985 F.

2d 1534

Laura Ann VERMEULEN, Plaintiff-Appellant,

v.
RENAULT, U.S.A., INC., et al., Defendants,
Regie Nationale Des Usines Renault; Defendants-Appellees.
No. 91-8765.

United States Court of Appeals,

Eleventh Circuit.
March 22, 1993.

Dennis T. Cathey, Cornelia, GA, Benjamin S. Williams, Williams &

Henry, Atlanta, GA, for plaintiff-appellant.
M. Diane Owens, Long, Weinberg, Ansley & Wheeler, Atlanta, GA, for
defendants-appellees.
Appeal from the United States District Court for the Northern District of
Georgia.
Before KRAVITCH and DUBINA, Circuit Judges, and RONEY, Senior
Circuit Judge.
KRAVITCH, Circuit Judge:

Like the Phoenix rising from the ashes, this case returns for us to address once
again the district court's dismissal of appellant Vermeulen's claims for lack of
personal jurisdiction. This panel previously rendered an opinion reversing the
district court, Vermeulen v. Renault U.S.A., Inc., 965 F.2d 1014, amended by,
975 F.2d 746 (11th Cir.1992), but our mandate has not yet issued. Now, we
again modify our opinion, reversing the district court, although on grounds
different from those stated in our previous opinion. Accordingly, we substitute
for our earlier opinion the following revised opinion.

REVISED OPINION
I.

On February 16, 1988, Laura Ann Vermeulen suffered an accident while

driving her 1982 Renault LeCar near Lawrenceville, Georgia. She sustained a
spinal injury that left her a quadriplegic. Vermeulen had purchased the car in
January 1988 from her brother. At the time of the purchase, both siblings were
residents of North Carolina. Shortly thereafter, but prior to the accident,
Vermeulen moved to Georgia.

Appellee Regie Nationale Des Usines Renault (RNUR or Renault), the

manufacturer and designer of the 1982 LeCar, is a corporation wholly owned
by the French government.

A.
4

In 1979, RNUR entered into a series of commercial agreements with American

Motors Corporation (AMC) and its wholly owned subsidiary, American Motors
Sales Corporation (AMSC), pursuant to which AMSC agreed to act as the
exclusive marketer and distributor of Renault automobiles in the United States.1
It is undisputed that AMSC distributed the 1982 Renault LeCar at issue in this
case under this distribution arrangement. The stated goals of the agreements
between RNUR and AMC/AMSC were, among other things, "to promote the
widest distribution of Renault products," and to "develop a dealer network for
Renault products in the [United States]." R3-34-Ex. A, at 1. Accordingly,
AMSC agreed to purchase Renault vehicles, including LeCars, in France from
RNUR, and to import them for resale in the United States.

Although the distribution agreement indicated that AMSC would take full
responsibility for marketing and distributing Renault vehicles in the United
States, id. at 4, the parties contemplated that Renault would be fully involved in
decisions affecting the sales of its product. AMSC covenanted to "use its best
efforts to carry out the Market Representation Plan." Id. at 6. This plan, not
itself part of the record but referenced and defined in the Distributor's
Agreement, was a "mutually agreed upon plan, initialled on behalf of the
parties [to the Distributor Agreement], for the franchising of Dealers to sell
Renault products within the [United States]." Id. at 3.

The Distributor's Agreement also provided that "Renault may from time to time
advise [AMSC] of suggested retail prices for Renault vehicles." Id. at 6.
Further, the Built-Up Sales Agreement indicated that "[t]he estimated quantities
of Renault Products to be purchased and sold hereunder during any Contract
Year shall be mutually agreed." R3-34-Ex.B, at 2.2

Although the Distributor Agreement provided that AMSC would take

Although the Distributor Agreement provided that AMSC would take

responsibility for maintaining "a sufficient number of trained and competent
personnel" and for instructing such personnel concerning the preparation,
servicing and repair of Renault products, it also stated that RNUR would "use
its best efforts to provide [AMSC] with suitable assistance in connection with
[such] training and instruction responsibilities." R3-34-Ex.A, at 7-8.

Article VII of the Distributor Agreement contemplated that AMSC would

maintain responsibility for "determining assortments, minimum quantities,
geographical distribution and other matters relating to" parts and accessories
offered for sale by Renault pursuant to the Sales Agreements entered into by
the parties. The Distributor's Agreement provided, however, that AMSC would
"discuss such matters with Renault and give serious consideration to Renault's
recommendations." Id. at 8.

Article IX of the Agreement stated that AMSC "shall print such business forms,
bearing Renault trademarks and Renault trade names, for exclusive use in its
'Renault' business as Renault and [AMSC] shall mutually agree," and that
AMSC would "cause each Dealer ... to maintain such portions of its facilities as
are dedicated to product identification and signage in conformity with Renault
standards and as mutually agreed." Id. at 10.

10

Under Article X of the Agreement, Renault retained the full and exclusive right
to and ownership of the "Renault" trademark. The Agreement provided that "
[a]ny particular use of any [Renault] trademark which, in the sole judgment of
Renault, is inconsistent with the image or goodwill of Renault or its business,
advertising or public relations policies, will be discontinued immediately after
the same comes to the attention of Renault if Renault so notifies [AMSC]." Id.
at 11.

11

Although Article XI of the Agreement provided that AMSC would retain full
and exclusive responsibility for advertising, promoting and merchandising
Renault products, AMSC covenanted to "work closely with Renault in the
planning and developing of themes and strategy and the related budget"; to
"build upon the Renault name and image as the manufacturer and designer of
outstanding small cars"; and to "verify the technical content of any
representation concerning Renault Products." Id. at 12. Article XI continued:

12
[AMSC]
shall not publish or permit to be published any advertising material relating
to Renault Products which is likely to mislead or deceive the public or to impair the
image or good will of Renault or the reputation of Renault Products. If Renault
notifies [AMSC] that any advertising is injurious to Renault's business, or is likely to
mislead or deceive the public, or is at variance with the business, advertising or

public relations policies of Renault, or is likely to impair the image or good will of
Renault, [AMSC] agrees to discontinue immediately any such advertising.
13

Id. at 13.

14

In Article XII, AMSC agreed to appoint AMC/Renault dealers in accordance

with the Market Representation Plan discussed above and undertook to "use its
best efforts to assure that Dealers will comply with all sales and service
manuals that Renault may from time to time issue relating to the sale and
servicing of Renault Products and other matters covered by this Agreement or
the Dealer Franchises." Id. at 14. Article XII also stated that "any dealership or
dealerships operated by [AMSC] for the sale of Renault Products at retail shall
at all times satisfy the standards for Renault dealerships prescribed by this
Agreement, the Dealer Franchises and the sales and service manuals that
Renault may issue from time to time relating to Dealers." Id. AMSC was
responsible for the actual appointment, training and termination of such dealers.
Id. at 13.3

15

Under Article XIII, Renault warranted its products to AMSC. Id. at 14.
Although AMSC warranted the product to the ultimate consumer, Renault
covenanted to reimburse AMSC "for warranty work performed by [AMSC]
itself or by Dealers within [the United States] with respect to Renault vehicles
sold therein." Id. at 15. Article XIII also provided that RNUR would hold
harmless and indemnify AMSC against any judgment resulting from lawsuits
commenced against AMSC seeking damages for alleged design or other defects
in Renault products, and permitted Renault to take over the defense of any such
lawsuit if Renault so chose. Id. at 17-18.

16

Article XV of the Agreement required AMSC to provide RNUR on a regular

basis with certain reports and records pertaining to the distribution of Renault
products. AMSC was required to provide Renault with (1) a monthly written
analysis of its inventories of Renault products; (2) thrice-monthly reports of the
then-current dealer stocks of Renault vehicles and the sales of Renault vehicles
during the preceding 10-day period; (3) a quarterly report of all Dealer
Franchise Agreements entered into during the preceding quarter, a list of all
terminations of dealers during that quarter, and an opinion report assessing the
impact of such new franchises and terminations on the Market Representation
Plan. Id. at 28. AMSC also agreed to "furnish to Renault such written reports of
compliance with the Market Representation Plan, and such marketing and
customer satisfaction reports, as Renault may from time to time reasonably
request." Id. at 29.

17

Finally, Article XVI of the Agreement stated explicitly that "[t]his Agreement
does not constitute [AMSC] the agent or legal representative of Renault for any
purpose whatsoever." Id. at 29.

18

The Master Agreement between Renault and AMC, R3-34-Ex.E, also contained
certain provisions relevant to the new distribution arrangements between
RNUR and AMC/AMSC. Prior to 1979, Renault U.S.A., RNUR's whollyowned American subsidiary, had acted as RNUR's distributor in the United
States. Under Section 4(c) of the Master Agreement, Renault agreed to cause
Renault U.S.A. to transfer all its capital stock in several of the latter's
distribution subsidiaries to AMC, and to cause Renault U.S.A. to sell to AMC
certain inventories held by those subsidiaries or by Renault U.S.A. itself. R334-Ex.E, at 10-11.4 The Master Agreement also provided that "AMC will cause
[AMSC] to fulfill all the obligations and responsibilities of Renault's
distribution subsidiaries as distributors under the terms of the Renault dealer
franchises in effect at the respective times of the transfers.... In accordance with
its franchising procedures, [AMSC] will also offer to reenfranchise ... dealers
who are parties to a franchise with any such subsidiary at such times of
transfer, provided such dealers are desirous of the same." Id. at 12-13. Finally,
Section 4(c) provided that "AMC will offer employment on its customary terms
to those officers and employees of Renault U.S.A. heretofore agreed upon by
Renault U.S.A. and AMC." Id. at 13.

19

Section 4(e) of the Agreement created a "Policy Committee" consisting of

equal numbers of "senior executives" from each company. This committee was
charged with the responsibility "for reviewing the matters contemplated by this
Agreement, and for recommending solutions to policy conflicts that may arise
between them in connection therewith." Id. at 15. Section 4(e) also stated that
"no decision shall be taken by either party with respect to the image or product
positioning of the products of either party except by mutual agreement." Id.

B.
20

Implementation of the new alliance between RNUR and AMC/AMSC took

many forms. First, through a number of financial agreements, RNUR invested
significant amounts of capital into AMC. Between the years 1979 and 1984,
RNUR committed $545,100,000.00 to AMC through various stock, warrant,
and debenture purchases. R2-27-Ex.6, at 28.5 Under these agreements, Renault
gained the right to "place certain limitations on the future incurrence by [AMC]
of secured indebtedness for borrowed money and [limit] the use of the proceeds
of the sales pursuant to the agreement." R2-27-Ex.3, at 29. As a result of this
financial commitment, AMC was able to negotiate a new five-year bank credit

agreement for an additional $250 million. R2-27-Ex.3, at 5. Ultimately, Renault

came to own 46.4% of AMC's capital stock, and to hold options on AMC stock
that could make RNUR the majority stockholder in AMC. R2-27-Ex.2, at 2.
RNUR's investments in AMC were crucial to the latter's health and future
prospects during the economically unstable early 1980s. R2-27-Ex.2, at 1; Ex.3, at 2.
21

Second, AMC and RNUR agreed to the "expansion of domestic wholesale

financing available to the Company's AMC, Jeep and Renault dealers, the
financing of fleet sales and the making of capital loans to dealers to whom
wholesale financing is also provided," with an eye toward "establishing a fullservice financial company, to support AMC, Jeep and Renault sales in the U.S.
and Canada." R2-27-Ex.2, at 18. This financial company, dubbed American
Motors Financial Corp. (AMFC), was ultimately formed pursuant to a joint
venture between AMC and Renault Credit Internationale S.A. (RCI), a whollyowned subsidiary of RNUR. RCI held a 50% interest in AMFC, which
operations were later expanded to include retail financing as well as dealership
financing. R3-34-Ex.C, at 2-3; -Ex.D, at 6-7.

22

Third, RNUR also reimbursed AMC for launch costs, marketing, and other
operating programs in the amounts of more than $6 million in 1980, more than
$22 million in 1981, more than $91 million in 1982, and more than $28 million
in 1983. R2-27-Ex.4, at 21; -Ex.5, at 26.

23

Throughout this time period, RNUR maintained several seats on the AMC
Board of Directors, although not on the AMSC Board. See, e.g., R2-27-Ex.2, at
47; -Ex.3, at 40; and -Ex.4, at 30. Further, Renault U.S.A. or RNUR would send
its executives to work in key positions in AMC or AMSC. Deposition of
Richard Willman, at 15. Renault U.S.A. leased these employees to AMC, but
retained them on its own account. Id. at 18.6

24

The actual process of sale and resale of Renault vehicles in the United States
took the following course: as noted above, AMSC purchased the Renault
vehicles in France and exported them to the United States; the decision as to
where in the United States to send the Renault vehicles rested with AMSC. R123-Ex.A. Renault officials met several times yearly, and engaged in frequent
conversations by phone, with representatives from AMC/AMSC regarding the
production, distribution, and promotion of Renault vehicles. Deposition of
Richard Everett, at 16, 20. During these meetings, the participants from both
companies exchanged ideas regarding volume forecasts, monthly projections
for orders, changes in vehicle specifications, and marketing strategies. Id. at 21,
24. This exchange of ideas resulted in modifications of Renault vehicles

designed to accommodate the American market. Id. at 45-47. RNUR built those
vehicles bound for the United States in conformance with federal regulations
governing automobile production in this country. Id. at 17. RNUR was aware of
the number of Renault dealerships in the United States; RNUR officials from
time to time toured these dealerships. Id. at 35.
C.
25

As of December 1980, there were 1302 Renault franchised dealers in the

United States. R2-27-Ex.2, at 3.7 These dealerships, as well as all other Renault
dealerships in the world, were listed as part of the "Renault Network" in a
pamphlet found in the glove compartment of Vermeulen's LeCar. This
pamphlet, dated March 1981 and bearing the Renault trademark, stated that
Renault's "16,800 Branches, Distributors and Dealers throughout the world are
just like helpful neighbors, being qualified and equipped to offer the motorist
all the services he requires for driving with peace of mind." Everett Depo.,
Ex.1.8

26

RNUR profited immensely from its alliance with AMC/AMSC. In 1980, RNUR
led all auto manufacturers in import sales improvement with a 34% increase
over 1979 volume. R2-27-Ex.2, at 3. RNUR led in the same category in 1981,
increasing its import sales 22% over 1980 volume. R2-27-Ex.3, at 2. Renault
sold more than 37,000 vehicles to AMSC in both 1980 and 1981, more than
50,000 vehicles in 1982, and more than 40,000 vehicles in 1983, earning over
$1.3 billion dollars as a result of purchases of Renault cars, components, and
service parts during that four-year period. R2-27-Ex.4, at 21; -Ex.5, at 26. Sales
of LeCars comprised a large percentage of these import sales. See, e.g., R2-27Ex.3, at 8. In 1984, the United States was the largest market for Renault sales
outside of France. R2-27-Ex.6, at 14.

II.
27

On April 18, 1989, Vermeulen filed suit in the Superior Court of Fulton
County, Georgia against RNUR, Renault U.S.A.,9 and Jeep Eagle Sales
Corporation (Jeep Eagle), the successor to AMC. Vermeulen alleged that the
injuries she suffered in the February 16, 1988 accident were the result of the
negligent manufacture and design of the LeCar's passenger restraint system.
The defendants removed the case to the United States District Court for the
Northern District of Georgia, asserting diversity of citizenship as their source of
federal subject matter jurisdiction. See 28 U.S.C. 1332. RNUR then moved to
dismiss the case against it for lack of personal jurisdiction. See Fed.R.Civ.P.
12(b)(2).

28

The district court granted RNUR's motion to dismiss without conducting an

evidentiary hearing on the issue. Vermeulen v. Renault U.S.A., Inc., No. 1:89cv-1042-HTW (N.D.Ga. November 19, 1990). The court held that the exercise
of jurisdiction over RNUR by a federal court situated in the State of Georgia
would violate both the Georgia long-arm statute, O.C.G.A. 9-10-91, and the
Due Process Clause of the Fourteenth Amendment. Vermeulen appealed from
the district court's order of dismissal.

III.
A.
29

Longstanding principles of federal law oblige us to inquire sua sponte whenever

a doubt arises as to the existence of federal jurisdiction. E.g., Metropolitan
Washington Airports Auth. v. Citizens for the Abatement of Aircraft Noise,
Inc., --- U.S. ----, ---- n. 13, 111 S.Ct. 2298, 2306 n. 13, 115 L.Ed.2d 236
(1991); Mt. Healthy City School Dist. v. Doyle, 429 U.S. 274, 278, 97 S.Ct.
568, 572, 50 L.Ed.2d 471 (1977); Liberty Mutual Insurance Co. v. Wetzel, 424
U.S. 737, 740, 96 S.Ct. 1202, 1204, 47 L.Ed.2d 435 (1976); Louisville &
Nashville R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126
(1908), overruled on other grounds, 255 U.S. 180, 41 S.Ct. 243, 65 L.Ed. 577
(1921); Mansfield, Coldwater & Lake Michigan R. Co. v. Swan, 111 U.S. 379,
382, 4 S.Ct. 510, 511, 28 L.Ed. 462 (1884). Such a doubt exists in this case.
Thus, before we may consider the merits of Vermeulen's appeal, we must
confirm whether Vermeulen's action is even properly before the federal courts.

30

When the defendants removed this case to federal court, they asserted federal
jurisdiction based on diversity of citizenship. Diversity of citizenship exists
between

31

(1) citizens of different States;

32

(2) citizens of a State and citizens or subjects of a foreign state;

33

(3) citizens of different States [when] citizens or subjects of a foreign state are
additional parties; and

34

(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and
citizens of a State or of different States.

35

28 U.S.C. 1332(a) (emphasis added). For diversity jurisdiction under 28

U.S.C. 1332, all defendants must be diverse from all plaintiffs. See, e.g.,
Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806),
overruled on other grounds, 43 U.S. (2 How.) 497, 11 L.Ed. 353 (1844);
Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1557 (11th Cir.1989).
36

RNUR is a corporation wholly owned by the Government of France. Under 28

U.S.C. 1603, an entity "a majority of whose shares or other ownership interest
is owned by a foreign state" is itself deemed a "foreign state" for purposes of
federal jurisdiction. Arango v. Guzman Travel Advisors, 761 F.2d 1527, 1533
(11th Cir.), cert. denied, 474 U.S. 995, 106 S.Ct. 408, 88 L.Ed.2d 359 (1985).10
As such, it is not considered a "citizen" or "subject" of a foreign state for
purposes of section 1332(a). Goar v. Compania Peruana de Vapores, 688 F.2d
417, 421 (5th Cir.1982); Ruggiero v. Compania Peruana de Vapores, 639 F.2d
872, 875-76 (2d Cir.1981); see Arango, 761 F.2d at 1532-33. Consequently,
RNUR does not fit into any of the categories of parties which trigger diversity
jurisdiction.11 Although Vermeulen and defendant Jeep Eagle are diverse
parties under section 1332(a)(1),12 absent diversity between Vermeulen and
RNUR the requirement of complete diversity among the parties is not met.
Thus, federal jurisdiction does not exist in this case on the basis of diversity of
citizenship. Before we can proceed to the merits of Vermeulen's appeal, we
must determine whether a separate basis of federal subject matter jurisdiction
exists.

B.
37

The only possible source of federal jurisdiction in suits against corporations

owned by foreign states is 28 U.S.C. 1330(a), the subject matter jurisdiction
provision relating to the Foreign Sovereign Immunities Act of 1976 (FSIA),
Pub.L. 94-583, 90 Stat. 2892 (currently codified at 28 U.S.C. 1602-11 (1988
& Supp. II 1990)). Goar, 688 F.2d at 421; Rex v. Cia. Pervana de Vapores,
S.A., 660 F.2d 61, 64 (3d Cir.1981), cert. denied, 456 U.S. 926, 102 S.Ct. 1971,
72 L.Ed.2d 441 (1982); Williams v. Shipping Corp. of India, 653 F.2d 875, 881
(4th Cir.1981), cert. denied, 455 U.S. 982, 102 S.Ct. 1490, 71 L.Ed.2d 691
(1982); see Arango, 761 F.2d at 1532-33; see also Argentine Republic v.
Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 688, 102
L.Ed.2d 818 (1989) (holding that Foreign Sovereign Immunities Act is sole
basis for obtaining jurisdiction over a foreign state as defined in 28 U.S.C.
1603). Section 1330(a) provides for federal jurisdiction in all cases

38
against
a foreign state as defined in section 1603(a) of this title as to any claim for
relief in personam with respect to which the foreign state is not entitled to immunity
either under sections 1605-1607 of this title or under any applicable international

agreement.
39

28 U.S.C. 1330(a). Hence, jurisdiction over a foreign state turns on the

existence of a statutory or treaty-based exception to foreign sovereign
immunity. This is only logical. If a foreign state is immune from suit in the
United States, federal jurisdiction does not lie.

40

Several exceptions to foreign state immunity are enumerated in 28 U.S.C.

1605. Subsection (a)(2) of this statute details three exceptions for causes of
action arising out of a foreign state's commercial activities. This subsection
provides that a foreign state shall not be immune from suit in an American court
in any action

41
based
upon a commercial activity carried on in the United States by the foreign state;
or upon an act performed in the United States in connection with a commercial
activity of the foreign state elsewhere; or upon an act outside the territory of the
United States in connection with a commercial activity of the foreign state elsewhere
and that act causes a direct effect in the United States.
42

28 U.S.C. 1605(a)(2). Because Vermeulen's allegations satisfy the third

clause of section 1605(a)(2), we conclude that federal jurisdiction exists in this
case.

C.
43

The acts upon which Vermeulen's claims against RNUR are based are the
allegedly negligent design and manufacture of the 1982 LeCar passenger
restraint system. Under the third clause of section 1605(a)(2), therefore, RNUR
is not immune from suit in the United States--and thus federal jurisdiction
exists--if the design and manufacture of the LeCar restraint system occurred
outside the territory of the United States; was done in connection with a
commercial activity outside the United States; and caused a direct effect in the
United States.

44

RNUR concedes that it designed and manufactured Vermeulen's LeCar in

France. See, e.g., Brief of Appellee at 5. Thus, the only issues are whether
those acts were taken in connection with a commercial activity of RNUR
outside, and whether they had a direct effect inside, the United States.

1.

The FSIA defines "commercial activity" as

45
either
a regular course of commercial conduct or a particular commercial transaction
or act. The commercial character of an activity shall be determined by reference to
the nature of the course of conduct or particular transaction or act, rather than by
reference to its purpose.
46

28 U.S.C. 1603(d). Last Term, in Republic of Argentina v. Weltover, Inc., --U.S. ----, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992), the Supreme Court
expounded on this rather vague definition. The Court explained that the FSIA,
and particularly the commercial activity exceptions to immunity, "largely
codifies the so-called 'restrictive' theory of foreign sovereign immunity." --U.S. at ----, 112 S.Ct. at 2165 (citing Verlinden B.V. v. Central Bank of
Nigeria, 461 U.S. 480, 486-89, 103 S.Ct. 1962, 1967-69, 76 L.Ed.2d 81
(1983)). This theory "would not bar a suit based upon a foreign state's
participation in the marketplace in the manner of a private citizen or
corporation." Id., --- U.S. at ----, 112 S.Ct. at 2166 (citing Alfred Dunhill of
London, Inc. v. Republic of Cuba, 425 U.S. 682, 698-705, 96 S.Ct. 1854, 186366, 48 L.Ed.2d 301 (1976) (plurality opinion)). Accordingly, the Court
concluded that "when a foreign government acts, not as a regulator of a market,
but in the manner of a private player within it, the foreign sovereign's actions
are 'commercial' within the meaning of the FSIA." Id.

47

Applying these principles to the instant case, RNUR's design and manufacture
of the Renault LeCar unquestionably were acts connected to a commercial
activity of RNUR outside the United States. RNUR designed and built LeCars
in order to sell them throughout the world. The sale of merchandise is a
quintessential commercial activity. In designing and manufacturing cars for
sale, RNUR acted not in any governmental capacity, "but in the manner of a
private player," no different from General Motors, Ford, or any other privately
owned automobile manufacturer. Indeed, in its brief to this court RNUR
admitted that its dealings with AMC and AMSC were "arms length, commercial
relationship[s]." Brief of Appellee at 8; see also id. at 6 ("RNUR entered a
series of commercial agreements with American Motors Corporation....").
RNUR sold the vehicles to AMC/AMSC in France for import into the United
States. See, e.g., id. at 5-6. We conclude, therefore, that RNUR's design and
manufacture of the 1982 LeCar passenger restraint system were acts performed
in connection with a commercial activity of RNUR outside the United
States.132.

48

The remaining question is whether the allegedly negligent design and

manufacture of the LeCar passenger restraint system had a "direct effect" in the

United States. In Republic of Argentina, the Supreme Court rejected the

suggestion that "direct effect" means a substantial or foreseeable effect. --- U.S.
at ----, 112 S.Ct. at 2168. Rather the Court held that "an effect is 'direct' if it
follows 'as an immediate consequence of the defendant's ... activity.' " Id.
(quoting Weltover, Inc. v. Republic of Argentina, 941 F.2d 145, 152 (2d
Cir.1991)).
49

The complaint in this case alleges that the injuries Vermeulen suffered in an
automobile accident on the roads of Georgia were the result of RNUR's
negligent design and manufacture of the LeCar passenger restraint system. We
can hardly imagine a more immediate consequence of the defendant's activity.
Thus, under the definition articulated in Republic of Argentina, the act upon
which Vermeulen's claim is based had a direct effect in the United States.

50

The Republic of Argentina Court acknowledged that the "direct effect" element
of section 1605(a)(2) might be construed as embodying the "minimum
contacts" test of International Shoe Co. v. Washington, 326 U.S. 310, 316, 66
S.Ct. 154, 158, 90 L.Ed. 95 (1945). --- U.S. at ----, 112 S.Ct. at 2169; see also
Waukesha Engine Div., Dresser Americas, Inc. v. Banco Nacional de Fomento
Cooperativo, 485 F.Supp. 490, 492 (E.D.Wis.1980) (holding that legislative
history shows that minimum contacts test is incorporated in jurisdictional
provisions of FSIA). Arguably, if the direct effect requirement were not so
interpreted, the exercise of federal subject matter jurisdiction pursuant to the
FSIA could, in a given case, violate the Due Process Clause of the Fifth
Amendment. Republic of Argentina, --- U.S. at ----, 112 S.Ct. at 2169.
Nevertheless, the Court did not resolve whether section 1605(a)(2) incorporates
the minimum contacts test. Instead it assumed that the Due Process Clause
confines the exercise of jurisdiction against foreign states and found that
Argentina possessed minimum contacts that would satisfy the constitutional
test. Id. Because we similarly conclude that RNUR possessed minimum
contacts to satisfy the Due Process Clause, we likewise hold that the exercise of
federal jurisdiction in this case would not violate RNUR's constitutional rights.

3.
a.
51
52

A defendant is constitutionally amenable to a forum's specific jurisdiction if it

possesses sufficient minimum contacts with the forum to satisfy due process
requirements, and if the forum's exercise of jurisdiction comports with "
'traditional notions of fair play and substantial justice.' " International Shoe Co.,
326 U.S. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463,

61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)); Morris, 843 F.2d at 492. This two-part
test embodies the controlling due process principle that a defendant must have
"fair warning" that a particular activity may subject it to the jurisdiction of a
foreign sovereign. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105
S.Ct. 2174, 2181, 85 L.Ed.2d 528 (1985); Madara v. Hall, 916 F.2d 1510, 1516
(11th Cir.1990). The relevant forum when a case is brought under the FSIA is
the United States. See, e.g., Republic of Argentina, --- U.S. at ----, 112 S.Ct. at
2169 (holding that "Argentina ' "purposefully avail[ed] itself of the privilege of
conducting activities within the [United States]" ' ") (quoting Burger King, 471
U.S. at 475, 105 S.Ct. at 2183 (quoting Hanson v. Denckla, 357 U.S. 235, 253,
78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958))) (brackets in Republic of
Argentina ); Alberti v. Empresa Nicaraguense de la Carne, 705 F.2d 250, 252
(7th Cir.1983); Texas Trading & Milling Corp. v. Federal Republic of Nigeria,
647 F.2d 300, 314 (2d Cir.1981), cert. denied, 454 U.S. 1148, 102 S.Ct. 1012,
71 L.Ed.2d 301 (1982); Ruiz v. Transportes Aereos Militares Ecuadorianos,
103 F.R.D. 458, 459 (D.D.C.1984).
53

To constitute constitutionally minimum contacts, the defendant's contacts with

the applicable forum must satisfy three criteria. First, the contacts must be
related to the plaintiff's cause of action or have given rise to it. Burger King,
471 U.S. at 472, 105 S.Ct. at 2181; Madara, 916 F.2d at 1516. Second, the
contacts must involve "some act by which the defendant purposefully avails
itself of the privilege of conducting activities within the forum ..., thus invoking
the benefits and protections of its laws." Hanson, 357 U.S. at 253, 78 S.Ct. at
1240; see also Burger King, 471 U.S. at 474-75, 105 S.Ct. at 2183-84. Third,
the defendant's contacts with the forum must be "such that [the defendant]
should reasonably anticipate being haled into court there." World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62
L.Ed.2d 490 (1980).

b.
54
55

In recent years, the Supreme Court has grappled with the "purposeful
availment" and "reasonable anticipation" elements of this test through its
consideration of the so-called "stream of commerce" theory of personal
jurisdiction. In World-Wide Volkswagen, the Court considered the claim of
two injured motorists that Oklahoma courts had jurisdiction over a New Yorkbased wholesale distributor and its New York automobile retailer, which,
plaintiffs contended, had sold them a defective automobile. Plaintiffs had
purchased the car in New York and were injured in Oklahoma en route to
Arizona. Neither defendant conducted any business in Oklahoma, shipped or
sold any products to or in the state, or sought in any way to take advantage of

the Oklahoma market. 14 Nevertheless, plaintiffs contended that the defendants

could have foreseen that the plaintiffs would drive their vehicle to Oklahoma
and suffer injury there, and that such foreseeability provided sufficient basis for
Oklahoma's exercise of jurisdiction over the defendants.
56

The Court rejected this argument, emphasizing that " 'foreseeability' alone has
never been a sufficient benchmark for personal jurisdiction under the Due
Process Clause." Id. at 295, 100 S.Ct. at 566. The Court, however, also rejected
the notion that foreseeability is irrelevant to the jurisdictional inquiry, noting
that "the foreseeability that is critical to due process analysis is not the mere
likelihood that a product will find its way into the forum State. Rather it is that
the defendant's conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there." Id. at 297, 100 S.Ct.
at 567. The Court continued:

57 the sale of a product or manufacturer or distributor such as Audi or Volkswagen

[I]f
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 been the source of injury to its owner or to others. The
forum State does not exceed its powers under the Due Process Clause 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.
58

Id. at 297-98, 100 S.Ct. at 567.

59

The Court concluded that the defendants in World-Wide Volkswagen, New

York corporations without any association with the Oklahoma market, had not
delivered their products into the stream of commerce with the expectation that
they would be purchased in Oklahoma. Thus, the Court held that the "stream of
commerce" analysis did not furnish a basis for Oklahoma's exercise of
jurisdiction over the defendants.

60

In Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 107
S.Ct. 1026, 94 L.Ed.2d 92 (1987), the Court reassessed its "stream of
commerce" analysis in the context of an indemnification action brought in
California by Cheng Shin, a Taiwanese tire manufacturer, against Asahi, the
Japanese tire valve manufacturer that had sold an allegedly defective
component part to Cheng Shin. The record in that case revealed that Asahi was
aware that its tire valves were incorporated into tires that were sold in
California.

61

In a plurality opinion authored by Justice O'Connor, four Justices concluded

that Asahi did not possess sufficient minimum contacts with California to
permit California's exercise of jurisdiction under the Due Process Clause. The
plurality determined that minimum contacts did not exist when "the defendant
acted by placing a product in the stream of commerce, and the stream
eventually swept defendant's product into the forum State, but the defendant did
nothing else to purposefully avail itself of the market in the forum State." Id. at
110, 107 S.Ct. at 1031 (plurality opinion).

62 placement of a product into the stream of commerce, without more, is not an act
The
of the defendant purposefully directed toward the forum State. Additional conduct of
the defendant may indicate an intent to serve the market in the forum State, for
example, designing the product for the market in the forum State, advertising in the
forum State, establishing channels for providing regular advice to customers in the
forum State, or marketing the product through a distributor who has agreed to serve
as the sales agent in the forum State.
63

Id. at 112, 107 S.Ct. at 1032 (plurality opinion). The plurality concluded that
because Asahi did not do business in California; had no office, agents,
employees, or property in California; did not advertise or otherwise solicit
business in California; and did not create, control, or employ the distribution
system that brought its valves to California, it did not possess minimum
contacts with California. Id.

64

The plurality also concluded that California's exercise of jurisdiction over Asahi
in this case did not comport with "traditional notions of fair play and substantial
justice," and that therefore, regardless of whether Asahi possessed minimum
contacts with California, the State's exercise of jurisdiction over Asahi violated
due process. Id. at 113-116, 107 S.Ct. at 1033-34.

65

Justice Brennan, although concurring in the plurality's holding that California's

exercise of jurisdiction did not comport with "traditional notions of fair play and
substantial justice" and therefore violated due process, did not join the
plurality's holding that Asahi did not possess minimum contacts with
California.15 Quoting liberally from World-Wide Volkswagen, Justice Brennan
emphasized that the "additional conduct" showing required by the plurality was
unnecessary, insofar as "[t]he stream of commerce refers not to unpredictable
currents or eddies, but to the regular and anticipated flow of products from
manufacture to distribution to retail sale." Id. at 117, 107 S.Ct. at 1034
(Brennan, J., concurring in part and concurring in the judgment). Justice
Brennan maintained that:

66 long as a participant in [this flow of products] is aware that the final product is
[A]s
being marketed in the forum State, the possibility of a lawsuit there cannot come as
a surprise. Nor will the litigation present a burden for which there is no
corresponding benefit. A defendant who has placed goods in the stream of
commerce benefits economically from the retail sale of the final product in the
forum State and indirectly benefits from the State's laws that regulate and facilitate
commercial activity.
67

Id. at 117, 107 S.Ct. at 1034-35 (Brennan, J., concurring in part and concurring
in the judgment).

68

Finally, Justice Stevens, although concurring in the judgment, also declined to

join the plurality's holding regarding minimum contacts on the grounds that that
discussion was unnecessary given the plurality's decision regarding the "fair
play and substantial justice" prong of the due process analysis.16 Justice
Stevens noted, however, that an analysis of purposeful availment and minimum
contacts should take into account "the volume, the value, and the hazardous
character of the components," id. at 122, 107 S.Ct. at 1037 (Stevens, J.,
concurring in part and concurring in the judgment), suggesting that "a regular
course of dealing that results in deliveries of over 100,000 units annually over a
period of several years would constitute 'purposeful availment' even though the
item delivered to the forum State was a standard product marketed throughout
the world." Id. (Stevens, J., concurring in part and concurring in the judgment).

69

As is evident from the foregoing discussion, the current state of the law
regarding personal jurisdiction is unsettled. Because jurisdiction in the United
States over RNUR in this case, however, is consistent with due process under
the more stringent "stream of commerce plus" analysis adopted by the Asahi
plurality, we need not determine which standard actually controls this case.17

70

Preliminarily, we note that the fact that title to the Renault vehicles passed to
AMSC in France rather than in the United States in no way determines the
degree of contacts between the United States and RNUR. " 'If International
Shoe stands for anything ..., it is that a truly interstate [or international]
business may not shield itself from suit by a careful but formalistic structuring
of its business dealings.' " Benitez-Allende v. Alcan Aluminio Do Brasil, S.A.,
857 F.2d 26, 30 (1st Cir.1988), cert. denied, 489 U.S. 1018, 109 S.Ct. 1135,
103 L.Ed.2d 196 (1989) (quoting Vencedor Manufacturing Co. v. Gougler
Industries, 557 F.2d 886, 891 (1st Cir.1977)); see also Meyers v. ASICS Corp.,
711 F.Supp. 1001, 1005 n. 3 (C.D.Cal.1989) (citing Taubler v. Giraud, 655
F.2d 991, 995 (9th Cir.1981)); Sound Move Autoplaza, Inc. v. Nissan Motor
Co., 1989 WL 50797 at 8, 1989 U.S.Dist. Lexis 5077 at 6 (S.D.N.Y.1989).

Likewise, the fact that RNUR did not maintain a direct physical presence in the
United States does not necessarily mean that no minimum contacts exist
between the defendant and this country. Burger King, 471 U.S. at 476, 105
S.Ct. at 2184; Cable/Home Communication Corp. v. Network Productions, 902
F.2d 829, 858 (11th Cir.1990). Finally, we recognize that no "alter ego"
relationship existed between RNUR and AMSC. Thus, AMSC's obvious
contacts with the United States are not imputed to RNUR. This is not to say,
however, that RNUR does not possess minimum contacts with the United States
as a result of its own independent role in the process that brought the
appellant's 1982 Renault LeCar to the United States. See Warren v. Honda
Motor Co., 669 F.Supp. 365, 369-70 (D.Utah 1987); ASICS Corp., 711 F.Supp.
at 1005 n. 4. We now proceed to an examination of RNUR's contacts with the
United States under Justice O'Connor's "stream of commerce plus" analysis in
Asahi.
71

As noted above, Justice O'Connor stated in Asahi that "the placement of a

product into the stream of commerce, without more, is not an act of the
defendant purposefully directed toward the forum State." Asahi, 480 U.S. at
112, 107 S.Ct. at 1032 (emphasis added). It is indisputable that RNUR
delivered its vehicles into the "stream of commerce" with the expectation that
they would be purchased by consumers in the United States. The distribution
system created by the alliance between Renault and AMC/AMSC contemplated
a nationwide network of Renault dealerships. Everett Depo. at 35; R-34-Ex.A,
at 28-29.

72

The remaining question under the Asahi plurality's analysis is whether RNUR
engaged in any additional conduct such that it could be said to have
"purposefully availed" itself of the privilege of conducting business in the
United States. We hold that RNUR did engage in such activity under the
standards announced by the Asahi plurality.

73

First, RNUR designed the Renault LeCar for the American market. Asahi, 480
U.S. at 112, 107 S.Ct. at 1032. The record reflects that meetings took place
between RNUR and AMC/AMSC officials which resulted in RNUR's
modification of its vehicles specifically to accommodate the American market.
Everett Depo. at 21, 45-47. RNUR did this to "promote the widest distribution
of Renault products." R3-34-Ex.A, at 1. Compare In re Perrier Bottled Water
Litigation, 754 F.Supp. 264, 268 (D.Conn.1990) (holding that Perrier designed
its product for the United States market because Perrier's liquid containers bore
liquid ounce markings rather than metric measure); Hawes v. Honda Motor
Co., 738 F.Supp. 1247, 1251 (E.D.Ark.1990); In re All Terrain Vehicles
Litigation, 1989 WL 30948, at 4, 1989 U.S.Dist. Lexis 1843, at 10

(E.D.Pa.1989); Warren, 669 F.Supp. at 370.

74

Second, RNUR advertised its product in the United States. Asahi, 480 U.S. at
112, 107 S.Ct. at 1032. It is undisputed that Renault vehicles, including the
LeCar, were the subject of a nationwide advertising campaign. See Morris, 843
F.2d at 494 (holding defendant's advertising in national trade magazines
sufficient to establish that defendant advertised in forum state); see also Sinatra
v. National Enquirer, Inc., 854 F.2d 1191, 1196 (9th Cir.1988) (nonresident
defendant's advertising in, among other publications, Town & Country and the
Wall Street Journal constituted advertising in California); Fogle v. Ramsey
Winch Co., 774 F.Supp. 19, 22 (D.D.C.1991); Cartwright v. Fokker Aircraft,
713 F.Supp. 389, 394 (N.D.Ga.1988). RNUR had a large hand in directing that
campaign. Article XI of the Distributor's Agreement does state that AMSC
would have full and exclusive responsibility for advertising Renault products;
AMSC, however, covenanted to "work closely with Renault in the planning and
developing of themes and strategy and the related budget." R3-34-Ex.A, at 12.
The record reflects that such coordination did in fact occur. Everett Depo. at 16,
20, 21, 24. Furthermore, Renault reserved the right to veto any advertising that
it deemed "injurious to Renault's business, ... likely to mislead or deceive the
public, ... at variance with the business, advertising or public relations policies
of Renault, or ... likely to impair the image or goodwill of Renault." R3-34Ex.A, at 13; see id. at 29; R3-34-Ex.E, at 15. This reservation indicates that
Renault reviewed all advertising before AMSC used it. RNUR placed great
emphasis on the nature and quality of the marketing strategies used to market
its products, and retained for itself a great deal of ultimate, if not daily, control
over such marketing. Under these circumstances, RNUR, as well as AMSC,
was responsible for the marketing and advertising of the LeCar in the United
States. See Sinatra, 854 F.2d at 1197 (nonresident defendant's instructions to
American representative to advertise, and defendant's approval of such
advertising, established "advertising" contact under Asahi ).

75

Third, RNUR, in conjunction with AMSC, established channels for providing

regular advice to customers in the United States. Asahi, 480 U.S. at 112, 107
S.Ct. at 1032. Numerous Renault dealerships existed throughout the United
States. These franchises were established pursuant to the Market Representation
Plan, R3-34-Ex.A, at 4, which incorporated Renault's strategies and vision
regarding the distribution of its products.

76

Although AMSC exercised day-to-day control over the establishment and

termination of Renault dealerships in the United States, Renault itself set the
terms according to which all these dealerships conducted business: AMSC
covenanted to "use its best efforts to assure that Dealers will comply with all

sales and service manuals that Renault may from time to time issue relating to
the sale and servicing of Renault products and other matters covered by [the
Distributor's Agreement] or the Dealer franchises." Id. at 14. The Distributor's
Agreement also stated that "[A]ny dealership or dealerships operated by
[AMSC] for the sale of Renault Products at retail shall at all times satisfy the
standards for Renault dealerships prescribed by this Agreement, the Dealer
Franchises and the sales and service manuals that Renault may issue from time
to time relating to Dealers." Id.
77

Further, RNUR took an active role in training AMSC personnel in the repair,
servicing, and preparation of Renault products. R3-34-Ex.A, at 7-8. Finally, the
record reflects that RNUR and AMSC jointly engaged in the financing of retail
dealerships throughout the United States. R3-34-Ex.C, at 2-3; -Ex.D, at 6-7.
Under these circumstances, there is no question but that Renault, as well as
AMSC, established channels for providing regular advice to customers in the
United States.

78

Fourth, RNUR created and controlled the distribution network that brought its
products into the United States. Asahi, 480 U.S. at 112, 107 S.Ct. at 1032. As
discussed in detail in Part I.A. of this opinion, the Distributor's Agreement
between RNUR and AMSC created a nationwide network for Renault products,
over which Renault retained ultimate control through various provisions in the
Agreements executed by RNUR and AMC/AMSC, and pursuant to which
AMSC's decisions were subject to the review or acquiescence of RNUR. See
generally R3-34-Ex.A. See also R3-34-Ex.B; R3-34-Ex.E. Further, RNUR was
fully involved in the implementation of the Agreements between itself and
AMSC/AMC, even though AMSC retained day-to-day control over the
nationwide Renault distribution network. Finally, RNUR's involvement in the
Renault distribution network is evidenced by the extensive financial support
rendered AMC by RNUR. Such support, described in detail in part I.B. above,
manifested itself in capital investments, reimbursements for marketing and
launch costs, and infusions of Renault personnel and resources into
AMC/AMSC. RNUR not only enabled AMSC to fulfill its role as Renault's
exclusive American distributor and to operate to RNUR's major financial
benefit the very network that RNUR disclaims as the sole responsibility of
AMSC; RNUR's support also made AMC/AMSC dependent on RNUR so as to
allow the latter significant control over the operations of the former. See supra
part I.C.18

79

In sum, RNUR designed the Renault LeCar for the American market,
advertised the LeCar in the United States, established channels for customers in
the United States to seek advice about the LeCar, and maintained a distribution

network by which LeCars were imported into the United States. These contacts
are sufficiently related to appellant's cause of action to confer specific
jurisdiction upon the United States. RNUR's activities were inextricable links in
the advertising and distribution network by which the appellant obtained her
vehicle, the subject of this product liability suit. More important, RNUR
directly targeted its LeCars toward the United States and thus fairly could
expect to defend in this country the very type of action this case presents: a
personal injury action challenging the car's design and safety. RNUR intended
its LeCars to be brought to the United States and took numerous affirmative
steps to bring that result about, and jurisdiction in this country would not
violate RNUR's due process rights. Because RNUR satisfied all the criteria
identified by the Asahi plurality as indicative of purposeful availment, we hold
that RNUR possessed minimum contacts with the United States sufficient to
satisfy the first prong of the due process inquiry.
c.
80
81

Even if a nonresident defendant possesses minimum contacts with the forum,

the exercise of jurisdiction nevertheless violates due process unless it comports
with traditional notions of fair play and substantial justice. International Shoe
Co., 326 U.S. at 316, 66 S.Ct. at 158. In determining the fairness and
reasonableness of a forum's exercise of jurisdiction, a court must consider,
among other things, "the burden on the defendant, the interests of the forum ...,
and the plaintiff's interest in obtaining relief." Asahi, 480 U.S. at 113, 107 S.Ct.
at 1033 (quoting World-Wide Volkswagen, 444 U.S. at 292, 100 S.Ct. at 564
(citations omitted)). The Asahi Court cautioned that "[t]he unique burdens
placed upon one who must defend oneself in a foreign legal system should have
significant weight in assessing the reasonableness of stretching the long arm of
personal jurisdiction over national borders." 480 U.S. at 114, 107 S.Ct. at 1033.
The Court also noted, however, that "[w]hen minimum contacts have been
established, often the interests of the plaintiff and the forum will justify even
the serious burdens placed on the alien defendant." Id. Such is the case here.

82

As reported above, Asahi was an indemnification action brought by Cheng

Shin, the Taiwanese manufacturer of an allegedly defective tire, against Asahi,
the Japanese manufacturer of the component tire valve that Cheng Shin
integrated into its final product. The individual injured as a result of the alleged
defect in the tire had already obtained relief in the California courts from Cheng
Shin, which sought indemnification by Asahi.

83

The Asahi Court, upon consideration of the factors outlined above, determined
that California's exercise of jurisdiction over Asahi did not comport with

traditional notions of fair play and substantial justice. The Court noted that the
burden on Asahi was severe, in that it had to "traverse the distance between [its]
headquarters in Japan and the Superior Court of California," and "submit its
dispute with Cheng Shin to a foreign nation's judicial system." Id. at 114, 107
S.Ct. at 1033. The Court also noted that because the plaintiff, Cheng Shin, was
not a California resident, and because the action was "primarily about
indemnification rather than safety standards," the interest of the forum State in
having the dispute adjudicated there was diminished considerably. Id.
Similarly, the defendant's lack of contacts with California lessened the
plaintiff's interest in having the dispute adjudicated in California. Id. Finally,
the Court noted that in an international context, the interests of foreign nations
in a State's assertion of jurisdiction over their citizens, as well as the "[f]ederal
interest in Government's foreign relations policies," counseled "an
unwillingness to find the serious burdens on an alien defendant outweighed by
minimal interests on the part of the plaintiff or the forum State." Id. at 115, 107
S.Ct. at 1034. Thus, on the basis of these factors, the Court held that
California's exercise of jurisdiction over the plaintiff did not comport with
traditional notions of fair play and substantial justice.
84

This case is different in kind from Asahi. First, the plaintiff in this case is not a
foreign corporation seeking indemnification from another foreign corporation,
as in Asahi, but rather a United States citizen who seeks relief for the crippling
injuries she suffered as a result of an alleged defect in her Renault LeCar. Her
interest in having her case adjudicated in this country is manifest.

85

Second, this case, unlike Asahi, is not about indemnification but rather about
product safety. The interest of the United States in adjudicating this dispute is
also manifest, given that it has a compelling interest in protecting persons
within its borders from unsafe products that find their way into the country.
Morris, 843 F.2d at 495.

86

Third, RNUR's interest in having this dispute adjudicated abroad is minimal;

whereas Asahi was burdened because it was forced to submit its dispute with
Cheng Shin to a foreign nation's judicial system, RNUR stands ready to
undertake the defense of any lawsuit against AMSC that arises from injuries
alleged to have been caused by defects in Renault vehicles, having expressly
reserved the right to take over the defense of any lawsuit in the United States
involving allegedly defective Renault products. R3-34-Ex.A, at 17-18. Thus,
subjecting RNUR to the American judicial system works no unfair surprise
against it. Moreover, in light of the relative burden that would be caused
Vermeulen if this case were adjudicated in France, the burdens on RNUR
caused by adjudication in this country are by no means unfair. See Delong

Equipment Co., 840 F.2d at 850, 854 ("[A]ny inconvenience caused to

[defendants] by subjecting them to the jurisdiction of the Northern District of
Georgia is overridden by the greater inconvenience of requiring a Georgia
plaintiff, injured in Georgia by the defendants' purposeful activity in and
directed at Georgia, to pursue its cause of action in a foreign forum.").
87

Fourth, although witnesses and evidence concerning the LeCar's manufacture

and design are located in France, evidence and witnesses concerning the
accident itself are located primarily in Georgia. Furthermore, dismissal of
RNUR from Vermeulen's suit would not end the litigation, but would merely
splinter it, leaving Vermeulen and the other defendants in Georgia, while
forcing Vermeulen to proceed against RNUR, if at all, in France. Thus, efficient
resolution of this case suggests that jurisdiction be asserted over RNUR in the
United States. Morris, 843 F.2d at 495.

88

In short, this is not "one of those rare cases in which 'minimum requirements
inherent in the concept of "fair play and substantial justice" ... defeat the
reasonableness of jurisdiction even [though] the defendant has purposefully
engaged in forum activities.' " Asahi, 480 U.S. at 116, 107 S.Ct. at 1034
(Brennan, J., concurring in part and concurring in the judgment) (quoting
Burger King, 471 U.S. at 477-78, 105 S.Ct. at 2184-85).

89

Thus, we hold that RNUR possesses sufficient contacts with the United States
to satisfy due process requirements, and that jurisdiction in an American court
over RNUR comports with traditional notions of fair play and substantial
justice.

D.
90

RNUR's design and manufacture of the 1982 Renault LeCar in France was an
act which was taken in connection with a commercial activity under the FSIA
and which had a direct effect in the United States. Accordingly, federal
jurisdiction exists in this case.

IV.
91

Having determined that federal jurisdiction lies in this case, we may consider
the merits of Vermeulen's appeal. We review de novo the district court's
dismissal for lack of in personam jurisdiction. E.g., Olivier v. Merritt Dredging
Co., 954 F.2d 1553, 1555 (11th Cir.1992).

92

The district court held that its exercise of personal jurisdiction over RNUR

92

The district court held that its exercise of personal jurisdiction over RNUR
would violate both the Georgia long-arm statute and the Due Process Clause of
the Fourteenth Amendment, the latter because RNUR did not have
constitutionally minimum contacts with the State of Georgia. In so holding, the
court acted under the misapprehension that federal jurisdiction in this case was
based on diversity of citizenship. This was the theory argued by the parties. In a
diversity action, a federal court may assert jurisdiction over a nonresident
defendant only to the extent permitted by the long-arm statute of the forum
state, and only if the exercise of jurisdiction comports with the requirements of
due process, namely that minimum contacts exist between the defendant and
the forum state and that jurisdiction be consistent with traditional notions of fair
play and substantial justice. Morris, 843 F.2d at 492 n. 3; Gold Kist, Inc. v.
Baskin Robbins Ice Cream, 623 F.2d 375, 377 (5th Cir.1980).19

93

Subject matter jurisdiction in this case lies exclusively under the FSIA. The
FSIA contains its own long-arm statute for obtaining personal jurisdiction over
foreign states. Under 28 U.S.C. 1330(b), "[p]ersonal jurisdiction over a
foreign state shall exist as to every claim for relief over which the district courts
have [subject matter] jurisdiction ... where service has been made under [28
U.S.C. 1608]." Neither compliance with the forum state's long-arm statute nor
minimum contacts between the defendant and the forum state are required. See,
e.g., Republic of Argentina, --- U.S. at ----, 112 S.Ct. at 2169 (holding that
"Argentina ' "purposefully avail[ed] itself of the privilege of conducting
activities within the [United States ]" ' ") quoting Burger King, 471 U.S. at 475,
105 S.Ct. at 2183 (quoting Hanson, 357 U.S. at 253, 78 S.Ct. at 1240) (brackets
in Republic of Argentina; emphasis added); Alberti, 705 F.2d at 252; Texas
Trading, 647 F.2d at 314 (holding that relevant forum for due process analysis
in claims brought under FSIA is United States, not particular forum state);
Ruiz, 103 F.R.D. at 459 (same). Hence, the district court erred in dismissing
Vermeulen's claims against RNUR for lack of personal jurisdiction on the
ground that such jurisdiction was improper under both the Georgia long-arm
statute and International Shoe Co. v. Washington.

94

The judgment of the district court is REVERSED. The case is REMANDED to

the district court for further proceedings consistent with this opinion.
RONEY, Senior Circuit Judge, concurring:

95

I concur in the decision of the court, but would cast it in somewhat different
terms. This panel previously rendered an opinion on July 9, 1992 reversing the
district court, Vermeulen v. Renault U.S.A., Inc., 965 F.2d 1014, amended by,
975 F.2d 746 (11th Cir.1992). On December 28, 1992, more than six months

thereafter, appellee, Regie Nationale Des Usines Renault U.S.A., Inc.

("RNUR"), having apparently employed another firm of attorneys, has filed a
"Motion to Vacate Order," asserting for the first time that, as a French
government-owned corporation, it is a "foreign state" for purposes of the
Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. 1330, 1604-08, and
is not a "citizen" or "subject" of a foreign state for purposes of 28 U.S.C. 1332
governing diversity of citizenship. RNUR had asserted in the district court and
in this court only that the federal court lacked jurisdiction based upon 1332
and the Georgia long-arm statute. It did not assert any lack of jurisdiction based
upon immunity.
96

In denying the motion to vacate our order reversing the district court's decision
based on the minimum contacts required for diversity jurisdiction, I would hold
four things: First, I would hold that RNUR has waived any ground of
jurisdiction not initially asserted in the district court. Although sovereign
immunity goes to subject matter jurisdiction, which normally cannot be waived
and is noticeable by a court at any stage of the litigation, the unique
jurisdictional grant provided for in the FSIA allows a foreign state, by waiving
its immunity, to waive what would otherwise be a defect in subject matter
jurisdiction of the federal court. Canadian Overseas Ores Ltd. v. Compania de
Acero Del Pacifico S.A., 528 F.Supp. 1337 (D.C.N.Y.1982), affirmed on other
grounds, 727 F.2d 274 (2d Cir.1984). Personal jurisdiction can, of course,
always be waived and I would hold RNUR has waived any ground of personal
jurisdiction not submitted to the district court or argued on appeal. Insurance
Corp. v. Compagnie des Bauxites, 456 U.S. 694, 703-05, 102 S.Ct. 2099, 210405, 72 L.Ed.2d 492 (1982).

97

Second, I concur in the court's opinion that, although federal subject matter
jurisdiction does not exist on the basis of diversity of citizenship, federal
jurisdiction does exist in this case under 28 U.S.C. 1330(a) and 1605(a)(2).

98

Third, I would hold, as the court does, that the minimum contacts test under the
due process clause of the Constitution and the Georgia long-arm statute,
although that statute is not applicable in this case, is essentially the same test
that a court should apply under the long-arm statute in the Foreign Sovereign
Immunities Act. Thus the decision of the district court and the prior decision of
this court which reversed, applied the correct test. Therefore, all that the district
court said and all that we said regarding the contacts of RNUR with the forum
state would be equally applicable under the FSIA long-arm statute. Thus there
is no need to remand this case to the district court for its consideration under
the proper statute, as requested by RNUR. We need not decide the wider issue
as to whether contacts elsewhere in the United States would be sufficient in this

case, since the issue as presented to the district court and this court was based
on contacts with Georgia, the forum state.
99

Fourth, I fully concur in the court's opinion that RNUR had sufficient contacts
with the United States and Georgia to satisfy the requirements of the FSIA
long-arm statute and the due process requirements of the Constitution.

The agreements executed between Renault and AMC/AMSC include: a

"Distributor Agreement," R3-34-Ex.A; a "Built-Up Sales Agreement," R3-34Ex.B; and a "Master Agreement," R3-34-Ex.E. These agreements contemplated
several different commercial arrangements between the parties, including the
manufacture of Renault cars at AMC's American plants and Renault's European
distribution of AMC vehicles. Thus, the distribution arrangement between
AMSC and Renault regarding the United States market was only one aspect of
a wide-ranging alliance created by the parties through these agreements

RNUR contends that AMSC had sole responsibility for determining the
quantity and type of vehicles to be purchased from RNUR. Brief of Appellee at
22. When, as in this case, however, the district court has not conducted an
evidentiary hearing, and the evidence presented by the parties' affidavits and
deposition testimony conflicts, the court must construe all reasonable
inferences in favor of the plaintiff. Delong Equipment Co. v. Washington Mills
Abrasive Co., 840 F.2d 843, 845 (11th Cir.1988); Morris v. SSE, Inc., 843 F.2d
489, 492 (11th Cir.1988). Therefore, we accept as true plaintiff's allegation that
RNUR was fully involved in determining the quantity of cars to be purchased
by AMSC from Renault

The "Dealer Franchises," as defined in the Distributor Agreement, were

"Renault Dealer Franchise Agreement[s]" drafted by the parties, a sample of
which was attached to the Distributor Agreement as Annex A-1

Renault U.S.A. continues to exist today, but does not play a role in the
distribution of Renault products in the United States. Renault U.S.A. played no
role in the distribution of the 1982 Renault LeCar at issue in this case

For a complete chronology and discussion of these financial transactions, see

R2-27-Ex.2, at 28; -Ex.3, at 4-5; -Ex.4, at 21-22; -Ex.5, at 22-23; and -Ex.6, at
26-27

During this time, several members of AMC's management team, including Jose
Dedeurwaerder, AMC's President from 1982-1984 and CEO in 1985 and 1986,
were former employees of Renault. See, e.g., R2-27-Ex.3, at 2; -Ex.7, at 3

Renault dealerships existed in 49 out of 50 states. Everett Depo., Ex. 1

It is unclear whether AMSC, RNUR, or any other entity was responsible for the
creation of this pamphlet and its placement in the glove compartment of
Vermeulen's LeCar

Renault U.S.A. was subsequently dismissed as a defendant pursuant to a

stipulation between the parties. R3-45

10

Section 1603 provides in relevant part:

(a) A "foreign state," except as used in section 1608 of this title, includes ... an
agency or instrumentality of a foreign state as defined in subsection (b).
(b) An "agency or instrumentality of a foreign state" means any entity-(1) which is a separate legal person, corporate or otherwise, and
(2) ... a majority of whose shares or other ownership interest is owned by a
foreign state ... and
(3) which is neither a citizen of a State of the United States as defined in section
1332(c) and (d) of this title, nor created under the laws of any third country.
28 U.S.C. 1603.

11

Prior to 1976, section 1332(a)(2) expressly provided for diversity suits against
foreign states. 28 U.S.C. 1332(a) (1970). The 1976 amendments to this
section removed that provision, making it clear that foreign states, as defined in
28 U.S.C. 1603, are not subject to jurisdiction on a diversity of citizenship
theory. See, e.g., Argentine Republic v. Amerada Hess Shipping Corp., 488
U.S. 428, 437 n. 5, 109 S.Ct. 683, 689 n. 5, 102 L.Ed.2d 818 (1989); H.R.Rep.
No. 1487 at 14, reprinted in 1976 U.S.C.C.A.N. 6604, 6613 ("Since jurisdiction
in actions against foreign states is comprehensively treated by the new section
1330, [see Part IV.B. of this opinion infra,] a similar jurisdictional basis under
section 1332 becomes superfluous.")

12

Vermeulen is a citizen of Georgia. Jeep Eagle, which is incorporated in

Delaware and has its principal place of business in Michigan, is a citizen of
both those states

13

The fact that Vermeulen seeks to recover for personal injuries does not belie the
commercial nature of RNUR's activity and thus does not require us to analyze
this case under the "noncommercial torts" exception to foreign sovereign

immunity, 28 U.S.C. 1605(a)(5). Section 1605(a)(5) provides for jurisdiction

in American courts in any case
not otherwise encompassed in [the paragraph on commercial activities] in
which money damages are sought against a foreign state for personal injury or
death,
subject to certain enumerated exceptions. Id. (emphasis added). The legislative
history of the third commercial activity exception in section 1605(a)(2) states
that Congress intended to subject foreign commercial conduct to jurisdiction
"consistent with principles set forth in section 18, Restatement of the Law,
Second, Foreign Relations Law of the United States (1965)." H.R.Rep. No. 941487 at 19, 1976 U.S.C.C.A.N. at 6618. The Restatement provides for
jurisdiction when "the conduct and its effect are generally recognized as
constituent elements of a ... tort under the law of states that have reasonably
developed legal systems." Restatement (Second) of the Foreign Relations Law
of the United States 18, at 47 (1965). Negligent design and manufacture of an
automobile resulting in personal injury unquestionably is a tort generally
recognized in American law. Thus, Vermeulen's claims are properly within the
third commercial activity exception to foreign sovereign immunity contained in
28 U.S.C. 1605(a)(2). See Ohntrup v. Firearms Center, Inc., 516 F.Supp.
1281, 1285 (E.D.Pa.1981) ("Personal injury suits are within the scope of this
exception."), aff'd, 760 F.2d 259 (3d Cir.1985); see also Martin v. Republic of
South Africa, 836 F.2d 91, 93 (2d Cir.1987) (applying section 1605(a)(2) in
ordinary personal injury case); Zernicek v. Brown & Root, Inc., 826 F.2d 415,
418 (5th Cir.1987) (same), cert. denied, 484 U.S. 1043, 108 S.Ct. 775, 98
L.Ed.2d 862 (1988); Australian Gov't Aircraft Factories v. Lynne, 743 F.2d
672, 674 (9th Cir.1984) (same), cert. denied, 469 U.S. 1214, 105 S.Ct. 1189, 84
L.Ed.2d 335 (1985); Sugarman v. Aeromexico, Inc., 626 F.2d 270, 272 (3d
Cir.1980) (same); Four Corners Helicopters, Inc. v. Turbomeca S.A., 677
F.Supp. 1096, 1099 (D.Colo.1988) (same).
14

Indeed, the Court noted that "there was no showing that any automobile sold by
[the distributor or the retailer] has ever entered Oklahoma with the single
exception of the vehicle involved in the present case." World-Wide
Volkswagen, 444 U.S. at 289, 100 S.Ct. at 563

15

Justice Brennan was joined by Justices Marshall, Blackmun and White

16

Justices White and Blackmun also joined Justice Stevens

17

We note, however, that in the absence of further guidance from the Supreme
Court, several courts have declined to follow the Asahi plurality's analysis, and
have instead continued to apply the "stream of commerce" approach adopted in

World-Wide Volkswagen. See, e.g., Irving v. Owens-Corning Fiberglass Corp.,

864 F.2d 383, 386 (5th Cir.), cert. denied, 493 U.S. 823, 110 S.Ct. 83, 107
L.Ed.2d 49 (1989); DeMoss v. City Market, Inc., 762 F.Supp. 913, 918 (D.Utah
1991); Abuan v. General Electric Co., 735 F.Supp. 1479, 1483 (D.Guam
1990); Curtis Management Group v. Academy of Motion Pictures Arts and
Sciences, 717 F.Supp. 1362, 1369 (S.D.Ind.1989); Wessinger v. Vetter Corp.,
685 F.Supp. 769, 776-77 (D.Kan.1987); Hall v. Zambelli, 669 F.Supp. 753, 756
(S.D.W.Va.1987)
18

We also note that the additional circumstances suggested by Justice Stevens to

establish minimum contacts are present in this case. Asahi, 480 U.S. at 122, 107
S.Ct. at 1037 (Stevens, J., concurring in part and concurring in the judgment)
(analysis of purposeful availment and minimum contacts should take into
account "the volume, the value, and the hazardous character of the
components")

19

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc),
the Eleventh Circuit adopted as circuit precedent all decisions of the former
Fifth Circuit rendered before October 1, 1981