Goodyear Dunlop Tires Operations, S.A. v. Brown

Supreme Court of the United States
564 U.S. 915, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011)

ELI5:

Rule of Law:

The placement of a product into the stream of commerce is insufficient to subject a foreign corporation to general personal jurisdiction in a forum state; rather, the corporation's affiliations with the state must be so 'continuous and systematic' as to render it essentially 'at home' there.

Facts:

Two 13-year-old boys from North Carolina were passengers on a bus that was part of a soccer trip.
The bus overturned on a road outside Paris, France, resulting in the fatal injuries of the two boys.
The boys' parents attributed the accident to a defective tire on the bus.
The tire in question was manufactured in Turkey by Goodyear Lastikleri T. A. S. (Goodyear Turkey), an indirect subsidiary of The Goodyear Tire and Rubber Company (Goodyear USA).
Goodyear Turkey, along with Goodyear subsidiaries in Luxembourg and France, manufacture tires primarily for European and Asian markets.
These foreign subsidiaries are not registered to do business in North Carolina, have no offices, employees, or bank accounts there, and do not directly solicit business or ship tires to the state.
A small percentage of the subsidiaries' tires, not of the type involved in the accident, were distributed in North Carolina through other Goodyear USA affiliates.

Procedural Posture:

The parents of the deceased boys filed a wrongful-death lawsuit in the Superior Court of Onslow County, North Carolina, a state trial court.
The defendants included Goodyear USA and its foreign subsidiaries, Goodyear Luxembourg, Goodyear Turkey, and Goodyear France (the petitioners).
The foreign subsidiaries filed a motion to dismiss the claims against them for lack of personal jurisdiction.
The trial court denied the motion to dismiss.
The foreign subsidiaries (appellants) appealed to the North Carolina Court of Appeals, an intermediate appellate court.
The Court of Appeals affirmed the trial court's decision, finding that general jurisdiction was proper.
The North Carolina Supreme Court, the state's highest court, denied discretionary review.
The United States Supreme Court granted certiorari to review the decision of the North Carolina Court of Appeals.

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Issue:

Are foreign subsidiaries of a U.S. parent corporation amenable to suit in a state court on claims unrelated to any of their activities within that state, merely because a small number of their products have entered the state through the stream of commerce?

Opinions:

Majority - Justice Ginsburg

No. Foreign subsidiaries of a U.S. parent corporation are not subject to a state's general personal jurisdiction simply because their products reach the state through the stream of commerce. A court may assert general jurisdiction over a foreign corporation only when its affiliations with the forum state are so continuous and systematic as to render it essentially at home there. The Court distinguished between specific jurisdiction, which arises from the defendant's contacts with the forum that are related to the lawsuit, and general jurisdiction, which allows a defendant to be sued on any claim, regardless of where it arose. Here, because the accident occurred in France and the tire was made and sold abroad, specific jurisdiction was lacking. The North Carolina court's reliance on the 'stream of commerce' theory was misplaced, as that concept is relevant to specific, not general, jurisdiction. Comparing this case to precedents like Perkins and Helicópteros, the Court found the subsidiaries' attenuated connections to North Carolina fell far short of the 'continuous and systematic general business contacts' required to be considered 'at home' in the state.

Analysis:

This decision significantly clarifies and narrows the scope of general personal jurisdiction over corporations. By rejecting the 'stream of commerce' theory as a basis for general jurisdiction, the Court established a much stricter 'at home' standard, typically limited to a corporation's place of incorporation or principal place of business. This ruling makes it more difficult for plaintiffs to sue multinational corporations in any forum where their products are sold, forcing litigation to occur in forums where the corporation has its primary roots or where the specific injury-causing conduct occurred. The case solidifies the distinction between specific and general jurisdiction, preventing courts from blending the two analyses and thereby protecting foreign corporations from being subject to suit on unrelated claims in any state their goods might reach.

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