capital Promotions involved intentional tort claims arising from a dispute between two boxing promoters over an Iowa-born prizefighter, Tye Fields. Id. at 830-31. Capital Promotions, an Iowa limited liability company based in this state, entered into a five-year exclusive promotional contract with Fields in 2000 when the boxer resided in Missouri. Id. at 831. Fields won a heavyweight title in 2003, prompting repeated efforts by Don King Productions to acquire the promotional rights for Fields, who had moved to Nevada. Id. Capital Promotions sued Don King Productions, a Delaware corporation based in Florida, for intentional interference with the Iowa entity's contract with Fields. Id. at 831-32. Don King had never promoted a prizefight in Iowa and had no Iowa office or employees. Id. at 831. The alleged interference
We reiterate that Svendsen and World-Wide Volkswagen remain the controlling precedent for evaluating personal jurisdiction in products-liability cases. Yet, this case presents the opportunity to revisit our precedent to consider adopting Justice O'Connor's more stringent stream-of-commerce plus test, as urged by Doublestar.
"`Fairness is the crux of the minimum-contacts analysis.'" Sioux Pharm., 859 N.W.2d at 189 (quoting Shams, 829 N.W.2d at 854). Is it unfair to compel a manufacturer selling thousands of products nationwide to defend its allegedly unsafe design in a state where its product was sold and injured a resident using it? We think not. See Asahi, 480 U.S. at 117, 107 S.Ct. at 1035, 94 L.Ed.2d at 107 (Brennan, J., concurring in part and concurring in judgment) ("A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State[.]"). We adopted products liability to ensure that "`the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market.'" Hawkeye-Sec. Ins. Co. v. Ford Motor Co., 174 N.W.2d 672, 683 (Iowa 1970) (quoting Greenman v. Yuba Power Prods., Inc., 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897, 900 (1963)). We would undermine that purpose if we closed the local courthouse door to injured consumers.
Significantly, the product at issue here is a tire with an allegedly dangerous design. We note Justice Stevens's concurrence in Asahi that the jurisdictional analysis "is affected by the volume, the value, and the hazardous character of the components." 480 U.S. at 122, 107 S.Ct. at 1037, 94 L.Ed.2d at 111 (Stevens, J., concurring in part and concurring in judgment) (emphasis added). Plaintiffs allege in this case that the Doublestar tire design is prone to explode during reasonably foreseeable mounting mistakes. Indeed, the accident underlying this lawsuit resulted when Jim Book made the not uncommon mistake of attempting to mount a sixteen-inch tire on a 16.5" rim, and his son Dylan, the victim, overinflated the tire to attempt to get it seated.
We recognize the burden placed on alien defendants: "The unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders." Id at 114, 107 S.Ct. at 1033, 94 L.Ed.2d at 105 (majority opinion). But, in this case, that concern is substantially diminished by Doublestar's concession that it is subject to personal jurisdiction in Tennessee. Doublestar does not identify any material additional burden it would face defending this case in Iowa instead of Tennessee. Nor does Doublestar contend it lacks the resources to defend this lawsuit in Iowa.
This case does not involve an isolated sale or a small manufacturer. J. McIntyre Machinery adjudicated personal jurisdiction over a foreign manufacturer in a state where no more than four of its machines (and perhaps only one) had been sold. 564 U.S. at ___, 131 S.Ct. at 2786, 180 L.Ed.2d at 773 (plurality opinion). We share the concern expressed in the concurring opinion for the plight of a small manufacturer:
Id. at ___, 131 S.Ct. at 2793, 180 L.Ed.2d at 781 (Breyer, J., concurring in judgment).
We decide only the case before us. Doublestar is not a small manufacturer. It manufactured over 3.1 million tires in the first nine months of 2009 alone and sold half of those internationally, including hundreds of thousands of tires to its American distributors in 2009. As we await further guidance from the fractured United States Supreme Court, we do not foreclose the possibility of revising the stream-of-commerce test for small nonresident sellers. We recognize such defendants may avoid personal jurisdiction when fairness and substantial justice dictate that outcome. Meanwhile, on this record, our existing Svendsen test is appropriate.
Having determined Doublestar has the requisite minimum contacts with Iowa, we next must decide "`whether the assertion of personal jurisdiction would comport with "fair play and substantial justice."'" Capital Promotions, 756 N.W.2d at 834 (quoting Burger King Corp., 471 U.S. at 476, 105 S.Ct. at 2184, 85 L.Ed.2d at 543). To make this determination, we consider
Id. (quoting Burger King Corp., 471 U.S. at 477, 105 S.Ct. at 2184, 85 L.Ed.2d at 543). "`[W]here a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'" Shams, 829 N.W.2d at 857 (quoting Burger King Corp., 471 U.S. at 477, 105 S.Ct. at 2184-85, 85 L.Ed.2d at 544). As the Burger King Court further observed, "[m]ost such considerations usually may be accommodated through means short of finding jurisdiction unconstitutional." Burger King Corp., 471 U.S. at 477, 105 S.Ct. at 2185, 85 L.Ed.2d at 544. We hold the exercise of personal jurisdiction over Doublestar comports with fair play and substantial justice.
We first address the burden on the defendant of litigating in this forum. Significantly, Doublestar has conceded it is subject to jurisdiction in Tennessee and has not shown defending this case here would be more burdensome than in that state. Next, the interest of plaintiffs and the State of Iowa strongly favor jurisdiction here. A Tennessee forum would be far more burdensome for the Books compared to their home county. Their interest in obtaining convenient relief at home clearly
Systemic judicial interests also favor jurisdiction in Iowa because the key occurrence and damages witnesses are located here, not Tennessee. The trial would require testimony by the Books regarding the accident and Dylan's injury and recovery. Other witnesses located in Iowa include Cody Donnelly, who was present when the tire exploded, as well as the first responders, the dozen medical witnesses who treated Dylan, and possibly the employees of the former defendant Hunter Engineering who designed and sold the allegedly defective tire mounting machine.
For these reasons, we hold that Doublestar is subject to personal jurisdiction in Iowa. Accordingly, we reverse the jurisdictional ruling of the district court and remand the case for further proceedings.
Id. The Woodhurst court followed our decision in Meyers v. Kallestead, 476 N.W.2d 65 (Iowa 1991), to affirm the dismissal of Manny's for lack of jurisdiction. See id. at *3; see also Meyers, 476 N.W.2d at 68 (affirming dismissal of Illinois tavern for lack of personal jurisdiction in Iowa). Neither case held that the Iowa or Illinois dram-shop statutes apply extraterritorially to impose liability on the licensee for injuries inflicted in another state. We agree with the Woodhurst court that dram-shop cases and products-liability cases are inapposite.