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

• Court: U.S. Supreme Court
• Writing for the Court: Justice GINSBURG delivered the opinion of the Court.
• Citation: Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011)
• Decision Date: 27 June 2011
• Docket Number: No. 10–76.,10–76.
• Parties: GOODYEAR DUNLOP TIRES OPERATIONS, S.A., et al., Petitioners, v. Edgar D. BROWN et ux., co-administrators of the Estate of Julian David Brown, et al.

564 U.S. 915

131 S.Ct. 2846

180 L.Ed.2d 796

GOODYEAR DUNLOP TIRES OPERATIONS, S.A., et al., Petitioners,

v.Edgar D. BROWN et ux., co-administrators of the Estate of Julian David Brown, et al.

No. 10–76.

Supreme Court of the United States

Argued Jan. 11, 2011.

Decided June 27, 2011.

James M. Brogan, Philadelphia, PA, William K. Davis, Charlot F. Wood, Bell, Davis & Pitt, Winston-Salem, NC, Glen D. Nager, Meir Feder, Samuel Estreicher, Eric E. Murphy, Rajeev Muttreja, Jones Day, New York, NY, for Petitioners.

David F. Kirby, William B. Bystrynski, C. Mark Holt, Kirby & Holt LLP, Raleigh, NC, Collyn A. Peddie, The Law Offices of Collyn Peddie, Houston, TX, for Respondents.

Justice GINSBURG delivered the opinion of the Court.

This case concerns the jurisdiction of state courts over corporations organized and operating abroad. We address, in particular, this question: Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?

A bus accident outside Paris that took the lives of two 13–year–old boys from North Carolina gave rise to the litigation we here consider. Attributing the accident to a defective tire manufactured in Turkey at the plant of a foreign subsidiary of The Goodyear Tire and Rubber Company (Goodyear USA), the boys' parents commenced an action for damages in a North Carolina state court; they named as defendants Goodyear USA, an Ohio corporation, and three of its subsidiaries, organized and operating, respectively, in Turkey, France, and Luxembourg. Goodyear USA, which had plants in North Carolina and regularly engaged in commercial activity there, did not contest the North Carolina court's jurisdiction over it; Goodyear USA's foreign subsidiaries, however, maintained that North Carolina lacked adjudicatory authority over them.

A state court's assertion of jurisdiction exposes defendants to the State's coercive power, and is therefore subject to review for compatibility with the Fourteenth Amendment's Due Process Clause. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (assertion of jurisdiction over out-of-state corporation must comply with " ‘traditional notions of fair play and substantial justice’ " (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940) )). Opinions in the wake of the pathmarking International Shoe decision have differentiated between general or all-purpose jurisdiction, and specific or case-linked jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, nn. 8, 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so "continuous and systematic" as to render them essentially at home in the forum State. See International Shoe, 326 U.S., at 317, 66 S.Ct. 154. Specific jurisdiction, on the other hand, depends on an "affiliatio[n] between the forum and the underlying controversy," principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation. von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L.Rev. 1121, 1136 (1966) (hereinafter von Mehren & Trautman); see Brilmayer et al., A General Look at General Jurisdiction, 66 Texas L.Rev. 721, 782 (1988) (hereinafter Brilmayer). In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of "issues deriving from, or connected with, the very controversy that establishes jurisdiction." von Mehren & Trautman 1136.

Because the episode-in-suit, the bus accident, occurred in France, and the tire alleged to have caused the accident was manufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy. The North Carolina Court of Appeals so acknowledged. Brown v. Meter, 199 N.C.App. 50, 57–58, 681 S.E.2d 382, 388 (2009). Were the foreign subsidiaries nonetheless amenable to general jurisdiction in North Carolina courts? Confusing or blending general and specific jurisdictional inquiries, the North Carolina courts answered yes. Some of the tires made abroad by Goodyear's foreign subsidiaries, the North Carolina Court of Appeals stressed, had reached North Carolina through "the stream of commerce"; that connection, the Court of Appeals believed, gave North Carolina courts the handle needed for the exercise of general jurisdiction over the foreign corporations. Id., at 67–68, 681 S.E.2d, at 394–395.

A connection so limited between the forum and the foreign corporation, we hold, is an inadequate basis for the exercise of general jurisdiction. Such a connection does not establish the "continuous and systematic" affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation's contacts with the State.

I

On April 18, 2004, a bus destined for Charles de Gaulle Airport overturned on a road outside Paris, France. Passengers on the bus were young soccer players from North Carolina beginning their journey home. Two 13–year–olds, Julian Brown and Matthew Helms, sustained fatal injuries. The boys' parents, respondents in this Court, filed a suit for wrongful-death damages in the Superior Court of Onslow County, North Carolina, in their capacity as administrators of the boys' estates. Attributing the accident to a tire that failed when its plies separated, the parents alleged negligence in the "design, construction, testing, and inspection" of the tire. 199 N.C.App., at 51, 681 S.E.2d, at 384 (internal quotation marks omitted).

Goodyear Luxembourg Tires, SA (Goodyear Luxembourg), Goodyear Lastikleri T.A.S. (Goodyear Turkey), and Goodyear Dunlop Tires France, SA (Goodyear France), petitioners here, were named as defendants. Incorporated in Luxembourg, Turkey, and France, respectively, petitioners are indirect subsidiaries of Goodyear USA, an Ohio corporation also named as a defendant in the suit. Petitioners manufacture tires primarily for sale in European and Asian markets. Their tires differ in size and construction from tires ordinarily sold in the United States. They are designed to carry significantly heavier loads, and to serve under road conditions and speed limits in the manufacturers' primary markets.¹

In contrast to the parent company, Goodyear USA, which does not contest the North Carolina courts' personal jurisdiction over it, petitioners are not registered to do business in North Carolina. They have no place of business, employees, or bank accounts in North Carolina. They do not design, manufacture, or advertise their products in North Carolina. And they do not solicit business in North Carolina or themselves sell or ship tires to North Carolina customers. Even so, a small percentage of petitioners' tires (tens of thousands out of tens of millions manufactured between 2004 and 2007) were distributed within North Carolina by other Goodyear USA affiliates. These tires were typically custom ordered to equip specialized vehicles such as cement mixers, waste haulers, and boat and horse trailers. Petitioners state, and respondents do not here deny, that the type of tire involved in the accident, a Goodyear Regional RHS tire manufactured by Goodyear Turkey, was never distributed in North Carolina.

Petitioners moved to dismiss the claims against them for want of personal jurisdiction. The trial court denied the motion, and the North Carolina Court of Appeals affirmed. Acknowledging that the claims neither "related to, nor ... ar[o]se from, [petitioners'] contacts with North Carolina," the Court of Appeals confined its analysis to "general rather than specific jurisdiction," which the court recognized required a "higher threshold" showing: A defendant must have "continuous and systematic contacts" with the forum. Id., at 58, 681 S.E.2d, at 388 (internal quotation marks omitted). That threshold was crossed, the court determined, when petitioners placed their tires "in the stream of interstate commerce without any limitation on the extent to which those tires could be sold in North Carolina." Id., at 67, 681 S.E.2d, at 394.

Nothing in the record, the court observed, indicated that petitioners "took any affirmative action to cause tires which they had manufactured to be shipped into North Carolina." Id., at 64, 681 S.E.2d, at 392. The court found, however, that tires made by petitioners reached North Carolina as a consequence of a "highly-organized distribution process" involving other Goodyear USA subsidiaries. Id., at 67, 681 S.E.2d, at 394. Petitioners, the court noted, made "no attempt to keep these tires from reaching the North Carolina market." Id., at 66, 681 S.E.2d, at 393. Indeed, the very tire involved in the accident, the court observed, conformed to tire standards established by the U.S. Department of Transportation and bore markings required for sale in the United States.

Ibid .² As further support, the court invoked North Carolina's "interest in providing a forum in which its citizens are able to seek redress for [their] injuries," and noted the hardship North Carolina plaintiffs would experience "[were they] required to litigate their claims in France," a country to which they have no ties. Id., at 68, 681 S.E.2d, at 394. The North Carolina Supreme Court denied discretionary review. Brown v. Meter, 364 N.C. 128, 695 S.E.2d 756 (2010).

We granted certiorari to decide whether the general jurisdiction the North Carolina courts asserted over petitioners is consistent with the Due Process Clause of the Fourteenth Amendment. 561 U.S. ––––, 131 S.Ct. 63, 177 L.Ed.2d 1152 (2010).

II

A

The Due Process Clause of the Fourteenth Amendment sets the outer boundaries of a state tribunal's authority to proceed against a defendant. Shaffer v. Heitner, 433 U.S. 186, 207, 97 S.Ct. 2569, 53...