Brief Fact Summary.
Two American boys are killed in a bus accident in France and the boys’ parents try to sue an foreign American tire company subsidiary
Synopsis of Rule of Law.
A state court may not exercise general jurisdiction over a foreign defendant unless the defendant engages in continuous and systematic activities within the forum state.
Defendants' marketing arrangements, although adequate to permit litigation of claims relating to their introduction of wine into the United States stream of commerce, would not be adequate to support general, all purpose adjudicatory authority.View Full Point of Law
Two boys from North Carolina died in a bus accident in Paris. Their parents sued Goodyear USA, an Ohio corporation, and 3 Goodyear European subsidiaries in a North Carolina court. The parents claimed that there was a defective tire, manufactured by Goodyear’s subsidiary in Turkey, that caused the accident. The Turkish subsidiary did not sell tires directly to the U.S., but some reached the U.S. through the stream of commerce.
Can a forieng subsidiary of an American corporation be sued in a state court if the subsidiary does not engage in any activity in the state?
A forum state cannot exercise jurisdiction over a foreign subsidary of an American corporation if the subsidiary does not engage in continuous activities in the forum state nor in actions in the forum state from which the cause of action arises. Judgement of the North Carolina Court of Appeals is reversed.
1. In International Shoe the court held that in order for a state to exercise jurisdiction over a foreign defendant the defendant must have minimum contacts with the state
2. Cases since International Shoe have split between general jurisdiction and specific jurisdiction.
3. General jurisdiction occurs when a defendant engages in continuous and systematic activity in a forum state and the state can consider almost any lawsuit brought against the defendant arising out of any of their business within the state.
4. Specific jurisdiction exists when a defendant purposefully avails itself of the privilege of conducting activities within the forum state thus invoking the benefits and protections of its laws. Under specific jurisdiction the court can only consider lawsuits arising out of the defendant’s contacts within the forum state.
5.The North Carolina court believed general jurisdiction was proper because the subsidiary placed the tires in the stream of commerce that reached North Carolina. Justice Ginsburg does not think this is enough to constitute the continuous and systematic activity needed to establish general jurisdiction.