Can a state court exercise personal jurisdiction over foreign subsidiaries of a U.S. parent corporation for claims unrelated to the subsidiaries' activities in that state?

On April 18, 2004, Julian Brown and Matthew Helms, two 13-year-old boys from North Carolina, died in a bus accident near Paris, France. Their parents filed a wrongful-death lawsuit in North Carolina state court against Goodyear USA, an Ohio corporation, and three of its foreign subsidiaries: Goodyear Luxembourg, Goodyear Turkey, and Goodyear France. The lawsuit alleged that a defective tire manufactured by Goodyear Turkey caused the accident.

The foreign Goodyear subsidiaries had no registered business, place of business, employees, or bank accounts in North Carolina. They did not design, manufacture, or advertise their products in the state. A small percentage of their tires were distributed in North Carolina through other Goodyear USA affiliates. However, the specific tire involved in the accident was never distributed in North Carolina.

The parents initiated a lawsuit in the Superior Court of Onslow County, North Carolina. The foreign subsidiaries responded by filing a motion to dismiss the claims against them, citing lack of personal jurisdiction. The trial court denied this motion.

The foreign subsidiaries then appealed this decision to the North Carolina Court of Appeals, which affirmed the trial court's ruling. The appellate court concluded that North Carolina courts had general jurisdiction over the foreign subsidiaries.

Seeking further review, the foreign subsidiaries petitioned the North Carolina Supreme Court. However, the state's highest court denied discretionary review of the case.

Following this, the foreign subsidiaries appealed to the U.S. Supreme Court. The Supreme Court granted certiorari to determine whether the general jurisdiction asserted by the North Carolina courts was consistent with the Due Process Clause of the Fourteenth Amendment.

(Ginsburg, J.)

No. A state court cannot exercise personal jurisdiction over foreign subsidiaries of a U.S. parent corporation for claims unrelated to the subsidiaries' activities in that state. The threshold for establishing general jurisdiction is significantly higher than that for specific jurisdiction and requires continuous and systematic general business contacts that render the defendant essentially at home in the forum state. Mere attenuated connections or the presence of a parent company in the state are insufficient. The stream-of-commerce analysis, while relevant to specific jurisdiction, does not apply to general jurisdiction cases. General jurisdiction requires a showing of affiliations so continuous and systematic as to render the foreign corporation comparable to a domestic enterprise in that state. Sporadic sales or indirect placement of products into the stream of commerce, without more, do not constitute the kind of continuous corporate operations within a state required to justify suit on causes of action unrelated to those activities. The Due Process Clause of the Fourteenth Amendment limits the power of a state court to render a valid personal judgment against a nonresident defendant. A court may exercise general jurisdiction over foreign corporations only when their affiliations with the state are so continuous and systematic as to render them essentially at home in the forum state. This stringent standard ensures fairness and predictability in the legal system, allowing corporations to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.