Book v. Voma Tire Corp. - 860 N.W.2d 576 (Iowa 2015)

Rule:

If the sale of a product of a manufacturer or distributor is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other states, it is not unreasonable to subject it to suit in one of those states if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum state does not exceed its powers under the Due Process Clause of the Fourteenth Amendment to the United States Constitution, U.S. Const. amend. XIV, if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state.

Facts:

The tire, which was manufactured by a Chinese tire manufacturer that sold thousands of tires in Iowa through an American distributor, exploded as Dylan Book, an Iowan, was airing it up at his father’s business in Adel, Iowa. Dylan Book suffered severe and permanent injuries and, through his mother, filed suit in his home county seeking recovery from the tire manufacturer, alleging the tire's design was defective and unreasonably dangerous and prone to explode during inflation. The manufacturer filed a motion to dismiss for lack of personal jurisdiction. The district court granted the manufacturer’s motion. The present appeal followed. 

Issue:

Was the Chinese tire manufacturer subject to personal jurisdiction in Iowa? 

Answer:

Yes.

Conclusion:

The court held that the Chinese tire manufacturer that sold thousands of tires in Iowa through an American distributor was subject to personal jurisdiction in Iowa under the stream-of-commerce test set forth in World-Wide Volkswagen and Svendsen because it had the requisite minimum contacts with Iowa, as it shipped 12,681 tires directly to Iowa for its distributor; the exercise of personal jurisdiction over the manufacturer comported with fair play and substantial justice, and systemic judicial interests favored jurisdiction in Iowa because the key occurrence and damages witnesses were located in Iowa.