Monday, June 27, 2011

Supreme Court Issues Personal Jurisdiction Opinion Relating To Foreign Subsidiary Of US Corporation

The Supreme Court, in a unanimous opinion written by Justice Ginsburg, held that three Goodyear USA subsidiaries, organized and operating, respectively, in Luxembourg, Turkey, and France, are not subject to personal jurisdiction in North Carolina. The specific question, as phrased by the Court, was: 
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" that ended upon the Supreme Court. The court said
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.
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 withthe State.
The Court's opinion in Goodyear Dunlop Tires Operations, S. A. v. Brown can be viewed HERE.


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