Brief Fact Summary.
Two boys were killed in a bus accident outside of Paris, France. The accident was attributed to a defective tire manufactured abroad by a foreign subsidiary of a United States tire company. The boys’ parents sued the foreign subsidiaries in North Carolina state court. The subsidiaries objected to the state court’s jurisdiction. The trial court upheld jurisdiction, the appellate court affirmed, and the state supreme court declined discretionary review.
Synopsis of Rule of Law.
A foreign subsidiary‘s products entering a state through the stream of commerce, without more, is too limited a connection between the forum and the subsidiary to support the exercise of general jurisdiction.
As we have said, a corporationâs âcontinuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity,â.View Full Point of Law
Two boys, both soccer players from North Carolina, were killed when a bus they were riding in overturned on its way to an airport in in Paris, France. The accident was attributed to a defective tire manufactured in Turkey at the plant of a foreign subsidiary of a United States tire company. The boys’ parents sued the foreign subsidiaries in North Carolina state court. The subsidiaries objected to the state court’s jurisdiction. The trial court upheld jurisdiction. The appellate court affirmed, finding that the subsidiaries’ tires had reached North Carolina through the stream of commerce such that the North Carolina courts could exercise general jurisdiction. The state supreme court declined discretionary review.
Are foreign subsidiaries of a United States corporation subject to suit in state court in the United States on claims unrelated to any activity of the subsidiaries in the forum state?
No. Where tires made abroad by the United States parent corporation‘s foreign subsidiaries reached North Carolina through the stream of commerce, the connection between the subsidiaries and the forum were too limited to serve as the basis for jurisdiction of the North Carolina courts over the subsidiaries.
The general jurisdiction asserted by the North Carolina courts over the foreign subsidiaries was inconsistent with the Due Process Clause of the Fourteenth Amendment. The subsidiaries were in no way “at home” in North Carolina; their contacts with the state were not the type of continuous and systematic contacts necessary to allow a lawsuit to be brought against them on claims unrelated to anything that connected them to the state.