Court: China tire maker can be sued in liability case

Miles Moore, Senior Washington Reporter

DES MOINES, Iowa (March 12, 2015) — A major Chinese tire manufacturer can be sued in Iowa in a product liability case, despite not being the direct shipper of the tires to the state, the Iowa Supreme Court has ruled.

In a 7-0 decision issued March 9, the high state court reversed the Iowa District Court for Dallas County, which ruled that Iowa courts had no jurisdiction over Doublestar Dongfeng Tyre Co. Ltd.

The case began Oct. 20, 2009, at Alley Auto Sales, an auto repair shop in Adel, Iowa. Jim Book, owner of Alley Auto Sales, tried mistakenly on that date to mount a 16-inch, 10-ply Doublestar Treadstone tire on a 16.5-inch rim for a horse trailer.

Mr. Book was interrupted by a telephone call, leaving the tire mounted on the rim but underinflated, according to the high court decision written by Justice Thomas Waterman.

Dylan Book, Mr. Book's 17-year-old son, and another employee started to inflate the tire in Mr. Book's absence. The tire exploded, causing Dylan Book serious and permanent injuries, including the loss of one eye, part of his jaw, and some of the use of his left arm and hand.

Dylan's mother, Karen Book, filed a product liability suit against several defendants including China's Doublestar.

The tire maker filed to be dismissed from the case on the grounds that Iowa courts had no jurisdiction over the company. The Treadstone trademark, Doublestar argued, was owned by a Memphis, Tenn.-based distributor, Voma Tire Corp., which shipped Treadstone-brand tires to Iowa from 2008 until it left the tire distribution business in late 2012.

Doublestar sold Voma 7,008 of the 10-ply Treadstone tires by the time of the accident — 999 of which were sold in Iowa, the high court decision said. The tire at issue in the case was probably manufactured in China in June 2009, judging from its Department of Transportation identification number, the court said.

The district court granted Doublestar's motion to dismiss the case in May 2013.

In reversing the lower court, the Iowa Supreme Court applied the longstanding Iowa interpretation of the “stream-of-commerce” doctrine, and rejected the more stringent interpretation advanced by Doublestar.

Under stream-of-commerce, courts have 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.”

Also, Doublestar conceded it was subject to the jurisdiction of Tennessee and had not shown it would be more burdensome for it to face a lawsuit there than in Iowa, the high court said.

“A Tennessee forum would be far more burdensome to the Books compared to their home county,” the court ruled. “Their interest in obtaining convenient relief at home clearly outweighs Doublestar's interest in avoiding Iowa in favor of Tennessee.”

Neil Ray Chamberlin, an attorney for the Little Rock, Ark., law firm of McMath Woods P.C. which represented the Books, praised the decision. “This was the right decision,” Mr. Chamberlin said. “I've seldom seen a case where the evidence was so compelling.”

Kevin M. Reynolds of the Des Moines-based law firm of Whitfield & Eddy P.L.C., which represented Doublestar, told Tire Business on March 10 that he was not sure whether Doublestar would appeal the case to the U.S. Supreme Court. Mr. Reynolds declined other comment on the case.

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To reach this reporter: [email protected]

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