9th Cir: CA Port Shipments, US Design Create Jurisdiction Over Foreign Mfrs
A foreign manufacturer's high-volume shipments through California ports, combined with a product design specific to the US market, are sufficient to establish specific personal jurisdiction.
The US Court of Appeals for the Ninth Circuit reversed a district court's dismissal of foreign manufacturers in a multidistrict litigation, holding that specific personal jurisdiction existed based on the companies' forum contacts. The panel found that Korean automakers Hyundai and Kia purposefully availed themselves of the California forum by directing over 70% of their US-bound vehicle shipments through California ports as the shippers of record. This conduct, combined with designing the vehicles specifically for the US market, satisfied the circuit's "stream-of-commerce-plus" test for jurisdiction.
The decision is significant for foreign manufacturers selling into the US through domestic subsidiaries. It clarifies that using FOB origin shipping terms does not create a jurisdictional safe harbor if the foreign parent is the shipper of record and does not deny control over the shipping destination. It also establishes that designing a product for the entire US market, not just California, can help establish jurisdiction in a specific state when combined with other direct contacts like port shipments. The case was remanded for the district court to conduct the seven-factor reasonableness inquiry. The court also noted defendants had forfeited a key jurisdictional argument regarding out-of-state class members.