Facts
- Two North Carolina residents’ 13-year-old sons died in a bus दुर्घटना near Paris, France.
- The parents alleged the accident was caused by failure of a tire manufactured at a foreign Goodyear subsidiary’s plant in Turkey.
- The parents filed wrongful-death actions in North Carolina state court against Goodyear USA and three foreign Goodyear subsidiaries incorporated and operating in Luxembourg, Turkey, and France.
- The foreign subsidiaries were not registered to do business in North Carolina and had no offices, employees, bank accounts, or property in the State.
- The foreign subsidiaries did not design, manufacture, advertise, solicit business, or directly sell or ship tires to North Carolina customers.
- The subsidiaries’ tires were made primarily for European and Asian markets and differed from tires ordinarily sold in the United States.
- A small percentage of the subsidiaries’ tires nonetheless entered North Carolina through the distribution channels of other Goodyear-related entities.
Issues
- Whether a state court may exercise general personal jurisdiction over foreign corporate defendants based solely on the in-forum presence of some of their products through the stream of commerce when the claims do not arise from or relate to the defendants’ forum contacts.
- Whether the Due Process Clause permits treating such limited, indirect product flow as “continuous and systematic” contacts sufficient to render a foreign corporation essentially at home in the forum.
Decision
- The Supreme Court unanimously reversed.
- North Carolina lacked general personal jurisdiction over the foreign subsidiaries for claims arising from an accident abroad involving a product manufactured and sold abroad.
- The Court rejected specific jurisdiction because the litigation did not arise out of or relate to any forum-based conduct of the foreign subsidiaries.
- The Court held that the subsidiaries’ limited connections to North Carolina—at most, a small and indirect flow of products into the State—were insufficient to establish the continuous and systematic affiliation required for general jurisdiction.
- The Court declined to attribute Goodyear USA’s North Carolina contacts to the foreign subsidiaries absent a basis to disregard corporate separateness.
Legal Principles
- The Due Process Clause of the Fourteenth Amendment limits state-court personal jurisdiction to defendants with contacts that make jurisdiction consistent with traditional notions of fair play and substantial justice.
- Specific jurisdiction requires that the suit arise out of or relate to the defendant’s contacts with the forum.
- General jurisdiction permits suit on claims unrelated to forum contacts only when the defendant’s affiliations with the forum are so continuous and systematic as to render it essentially at home there.
- For corporations, the paradigm forums for general jurisdiction are ordinarily the place of incorporation and the principal place of business.
- The mere placement of goods into the stream of commerce, resulting in some in-forum sales through intermediaries, does not by itself create general jurisdiction.
- Corporate separateness is respected for jurisdictional analysis absent circumstances justifying imputation of contacts (such as an alter-ego showing).
Conclusion
The Court held that North Carolina could not assert general jurisdiction over foreign Goodyear subsidiaries based on a small, indirect flow of their products into the State, because such attenuated contacts did not make the subsidiaries essentially at home there and the claims were unrelated to any in-state activity by those defendants.