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

Brief Fact Summary.

Parents of two boys who were killed in a bus accident brought a wrongful death action against Petitioners in North Carolina, alleging negligence in the design, construction, testing and inspection of bus tires. Petitioners were not registered to do business in North Carolina; had no place of business, employees, or bank accounts in North Carolina; did not design their products in North Carolina; and did not solicit business in North Carolina or sell or ship their products into North Carolina. Petitioners moved to dismiss the complaint for lack of jurisdiction. The North Carolina courts held that Petitioners were subject to the jurisdiction of the North Carolina state courts. The United States Supreme Court granted certiorari.

Synopsis of Rule of Law.

The fact that a foreign subsidiary’s products have reached a forum state through the stream of commerce is an inadequate basis, in and of itself, for the exercise of general jurisdiction over the foreign subsidiary because it does not establish the necessary “continuous and systematic” affiliation with the forum.

Facts.

Two boys were killed in a bus accident in France. Respondents, the boys’ parents, as administrators of their sons’ estates, brought a wrongful death action against Petitioners in North Carolina, alleging negligence in the design, construction, testing and inspection of bus tires. Petitioners manufactured tires primarily for Asian and European markets, although some of their tires were distributed in North Carolina by other affiliates. Petitioners were not registered to do business in North Carolina; had no place of business, employees, or bank accounts in North Carolina; did not design their products in North Carolina; and did not solicit business in North Carolina or sell or ship their products into North Carolina. Also, Petitioners stated, and Respondents did not dispute, that the tire involved in the accident was never distributed in North Carolina. Petitioners moved to dismiss the complaint for lack of jurisdiction. The North Carolina courts held that Petitioners were subject to the jurisdiction of the North Carolina state courts. The United States Supreme Court granted certiorari.

Issue.

Is a foreign subsidiary of a United States corporation subject to a state court’s jurisdiction on claims unrelated to the subsidiary’s activities within the state?

Held.

No. A foreign subsidiary of a United States corporation is not subject to a state court’s jurisdiction on claims unrelated to thesubsidiary’s activities within the state.

Discussion.

Petitioners did not have continuous and systematic general business contacts with North Carolina. The lack of continuous and systematic general contacts precluded the exercise of general jurisdiction over Petitioners by the North Carolina courts on claims unrelated to anything that connected them with North Carolina.