“The state court made the stream of commerce flow all the way from the Danube to the Los Angeles River. That’s bad hydrology—and even worse jurisprudence.”
—Zac Morgan, WLF Senior Litigation Counsel

Click here to read WLF’s brief.

(Washington, DC)—Washington Legal Foundation (WLF) today urged the U.S. Supreme Court to review (and ultimately reverse) a California state court’s decision to exercise personal jurisdiction over Audi AG, a German company with no relevant ties to California.

The case arises from a products liability suit by California plaintiffs against Audi and Volkswagen Group of America. The latter company, unlike Audi, is an American corporation that markets and sells vehicles to authorized dealerships, including in California—but it takes no direction from Audi itself. Despite Audi’s lack of tangible connections to the state, the California court denied Audi’s efforts to dismiss itself from the case. That state-court decision relied on a stray statement from a 45-year-old Supreme Court case that merely placing a product in the general “stream of commerce” provides jurisdiction.

As WLF’s amicus brief explains, however, the “stream of commerce” theory produces absurd results and deprives the business community of predictability. Indeed, twice in the past 40 years, the Supreme Court has mustered four votes to eliminate this confusing rule. WLF’s brief contends that the third time should be the charm—and this “incoherent aphorism” should be replaced with the “coherent rubric” that state courts can assert personal jurisdiction only over companies that knowingly cause the distribution of their products into the state.