The Two-Track Stream-of-Commerce Doctrine: Seventh Circuit Separates “End-Product” and “Derivative-Product” Contacts for Specific Personal Jurisdiction

1. Introduction

Case: B.D. v. Samsung SDI Co., Ltd., No. 24-2444, U.S. Court of Appeals for the Seventh Circuit (Decided 9 July 2025, Brennan, J.).

Backdrop. An Indiana minor, B.D., was severely burned when a Samsung SDI lithium-ion 18650 battery exploded in his pocket. The battery had been bought loose (“stand-alone”) by his stepfather from a local e-cigarette shop. B.D. sued Samsung SDI in Indiana; the Korean manufacturer moved to dismiss for lack of personal jurisdiction. After jurisdictional discovery, the district court granted dismissal. On appeal, the Seventh Circuit affirmed.

Key Issue. Whether Indiana courts can exercise specific personal jurisdiction over a foreign component manufacturer whose batteries predictably reach the state only when built into battery packs (the end-product stream), but whose liability suit arises from a loose battery sold in a different, unauthorized channel (the derivative-product stream).

Holding. Although Samsung SDI purposefully availed itself of Indiana through the end-product stream of commerce, B.D.’s claim arises from the derivative-product stream, creating a “disconnect” that defeats specific jurisdiction.

2. Summary of the Judgment

The Seventh Circuit adopts an expressly dual-stream approach to stream-of-commerce cases.
Distinguishes between (a) batteries shipped to sophisticated customers, incorporated into monitored battery packs, and placed in finished consumer goods (laptops, drills, etc.) and (b) identical batteries resold loose to vapers.
Samsung SDI purposefully availed itself of Indiana only under stream (a); stream (b) was created solely by “unilateral” third-party actors.
Because the claim is tied to stream (b), the “arise-out-of or relate-to” prong fails.
The opinion re-emphasises that personal jurisdiction is defendant- and contact-focused, not plaintiff-focused; plaintiff residence and situs of injury cannot cure the mismatch.
Judgment of dismissal affirmed.

3. Analysis

3.1 Precedents Cited & Their Functions

International Shoe Co. v. Washington (1945) – The modern “minimum contacts” foundation; cited to frame general/specific jurisdiction dichotomy.
World-Wide Volkswagen Corp. v. Woodson (1980) – First articulation of stream-of-commerce; used to show that unilateral third-party movement of products cannot create jurisdiction.
Asahi Metal v. Superior Court (1987) – Competing “stream-of-commerce” tests explained; Seventh Circuit aligns with Justice Brennan’s “knowledge version.”
Walden v. Fiore (2014) – Emphasizes defendant-focused inquiry; quoted to reject plaintiff-centric arguments.
Bristol-Myers Squibb Co. v. Superior Court (2017) – Highlights the need for a real connection between defendant’s forum contacts and the plaintiffs’ claims; guardrail against “loose and spurious” jurisdiction.
Ford Motor Co. v. Montana Eighth Judicial District Court (2021) – Allows suits that “relate to” (not only “arise out of”) forum contacts; but Court notes unresolved scenario where defendant markets a different model than the one that injures plaintiff. Seventh Circuit seizes on that caveat.
Prior circuit splits: Sullivan v. LG Chem (6th Cir. 2023), Yamashita v. LG Chem (9th Cir. 2023), Ethridge v. Samsung SDI (5th Cir. 2025), etc., illustrating national disarray and paving the way for the Seventh Circuit’s refinement.

3.2 Court’s Legal Reasoning

Purposeful Availment (Prong 1)
- Adopts Brennan’s knowledge-based stream-of-commerce test.
- Recognises two distinct market channels:
  1. End-Product Stream: Batteries → battery packs → finished goods sold nationwide (foreseeable to Samsung SDI). Purposeful.
  2. Derivative-Product Stream: Loose batteries resold to consumers (foreseeability denied; Samsung SDI actively discouraged). Not purposeful.
- Only stream (a) counts as defendant’s deliberate contact.
Relatedness (“Arise-out-of/Relate-to”) (Prong 2)
- B.D.’s injury stems from stream (b); Samsung SDI’s purposeful contacts lie in stream (a) – a “disconnect.”
- No reciprocity: Indiana gives legal benefits for conduct in stream (a), but lawsuit asks liability for stream (b).
- Fair-warning principle: Samsung SDI lacked notice it would be haled into Indiana over transactions it tried to avoid.
- Rejects broad reading of Ford; emphasises Supreme Court’s reserved question when the marketed product differs.
Fair Play & Substantial Justice (Prong 3)
- Not reached—failure on Prong 2 already fatal.

3.3 Impact of the Decision

Creates new precedent within the Seventh Circuit: courts must analyse which stream of commerce the defendant deliberately exploited; plaintiffs must trace their injury to that same stream.
Narrows plaintiffs’ forum options in battery-explosion and other component cases; mere foreseeability of resale is insufficient.
Compliance roadmap for manufacturers: delineating and policing distribution channels can meaningfully limit jurisdictional exposure.
Deepens circuit split. Fifth & Sixth Circuits accept jurisdiction in analogous circumstances; Ninth and Seventh now reject. Heightens probability of Supreme Court review.
Influences contract drafting and supply-chain controls. Expect tighter downstream-use covenants, audits, and “no-vaping-industry” clauses.

4. Complex Concepts Simplified

Specific Personal Jurisdiction – A court’s power to decide a case against an out-of-state defendant, but only for claims that arise from or relate to the defendant’s contacts in that state.
Purposeful Availment – The defendant’s intentional exploitation of a state’s market or legal benefits. Accidental or third-party actions don’t count.
Stream-of-Commerce Theory
- “Knowledge version” (7th Cir.): jurisdiction if the defendant is aware its product will be marketed in the forum.
- “Plus” version (other circuits): requires targeted marketing or design for the forum.
End-Product vs. Derivative-Product
- End-Product: Component embedded in a finished, safer product (e.g., laptop battery pack).
- Derivative-Product: Same component sold loose or repurposed (e.g., vaping battery) without intended safeguards.
Thermal Runaway – A chain reaction inside lithium-ion cells causing heat buildup and potential explosion; mitigated by battery management circuits in packs.

5. Conclusion

The Seventh Circuit’s decision inaugurates a Two-Track Stream-of-Commerce Doctrine: courts must tie the plaintiff’s injury to the very market channel the defendant purposefully exploited. By isolating Samsung SDI’s Indiana contacts to the safe, packaged-battery stream, the court found no jurisdiction for claims arising from the unsafe, loose-battery stream.

Practically, the ruling empowers manufacturers to cabin liability by structuring and policing distribution networks, while compelling plaintiffs to establish a channel-to-injury nexus. The doctrinal split with other circuits now presents a clear question for Supreme Court resolution: Does “relates to” stretch to unauthorised aftermarkets, or must the forum contacts and injury originate in the same stream?

Until that answer arrives, litigants in Illinois, Indiana and Wisconsin must navigate this newly charted two-track landscape—where not all streams flow to the courthouse.