Two North Carolina boys were killed in a bus accident outside Paris, France, allegedly caused by a defective tire on the bus. Their parents sued several foreign Goodyear subsidiaries in North Carolina state court, alleging negligent tire design and manufacture. The subsidiaries were organized and operated abroad, had no place of business, employees, or bank accounts in North Carolina, and did not design, manufacture, or advertise their tires there. A small percentage of their tires reached North Carolina through the stream of commerce when incorporated into other Goodyear products distributed in the United States.
May a state court exercise general personal jurisdiction over foreign corporations based on the sale in the forum of a small number of their products through the stream of commerce when the suit does not arise from those forum contacts?
A court may exercise general personal jurisdiction over a corporation only when the corporation’s affiliations with the forum state are so continuous and systematic as to render it essentially at home there. Mere placement of products into the stream of commerce, even if some reach the forum state, does not support general jurisdiction for claims unrelated to those contacts.
No. North Carolina courts lacked general personal jurisdiction over the foreign Goodyear subsidiaries because their limited forum contacts did not render them essentially at home in North Carolina, and the plaintiffs’ claims arose from an accident in France, not from any activity in North Carolina.
Justice Ginsburg distinguished specific jurisdiction from general jurisdiction: specific jurisdiction depends on a connection between the forum and the underlying controversy, while general jurisdiction permits all-purpose adjudication only where the defendant is genuinely at home. The foreign subsidiaries’ sporadic sales into North Carolina through intermediaries were insufficiently substantial to make them at home there, especially given their lack of offices, property, or direct operations in the state. The Court rejected the North Carolina courts’ reliance on the stream-of-commerce theory because that theory addresses case-linked jurisdiction, not all-purpose jurisdiction. Since the accident and alleged defect had no connection to North Carolina, only general jurisdiction was at issue, and it was absent.
Goodyear sharply limited general personal jurisdiction over corporations and introduced the modern 'essentially at home' formulation later expanded in Daimler AG v. Bauman, 571 U.S. 117 (2014). It also clarified the distinction between specific and general jurisdiction, building on Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408 (1984), and International Shoe Co. v. Washington, 326 U.S. 310 (1945). The decision curtailed states’ ability to hear suits against foreign corporations based merely on the in-state circulation of some products unrelated to the plaintiff’s claim.
Daimler AG v. Bauman, 571 U.S. 117 (2014) |
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S. A. v. Hall, 466 U.S. 408 (1984) |
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International Shoe Co. v. Washington, 326 U.S. 310 (1945) |
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