In this original proceeding, we issued a rule to show cause why the respondent district court should not be prohibited from asserting jurisdiction over the petitioner, Le Manufacture Francaise Des Pneumatiques Michelin, a foreign corporation (Michelin of France), on the grounds that assertion of jurisdiction is not authorized by the Colorado long-arm statute, section 13-1-124(1), C.R.S.1973, and violates due process of law. Finding no statutory or constitutional violation, we now discharge the rule.
Rick and Sheila Mrsny brought an action in Jefferson County district court against Michelin of France for injuries sustained in a one-car accident in Colorado on July 11, 1976, when a tire manufactured by Michelin of France allegedly failed.
A plaintiff seeking to establish personal jurisdiction over a defendant upon the basis of the long-arm statute must make a prima facie showing of threshold jurisdiction. Such showing may be established by the allegations of the complaint. Pioneer Astro Industries, Inc. v. District Court, 193 Colo. 409, 566 P.2d 1067 (1977); Alliance Clothing, Ltd. v. District Court, 187 Colo. 400, 532 P.2d 351 (1975); Texair Flyers v. District Court, 180 Colo. 432, 506 P.2d 367 (1973). In order to evaluate whether a prima facie showing of threshold jurisdiction has been established, it is also appropriate to consider evidence adduced at the hearing on a motion to dismiss. Waterval v. District Court, Colo., 620 P.2d 5 (1980).
Michelin of France is a French corporation which engages in the business of manufacturing and selling tires. During the years 1973 through 1978, tires which it manufactured were used in more than one hundred countries in addition to the United States.
Michelin of France has no manufacturing facilities outside of France. It has no facilities of any kind in the United States and owns no property in this country. It does not have an appointed agent for service of process, a bank account, or a telephone listing in the United States. It engages in no advertising of its products in this country.
Since 1951 Michelin of France has sold tires to purchasers having principal places of business in the United States. In the years 1973 through 1978 approximately six to ten percent of the tires manufactured by Michelin of France were sold to Michelin Tire Corporation, a New York corporation (Michelin of New York), and Sears Roebuck and Company, each of which maintained its principal place of business in the United States. Those buyers purchased the tires f.o.b. Michelin of France's plant in France, for eventual resale within the United States. Michelin of France relinquished title and control over the tires upon sale.
Certain tires made and sold by Michelin of France have sidewall markings in English, among other languages, and code numbers required by the United States Department of Transportation (DOT). Tires so marked have been constructed to satisfy relevant United States safety standards. The tire which is the subject of this action has a DOT number on the sidewall. It was reasonably foreseeable that some of the tires manufactured by Michelin of France would be used in Colorado or other parts of the United States.
Michelin of New York also purchases Michelin-brand tires manufactured by other foreign corporations. Such purchases are made f.o.b. Italy and Spain, and the tires are resold in the United States. Beginning in May 1975, Michelin of New York also manufactured Michelin-brand tires in the United States.
Neither Michelin of New York nor Michelin of France owns any of the other's stock. The only connection between these two corporations reflected by the record is their relationship as buyers and seller of Michelin of France tires.
The tire in question did not arrive in Colorado through a typical chain of distribution. Rather, it was one of four new Michelin tires purchased from a German retailer by an American serviceman who installed it on his Fiat automobile. The car subsequently was shipped to the United States and eventually was transferred to a Colorado car dealership in trade for a new vehicle. The plaintiffs purchased the car with the allegedly defective tire from this dealership. The failure of the tire and the ensuing accident occurred in Colorado.
Michelin of France was served with process in France. It does not contend that such service was improper. Instead, that corporation bases its motion to dismiss solely on the contention that the district court may not subject it to jurisdiction in this case consistent with our long-arm statute and due process of law. We disagree.
Before jurisdiction can be asserted over a foreign corporation, its conduct must bring it within the purview of our long-arm statute, section 13-1-124(1), C.R.S. 1973, which provides in pertinent part:
"(1) Engaging in an act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such
. . . . .
In enacting our long-arm statute, the Colorado legislature intended to extend the jurisdiction of our courts to the fullest extent permitted by the due process clause of the United States Constitution. Waterval v. District Court, supra; Jenner & Block v. District Court, 197 Colo. 184, 590 P.2d 964 (1979); Safari Outfitters v. Superior Court, 167 Colo. 456, 448 P.2d 783 (1969). Conversely, our legislature did not intend that the long-arm statute be construed to permit jurisdiction to be asserted where to do so would violate due process of law. See section 2-4-201(1)(a), C.R.S. 1973.
In Vandermee v. District Court, 164 Colo. 117, 433 P.2d 335 (1967), we held that a person or entity whose allegedly tortious conduct in another state causes injury in this state has committed "a tortious act within this state" for purposes of the long-arm statute. Accord, Jenner & Block v. District Court, supra; Texair Flyers v. District Court, supra; Czarnick v. District Court, 175 Colo. 482, 488 P.2d 562 (1971); see Ferrari v. District Court, 185 Colo. 136, 522 P.2d 105 (1974). Although the subject tire was manufactured in France, the injuries allegedly resulting from that tire's failure occurred in Colorado. Therefore, the "tortious act" standard of the long-arm statute has been satisfied if such a construction of the statute is consistent with due process of law. We now address that constitutional question.
The due process clause of the Fourteenth Amendment to the United States Constitution limits state power over a nonresident defendant by prohibiting the assertion of in personam jurisdiction unless that defendant has "certain minimum contacts with [the forum state] such that maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945); accord, e. g., McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). As the United States Supreme Court recently stated,
Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490, 498 (1980); see Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); International Shoe Co. v. Washington, supra.
Whether sufficient contacts exist to support jurisdiction over a nonresident defendant depends upon the quality and nature of that defendant's activity in the forum state. Hanson v. Denckla, supra; International Shoe Co. v. Washington, supra. Of primary importance is that the defendant by its conduct "purposely avail[ed] itself of the privilege of conducting activities within [that] state." Hanson v. Denckla, supra, at 253, 78 S.Ct. at 1240, 2 L.Ed.2d at 1298; accord, Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). Such purposeful activity has been found in products liability cases where a manufacturer delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state. E. g., Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980); Alliance Clothing Ltd. v. District Court, supra; Czarnick v. District Court, supra; Vandermee v. District Court, supra; Connelly v. Uniroyal,
A manufacturer may be found to have engaged in the requisite purposeful activity even when title and control of its products pass outside of the forum state to middlemen who eventually resell the products to consumers within the state. Alliance Clothing Ltd. v. District Court, supra. Other courts which have considered the question have reached the same result. For example, in Connelly v. Uniroyal, Inc., supra, a Belgian tire manufacturer was held to have purposely availed itself of the Illinois market by selling some of its tires in Belgium to General Motors. General Motors installed the tires on automobiles which it manufactured in Belgium for sale in the United States, including Illinois. The plaintiff's father purchased such an automobile from a General Motors dealer in Illinois. In upholding jurisdiction of the Illinois courts over the foreign tire manufacturer in a personal injury suit based upon the failure of a tire in Colorado, the Illinois Supreme Court stated:
Id. at 405, 27 Ill.Dec. at 348, 389 N.E.2d at 160; see Worldwide Volkswagen Corp. v. Woodson, supra; Oswalt v. Scripto, Inc., supra; Thornton v. Toyota Motor Sales U.S.A. Inc., 397 F.Supp. 476 (N.D.Ga.1975); Van Eeuwen v. Heidelberg Eastern, Inc., 124 N.J.Super. 251, 306 A.2d 79 (1973).
Although the materials before us do not reflect the extent to which Michelin of France tires are sold in Colorado,
Although the economic benefits which Michelin of France derives from the eventual sale of its tires in Colorado are indirect and unquantified by the information before us, such benefits are not so fortuitous as to negate "existence of an intent on the manufacturer's part to bring [them] about ...." Buckeye Boiler Co. v. Superior Court, 71 Cal.2d 893, 458 P.2d 57, 64, 80 Cal.Rptr. 113 (1969). As a matter of commercial actuality, therefore, Michelin purposefully has availed itself of the Colorado market. See Buckeye Boiler Co. v. Superior Court, supra; Connelly v. Uniroyal, Inc., supra; see also Alliance Clothing, Ltd. v. District Court, supra.
In arguing that it has not purposefully availed itself of the privilege of conducting
In Worldwide Volkswagen Corp. v. Woodson, supra, an automobile sold and distributed to the plaintiffs in New York was being driven through Oklahoma when an accident occurred causing injuries. Suit was brought in Oklahoma based upon an alleged defect in the car, naming among the defendants
Michelin of France claims that the arrival in Colorado of the tire in question was even less foreseeable than the presence of the automobile in Oklahoma in Worldwide Volkswagen Corp. v. Woodson, supra. But Michelin of France misses the point by examining only whether the subject tire's presence here was foreseeable. The pertinent inquiry is whether "the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Worldwide Volkswagen Corp. v. Woodson, supra at 297, 100 S.Ct. at 567, 62 L.Ed.2d at 501. In pursuing this inquiry, the purposeful contacts which Michelin of France does have with Colorado are of prime importance.
In Worldwide the defendants' only tie with the forum was the foreseeable presence of the one product which caused the injury. However, the affiliating circumstances absent in Worldwide are present here. As noted above, Michelin of France purposely avails itself of the Colorado market by placing its products in the stream of commerce with the foreseeable result that they may be sold anywhere in the United States, including Colorado. See Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961). It is because of this activity that Michelin of France should reasonably anticipate being required to defend an action here.
Had the tire which failed been purchased by the plaintiffs from a Colorado retailer who in turn purchased the tire from either Michelin of New York or Sears Roebuck and Company, the link between Michelin of France's purposeful activity in Colorado and this cause of action would be enough to support jurisdiction. Alliance Clothing, Ltd. v. District Court, supra; see Worldwide Volkswagen Corp. v. Woodson, supra. In this case the presence in Colorado of the particular tire alleged to be defective is unrelated to the commercial channels by which Michelin of France's products normally reach the various states. Therefore, we must determine whether this fact makes it unreasonable or unfair, in a constitutional sense, for Colorado to assert jurisdiction. See Worldwide Volkswagen Corp. v. Woodson, supra. We conclude it does not.
Generally speaking, the more tenuous the connection between the cause of action sued upon and the defendant's activities in the forum state, the more substantial the defendant's contacts with the forum state must be to render the assertion of jurisdiction reasonable. See 2 J. Moore, Federal Practice ¶ 4.25 (1980). Thus, where jurisdiction is based upon a single transaction, the cause of action must arise out of that transaction. Tucker v. Vista Financial Corp., 192 Colo. 440, 560 P.2d 453 (1977); Van Schaack v. District Court, 189 Colo. 145, 538 P.2d 425 (1975). However, where a defendant has substantial continuous contacts with the forum state, exercise of in personam jurisdiction on causes of action wholly unrelated to the defendant's activity in the forum state may comport with due process. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952).
An examination of the relationship between the defendant, the litigation, and the forum must be made to determine the reasonableness of a particular assertion of jurisdiction. Shaffer v. Heitner, supra. As we noted in Waterval v. District Court, supra, each case involves an ad hoc analysis of the facts and application of basic constitutional principles of in personam jurisdiction to those facts. Here, it may be that Michelin of France's contacts with Colorado to the extent established by the materials before us are not so extensive as to render it amenable to suit in this state on causes of action unconnected with its Colorado-related activity. See Shon v. District Court, Colo., 605 P.2d 472 (1980); Tucker v. Vista Financial Corp., supra; Van Schaack v. District Court, supra; Ferrari v. District Court, supra. But, although not directly arising from Michelin of France's purposeful activity in Colorado, the cause of action asserted here is sufficiently related to that activity to render exercise of jurisdiction fair and reasonable.
The tires manufactured by Michelin of France which come into this state through more ordinary means do not differ significantly from the tire which failed. Tires of the same size and tread design are sold to Michelin of New York and Sears Roebuck and Company for resale in the United States, including Colorado. Moreover, while the tire in question was sold in Germany, it had DOT markings stamped on it. It may be inferred from this fact that the subject tire was manufactured to meet the same quality standards as those tires normally sent to this country. Thus, the burden on Michelin of France to defend an action based upon this tire is no different than the burden which would arise from a defense of an action relating to any of the tires which reach Colorado as a result of Michelin of France's purposeful activity. See Buckeye Boiler Co. v. Superior Court, supra.
The burden to defend is not the only relevant consideration in assessing the reasonableness and fairness of the state's assertion of jurisdiction.
We discharge the rule to show cause.
The Mrsnys also appealed the summary judgment as to Michelin Tire Corporation only. In an unpublished opinion, the court of appeals affirmed the summary judgment, but granted the plaintiffs leave to amend their complaint. The materials before us indicate no amended complaint has been filed.
Worldwide Volkswagen Corp. v. Woodson, supra, at 292, 100 S.Ct. at 564, 62 L.Ed.2d at 498.