7. Should the court grant the subsidiary's motion?

To have personal jurisdiction over parties in a federal lawsuit, two distinct requirements must be met: (i) the court must have the power to act on a given person so as to subject him to personal liability (substantive due process), and (ii) the court must have given the defendant adequate notice of the action against him and an opportunity to be heard (procedural due process). A court may not exercise jurisdiction over a defendant unless minimum contacts with the state in which the court sits have been established. The defendant must have taken actions that were purposefully directed towards the forum state to create these contacts.

Minimum contacts to the forum state can be established in a variety of ways. The applicable test for determining whether a corporation has sufficient minimum contacts with a forum state for that state to assert personal jurisdiction was codified in International Shoe. In order to subject a defendant to a judgment, that defendant must have minimum contacts with that state such that the maintenance of the lawsuit does not offend traditional notions of fair play and substantial justice.

The mere fact alone that a product finds its way into a state and causes injury there is not enough to subject an out of state manufacturer or vendor to jurisdiction there. Instead, the defendant must have made some sort of intentional effort to market in the forum state, either directly or indirectly, in order for personal jurisdiction over the defendant to meet the requirements of due process (World-Wide Volkswagen).

D is correct. Here, the subsidiary did have contact: it put tires into the stream of commerce knowing they would end up in State A. The cause of action, however, is not related to the activity in the state because the accident occurred in Europe, not in State A. Additionally, defending a lawsuit in a foreign legal system would be a severe burden on the subsidiary that would not be outweighed by the small interest State A has in exercising jurisdiction. Thus, although a few of the subsidiary's tires ended up in State A, there are not sufficient minimum contacts to force the foreign subsidiary to defend a lawsuit there.

A is incorrect. Even though the subsidiary put tires into the stream of commerce knowing they would end up in State A, the claim is still not related to the contact, and the burden placed on the subsidiary is not outweighed by the forum's interest.

B is incorrect. The court does not have jurisdiction over the subsidiary just because it has jurisdiction over the parent corporation.

C is incorrect. Proving sufficient contact with the forum is an analysis of the contact, relatedness, and fairness. Where the accident occurred is not a determinative factor in determining if the subsidiary had sufficient contacts for State A to have personal jurisdiction over it.